Document:

Exhibit

SOLICITING DEALER AGREEMENT 
WITH PREFERRED CAPITAL SECURITIES, LLC

RE:    PREFERRED APARTMENT COMMUNITIES, INC.

Ladies and Gentlemen:

Preferred Capital Securities, LLC (the “Dealer Manager”) entered into a dealer manager agreement, dated as of February 14, 2017 (the “Dealer Manager Agreement”), with Preferred Apartment Communities, Inc., a Maryland corporation (the “Company”), under which the Dealer Manager agreed to use its best efforts to solicit subscriptions in connection with the public offering (the “Offering”) for up to 1,500,000 shares of the Company’s Series A Redeemable Preferred Stock, par value $0.01 per share, referred to as Series A Redeemable Preferred Stock, and warrants, referred to as the Warrants, to purchase a maximum of 30,000,000 shares of the Company’s common stock in this offering. The Offering also covers the shares of common stock that are issuable from time to time upon exercise of the Warrants and that may be issuable upon redemption of the Series A Redeemable Preferred Stock. The Series A Redeemable Preferred Stock and the Warrants will be sold in units (“Units”), with each Unit consisting of (i) one share of Series A Redeemable Preferred Stock with an initial stated value of $1,000 per share, and (ii) one Warrant to purchase 20 shares of common stock, exercisable by the holder at an exercise price that is set at a 20% premium to the current market price per share of the Company’s common stock determined using the closing price of the Company’s common stock immediately preceding the issuance of such Warrant, subject to a minimum exercise price of $19.50 per share (subject to adjustment).  Each Unit will be sold at a public offering price of $1,000 per Unit. The Offering will commence on the initial Effective Date (as defined below). Unless otherwise defined herein, capitalized terms used herein shall have the respective meanings therefor as in the Dealer Manager Agreement.

In connection with the performance of the Dealer Manager’s obligations under Section 3 of the Dealer Manager Agreement, the Dealer Manager is authorized to retain the services of securities dealers (the “Soliciting Dealers”) who are members of the Financial Industry Regulatory Authority (“FINRA”) to solicit subscriptions for Units in connection with the Offering. You are hereby invited to become a Soliciting Dealer and, as such, to use your reasonable best efforts to solicit subscribers for Units, in accordance with the following terms and conditions of this Soliciting Dealer Agreement (this “Agreement”). The Company will sell Units using two closing services provided by the Depository Trust Company (“DTC”). The first service is DTC closing (“DTC Settlement”), and the second service is Direct Registration Service (“DRS Settlement”).

		
	1.
	Registration Statement.

		
	(a)
	Registration Statement and Prospectus. A registration statement on Form S-3 (File No. 333- 211924), including a preliminary prospectus, has been prepared by the Company and was initially filed with the Securities and Exchange Commission (the “Commission”) on June 9, 2016, in accordance with the applicable requirements of the Securities Act of 1933, as amended (the “Securities Act”), and the applicable rules and regulations of the Commission promulgated thereunder (the “Securities Act Rules and Regulations”) for the registration of the Units. The Company has prepared and filed such amendments thereto and such amended prospectus as may have been required to the date hereof, and will file such additional amendments and supplements thereto as may hereafter be required. The registration statement on Form S-3 and the prospectus contained therein, as finally amended at the date the registration statement is declared effective by

the Commission (the “Effective Date”) are respectively hereinafter referred to as the “Registration Statement” and the “Prospectus”, except that:

		
	(i)
	if the Company files a post-effective amendment to such registration statement, then the term “Registration Statement” shall, from and after the declaration of the effectiveness of such post-effective amendment by the Commission, refer to such registration statement as amended by such post-effective amendment, and the term “Prospectus” shall refer to the amended prospectus then on file with the Commission; and

		
	(ii)
	if the prospectus filed by the Company pursuant to either Rule 424(b) or 424(c) of the Securities Act Rules and Regulations shall differ from the prospectus on file at the time the Registration Statement or the most recent post-effective amendment thereto, if any, shall have become effective, then the term “Prospectus” shall refer to such prospectus filed pursuant to either Rule 424(b) or 424(c), as the case may be, from and after the date on which it shall have been filed. The term “preliminary Prospectus” as used herein shall mean a preliminary prospectus related to the Units as contemplated by Rule 430 or Rule 430A of the Securities Act Rules and Regulations included at any time as part of the Registration Statement.

As used herein, the terms “Registration Statement”, “preliminary Prospectus” and “Prospectus” shall include the documents, if any, incorporated by reference therein. As used herein, the term “Effective Date” also shall refer to the effective date of each post-effective amendment to the Registration Statement, unless the context otherwise requires.

		
	2.
	Compliance with Applicable Rules and Regulations; License and Association Membership.

Upon the date of this Agreement, the undersigned securities dealer will become one of the “Soliciting Dealers” referred to in the Dealer Manager Agreement and is referred to herein as “Soliciting Dealer.” Soliciting Dealer agrees that solicitation and other activities by it hereunder shall comply with, and shall be undertaken only in accordance with, the terms of the Dealer Manager Agreement, the terms of this Agreement, the Securities Act, the Securities Act Rules and Regulations, the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the applicable rules and regulations promulgated thereunder (the “Exchange Act Rules and Regulations”), the FINRA Rules applicable to the Offering from time to time in effect, specifically including, but not in any way limited to, NASD Conduct Rule 2340 (Customer Account Statements) and FINRA Rules 2040 (Payments to Unregistered Persons), 2111 (Suitability), 2310 (Direct Participation Programs), 5130 (Restrictions on the Purchase and Sale of Initial Equity Public Offerings), and 5141 (Sale of Securities in a Fixed Price Offering), and all other applicable federal and state laws and regulations promulgated thereunder.

Soliciting Dealer’s acceptance of this Agreement constitutes a representation to the Company and to the Dealer Manager that Soliciting Dealer is a properly registered or licensed broker-dealer, duly authorized to sell Units under federal and state securities laws and regulations in all states where it offers or sells Units, and that it is a member in good standing of FINRA. Soliciting Dealer represents and warrants that it is currently licensed as a broker-dealer in the jurisdictions identified on Schedule I to this Agreement and that its independent contractors and registered representatives have the appropriate licenses to offer and sell the Units in such jurisdictions.

This Agreement shall automatically terminate with no further action by either party if Soliciting Dealer ceases to be a member in good standing of FINRA or with the securities commission of the state in which Soliciting Dealer’s principal office is located. Soliciting Dealer agrees to notify the Dealer Manager
immediately if Soliciting Dealer ceases to be a member in good standing of FINRA or with the securities commission of any state in which Soliciting Dealer is currently registered or licensed.

		
	3.
	Limitation of Offer; Investor Suitability.

		
	(a)
	Soliciting Dealer will not offer Units and will not permit any of its registered representatives to offer Units in any jurisdiction unless both Soliciting Dealer and such registered representative are duly licensed to transact securities business in such jurisdiction. In offering Units, Soliciting Dealer shall comply with the provisions of the FINRA Rules.

		
	(b)
	In offering the sale of Units to any person, Soliciting Dealer will have reasonable grounds to believe (based on such information obtained from the investor concerning the investor’s age, investment objectives, other investments, financial situation, needs or any other information known by Soliciting Dealer after due inquiry) that: (A) such person is in a financial position appropriate to enable such person to realize to a significant extent the benefits described in the Prospectus, including the tax benefits where they are a significant aspect of the Company; (B) the investor has a fair market net worth sufficient to sustain the risks inherent in the program, including loss of investment and lack of liquidity; (C) the purchase of the Units is otherwise suitable for such person. Soliciting Dealer further will use its best efforts to determine the suitability and appropriateness of an investment in the Units of each proposed investor solicited by a person associated with Soliciting Dealer by reviewing documents and records disclosing the basis upon 

which the determination as to suitability was reached as to each proposed investor, whether such documents and records relate to accounts which have been closed, accounts which are currently maintained or accounts hereinafter established. For Units a Soliciting Dealer has sold using DRS Settlement, Soliciting Dealer shall maintain all Subscription Agreements (as defined below) for at least six years or for a period of time not less than that required in order to comply with all applicable federal and other regulatory requirements. Soliciting Dealer may satisfy its obligation by contractually requiring Subscription Agreements to be maintained by the investment advisers or banks it engages. Soliciting Dealer further agrees to comply with the record keeping requirements of the Exchange Act, including, but not limited to, Rules 17a-3 and 17a-4 promulgated under the Exchange Act. Soliciting Dealer agrees to make such documents and records available to the Dealer Manager and the Company upon request, and representatives of the Commission and FINRA upon Soliciting Dealer’s receipt of an appropriate document subpoena or other appropriate request for documents from any such agency.

		
	4.
	Delivery of Prospectus and Approved Sales Literature.

		
	(a)
	Delivery of Prospectus and Approved Sales Literature. Soliciting Dealer will:

		
	(i)
	deliver a Prospectus, as then supplemented or amended, to each person who subscribes for Units prior to the tender of such person’s subscription agreement (the “Subscription Agreement”), if such DRS Settlement, or prior to submitting orders, if using DTC Settlement;

		
	(ii)
	promptly comply with the written request of any person for a copy of the Prospectus, as then supplemented or amended, during the period between the initial Effective Date and the termination of the Offering;

		
	(iii)
	deliver to any person, in accordance with applicable law or as prescribed by any state securities administrator, a copy of any prescribed document included within or

incorporated by reference in the Registration Statement and any supplements thereto during the course of the Offering;

		
	(iv)
	not use any sales materials in connection with the solicitation of purchasers of the Units except Approved Sales Literature;

		
	(v)
	to the extent the Company provides Approved Sales Literature, not use such materials unless accompanied or preceded by the Prospectus, as then currently in effect, and as may be amended or supplemented in the future; and

		
	(vi)
	not give or provide any information or make any representation or warranty other than information or representations contained in the Prospectus or the Approved Sales Literature. Soliciting Dealer will not publish, circulate or otherwise use any other advertisement or solicitation material in connection with the Offering without the Dealer Manager’s express prior written approval. As used in this Agreement, “Approved Sales Literature” has the meaning set forth in the Dealer Manager Agreement, but excludes material or writing marked “broker-dealer use only” or otherwise bearing a legend denoting that it is not to be used in connection with the offer or sale of Units.

		
	(b)
	Agency is Not Created. Nothing contained in this Agreement shall be deemed or construed to make Soliciting Dealer an employee, agent, representative or partner of the Dealer Manager or the Company, and Soliciting Dealer is not authorized to act for the Dealer Manager or the Company.

		
	(c)
	Documents Must Be Accompanied or Preceded by a Prospectus. Soliciting Dealer will not send or provide amendments or supplements to the Prospectus or any Approved Sales Literature to any investor unless it has previously sent or provided a Prospectus and all amendments and supplements thereto to that investor or has simultaneously sent or provided a Prospectus and all amendments and supplements thereto with such Prospectus amendment or supplement or Approved Sales Literature.

		
	(d)
	Broker-Dealer Use Only Material. Soliciting Dealer will not show to or provide any investor or reproduce any material or writing which is supplied to it by the Dealer Manager and marked “broker-

dealer use only,” institutional communication, or otherwise bearing a legend denoting that it is not to be used in connection with the offer or sale of Units to members of the public.

		
	(e)
	Copies of Prospectuses and Approved Sales Literature. The Dealer Manager will supply Soliciting Dealer with reasonable quantities of the Prospectus (including any supplements thereto), as well as any Approved Sales Literature, for delivery to investors.

		
	(f)
	Prospectus Delivery Requirement. Soliciting Dealer shall furnish a copy of any revised preliminary Prospectus to each person to whom it has furnished a copy of any previous preliminary Prospectus, and further agrees that it will mail or otherwise deliver all preliminary and final Prospectuses required for compliance with the provisions of Rule 15c2-8 under the Exchange Act.

		
	(g)
	Reliance by Soliciting Dealer. Soliciting Dealer agrees that it will rely upon no statement whatsoever, written or oral, other than the statements in the final Prospectus (as amended or supplemented from time to time) or in Approved Sales Literature. Soliciting Dealer is not authorized by the Dealer Manager nor the Company to give any information or to make any representation not contained in the final Prospectus (as amended or supplemented from time to time) or in Approved Sales Literature in connection with the sale of the Units.

		
	5.
	Submission of Orders; Right to Reject Orders.

		
	(a)
	With respect to Soliciting Dealer’s participation in any resales or transfers of the Units, Soliciting Dealer agrees to comply with any applicable requirements set forth in Section 2.

		
	(b)
	If using DRS Settlement:

		
	(i)
	Payments for Units shall be made by wire transfer to the Escrow Agent (as defined below) or checks payable to “UMB Bank, N.A., Escrow Agent for Preferred Apartment Communities, Inc.” Soliciting Dealer shall forward original checks for the purchase of Units together with an original Subscription Agreement, completed, executed and initialed where indicated by the subscriber as provided for in the Subscription Agreement, to UMB Bank, N.A. (the “Escrow Agent”) at the address provided in the Subscription Agreement;

		
	(ii)
	When Soliciting Dealer’s internal supervisory procedures are conducted at the site at which the Subscription Agreement and check for the purchase of Units were initially received by Soliciting Dealer from the subscriber Soliciting Dealer shall transmit the Subscription Agreement and check for the purchase of Units to the Escrow Agent by the end of the next business day following receipt of the check and Subscription Agreement. When, pursuant to Soliciting Dealer’s internal supervisory procedures, Soliciting Dealer’s final internal supervisory procedures are conducted at a different location (the “Final Review Office”), Soliciting Dealer shall transmit the check for the purchase of Units and Subscription Agreement to the Final Review Office by the end of the next business day following Soliciting Dealer’s receipt of the Subscription Agreement and check for the purchase of Units. The Final Review Office will, by the end of the next business day following its receipt of the Subscription Agreement and check for the purchase of Units, forward both the Subscription Agreement and check for the purchase of Units to the Escrow Agent. If any Subscription Agreement solicited by Soliciting Dealer is rejected by the Company, then the Subscription Agreement and check will be returned to the rejected subscriber within ten business days from the date of rejection. As used in this Agreement, “business day” means any day other than a Saturday, Sunday or a day on which banking institutions in the State of New York are authorized or obligated by law or executive order to close; and

		
	(c)
	If using DTC Settlement, the Soliciting Dealer will coordinate for payment in connection with their electronically placed orders.

		
	(d)
	All subscriptions and orders, whether initial or additional, are subject to acceptance by and shall become effective upon confirmation by the Company, which reserves the right to reject any subscription or order in its sole discretion for any or no reason. Subscriptions and orders not accompanied by the required instrument of payment for Units may be rejected. Issuance and delivery of a Unit will be made only after 

a sale of a Unit is deemed by the Company to be completed in accordance with Section 3(c) of the Dealer Manager Agreement. If a subscription or order is rejected, cancelled or rescinded for any reason, then Soliciting Dealer will return to the Dealer Manager any selling commissions or Dealer Manager Fees theretofore paid with respect to such order, and, if Soliciting Dealer fails to so return any such selling commissions or Dealer Manager Fees, the Dealer Manager shall have the right to offset amounts owned against future commissions or Dealer Manager Fees due and otherwise payable to Soliciting Dealer (it being understood and agreed that such right to offset shall not be in limitation of any other rights or remedies that the Dealer Manager may have in connection with such failure).

		
	6.
	Soliciting Dealer Compensation.

		
	(a)
	Selling Commissions. Subject to the terms and conditions set forth herein and in the Dealer Manager Agreement and, subject to the special circumstances and discounts described in the “Plan of Distribution” section of the Prospectus, the Dealer Manager shall pay to Soliciting Dealer a selling commission of 5% of the gross proceeds from the Units sold by it and accepted and confirmed by the Company.

For purposes of this Section 6(a), Units are “sold” for DRS Settlement only if an executed Subscription Agreement is accepted by the Company and the Company has thereafter distributed the selling commission to the Dealer Manager in connection with such transaction pursuant to the Dealer Manager Agreement. For purposes of this Section 6(a), Units are “sold” for DTC Settlement only when electronically submitted orders are confirmed by the Dealer Manager.

		
	(b)
	Dealer Manager’s Authority to Issue Confirmation. Notwithstanding the foregoing, it is understood and agreed that no commission shall be payable with respect to particular Units if the Dealer Manager or the Company rejects a proposed subscriber’s Subscription Agreement. Accordingly, Soliciting Dealer shall have no authority to issue a confirmation (pursuant to Exchange Act Rule 10b-10) to any subscriber; such authority residing solely in the Dealer Manager, as the Dealer Manager and processing broker-dealer.

		
	(c)
	Reallowance of Dealer Manager Fee. The Dealer Manager may, in its sole discretion, re-allow any or all of the Dealer Manager Fee received by it to Soliciting Dealer as a marketing fee.

Subject to the immediately succeeding paragraph, the Dealer Manager may, in its sole discretion, request the Company to reimburse, to Soliciting Dealer for reasonable accountable bona fide due diligence expenses, provided such expenses have actually been incurred, are supported by detailed and itemized invoices provided to the Company and the Dealer Manager, and the Company or the Dealer Manager had theretofore given its prior written approval of incurrence of such expenses.

		
	(d)
	Marketing Expenses. Certain marketing expenses such as Soliciting Dealer conferences may be advanced to Soliciting Dealer and later deducted from the portion of the Dealer Manager Fee re- allowed to that Soliciting Dealer. Soliciting Dealer will repay any such advance to the extent not expended on marketing expenses. Any such advance shall be deducted from the maximum amount of the Dealer Manager Fee that may otherwise be re-allowable to Soliciting Dealer.

Notwithstanding anything herein to the contrary, Soliciting Dealer will not be entitled to receive any Dealer Manager Fee which would cause the aggregate amount of selling commissions, dealer manager fees and other forms of underwriting compensation (as defined in accordance with FINRA Rule 2310(b)(4)(B)(ii)) received by the Dealer Manager and all Soliciting Dealers to exceed 10.0% of the gross proceeds raised from the sale of Units in the Offering (“FINRA’s 10% Cap”).

		
	(e)
	Limitations on Dealer Manager’s Liability for Commissions. The Company will not be liable or responsible to any Soliciting Dealer for the payment of any selling commissions or any reallowance of fees to Soliciting Dealer, it being the sole and exclusive responsibility of the Dealer Manager for the payment of selling commissions or any reallowance to Soliciting Dealer.

Soliciting Dealer hereby waives any and all rights to receive payments of commissions, or any other fees or reallowance payable to the Soliciting Dealer, if any, until the Dealer Manager is in receipt of the selling commissions or other fees or reallowance. Soliciting Dealer acknowledges

and agrees that the Dealer Manager’s liability for commissions or other fees or reallowances payable to Soliciting Dealer is limited solely to commissions received and the portion of the Dealer Manager fee which represents the Marketing Fee received by the Dealer Manager from the Company in connection with Soliciting Dealer’s sale of Units.

		
	7.
	Reserved Units. The number of Units, if any, to be reserved for sale by each Soliciting Dealer may be decided by the mutual agreement, from time to time, of the Dealer Manager and the Company. The Dealer Manager reserves the right to notify Soliciting Dealer by United States mail or by other means of the number of Units reserved for sale by Soliciting Dealer, if any. Such Units will be reserved for sale by Soliciting Dealer until the time specified in the Dealer Manager’s notification to Soliciting Dealer. Sales of any reserved Units after the time specified in the notification to Soliciting Dealer or any requests for additional Units will be subject to rejection in whole or in part.

		
	8.
	Dealer Manager’s Authority. Subject to the Dealer Manager Agreement, the Dealer Manager shall have full authority to take such action as it may deem advisable with respect to all matters pertaining to the Offering or arising thereunder. The Dealer Manager shall not be under any liability to Soliciting Dealer, except (i) for its own lack of good faith and (ii) for obligations expressly assumed by the Dealer Manager hereunder.

		
	9.
	Indemnification.

		
	(a)
	Incorporation of Indemnification Obligations Under the Dealer Manager Agreement. Under the Dealer Manager Agreement, the Company has agreed to indemnify Soliciting Dealer and the Dealer Manager and each of their respective Indemnified Parties, in certain instances and against certain liabilities, including liabilities under the Securities Act in certain circumstances. Soliciting Dealer hereby agrees to indemnify the Company and each of its Indemnified Parties as provided in the Dealer Manager Agreement and to indemnify the Dealer Manager to the extent and in the manner that Soliciting Dealer agrees to indemnify the Company in the Dealer Manager Agreement.

		
	(b)
	Soliciting Dealer’s Hold Harmless Obligation. In furtherance of, and not in limitation of the foregoing, Soliciting Dealer will indemnify, defend and hold harmless the Dealer Manager and the Company, and their officers, directors, employees, members, partners, affiliates, agents and representatives, and each person, if any, who controls such entity within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, and each person who has signed the Registration Statement (“Indemnified Parties”), from and against any losses, claims, damages or liabilities to which any of the Indemnified Parties may become subject, under the Securities Act or the Exchange Act, or otherwise, insofar as such losses, claims and expenses (including the reasonable legal and other expenses incurred in investigating and defending any such claims or liabilities), damages or liabilities (or actions in respect thereof) arise out of or are based upon:

		
	(i)
	in whole or in part, any material inaccuracy in the representations or warranties contained in this Agreement or any material breach of a covenant contained herein by Soliciting Dealer;

		
	(ii)
	any untrue statement or any alleged untrue statement of a material fact contained in any Registration Statement or any post-effective amendment thereto or in the Prospectus or any amendment or supplement to the Prospectus; or in any Approved Sales Literature;

		
	(iii)
	the omission or alleged omission to state a material fact required to be stated in the Registration Statement or any post-effective amendment thereof or the omission or

alleged omission to state a material fact required to be stated in the Prospectus or any amendment or supplement to the Prospectus to make the statements therein, in light of the circumstances under which they were made, not misleading, provided, however, that in each case described in clauses (ii) and (iii) to the extent, but only to the extent, that such untrue statement or omission was made in reliance upon and in conformity with written information furnished to the Company or the Dealer Manager by Soliciting Dealer specifically for use with reference to Soliciting Dealer in the preparation of the Registration Statement or any such post-effective amendments thereof or the Prospectus or any such amendment thereof or supplement thereto;

		
	(iv)
	any use of sales literature, including “broker dealer use only” or institutional materials, by 

Soliciting Dealer that is not Approved Sales Literature;

		
	(v)
	any untrue statement made by Soliciting Dealer or Soliciting Dealer’s representatives or agents or omission by Soliciting Dealer or Soliciting Dealer’s representatives or agents to state a fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading in connection with the offer and sale of the Units in each case, other than statements or omissions made in conformity with the Registration Statement, Prospectus, Approved Sales Literature or any other materials or information furnished by or on behalf of the Company; or

		
	(vi)
	any failure by Soliciting Dealer to comply with applicable laws governing money laundry abatement and anti-terrorist financing efforts in connection with the Offering, including applicable FINRA Rules, Exchange Act Rules and Regulations and the USA PATRIOT Act of 2001 (the “PATRIOT Act”).

Soliciting Dealer will reimburse the aforesaid parties for any reasonable legal or other expenses incurred in connection with investigation or defense of such loss, claim, damage, liability or action. This indemnity agreement will be in addition to any liability which Soliciting Dealer may otherwise have.

		
	(c)
	Notice of Claim. Promptly after receipt by any indemnified party under this Section 9 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 9, promptly notify the indemnifying party of the commencement thereof; provided, however, the failure to give such notice shall not relieve the indemnifying party of its obligations hereunder except to the extent it shall have been prejudiced by such failure.

In case any such action is brought against any indemnified party, and it notifies an indemnifying party of the commencement thereof, the indemnifying party will be entitled, to the extent it may wish, jointly with any other indemnifying party similarly notified, to participate in the defense thereof, with separate counsel. Such participation shall not relieve such indemnifying party of the obligation to reimburse the indemnified party for reasonable legal and other expenses incurred by such indemnified party in defending itself, except for such expenses incurred after the indemnifying party has deposited funds sufficient to effect the settlement, with prejudice, of, and unconditional release of all liabilities from, the claim in respect of which indemnity is sought. Any such indemnifying party shall not be liable to any such indemnified party on account of any settlement of any claim or action effected without the consent of such indemnifying party, such consent not to be unreasonably withheld or delayed.
		
	(d)
	Reimbursement. An indemnifying party under Section 9 of this Agreement shall be obligated to reimburse an indemnified party for reasonable legal and other expenses as follows: the indemnifying party shall pay all legal fees and expenses reasonably incurred by the indemnified party in the defense of such claims or actions; provided, however, that the indemnifying party shall not be obligated to pay legal expenses and fees to more than one law firm in connection with the defense of similar claims arising out of the same alleged acts or omissions giving rise to such claims notwithstanding that such actions or claims are alleged or brought by one or more parties against more than one indemnified party.

If such claims or actions are alleged or brought against more than one indemnified party, then the indemnifying party shall only be obliged to reimburse the expenses and fees of the one law firm (in addition to local counsel) that has been participating by a majority of the indemnified parties against which such action is finally brought; and in the event a majority of such indemnified parties is unable to agree on which law firm for which expenses or fees will be reimbursable by the indemnifying party, then payment shall be made to the first law firm of record representing an indemnified party against the action or claim. Such law firm shall be paid only to the extent of services performed by such law firm and no reimbursement shall be payable to such law firm on account of legal services performed by another law firm.

		
	10.
	Contribution. If the indemnification provided for in Section 9 hereof is for any reason unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, liabilities, claims, damages or expenses referred to therein, the contributions provisions set forth in Section 8 of the Dealer Manager Agreement shall be applicable.

		
	11.
	Company as Party to Agreement. Each of the Company and the Manager shall be a third party beneficiary of Soliciting Dealer’s representations, warranties, covenants and agreements contained in Sections 9 and 10. No provision of Section 9 or Section 10 may be amended or waived without the prior written consent of the Company and the Manager. The Company shall have all enforcement rights in law and in equity with respect to those portions of this Agreement as to which it is third party beneficiary.

		
	12.
	Privacy Laws; Compliance.

		
	(a)
	Soliciting Dealer agrees to:

		
	(i)
	abide by and comply with (A) the privacy standards and requirements of the Gramm- Leach-Bliley Act of 1999 (the “GLB Act”); (B) the privacy standards and requirements of any other applicable federal or state law; and (C) Soliciting Dealer’s own internal privacy policies and procedures, each as may be amended from time to time;

		
	(ii)
	refrain from the use or disclosure of nonpublic personal information (as defined under the GLB Act) of all customers, except as necessary to service the customers or as otherwise necessary or required by applicable law; and

		
	(iii)
	determine which customers have opted out of the disclosure of nonpublic personal information by periodically reviewing and, if necessary, retrieving an aggregated list of such customers (the “List”) as provided by each to identify customers that have exercised their opt-out rights.

If either party uses or discloses nonpublic personal information of any customer for purposes other than servicing the customer, or as otherwise required by applicable law, that party will consult the List to determine whether the affected customer has exercised his or her opt-out rights. Each party
understands that it is prohibited from using or disclosing any nonpublic personal information of any customer that is identified on the List as having opted out of such disclosures.

		
	13.
	Anti-Money Laundering Compliance Programs. Soliciting Dealer represents to the Dealer Manager and to the Company that it has established and implemented an anti-money laundering compliance program (“AML Program”) in accordance with Section 352 of the PATRIOT Act and FINRA Rule 3310, that complies with applicable anti-money laundering laws and regulations, including, but not limited to, the customer identification program requirements of Section 326 of the PATRIOT Act, and the suspicious activity reporting requirements of Section 356 of the PATRIOT Act, and the laws, regulations and Executive Orders administered by the Office of Foreign Assets Control (“OFAC”) of the U.S. Department of Treasury (collectively, “AML/OFAC Laws”). The Soliciting Dealer hereby covenants to remain in compliance with the AML/OFAC Laws and shall, upon request by the Dealer Manager and/or the Company, provide a certification to the Dealer Manager and/or the Company that, as of the date of such certification, its AML Program is compliant with the AML/OFAC Laws.

Upon request by the Dealer Manager and/or the Company at any time, Soliciting Dealer will (i) furnish a written copy of its AML Program, or a summary of its AML Program, to the Dealer Manager and/or the Company for review, and (ii) furnish any information that the Dealer Manager and/or the Company may request to satisfy applicable AML/OFAC laws.

		
	14.
	Confidentiality. Each party to this Agreement agrees to maintain all information received from the other party pursuant to this Agreement in confidence, and each party to this Agreement agrees not to use any such information for any purpose, or disclose any such information to any person or entity, except as permitted by this Agreement or applicable laws, rules and regulations. This Section 14 shall survive the termination or expiration of this Agreement.

		
	15.
	Non-Solicitation. Subject to this Section 15, the Dealer Manager agrees that it will not (and the Dealer Manager will use reasonable good faith efforts to ensure that its employees and representatives do not) solicit business from any of Soliciting Dealer’s contacts or customers or knowingly recruit any of Soliciting Dealer’s independent registered representatives. Notwithstanding the foregoing, the Dealer Manager may solicit Soliciting Dealer’s contacts, customers or independent registered representatives but only to the extent that the Dealer Manager can demonstrate a relationship with such contacts, customers or independent registered representatives that was not 

derived through the efforts of Soliciting Dealer’s representatives who are engaged in selling efforts directly in connection with the Offering. This Section 15 shall survive the termination or expiration of this Agreement.

		
	16.
	Miscellaneous.

		
	(a)
	Ratification of Dealer Manager Agreement. Soliciting Dealer hereby authorizes and ratifies the execution and delivery of the Dealer Manager Agreement by the Dealer Manager as Dealer Manager for itself and on behalf of all Soliciting Dealers (including Soliciting Dealer party hereto) and authorizes the Dealer Manager to agree to any variation of its terms or provisions and to execute and deliver any amendment, modification or supplement thereto. Soliciting Dealer hereby agrees to be bound by all provisions of the Dealer Manager Agreement relating to Soliciting Dealers. Soliciting Dealer also authorizes the Dealer Manager to exercise, in the Dealer Manager’s discretion, all the authority or discretion now or hereafter vested in the Dealer Manager by the provisions of the Dealer Manager Agreement and to take all such actions as the Dealer Manager may believe desirable in order to carry out the provisions of the Dealer Manager Agreement and of this Agreement.

		
	(b)
	Termination. This Agreement, except for the provisions of Sections 8 (Dealer Manager’s Authority), 9 (Indemnification), 10 (Contribution), 11 (Company as Party to Agreement), 12 (Privacy Laws; Compliance), 14 (Confidentiality), 15 (Non-Solicitation) and this Section 16 (Miscellaneous), may be terminated at any time by either party hereto by five days’ prior written notice to the other party and, in all events, this Agreement shall terminate on the termination date of the Dealer Manager Agreement, except for the provisions of Sections 8, 9, 10, 11, 12, 14, 15 and this Section 16.

		
	(c)
	Communications. Any communications from Soliciting Dealer should be in writing addressed to the Dealer Manager at:

Preferred Capital Securities, LLC 3284 Northside Parkway, NW Atlanta, Georgia 30327 Attention: Mr. James P. Curtis

with a copy to:

Kunzman & Bollinger, Inc.
5100 N. Brookline Avenue, Suite 600 Oklahoma City, Oklahoma 73112 Facsimile No: (405) 942-3501 Attention: Wallace W. Kunzman, Jr.

Any notice from the Dealer Manager to Soliciting Dealer shall be deemed to have been duly given if mailed, communicated by electronic delivery or facsimile or delivered by overnight courier to Soliciting Dealer at Soliciting Dealer’s address shown below.

		
	(d)
	No Partnership. Nothing herein contained shall constitute the Dealer Manager, Soliciting Dealer, the other Soliciting Dealers or any of them as an association, partnership, limited liability company, unincorporated business or other separate entity.

		
	(e)
	Notice of Registration Statement Effectiveness. If this Agreement is executed before the initial Effective Date, then the Dealer Manager will notify Soliciting Dealer in writing when the initial Effective Date has occurred. Soliciting Dealer agrees that Soliciting Dealer will not make any offers to sell the Units or solicit purchasers for the Units until Soliciting Dealer has received such written notice of the initial Effective Date from the Dealer Manager or the Company. This Agreement shall be effective for all sales by Soliciting Dealer on and after the initial Effective Date.

		
	(f)
	Transfer Agent. The Company may authorize its transfer agent to provide information to the Dealer Manager and Soliciting Dealer regarding record holder information about the clients of Soliciting Dealer who have invested with the Company on an on-going basis for so long as Soliciting Dealer has a relationship with such client. Soliciting Dealer shall not disclose any password for a restricted website or portion of a website provided to Soliciting Dealer in connection with the Offering and shall not disclose to any person, other than an officer, director, employee or agent of Soliciting Dealer, any material downloaded from such restricted website or portion of a restricted website.

		
	(g)
	Assignment. Soliciting Dealer shall have no right to assign this Agreement or any of its rights hereunder or to delegate any of its obligations. Any purported assignment or delegation by

Soliciting Dealer shall be null and void. The Dealer Manager shall have the right to assign any or all of its rights and obligations under this Agreement by written notice, and Soliciting Dealer shall be deemed to have consented to such assignment by execution hereof. Dealer Manager shall provide written notice of any such assignment to Soliciting Dealer.

		
	(h)
	Amendment. This Agreement may be amended from time to time by consent of the parties hereto. Soliciting Dealer’s consent will be deemed to have been given to an amendment to this Agreement, and such amendment will be effective, five business days following written notice to Soliciting Dealer of such amendment if it does not notify the Dealer Manager in writing prior to the close of business on such fifth business day that Soliciting Dealer does not consent to such amendment. Notwithstanding the foregoing, Soliciting Dealer agrees that (i) it shall consent to any amendment, supplement or modification of the terms of this Agreement requested by FINRA, and

(ii) any amendment, supplement or modification of the terms of this Agreement will be effective immediately and Soliciting Dealer’s consent will be deemed to have been given to any such amendment, supplement or modification by its sale of Units or otherwise receiving and retaining an economic benefit for participating in the Offering as a Soliciting Dealer.

		
	(i)
	Counterparts. This Agreement may be executed (including by facsimile transmission) with counterpart signature pages or in counterpart copies, each of which shall be deemed an original but all of which together shall constitute one and the same instrument comprising this Agreement.

		
	(j)
	Invalidity. The invalidity or unenforceability of any provision of this Agreement shall not affect the other provisions hereof, and this Agreement shall be construed in all respects as if such invalid or unenforceable provision were omitted.

		
	(k)
	Strict Performance. The failure of any party to insist upon or enforce strict performance by any other party of any provision of this Agreement or to exercise any right under this Agreement shall not be construed as a waiver or relinquishment to any extent of such party’s right to assert or rely upon any such provision or right in that or any other instance; rather, such provision or right shall be and remain in full force and effect.

If the foregoing is in accordance with Soliciting Dealer’s understanding and agreement, please sign and return the attached duplicate of this Agreement. Soliciting Dealer’s indicated acceptance thereof shall constitute a binding agreement between Soliciting Dealer and the Dealer Manager.

DEALER MANAGER:

PREFERRED CAPITAL SECURITIES, LLC

By: /s/ Al Haworth    
Al Haworth
CEO

The undersigned dealer confirms its agreement to act as a Soliciting Dealer pursuant to all the terms and conditions of the above Soliciting Dealer Agreement and the attached Dealer Manager Agreement. The undersigned dealer hereby represents that it will comply with the applicable requirements of the Securities Act and the Exchange Act and the published rules and regulations of the Commission thereunder, and applicable blue sky or other state securities laws. The undersigned dealer represents and warrants that the undersigned dealer is duly registered as a broker-dealer under the provisions of the Exchange Act and the Exchange Act Rules and Regulations or is exempt from such registration. The undersigned dealer confirms that it and each salesperson acting on its behalf are members in good standing of FINRA and duly licensed by each regulatory authority in each jurisdiction in which the undersigned dealer or such salesperson will offer and sell Units, or are exempt from registration with such authorities. The undersigned dealer hereby represents that it will comply with the Rules of FINRA and all rules and regulations promulgated by FINRA.

Dated: April 5, 2017
Investacorp, Inc.    
Name of Soliciting Dealer

  ON FILE WITH COMPANY
Federal Identification Number

		
	By:
	   /s/Patrick Farrell

		
	Name:
	 Patrick Farrell

Authorized Signatory

Kindly have checks representing commissions forwarded as follows (if different than above): (Please type or print) 
Name of Firm:    Investacorp, Inc.    
		
	Address:
	4400 Biscayne Blvd. - Suite 1100

Miami, FL 33137

(305) 557-3000

Attention:    Patrick Farrell    

SCHEDULE I TO
SOLICITING DEALER AGREEMENT WITH PREFERRED CAPITAL SECURITIES, LLC
Soliciting Dealer represents and warrants that it is currently licensed as a broker-dealer in the following jurisdictions:

	
		
	oAlabama
	oNebraska

	oAlaska
	oNevada

	oArizona
	oNew Hampshire

	oArkansas
	oNew Jersey

	oCalifornia
	oNew Mexico

	oColorado
	oNew York

	oConnecticut
	oNorth Carolina

	oDelaware
	oNorth Dakota

	oDistrict of Columbia
	oOhio

	oFlorida
	oOklahoma

	oGeorgia
	oOregon

	oHawaii
	oPennsylvania

	oIdaho
	oPuerto Rico

	oIllinois
	oRhode Island

	oIndiana
	oSouth Carolina

	oIowa
	oSouth Dakota

	oKansas
	oTennessee

	oKentucky
	oTexas

	oLouisiana
	oUtah

	oMaine
	oVermont

	oMaryland
	oVirgin Islands

	oMassachusetts
	oVirginia

	oMichigan
	oWashington

	oMinnesota
	oWest Virginia

	oMississippi
	oWisconsin

	oMissouri
	oWyoming

	oMontanaExhibit 10.44

 

 

 

BUSINESS PARTNERSHIP AGREEMENT

This Business Partnership Agreement (this "Agreement") is entered into as of March 10th, 2016 ("Effective Date") by and between Lenovo PC HK Limited ("Lenovo") a company organized and existing under the laws of Hong Kong with its office located at 23/F, Lincoln House, Taikoo Place, 979 King's Road, Quarry Bay, Hong Kong, and LifeMed ID, Inc – ("Partner" or "LifeMed") a company organized and existing under the laws of California with its office located at 6349 Auburn Blvd., Citrus Heights, CA 95621.  Each of Lenovo and Partner is referred to herein as a "Party" and are collectively referred to herein as the "Parties".

WHEREAS, Partner is in the software business of patient and consumer identity and payment authentication, including but not limited to those other services outlined on Partner's web and marketing materials;

WHEREAS, Lenovo is in the business of developing, manufacturing and marketing various personal equipment, including but not limited to computers, mobile devices, and consumer and commercial products;

WHEREAS, Partner and Lenovo desire to enter into this Agreement setting forth the terms pursuant to which Partner will offer software and services which may be preloaded on Lenovo Products or downloaded for use by End Users;

WHEREAS, Partner owns certain trademarks and service marks, to be identified by Partner (the "Licensed Marks"), for use in connection with Partner's software; and

WHEREAS, Lenovo wishes to use the Licensed Marks in connection with the terms and conditions set forth herein, and Partner is willing to grant Lenovo a license to use the Licensed Marks under these terms and conditions.

NOW, THEREFORE, subject to the terms and conditions set forth herein, the Parties intending to be mutually bound, hereby agree as follows:

1. Definitions.

1.1     "Affiliates" means entities that control, are controlled by, or are under common control with, a Party to this Agreement.

1.2     "Bundled System" means an identified Lenovo Product installed with Software and other identified 3rd party hardware or software in accordance with the terms of this Agreement.

1.3     "Covenant Period" means any period during which Partner supplies and/or has a contract to supply goods or services directly or indirectly to or for Lenovo.

1.4     "Covenanted Product" means any Bundled System designed by, manufactured by or for, used by, imported by and/or sold or offered for sale by Lenovo during any Covenant Period.

 

 

 

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1.5     "Effective Date" has the meaning ascribed to this term in the first paragraph of this Agreement.

1.6     "Electronic Self-Help" means a process where Partner electronically disables, removes, or otherwise prevents the use of its software product without the End User's cooperation or consent.

1.7     "Deliverables" means items that Partner prepares for or provides to Lenovo as described in this Agreement and any relevant attachments, appendices or exhibits specifically referenced in this Agreement.  Deliverables include Software.

1.8     "End User" means an end-user (not a reseller or sub-licensor) of a Lenovo Product.

1.9     "End User Agreement" means the agreement between Partner and End User for use of Software and Services.

1.10     "Harmful Code" means any computer code, programming instruction, set of instructions (including but without limitation, self-replicating and self-propagating programming instructions commonly called viruses and worms) or the like with the ability to damage, interfere, or otherwise adversely affect computer programs, data files, or hardware, without the consent or intent of the user of the Software and/or Lenovo Product.

1.11     "Lenovo Product" means Lenovo's and Lenovo Affiliates' products which may include personal computer products and devices.

1.12     "Lenovo Report" means the report to be submitted by Lenovo to Partner as described in Exhibit B.

1.13     "Licensed Marks" means the name(s), logos, trade names, service names, trademarks, and/or service marks used, owned by or licensed to Partner to identify and/or promote the Deliverables and Services, including any portions thereof.

1.14     "Partner Material(s)" means Partner Licensed Marks and Deliverables as described in Exhibit A.

1.15     "Partner Report" means the report to be submitted by Partner to Lenovo as described in Exhibit B.

1.16     "Personal Data" means any information that may identify an individual, including Protected Health Information as defined under the U.S.  Health Insurance Portability and Accountability Act (HIPAA) and Health Information Technology for Economic and Clinical Health Act (HITECH)

1.17     "Personnel" means agents, employees or subcontractors engaged or appointed by Lenovo or Partner.

 

 

 

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1.18     "Services" means (A) supporting services of Software provided by Partner to Lenovo or End Users; and/or (B) information services provided by Partner to End Users through internet, paid or unpaid, including files or content that can be accessed or downloaded through the usage of Software, as described in Exhibit A.

1.19     "Software" means the software created or supplied by Partner for which Partner owns or is licensed to any and all the rights to grant license to Lenovo under this Agreement, as described in Exhibit A.  Software includes Updates.

1.20     "Term" means the duration of this Agreement, commencing on the Effective Date including any applicable "wind down period".

1.21     "Territory" refers to countries and territories identified in Exhibit A.

1.22     "Updates" means maintenance releases (e.g., containing bug fixes or other minor improvements) which are developed and released by Partner or its authorized contractors during the Term.

2. Rights in Deliverables and Exclusivity.

2.1     Grant of Usage Rights for Manufacturing.  During the Term Partner grants to Lenovo and its Affiliates, an exclusive (within scope), royalty-free, non-transferable worldwide license to use, execute, preload, and reproduce, Deliverables solely as part of a Bundled System. This license includes the right of Lenovo to sublicense such rights to its subcontractors, and service providers solely for the purpose of Lenovo fulfilling its obligations and exercising its rights under this Agreement.

1.     Grant of Rights to Distribute. During the Term and in the Territory, Partner grants to Lenovo and its Affiliates, an exclusive (within scope), royalty-free, non-transferable license to market and distribute Deliverables solely as part of a Bundled System. This license includes the right of Lenovo to sublicense such rights to its subcontractors, and service providers for the purpose of Lenovo fulfilling its obligations and exercising its rights under this Agreement. The Parties agree that the rights granted in this Section 2 include the right of Lenovo to distribute the Software through a dynamic application delivery solution which may be operated by a third party under contract with Lenovo. .

2.     Exclusivity. During the Term of the agreement, Lenovo will be LifeMed ID's exclusive computer/tablet hardware partner in the Territory for running the LifeMed ID patient and consumer identity software as part of hardware / software bundled offering. During the term of the Agreement, Lenovo agrees that Partner shall be their exclusive provider of patient identity software in the Territory.

2.2     Names and Trademarks.  During the Term and in the Territory, Partner grants Lenovo an exclusive (within scope), perpetual, irrevocable, paid-up license to use the names and trademarks Partner uses to identify the Software for Lenovo's marketing of the Software and its derivative works and Bundled Systems.  If Partner objects to Lenovo's improper use of Partner's names or trademarks, Lenovo will take all reasonable steps necessary to resolve Partner's objections.  Partner may reasonably monitor the quality of Licensed Work bearing its trademark under this license.  Any goodwill attaching to Lenovo's trademarks, service marks, or trade names belongs to Lenovo and this Agreement does not grant Partner any right to use them.

 

 

 

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During the Term and in the Territory Lenovo grants an exclusive (within scope), perpetual, irrevocable, paid-up license to use the names and trademarks Lenovo uses to identify the Lenovo product for Partner's marketing of the Bundled Systems.  If Lenovo objects to Partner's improper use of Lenovo's names or trademarks, Partner will take all reasonable steps necessary to resolve Lenovo's objections.  Lenovo may reasonably monitor the quality of marketing materials bearing its trademark under this license.  Any goodwill attaching to Partner's trademarks, service marks, or trade names belongs to Partner and this Agreement does not grant Lenovo any right to use them.

2.3     Patents.  During the Term. Partner grants to Lenovo a nonexclusive worldwide, perpetual, irrevocable, and paid-up license under any patents and patent applications licensable by Partner to make, have made, use, have used, and otherwise transfer the Deliverables and use the Services to the extent authorized in this Agreement. However, the License grant to sell, have sold and distribute is limited to the Territory, never provided or sold to a direct or indirect competitor of LifeMed ID and only for use with a LifeMed ID solution.

2.4     Non-Assertion.  As partial, material consideration for this Agreement, Partner covenants that, during any Covenanted Period, it will not (i) assert any claim of patent infringement against Lenovo, or against any Lenovo Affiliate, customer, end user, or supplier, for any Covenanted Product, or (ii) aid, encourage, cooperate with, or support any entity in asserting such a claim.  Partner may suspend this covenant with respect to any entity which first asserts any patent infringement claim against Partner including Lenovo and its Affiliates.  This section does not preclude Partner from bringing any claim against Lenovo's customers/end users for breach of the terms of customers/end user's license / service agreement between Partner and customer/end user.

2.5     Joint Invention. The Parties agree that if any intellectual property is jointly created during the Term of this Agreement (a "Joint Invention"), the Party whose background intellectual property is most closely associated with the new intellectual property will own that new jointly created intellectual property and the other Party will receive a nonexclusive, worldwide, perpetual, irrevocable and paid-up license to such Joint Invention

3. Additional Obligations of Partner.

3.1     Deliverable Obligations. Partner shall at Partner's expense deliver to Lenovo immediately upon execution of this Agreement:

1.     Software in the format reasonably requested by Lenovo and related files that are required by Lenovo for test purposes;

2.     a completed set of document(s) certifying originality of the Software in compliance with Lenovo's requirements, including but not limited to Certificate of Originality as required by Lenovo;

 

 

 

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3.     Updates to the Software;

4.     a complete list of all commercially available software required for the development, maintenance or implementation of any software Deliverable, including updates to the list.

If any item is not readily available for delivery at the time of execution of this Agreement, it shall be delivered to Lenovo by Partner as soon as the item becomes available;

3.2     Support Obligations. At a minimum, Partner shall provide at Partner's expense, the same support options for the Software to End Users as it makes generally available to all end users.  Partner shall maintain an adequate number of qualified Personnel to provide customer support to End Users for the Software in a timely and knowledgeable fashion.  Partner's support obligations with respect to Lenovo and End Users shall be more fully defined in Exhibit C.  Except as expressly provided herein, Lenovo will have full control at its own discretion for providing all support and maintenance and repairs to End Users with respect to the Lenovo Products.

 

3.3     Software and Data Security Requirements.  As a prerequisite to distributing the Software and handling Personal Data, Lenovo requires that Partner complete and submit security questionnaires ("Questionnaires") which Lenovo will make available to Partner.  Partner agrees to complete and submit the Questionnaires to Lenovo and to update the Questionnaires when Software Updates are made available or IT changes happen. Lenovo may require security tests to be performed on the Software as a prerequisite to distributing the Software.  If security testing is required of Software, it will be Partner's responsibility to have such security testing performed by a Lenovo-approved test provider, fund the security testing, and provide the test results to Lenovo.

3.4     Notice Obligations.  Partner shall provide End Users an End User Agreement that encloses all necessary information, rights and obligations of Partner and End Users to use the Software and Services. Partner shall explicitly notify End Users in the End User Agreement that Software and Services are provided by Partner as an independent entity, and shall not cause Lenovo to bear obligations beyond this Agreement. The whole content of an End User Agreement shall be provided to End Users in a legible and understandable fashion (as the local language in a Lenovo Product) and shall seek End Users' consent prior to use of Software by End Users. Upon Lenovo's request, Partner shall provide Lenovo with evidence of the footprint / acknowledgement of the End-User on the terms and conditions of End User Agreement in case of any dispute between Lenovo and the End-User.

3.5     Assistance.  As requested by Lenovo and at Lenovo's expenses, Partner shall render all reasonable assistance, including but not limited to executing required documentation and taking required actions, in connection with any regulatory approval requirements necessary for distribution of the Lenovo Products with pre-loaded Software in any part of the Territory, as Lenovo may require or request during or after the Term of this Agreement.

 

 

 

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4. Test and Acceptance.

4.1     Testing.  Upon delivery of Deliverables (which includes Software), Lenovo shall, as soon as practicable, inspect, test and evaluate such Software to determine whether the Software satisfies the acceptance criteria in accordance with Lenovo procedures.

4.2     If the Software does not satisfy the acceptance criteria, Lenovo shall give Partner written notice stating why the Software is unacceptable. Partner shall promptly upon receipt of such notice work to correct the deficiencies. Upon the corrected Software being delivered to Lenovo, Lenovo shall then inspect, test and reevaluate the Software.  If the Software still does not satisfy the acceptance criteria, Lenovo shall at its own discretion have the option of either: (1) asking Partner to repeat the procedure set forth above until the acceptance criteria is met, or (2)  If Lenovo does not give written notice to Partner in thirty (30) days from Partner's written notice requesting confirmation on acceptance after the first time of correcting the deficiencies, it shall be deemed that Lenovo has accepted the Software upon thirty (30) days from receipt of the Partner's aforesaid written notice requesting confirmation on acceptance.  Lenovo may continue to inspect the Software on an ongoing basis to ensure that the Software continues to comply with Lenovo's acceptance criteria.

5. Marketing Activities.

5.1     Co-Marketing.  The Parties agree to jointly develop marketing and sales strategies with respect to the marketing of the Bundled Systems in the Territory.   Partner will participate in mutually agreed upon and approved Bundled Systems launch-related events and announcements, such approvals of product launch related events and announcements will not be reasonability withheld.

5.2     Either Party may request permission from the other Party to identify the other as a "partner" (subject to Section 13.6) and include the other Party's logo and screenshots in marketing materials and/or in a section of its web site, such permission may be granted or withheld, in the other Party's sole discretion, in each instance. Except for disclosures mutually approved, neither Party will disclose to any third party the existence of the relationship between the Parties, either implied or otherwise, nor will either Party publicly disclose any aspect or information in connection with such relationship or Agreement, without the prior written approval of the other Party.

6. Fees, Payment and Reporting

6.1     Payment. All Partner Reports, Lenovo Reports and payment terms shall be in accordance with Exhibit B. A calendar month shall be a reporting and a settlement period hereunder ("Reporting Period"). Unless otherwise agreed by both Parties in writing in Exhibit B, all payments shall be due and payable within thirty (30) days after the last day of each calendar month, for the corresponding Reporting Period.

 

 

 

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Parties shall be deemed to have fulfilled its payment obligations on the day when the amount of the payment for the Reporting Period has been received onto the correspondent account that is specified in Exhibit B. Bank transfer fees shall be borne by the receiving Party.

6.2     Late Payment Charges. Parties agrees to pay the penalty on outstanding amounts not received in accordance with payment terms prescribed hereby at a daily compounded rate of 0.1% (or maximum rate allowed under applicable laws in the case the maximum legitimate rate is lower than 0.1% per day as proven by Partner) on overdue amounts outstanding from the due date of payment.

6.3     Taxes. Each Party shall be liable for taxes to the extent they fall due to that party under the applicable law.

7. Representations and Warranties.

7.1     Mutual Warranties.  Each Party hereby represents and warrants that: (a) it has full corporate power and authority to enter into and perform this Agreement, and no contract, agreement, promise, undertaking or other fact or circumstance will prevent the full execution and performance of this Agreement by it; and (b) it is duly organized and in good standing in the country or state of its formation.

7.2     Warranty of Title.  Partner represents and warrants that: (a) it has and shall maintain full authority to license the Software to Lenovo hereunder; and (b) the Software does not and will not infringe upon and is free from any claim by any third party of infringement of any proprietary right of any third party.

7.3     Performance Warranty.  Partner represents and warrants that the Software, as delivered, will be free from material defects.  In the event Lenovo discovers that the Software fails to conform with the foregoing warranty, Lenovo shall promptly notify Partner and provide Partner with all available information in written or electronic form so that Partner can verify such non-conformance.  Lenovo's sole remedy and Partner's sole obligation with respect to a breach of this Section 7.3 shall be to undertake reasonable commercial efforts to repair or replace the Software in order to correct such non-conformance.

7.4     Third Party Software.  Partner has disclosed to Lenovo in writing the existence of any third party code, including without limitation open source code, that is included in or is provided in connection with the Software and that Partner and the Partner Materials are in compliance with all licensing agreements applicable to such third party code.

7.5     Harmful Code and Electronic Self-Help.  Partner represents and warrants that the Software does not contain Harmful Code, and Partner and the Software will not engage in Electronic Self-Help.

7.6     Partner represents and warrants that Partner Materials do not contain or promote any (i) sexually explicit adult entertainment or product, (ii) viruses, worms, Trojans, error files, password cracking programs, malware or any program that might compromise security or privacy for the End Users (iii) firearms or tobacco product, (iv) federally regulated drug or narcotic, (v) religious faith or service, (vi) service or product that does not comply with applicable laws, rules, or regulations, (vii) racial, heinous or defamatory content or (viii) any other item that Lenovo reasonably believes might damage Lenovo's brand or reputation.

 

 

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7.7     Partner will comply with all applicable data privacy and security laws including the privacy and security provisions of the U.S.  Health Insurance Portability and Accountability Act (HIPAA) and Health Information Technology for Economic and Clinical Health Act (HITECH).Partner will protect Personal Data and will not use, disclose, or transfer Personal Data across borders  except as necessary to perform under this Agreement and pursuant to the terms of a separate confidentiality agreement signed by the Parties.  Partner will protect the privacy and legal rights of End Users. If the End Users provide Partner with, or Partner Materials access or use, user names, passwords, or other login information or personal information, Partner must make the End Users aware that the information will be available to Partner Materials, and Partner must provide legally adequate privacy notice and protection for those End Users. Further, Partner Materials may only use that information for the limited purposes for which the End User has given Partner permission.

7.8     Partner understands and will comply fully with all applicable laws, regulations, government orders, and the like;

7.9     Partner warrants that its marketing materials describing Software and services are true, and Lenovo, Lenovo Affiliates, and their customers may rely on such claims in creating their own marketing materials for the Bundled Systems;

7.10    Partner warrants that it shall comply with Section 255, 716, 717 and 718 of the Communications Act, 47 USC § 255, 617 – 619 (2011), and their implementing regulations, 47 C.F.R (collectively, the "Accessibility Standards")  to develop, manufacture and provide products, including future versions of the product. Partner shall have in place operating procedures to ensure compliance with record creation and retention requirements of section 717 of the Communications Act. If Lenovo receives a complaint pertaining to the accessibility or usability of a product or service covered by this Agreement, Lenovo shall forward the complaint to Partner and Partner shall within 7 calendar days provide Lenovo with all requested documents and information pertaining to its accessibility and usability. In the event of breach of Partner's warranty under this section, Partner shall indemnify Lenovo for all costs, penalties, fines related to Partner's failure to comply with the Accessibility Standards. Terms of this section shall survive the termination or expiration of this Agreement;

7.11    Partner warrants that in its agreements with customers as well as its website offering the software as a service, personal and financial information shared and all business is between Partner and customer and not Lenovo and that Lenovo has no liability related to claims arising from these areas.

7.12    Disclaimer.  EXCEPT FOR THE EXPRESS LIMITED WARRANTIES SET FORTH IN THIS AGREEMENT AND TO THE EXTENT ALLOWED BY APPLICABLE LAW, PARTNER HEREBY DISCLAIMS ALL OTHER WARRANTIES, WHETHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, REGARDING THE SOFTWARE. PARTNER SPECIFICALLY DISCLAIMS, WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR USE OR PURPOSE, AND NON-INFRINGEMENT, AND THOSE ARISING FROM A COURSE OF DEALING OR USAGE OF TRADE.  EXCEPT AS OTHERWISE STATED IN THIS AGREEMENT, PARTNER DOES NOT WARRANT, GUARANTEE OR MAKE ANY REPRESENTATIONS THAT THE SOFTWARE WILL BE ERROR-FREE OR FREE FROM BUGS OR THAT ITS USE WILL BE UNINTERRUPTED, OR REGARDING THE USE, OR THE RESULTS OF THE USE, OF THE SOFTWARE, OR REGARDING THE ACCURACY OR RELIABILITY OF THE SOFTWARE.

 

 

 

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8. Exchange of Confidential Information.  The Parties will not publicize the terms of this Agreement, or the relationship, without prior written consent of the other Party except as may be required by law, provided the Party publicizing obtains any confidentiality treatment available.  Partner will use information regarding this Agreement only in the performance of this Agreement.  Partner will obtain agreement from its employees and entities allowing Lenovo to receive and use information Partner may provide Lenovo about those employees and entities if that information is governed by privacy laws or other non-disclosure agreements.  Other than the foregoing, all information exchanged in connection with this Agreement is non-confidential unless exchanged pursuant to the terms of Confidentiality Agreement [# L505-0079-03] as executed by the Parties.

9. Indemnification.

9.1     Proprietary Rights Indemnity.

A.     Partner shall defend, indemnify and hold Lenovo and Lenovo Affiliates, along with the directors, employees, customers, distributors, and service providers of Lenovo and any Lenovo Affiliate ("Indemnitees") harmless from and against any claims and liabilities arising out of any actual or alleged infringement of any intellectual property right, solely related to the Software. Partner shall pay all damages and costs associated with such a claim, including, but not limited to, attorney fees, damage awards, settlement payments, costs of defense, fines, and the cost of Lenovo's and Lenovo's Affiliates' internal resources in handling such matters.

  Additionally, in the event of such a claim of infringement, Partner shall, at its expense: (i) modify the Software to be non-infringing with equivalent or better functionality; or (ii) obtain for Lenovo a license to continue using the Software,

B.     Notwithstanding the foregoing, Partner shall have no obligation to indemnify the Indemnitees to the extent any such claim arises as the result of : (a) modification of the Software that is not performed or authorized by Partner and that was not necessary or recommended for the intended use or installation of the Software and where such claim would not have arisen in the absence of such modification; (b) the combination or use of the Software, or any portion thereof, by Lenovo with other products, processes or materials not supplied by Partner outside of the inclusion in Bundle System if the infringement claim would have been avoided in the absence of the combination;

 

 

 

 

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Page 9 of 25

 

 

9.2     General Indemnity.  Partner hereto will indemnify and hold harmless Indemnitees from and against any and all losses, claims, damages, liabilities and expenses solely related to the Software or Partners performance under this Agreement (including, without limitation, legal fees and expenses) (collectively, "Losses" and individually, a "Loss")  to the extent such Losses arise from any third party claims related to (i) breach of any of Partner's representations or warranties, or of any other term of this Agreement, (ii) personal injury, death or property damage, (iii) unlawful, unfair, or deceptive trade practices attributable to Partner or its contractors, and (iv) other acts or omissions by Partner or its contractors not otherwise covered by this section.

Lenovo will indemnify and hold harmless Partner and any and all Partner Affiliates (the "Partner Indemnitees") from and against any and all losses, claims, damages, liabilities and expenses (including, without limitation, legal fees and expenses) (collectively, "Losses" and individually, a "Loss") to the extent such Losses arise from any third party claims related to  (i) Lenovo Products and (ii) personal injury, death or property damage.

Limitation on Liability.

TO THE FULLEST EXTENT PERMITTED BY LAW, AND EXCEPT FOR PARTNER'S INDEMNIFICATION OBLIGATIONS, NEITHER PARTY SHALL BE LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES (INCLUDING LOST REVENUE, LOST PROFITS, LOST CLIENTS OR BUSINESS INTERRUPTION) ARISING OUT OF ANY PERFORMANCE OR NON-PERFORMANCE OF THIS AGREEMENT OR IN FURTHERANCE OF THE PROVISIONS OR OBJECTIVES OF THIS AGREEMENT, REGARDLESS OF WHETHER SUCH DAMAGES ARE BASED ON TORT, WARRANTY, CONTRACT OR ANY OTHER LEGAL THEORY, EVEN IF ADVISED OR NOT OF THE POSSIBILITY OF SUCH DAMAGES.  LENOVO SHALL NOT BE LIABLE FOR GREATER THAN THE AMOUNT PAID UNDER THE AGREEMENT.

10. Term and Termination.

10.1     Term.  The Term of this Agreement commences on the Effective Date and shall continue for thirty six (36) months from the Effective Date.   This Agreement will renew for an additional term of one (1) year upon the first anniversary of the Effective Date and each anniversary thereafter, unless either Party notifies the other Party in writing of its intent not to renew at least sixty (60) days prior to the end of the Term.

10.2     Termination for Material Breach.  Either Party may terminate this Agreement upon thirty (30) days written notice to the other Party, if the other Party breaches a material provision of this Agreement unless the breach is cured within such thirty (30) day period, or, if the breach cannot be so cured, diligent efforts to effect such cure are commenced during that period.

 

 

 

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Page 10 of 25

 

 

10.3     Wind Down Period.  Any termination date shall be extended for one hundred and twenty (120) days in order to allow distribution of Lenovo Products with the Software or Partner Licensed Marks or Deliverables. The provisions of this Agreement shall apply to any matter that is first raised after the end of the Term but that pertains to actions during the Term, subject to applicable statutes of limitation.  For example, Partner's payment obligations to Lenovo shall apply to all transactions during the Term including the 120 day extension referenced above, even if the accounting occurs after the end of the Term.

10.4     Termination for Other Events.  Either Party may immediately terminate this Agreement upon written notice: (a) if a receiver is appointed for the other Party or its property; (b) if the other Party becomes insolvent or unable to pay its debts as they mature in the ordinary course of business or makes an assignment for the benefit of its creditors; (c) if Lenovo reasonably rejects or fails to pass Partner's (1) Software Security or Data Protection Questionnaires or IT Security regime and after attempts to remedy Partner cannot resolve to satisfaction of Lenovo or (d) if any proceedings (whether voluntary or involuntary) are commenced against the other Party under any bankruptcy, insolvency or debtor's relief law and such proceedings are not vacated or set aside within sixty (60) days from the date of commencement thereof.

11. Miscellaneous Provisions.

11.1     Prohibition Against Assignment.   Except for Lenovo assignment to an Affiliate, a Party may not assign, assume, transfer or, except as permitted under Section 2 hereof, sublicense any obligations or benefit under this Agreement without the written consent of the other Party.  Subject to the foregoing, this Agreement will bind and inure to the benefit of the Parties, their respective successors and permitted assigns.

11.2     Notices and Requests.  All notices, requests and other communications hereunder shall be in writing and shall be delivered in person or sent by nationally recognized overnight courier service to the address of the Party set forth on the signature page of this Agreement or to such other address designated in writing by the receiving Party.  Unless otherwise provided, notice shall be effective on the date it is delivered in the case of hand delivery or two (2) business days after deposit with a nationally recognized overnight courier services, return receipt requested.

11.3     Governing Law and Dispute Resolution.  This Agreement will be governed by the laws of the State of New York. The Parties agree that any action to enforce any provision of this Agreement or arising out of or based upon this Agreement shall be brought in a state or federal court of competent jurisdiction in the State of New York. The United Nations Convention on Contracts for the International Sale of Goods does not apply.  The Parties expressly waive any right to a jury trial regarding disputes related to this Agreement.

11.4     Entire Agreement.  Upon execution by both Parties, this Agreement (including its exhibits) shall constitute the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous proposals (oral or written), negotiations, conversations, or discussions between or among the Parties relating to the subject matter of this Agreement and all past dealing or industry custom. This Agreement if signed ahead of the completion of Exhibit it will not become effective until all exhibits are finalized between the Parties This Agreement shall not be modified except by a written instrument executed on behalf of Lenovo and Partner by their respective duly authorized representatives.  This Agreement may be executed by facsimile signature and in two (2) or more counterparts, all of which taken together will constitute one and the same agreement.

 

 

 

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Page 11 of 25

 

 

 

11.5     Severability.    In the event that any provision of this Agreement shall for any reason be held to be void, invalid, illegal, or unenforceable in any respect, such voidance, invalidity, illegality, or unenforceability shall not affect any other portion of this Agreement. In such event, the Parties agree that the invalid or unenforceable provision will be replaced by a mutually acceptable provision that comes closest to the original intent of the Parties.

11.6     Relationship of the Parties.  Nothing in this Agreement will be construed to constitute either Party as the agent, employee or representative of the other Party and no joint venture or partnership will be created hereby.  Neither Party will make or have the power or authority to act for, bind or otherwise create or assume any obligation on behalf of the other Party for any purpose whatsoever.

11.7     No Waiver.  No waiver of any breach of any provision of this Agreement shall constitute a waiver of any prior, concurrent or subsequent breach of the same or any other provisions hereof, and no waiver shall be effective unless made in writing and signed by an authorized representative of the waiving Party.

11.8     Force Majeure.  Neither Party hereto shall be responsible for any failure to perform its obligations under this Agreement (other than obligations to pay money and confidentiality obligations under Section 8 above) to the extent such failure is caused by acts of God, war, revolutions, lack or failure of transportation facilities, failure of telecommunications partners, fire, laws or governmental regulations, actions by governmental authorities or other causes which are beyond the reasonable control of such Party.

11.9     Section Headings.  The section headings used in this Agreement and the attached Exhibits are intended for convenience only and shall not be deemed to supersede or modify any provisions.

11.10   Survival.  The provisions set forth in the following Sections and Subsections of this Agreement will survive after termination or expiration of this Agreement and will remain in effect until fulfilled:  "Grant of Usage Rights," "Trademark License," "Fees, Payment and Reporting", "Lenovo's Audit Rights" "Representations and Warranties", "Indemnification", "Limitation of Liability", "Record Keeping and Audit Rights", "Governing Law and Dispute Resolution,", "Exchange of Confidential Information", and "Miscellaneous Provisions".

11.11   Exhibits and Attachments.  The following Exhibits and Attachments are incorporated into this Agreement by the first reference to each:

 

	
A.

	
Exhibit A, Partner Responsibilities and Deliverables

	
B.

	
Exhibit B, Payment and Reporting

	
C.

	
Exhibit C, Support Service Requirements

	
D.

	
Exhibit D, Partner Brand Usage Guidelines

	
E.

	
Attachment 1, Lenovo Monetization Report Template

 

 

 

 

 

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Page 12 of 25

 

 

 

 

 

The Parties agree that if anything related to the Exhibits changes during the implementation phase that the parties will amend the Agreement with updated Exhibits.

12.0    Parental Guarantee.  Orangehook guarantees the prompt and satisfactory performance of obligations and responsibilities under the Agreement related to all financial obligations of LifeMed including but not limited to payment of damages, indemnification or payment of revenue sharing, ("Financial Obligations) by Partner in accordance with all the terms and conditions of the Agreement. If a defaults in performance of its Financial Obligations, OrangeHook shall pay to Lenovo or Lenovo's Affiliate(s) all damages, costs and expenses that Lenovo or Lenovo Affiliate(s) are entitled to recover from Partner by reason of such default. This guaranty shall continue in force until all obligations of Partner under the Agreement have been completely discharged. Orangehook shall not be discharged from liability under this guaranty as long as any claim by Lenovo or Lenovo Affiliate against Partner remains outstanding.

 

 

 

----Signature Page Follows----

 

 

 

 

 

 

 

 

 

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Page 13 of 25

 

 

  

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement or have caused this Agreement to be executed on their behalf as of the date first written above.

	
LIFEMED ID

	
LENOVO PC HK LIMITED

	 	 
	 	 
	
By:  /s/ David Batchelor                                                     

	
By:  /s/  James Stevens                                                      

	
             David Batchelor, CEO

	
 

Name:    James Stevens                                                      

	
Date:    3/10/2016                                                                 

	
 

Title:      Director Procurement                                         

	 	 
	
ORANGEHOOK, INC.

 

 

By:  /s/ James L. Mandel                                                  

             James L. Mandel, CEO

 

Date:    3/10/2016                                                                  

 

	
Date:      3/15/2016                                                              

	
Address for notices

Fredrikson & Byron, P.A.

200 South Sixth Street

40th Floor

Minneapolis, MN 55402-1425

Attn: Steven Tight, Esq.

stight@fredlaw.com

With email copy to:

LifeMed ID, Inc

6349 Auburn Blvd

Citrus Heights, CA 95621 USA

Attn: David Batchelor, CEO

davidb@lifemedid.com

	
Address for notices

Lenovo

1009 Think Place

Morrisville, NC27560, USA

Attn:  Legal Department

With Copy To:

Lenovo

1009 Think Place

Morrisville, NC 27560, USA

Attn:  James Stevens

919-294-2567

jimste@lenovo.com

	 	 
	 	 
	 	 

Solely with respect for the Parental Guarantee in section 12 Parental Guarantee.

 

 

 

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Page 14 of 25

 

 

EXHIBIT A

PARTNER RESPONSIBILITIES AND DELIVERABLES

	
1.

	
Software.  The following components are included in LifeMed's patient identification system Software.

	
·

	
LifeMed Desktop Application, SecureReg v4.0 or greater

	
·

	
LifeMed Client Authentication Server

	
·

	
LifeMed Cloud Services Application

	
·

	
Interoperability with 3rd party services to assist in identity validation (i.e. Facial and Photo, Data Analytics, Different Law Enforcement Agencies, 3rd Party Data Validators)

	
·

	
Interoperability with identified Zebra wristband printers

	
·

	
Interoperability with POS application and services

	
2.

	
Services.   LifeMed patient identification system, currently known as SecureReg ID, to be utilized initially in the healthcare market with the intent of addressing Point of Sale (POS) market at a later date. Offering will be branded "Lenovo Health - Authoritative Identity Management (AIMe) - Powered by LifeMed ID" ("Service").

	
3.

	
 Deal Specifics.

	
i.

	
Lenovo and LifeMed Bundle - Lenovo and LifeMed to bundle LifeMed's patient identification system software - (the "System") only on Lenovo 10 inch Tablet,  Windows Yoga Laptop or Tiny in one (or other hardware in the future, as mutually agreed by the parties) along with other compatible hardware (not offered by Lenovo) to create an offering Bundled Systems and associated LifeMed Service aimed at sales to healthcare facilities in the Territory commencing 90 days from the execution of the agreement and acceptance of deliverables.  The Bundle System and associated LifeMed Service is intended to address opportunities in healthcare and known to have applications in other verticals

	
ii.

	
Pricing – LifeMed, Lenovo, and Zebra will all independently establish pricing. The client pays for nothing up front for the hardware, they get that as a lease; however client pays a monthly subscription for the overall Service and Bundled System (the bundle). 

 

 

 

 

 

 

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Page 15 of 25

 

 

 

 

	
iii.

	
The cost of the Service has a monthly minimum; this will be inclusive of (LMID software coupled with hardware and services cost)

	
iv.

	
Sales – All parties proposes to use commercially reasonable efforts to drive sales or leases of the Bundle to their clients and mutual channels...

	
v.

	
Integration - LifeMed will have primary responsibility for integrating the LifeMed software with the approved applicable Lenovo hardware, along with other hardware vendors,

	
vi.

	
Lenovo & LifeMed and any 3rd party selling the Bundle will make it clear on their website, in all marketing materials and in the transaction documents for the Service with customers that the Service is "powered by" LifeMed and the customer will be engaging with LifeMed directly. Such information will also make it clear to customer that all liability related to the Service is between LifeMed and Customer and Lenovo will have no liability related to the Service.

	
vii.

	
Lenovo Financial Services will lease Bundled Systems to clients and manage all billing and distribution of revenue sharing.

	
viii.

	
Synnix will act as primary bundler and distribution for the Bundled Systems

	
ix.

	
Lenovo or Lenovo subcontractor will be responsible for installation and will charge separately for that service.

	
x.

	
LifeMed will be responsible for all patient data and information including the protection of such data and Lenovo will have no role and should not have any access to customer or patient sensitive data.

	
xi.

	
All parties including but not limited to Lenovo, LifeMed and Zebra will work together on sales contracts /documentation and licenses that reflect the lease terms and that Service is provided by LifeMed

	
4.

	
 Lenovo or its subcontractors will perform the following roles and responsibilities:

	
A.

	
Billing related to Lenovo sales

	
i.

	
Take in billing feed from LifeMed (format of data TBD) to then send bill  client

	
ii.

	
Collect outstanding balance from clients

	
iii.

	
Report monthly billing and collection activity

	
iv.

	
Distribute collection to noted parties (see paragraph 6 below)

	
v.

	
Ability to bill / collect via approved white-label

 

 

 

 

 

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Page 16 of 25

 

 

 

	
B.

	
Distribution

	
i.

	
Ability to acquire identified components that make up the LifeMed Bundle

	
ii.

	
Establish unique part# for different aspects of the bundle (ie. Clients may already have component(s) that meet bundle specification)

	
iii.

	
Ability to pick and ship bundles to client at the direction of LifeMed/Lenovo

	
C.

	
Tier 1 and Tier 2 help desk

	
i.

	
Take initial call from client to triage client escalation – manage client delight; single  point of contact to manage client issues

	
ii.

	
Triage call tags to appropriate internal or external organization

	
iii.

	
Manage device warranty calls and replacement (when necessary)

	
iv.

	
NOC hours of operation TBD

	
D.

	
Implementation Services

	
i.

	
Unbox and setup equipment on client premises

	
ii.

	
Integrate each device with client enterprise and the LifeMed cloud service

	
iii.

	
Test overall solution

	
iv.

	
Validate go-live readiness

	
v.

	
Transition to help desk (paragraph 1.C above) after go-live

	
E.

	
Sales

	
i.

	
Assist across all LifeMed channel partners in approved Territory to maximize client engagement and deal closure.

	
ii.

	
Direct Sell the overall SecureReg solution set inclusive of "the bundle".

	
F.

	
 Marketing

	
i.

	
Create and distribution marketing collateral based on approved messaging framework for Lenovo Channel with Lifemed ID responsible for their channel marketing.

	
ii.

	
Collaborate with LifeMed ID on conference show participation.

	
G.

	
Client Adoption Success and Support Program

	
i.

	
Work with LifeMed to develop a world class post sale client adoption success and support program,  Demonstrate, educate and train on efficiencies using workflow automation and reporting capabilities using RPM to increase ROI.

 

 

 

 

 

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Page 17 of 25

 

 

 

 

	
H.

	
Lenovo recognizes it is necessary for LifeMed to scale its infrastructure to support the anticipated transaction volume.  In support of this effort

	
i.

	
Development Expenses – Lenovo will provide $900k at signing of Definitive Agreement for development of application, configuration of embedded solution on Lenovo tablet, enterprise and other hardware. Payment to be forwarded to LifeMed at signing of the Definitive Agreement.

	
ii.

	
 The Development Expense will be associated with  work, timelines and Deliverables which further defines development efforts and will be detailed below section 5.  Once all Deliverables  are validated, Lenovo will move toward promoting the solution to the market.

	
iii.

	
Recoupment of Development Expense – If Lenovo terminates the Agreement for material breach within 90 days under section 10.2, or other reasons under 10.4 Partner will reimbursethe portion of  Development Expenses not yet used for the program by LifeMed  up until the date of termination. For clarity the parties agree that material breach of the Agreement will include but not be limited to failure of LifeMed to scale the Service to where it is commercially viable in a timely manner as determined in Lenovo's sole discretion. Breach of LifeMed of the exclusivity provision of the Agreement at anytime during the term of the Agreement will trigger Lenovo's recoupment powers.

 

5.  LifeMed will perform the following roles and responsibilities:

 

	
A.

	
Demonstrate establishment of internal policies and procedures compliant to 45 CFR 164.504(e) which positions LifeMed ID/OH to claim compliance to HIPAA regulation and ability to sign a Business Associates Agreement.

	
a.

	
Deliverable: a Document reflecting the stated internal policies and procedures

	
b.

	
Timeline: 30 days post signing of DA and prior to any initial deployment

	
c.

	
Lenovo Involvement: Validate receipt of deliverable

	
B.

	
Establish specific Representations and Warranties which establish compliance which protects the PHI data with the LifeMed service offering. 

Note: This may have already been addressed due to concerns raised by Robert

	
a.

	
Deliverable: A combination of "A" above and additional language that was added to the DA

	
b.

	
Timeline: Same as "A" above

	
c.

	
Lenovo Involvement: Validate receipt of deliverable

 

 

 

 

 

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C.

	
LifeMed will provide an EHNAC Accredited Registration Authority (ARA) (with cross certification with the Federal Bridge) as part of the solution offering. 

	
a.

	
Deliverable: Present either EHNAC ARA credential certificate or an agreement with a ARA which must have their credentials posted on https://www.ehnac.org/accredited-organizations/

	
b.

	
Timeline: 30 days post signing of DA and prior to any initial deployment

	
c.

	
Lenovo Involvement: Validate receipt of deliverable

	
d.

	
Both Parties understand that this activity is dependent on the cooperation of a 3rd party vendor which may not be able to meet the specified timeline.

	
D.

	
LifeMed will enhance the  NAHAM training program with that of the ARA criteria

	
a.

	
Deliverable: present training material in presented and electronic format.  

	
b.

	
Timeline: 30 days post signing of DA and prior to any initial deployment

	
c.

	
Lenovo Involvement: Approve

	
d.

	
Both Parties understand that this activity is dependent on the cooperation of a 3rd party vendor which may not be able to meet the specified timeline.

	
E.

	
LifeMed will establish a token replacement feature within the mobile app coupled with a supporting workflow.

	
a.

	
Deliverable: demonstrate functionality and identify the production release candidate the functionality will be a part of 

	
b.

	
Timeline: 90 days post signing of DA

	
c.

	
Lenovo Involvement: Approve

	
F.

	
LifeMed will ensure bi-directional HL7 interfaces (or other related interfaces necessary for functional integration) are available to be  either certified and/or approved by ISV/Health IT vendor associated with platform used by client; and to maintain functionality for as long as the client subscribes to the services..

	
a.

	
Deliverable: Demonstrate prior to deployment of each unique ISV; there is no limitations on the number of supported ISV/Health IT vendors

	
b.

	
Timeline: 45 days prior to go live of deployment or to support any demonstration of requested functionality during sales process.  

	
c.

	
Lenovo Involvement: Validating

	
G.

	
LifeMed will work with Lenovo to validated and roll-out necessary end-to-end workflows required to rollout and support the bundle.

	
a.

	
Deliverable: Demonstrate prior to deployment of each unique ISV; there is no limitations on the number of supported ISV/Health IT vendors

	
b.

	
Timeline: prior to initial roll-out; to be tweaked as experience grows.   

	
c.

	
Lenovo Involvement: Mutual Collaborator  / approver

	
H.

	
Provide Tier III support and software warranty services.

	
a.

	
Deliverable: present as part of "G"; coupled with identification on Manager name and contact information; integrate Tier II support and software warranty services into escalation process and Service Level agreement construct

	
b.

	
Timeline: prior to initial roll-out

	
c.

	
Lenovo Involvement: Validate

 

 

 

 

 

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I.

	
Deliver the Service to Customers in a professional manner and to protect all Personal Data it receives.  This shall include responding to issues in a timely manner with persons of adequate training and skill.

	
a.

	
Deliverable: a task that is managed on a client by client basis – the key is the ability to escalate; Lenovo leadership must have access to OH/LMID executive team to discuss such matters

	
b.

	
Timeline: daily

	
c.

	
Lenovo Involvement: Mutual Collaborator 

	
J.

	
LifeMed will make sure that in agreements with third parties that will be selling this LifeMed Service and Bundle System that LifeMed include terms commensurate with this Agreement including all terms ensuring that the Service is sold as "powered by LifeMed". LifeMed is liable for any and all claims and damages arising from its resellers, distributors and partners including but not limited to those arising from not marketing the Service as "Powered by LifeMed".

	
a.

	
Deliverables: Providing copies of each reseller agreement

	
b.

	
Timeline: within 7 business days of Signing each reseller agreement

	
c.

	
Lenovo Involvement: Validate Receipt

	
K.

	
LifeMed will complete, and return security and data protection questionnaires and fully comply and participate in Lenovo's validation program for these two areas.

	
a.

	
Deliverables: receipt of completed questionnaire

	
b.

	
Timeline: 7 days post receiving questionnaire

	
c.

	
Lenovo Involvement: provide latest copy of questionnaire; provide final approval of submitted material

6.    Partner Licensed Marks. (see Exhibit D)

 

7.    Territory.  North America (USA and Canada)

 

8.    Software Language Support.

 

 

 

 

 

 

 

 

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Page 20 of 25

 

 

 

EXHIBIT B

PAYMENT AND REPORTING

	
1.

	
Development Expense

 

Development Expenses – Lenovo will provide $900,000 at signing of Agreement for development of application, configuration of embedded solution on Lenovo tablet, enterprise and other hardware.

2.     Revenue Share.

	
A.

	
Partner or Lenovo Financial Services agrees to pay revenue share of gross revenue on all LifeMed Service monthly fees and usage, including all upgrades and upsells to Lenovo based on the following schedule:  [***]

	
B.

	
Report. Within 15 days following the last day of each calendar month,  responsible party shall provide a Report, in Excel format provided in Attachment 1 of this Agreement, stating (i) the number of activation/registration/subscription/purchases by End Users, (ii) the purchase amount received by collecting party for initial and repeat purchases , (iii) the revenue share information , (iv) the type of Product or software, (vi) amount of retained revenue for reporting period and YTD value and (vii) the calculation of the total payment due. Monthly reports shall be sent to monetization@lifemedid.com or monetization@lenovo.com, tlakin@lenovo.com and pgfinance@lenovo.com depending on allocated Party.

	
C.

	
Payment.  Owing Party shall pay the amounts owed designated account within forty-five (45) days after the last day of each calendar month in which the purchase occurred without the requirement of an invoice allocated Party.

 

 

 

 

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3. Designated Account.

 

	
a.

	
Lenovo. All payments to Lenovo shall be in immediately available US dollars ($) and shall be sent, via wire transfer to the address set forth below.

[***]

		b.	
LifeMed ID, Inc. All payments to LifeMed ID, Inc. shall be in immediately available US dollars ($) and shall be sent, via wire transfer to the address set forth below.

[***]

	
 

	
4.  Audit Rights.  On not less than thirty (30) days prior notice and only once during any twelve month period, either Party may retain an independent certified public accountant to audit the relevant records during regular business hours at  offices, and make copies and extract thereof, solely to verify the amounts due and payable under this Agreement. The auditor may examine relevant records pertaining to any time period within the Term, provided that any particular relevant records may only be audited once. Auditing Party shall pay the expenses of any such audit, unless such audit reveals that the amounts paid are less than 95% of amounts that should have paid for the audited period; in the event of any such shortfall, the owing Party shall promptly pay the shortfall, including interest, as well as the reasonable costs of such audit. Both Parties right to audit the relevant records shall continue for a period of twenty-four months following the last date on which Lenovo is entitled to payment.

 

 

 

 

 

 

 

 

 

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Page 22 of 25

 

 

EXHIBIT C

 

SUPPORT SERVICE REQUIREMENTS

	
1.

	
Partner will (i) take primary responsibility for resolving any and all issues related to Software's failure to perform in accordance with Partner's stated functionality as reported by Lenovo; and (ii) lead/help any internal/external vendor for the investigation and fix.

	
2.

	
End User Support.  Partner shall provide support to End Users as described here within and the attachment II.

Partner will be responsible for support issues pertaining to the Software.  If an End User contacts Lenovo regarding an issue related to the Software, Lenovo will instruct the End User to contact Partner by the following as described here within and the attachment II.

	
3.

	
Support to Lenovo.  In addition to the support provided under Section 4.2 of this Agreement, Partner shall provide prompt communication and assistance to Lenovo in the event a problem is related to the Software operating with a Lenovo Product, provide a knowledgeable contact for technical support, and cooperate with Lenovo to resolve all End User issues.   Lenovo will report problems found by Lenovo or End Users to the Partner and will assign a severity code to each problem. Partner will meet the following rules for each priority code.

	 	
Standard Support First Response Time(for Tier 3)

	
Severity

	
Definition

	
Response

	
Updates

	
Resolution

	
Severity1

	
Application outage, down, severe business impact

	
Within 1 hour (7/24)

	
Every 2 hours via email

	
Within 8 hours  (7/24)

	
Severity 2

	
Functionality Impacted (cannot access, unrecoverable data corruption, unrecoverable loss of form submission

	
Within 4 hours (5/12)

	
Every 8 hours via email

	
Use commercially reasonable continuous efforts to provide a computer-based interim resolution

	
Severity 3

	
Application Impacted, extreme slowness, functionality working intermittently

	
8 hours

	
If no response, begin escalation

	
Severity 4

	
Application Impaired - working but functionality and/or performance is impaired

	
Within 24 hours

	
If no response, begin escalation

	
Severity 5

	
General Questions and Product Information

	
Within 48 hours

	
If no response, begin escalation

	
4.

	
Training.  At Lenovo's request, Partner shall conduct Software training of Lenovo customer support personnel no later than two (2) weeks prior to Lenovo's first scheduled launch of a Lenovo Product with the Software.  Lenovo and Partner shall coordinate the training event and schedule. Such training may be conducted in person or via electronic means (ex. Web conference calls, video conference).

	
5.

	
Partner will continue to provide support as designated in this Exhibit C for the longer of: (a) three years from the termination of the Agreement or (b) as long as the Software is warranted to the End User.

 

 

 

 

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.  THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

Page 23 of 25

 

 

 

EXHIBIT D

PARTNER BRAND USAGE GUIDELINES

	
1.

	
Partner Licensed Marks

 

	
i.

	
Ownership of the Marks

 

All trademarks, service marks, trade names, logos or other words or symbols identifying the LifeMed Products or LifeMed (collectively the "Marks") and all goodwill associated with the Marks are and shall remain the exclusive property of LifeMed, whether or not specifically recognized, registered or perfected under the laws of the United States or any other nation.

 

	
ii.

	
Use of the Marks

 

Lenovo shall use the Marks to Market the LifeMed Products on the terms and subject to the conditions set forth in this Agreement. Lenovo & LifeMed and any 3rd party selling the Bundle will make it clear on their website, in all marketing materials and in the transaction documents for the Service with customers that the Service is "powered by" LifeMed ID and the customer will be engaging with LifeMed directly. All advertisement and promotional materials shall (i) clearly identify LifeMed as the owners of the Marks; (ii) conform to LifeMed's then current trademark or logo guidelines; and (iii) otherwise comply with any local notice or marketing requirement contemplated under applicable laws. Before publishing or disseminating any advertisement or promotional materials bearing a Mark, other than those materials provided to Lenovo by LifeMed, Lenovo shall deliver a sample of the advertisement or promotional materials to LifeMed for prior approval. If LifeMed notifies Lenovo that the use of the Marks is inappropriate, Lenovo will not publish or otherwise disseminate the advertisement or promotional materials until they have been modified to LifeMed's satisfaction. All rights to use the Marks shall immediately terminate upon termination of this Agreement for any reason. If in its reasonable judgment LifeMed determines that Lenovo's use of the Marks dilutes or diminishes the Mark or the goodwill, quality or services associated with any of the Marks, then LifeMed will give notice to Lenovo of such issues, and if the issues are not resolved within five (5) business days of Lenovo's receipt of such notice, then LifeMed shall have the right to terminate the license granted in this Agreement upon notice to Lenovo.

 

	
iii.

	
Copyright and Proprietary Notices

 

Lenovo agrees to maintain and respect the copyrights of LifeMed in the LifeMed Products and LifeMed Documentation. Lenovo shall not remove, obscure or deface any copyright, trademark or similar mark or notice on any LifeMed Products, LifeMed Documentation, manual, promotional material, or the like.

  

	
2.

	
Product Names: AIMeTM (Authoritative Identity Management Exchange); SecureRegTM

 

	
3.

	
Logos:

 

 

 

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.  THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

Page 24 of 25

 

 

 

ATTACHMENT I

LENOVO MONETIZATION REPORT

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.  THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

Page 25 of 25

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