Document:

Exhibit
10.1

 

 

  

February
12, 2016

 

William
Febbo

154
Vassal Lane

Cambridge,
MA

02138

 

Dear
Will:

 

We
are delighted to have you join the OptimizeRx family, and look forward to welcoming you into our growing organization. Accordingly,
I am pleased to offer you a regular full-time position with OptimizeRx Corporation (the "Company" or "OptimizeRx"),
as Chief Executive Officer, commencing on February 22, 2016 (the date you commence employment, the "Hire Date"). This
role reports directly to the Board of Directors. It is our intention for you to become a member of the Company's board of directors
as soon as permitted by our governing documents, including WPP's Investor Rights Agreement, and in accordance with any necessary
shareholder approvals. The Company is located in Rochester, Michigan, but the Company recognizes you live in Cambridge, Massachusetts
and will require extensive travel.

 

Compensation

 

Your
base salary initially will be $220,000.00 annually, minus applicable deductions and prorated for any partial periods of employment.
You will be paid semi-monthly in accordance with our normal payroll procedure. All forms of compensation referred to in this letter
agreement are subject to reduction to reflect applicable withholding and payroll taxes and other deductions required by law. Your
annual compensation will be reviewed by the compensation committee or the board of directors annually and will be adjusted at
their discretion.

 

Bonus

 

As
Chief Executive Officer, you are eligible for a bonus as outlined herein. Your annual bonus target will be 50% of your annual
salary, payable in a lump sum at such time as may be determined by our Board of Directors, but no later than the earlier
of ten (10) business days after we finalize our audited financial statements for the fiscal year; or one hundred and fifty (150)
days following the end of such fiscal year. To be eligible to receive a payment, you must be employed by OptimizeRx at the time
any bonuses are paid. Based on your Hire Date, you will be eligible for a pro-rated annual bonus for the 2016 fiscal year during
which you were employed by OptimizeRx. Whether a bonus will be awarded, and in what amount, will be based on revenue goals and
EBITDA as set forth in our bonus plan. You will have 30 days following your Hire Date to review Attachment A and present any changes
to the board for their approval. Please see Attachment A, which is incorporated herein by reference, for the complete terms and
conditions of your bonus plan.

 

     

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Equity

 

As
Chief Executive Officer, you will be granted a one-time stock option to purchase one million five hundred thousand (1,500,000)
shares of restricted common stock (the "Option Grant") under the OptimizeRx 2013 Inventive Plan (the "Plan").
The Option Grant will vest in 20% increments annually on each of the first, second, third, fourth and fifth anniversaries of the
original grant date. The exercise price per share of these stock options will be the thirty (30) day average of OptimizeRx's closing
price per share prior to the Hire Date. Your Option Award will be subject to all the terms, conditions and restrictions of the
Form of Option Grant Agreement and the Plan. Please see Attachment B, which is incorporated herein by reference, for the terms
and conditions of your Form of Option Grant Agreement. The grant date for your initial Option Grant is anticipated to be no more
than ten (10) days following the first anniversary of the Hire Date.

 

Benefits

 

You
will be entitled to participate in OptimizeRx's health and welfare benefit programs and four weeks of vacation (prorated for 2016)
and other benefit programs for which other employees of OptimizeRx are generally eligible, subject to any eligibility requirements
of such plans and programs.

 

Additionally,
travel and accommodations shall be provided during required time within the corporate offices per approved travel budget from
board.

 

Severance
Benefits

 

If
(i) your employment is terminated by us without Cause (as defined below), (ii) you resign following an event constituting Good
Reason (as defined below), provided that you have given written notice to the Company of such event within forty-five (45) days
of its occurrence and the Company has failed to cure such event within thirty (30) days following receipt of such notice, or (iii)
you no longer render services to us as a result of your death or Disability (as defined below), then you will receive a severance
payment in the amount equal to (x) 6 months of your then applicable base pay prior to the one year anniversary of your Hire Date;
(y) or (z) twelve (12) months of your then applicable base pay on or after the first year anniversary of your Hire Date, less
applicable withholding taxes and regular deductions, payable in a lump sum ("Severance Benefits"). Health benefits will
also stay during the applicable severance term.

 

Your
receipt of the foregoing Severance Benefits is conditioned on you having first executed, and not revoked, a general release of
claims in favor of OptimizeRx (in a form reasonably prescribed by us) and the return of all OptimizeRx property. The Severance
Benefits will be paid in the form of a lump sum, in accordance with our standard payroll procedures, within sixty (60) days following
your "separation from service," as defined under Section 409A of the Internal Revenue Code of 1986, as amended (the
"Code") (subject to a six-month delay if you are a "specified employee" as defined under the Treasury Regulations
under Section 409A of the Code and such delay is required to avoid the penalty taxes that otherwise may be imposed by Section
409A of the Code).

 

To
the extent that any provision of this letter agreement is ambiguous as to its exemption or compliance with Code Section 409A,
the provision will be read in such a manner so that all payments hereunder are exempt from Code Section 409A to the maximum permissible
extent, and for any payments where such construction is not tenable, that those payments comply with Code Section 409A to the
maximum permissible extent. To the extent any payment under this letter agreement may be classified as a "short-term deferral"
within the meaning of Code Section 409A, such payment shall be deemed a short-term deferral, even if it may also qualify for an
exemption from Code Section 409A under another provision of Code Section 409A. Payments pursuant to this Offer Letter (or referenced
in this Offer Letter) are intended to constitute separate payments for purposes of Section 1.409A-2(b)(2) of the regulations under
Code Section 409A. 

 

     

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"Cause"
means your (i) gross negligence or willful misconduct in the performance of your duties, in each case in a manner that causes
material harm to the Company; (ii) commission of any act of fraud or material dishonesty with respect to the Company; (iii) conviction
of, or plea of guilty or "no contest" to, a felony or a crime of moral turpitude or dishonesty; (iv) material breach
of any proprietary information and inventions agreement with the Company, including the Employee Confidentiality, Invention Assignment
and Non-Compete Agreement, or any other unauthorized use or disclosure of the OptimizeRx's confidential information or trade secrets;
or (v) repeated failure to perform the duties reasonably assigned to you in a manner that causes material harm to the Company.

 

"Disability"
means (i) a permanent and total disability that entitles you to disability income payments under any long-term disability plan
or policy provided by the Company under which you are covered, as such plan or policy is then in effect; or (ii) if you are not
covered under a long-term disability plan or policy provided by the Company at such time for whatever reason, then the term "Disability"
means that you are unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or which has lasted, or can be expected to last, for a continuous period of
not less than 12 months, and, in this case, the existence of any such Disability shall be certified by a physician reasonably
acceptable to the Company.

 

"Good
Reason" means (i) a material reduction or change in your duties, responsibilities, authority, power or function; or (ii)
a material reduction in your annual compensation, including base salary and bonus (assuming all applicable target goals are met).

 

Change
of Control Benefits

 

In
the event of your Qualifying Termination (as defined below), within twelve (12) months following a Change in Control (as defined
below) during which you were actively employed, you will receive (i) twelve (12) months of your final base pay rate; and (ii)
if the Company's equity awards are assumed in the Change in Control, accelerated vesting of the number of your then-unvested Company
stock option shares it being acknowledge and agreed that this section shall supersede any language to the contrary in any other
document including the Form of Option Grant Agreement (collectively, the "Change in Control Benefits"). The Change in
Control Benefits would be provided in lieu of any other severance-related benefits for which you may be eligible. Your receipt
of the Change in Control Benefits is conditioned on you having first executed, and not revoked, a general release of claims in
favor of the Company (in a form reasonably prescribed by the Company) and the return of all Company property.

 

"Qualifying
Termination" means (i) a termination of your employment by the Company or its successor without Cause (as defined above)
or (ii) your resignation within three (3) months following an event constituting Good Reason (as defined above), provided that
you have given written notice to the Company of such event within forty-five (45) days of its occurrence and the Company has failed
to cure such event within thirty (30) days following receipt of such notice.

 

"Change
in Control" means: (i) the sale or other disposition of all or substantially all of the assets of the Company; (ii) any sale
or exchange of the capital stock of the Company by the stockholders of the Company in one transaction or series of related transactions
where more than fifty percent (50%) of the outstanding voting power of the Company is acquired by a person or entity or group
of related persons or entities; (iii) any reorganization, consolidation or merger of the Company where the outstanding voting
securities of the Company immediately before the transaction represent or are converted into less than fifty percent (50%) of
the outstanding voting power of the surviving entity (or its parent corporation) immediately after the transaction; or (iv) the
consummation of the acquisition of fifty-one percent (51%) or more of the outstanding stock of the Company pursuant to a tender
offer validly made under any federal or state law (other than a tender offer by the Company). Notwithstanding the foregoing, a
transaction will not be deemed a Change in Control unless the transaction qualifies as a change in control event within the meaning
of Section 409A of the Code.

  

     

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Employment
Eligibility Verification

 

For
purposes of federal immigration law, you will be required to provide to us documentary evidence of your identity and eligibility
for employment in the United States. Such documentation must be provided to us within three (3) business days of your Hire Date,
or our employment relationship with you may be terminated.

 

Employment
at Will

 

If
you choose to accept this offer, your employment with us will be voluntarily entered into and will be for no specified period.
As a result, you will be free to resign at any time, for any reason, as you deem appropriate. We will have a similar right and
may terminate our employment relationship with you at any time, with or without Cause or advance notice.

 

Exclusive
Employment

 

While
you render services to us, you agree that you will not engage in any other employment, consulting or other business activity without
our prior written consent. The Company hereby authorizes your current involvement as Director of Merriman Holdings for a period
of up to 30 days after acceptance of employment at OptimizeRx, Chairman and Founder of Plexuus and advisor to Decision Resource
Group as long as those responsibilities do not interfere with your duties to OptimizeRx. While you render services to us, you
also will not assist any person or entity in competing with us, in preparing to compete with us or in hiring any of our employees
or consultants.

 

Confidentiality,
Invention Assignment and Non-Compete

 

As
a condition of employment, you will be required to execute the Employee Confidentiality, Invention Assignment and Non-Compete
Agreement between you and the Company. Please see Attachment C, which is incorporated herein by reference, for the complete terms
and conditions this agreement.

 

Choice
of Law, Exclusive Venue

 

THIS
AGREEMENT, AND ALL ISSUES AND QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT,
WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF MICHIGAN, WITHOUT GIVING EFFECT TO ANY
CHOICE OF LAW OR CONFLICT OF LAW RULES OR PROVISIONS (WHETHER THE STATE OF MICHIGAN OR ANY OTHER JURISDICTION) THAT WOULD CAUSE
THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF MICHGAN. THE PARTIES AGREE THAT ALL DISPUTES, LEGAL ACTIONS,
SUITS AND PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT MUST BE BROUGHT EXCLUSIVELY IN A FEDERAL OR STATE COURT LOCATED
IN DETROIT, MICHIGAN (COLLECTIVELY THE "DESIGNATED COURTS").

 

EACH
PARTY HEREBY CONSENTS AND SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE DESIGNATED COURTS. NO LEGAL ACTION, SUIT OR PROCEEDING
WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN ANY OTHER FORUM. EACH PARTY HEREBY IRREVOCABLY WAIVES ALL CLAIMS OF IMMUNITY
FROM JURISDICTION AND ANY OBJECTION WHICH SUCH PARTY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING
IN ANY DESIGNATED COURT, INCLUDING ANY RIGHT TO OBJECT ON THE BASIS THAT ANY DISPUTE, ACTION, SUIT OR PROCEEDING BROUGHT IN THE
DESIGNATED COURTS HAS BEEN BROUGHT IN AN IMPROPER OR INCONVENIENT FORUM OR VENUE.

 

     

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Acceptance
of Offer

 

To
indicate your acceptance of the terms of this offer, please sign and date in the space provided below and return an executed copy
to: OptimizeRx, 400 Water Street, Suite 200, Rochester, MI 48307, Attention: Douglas Baker, CFO, no later than February 13, 2016
after which this offer will expire. In addition to this letter, your offer of employment is conditioned upon: (1) providing documentation
which establishes eligibility for employment in the United States; (2) completion and signing of the OptimizeRx employment application;
(3) successful completion of a background and reference check and (4) your signing of the OptimizeRx Employee Confidentiality,
Invention Assignment and Non-Compete Agreement (and any other similar agreements relating to proprietary rights between you and
the Company).

 

This
letter agreement, and all of its attachments, constitute the entire agreement between you and us regarding the terms and conditions
of your employment with OptimizeRx and together supersede any prior representations or agreements, whether written or oral. This
letter, along with any attachments hereto, may not be modified or amended except by a written agreement signed by an authorized
person of OptimizeRx. If by February 12, 2016 we have not received a copy of this letter executed by you, then we will assume
you have decided not to join the Company.

 

We're
sure you will find our corporate culture, including an environment that rewards talent, results and teamwork a gratifying place
to work. We look forward to your positive response and sharing our future success with you as part of the OptimizeRx team.

 

If
you have any questions regarding this offer, please feel free to contact me.

 

Sincerely,

 

	/s/
    David
Harrell	 
	David
Harrell	 
	Chief
Executive Officer

OptimizeRx Corporation	 

 

Attachments:

 

Bonus
Plan (Attachment A)

Form
of Stock Option Agreement (Attachment B)

Employee
Confidentiality, Invention Assignment and Non-Compete Agreement (Attachment C)

 

     

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I
accept OptimezeRx's offer of employment and agree to the terms in this letter agreement and its attachments. I accept this offer
voluntarily and not in reliance on any promises other than those contained in this letter agreement and its attachments.

  

	/s/
    William Febbo	 
	William Febbo	 
	 	 
	2-12-16	 
	Date	 

 

     

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Attachment
A

BONUS
PLAN

 

Your
target bonus is 50% of your annual base salary upon meeting the following revenue and EBITDA goals. You will receive the full
50% of your annual base salary if the following goals are 100% met. For every 1% below these goals, there will be a 2% reduction
in your bonus. For every 1% above these goals, there will be a 1% increase in your bonus. If the goals are less than 85% met,
you will receive no bonus. These are the goals:

 

		a.	Annual
                                         revenue goal as to be determined by the board of directors; and

		b.	Adjusted
                                         EBITDA goal as to be determined by the board of directors (adjusted for non-cash charges).

 

For
purposes of clarity, upon achieving 90% of the above targeted goals, you would be eligible for 80% of the payout target of 50%
of your annual base salary (40% of your annual base salary).

 

 

 

     

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Attachment
B 

FORM
OF STOCK OPTION AGREEMENT

 

OPTIMIZERX
CORP.

 

2013
INCENTIVE PLAN

 

STOCK
OPTION GRANT NOTICE

 

OptimizeRx
Corp. (the "Company") hereby grants to you an Option (the "Option") to purchase
shares of the Company's Common Stock, $0.001 par value ("Shares") under the Company's 2013 Incentive Plan
(the "Plan"). The Option is subject to all the terms and conditions set forth in this Stock Option Grant
Notice (this "Grant Notice"), in the Stock Option Agreement and the Plan, which are attached to and incorporated
into this Grant Notice in their entirety.

 

	Participant:	______________________
	 	 
	Grant
    Date:	______________________
	 	 
	Vesting
    Commencement Date:	______________________
	 	 
	Number
    of Shares Subject to Option:	______________________
	 	 
	Exercise
    Price (per Unit):	______________________
	 	 
	Option
    Expiration Date:	______________________
    (subject to earlier termination in accordance with the terms of the Plan and the Stock Option Agreement)
	 	 
	Type
    of Option:	 ☐
    Incentive Stock Option*      ☐ Nonqualified Stock Option
	 	 
	Vesting
    and Exercisability Schedule:	 

 

Additional
Terms/Acknowledgement: You acknowledge receipt of, and understand and agree to, this Grant Notice, the Stock Option Agreement
and the Plan. You further acknowledge that as of the Grant Date, this Grant Notice, the Stock Option Agreement and the Plan set
forth the entire understanding between you and the Company regarding the Option and supersede all prior oral and written agreements
on the subject.

 

	OPTIMIZERX CORP.PARTICIPANT	 	PARTICIPANT
	 	 	 
	 	 	 
	By:________________________________________	 	Signature
	Name: _____________________________________	 	 
	Its:________________________________________	 	 
	 	 	Date:_______________________________________
	 	 	 
	Attachments:	 	Address:____________________________________
	1.    Stock Option Agreement	 	                ____________________________________
	2.   2013 Incentive Plan 	 	Taxpayer ID:_________________________________

 

 

*
See Sections 3 and 4 of the Stock Option Agreement.

 

     

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OPTIMIZERX
CORP.

 

2013
INCENTIVE PLAN

STOCK
OPTION AGREEMENT

 

Pursuant
to your Stock Option Grant Notice (the "Grant Notice") and this Stock Option Agreement (this "Agreement"),
OptimizeRx Corp. has granted you an Option under its 2013 Incentive Plan (the "Plan") to purchase
the number of shares of the Company's Common Stock indicated in your Grant Notice (the "Shares") at the
exercise price indicated in your Grant Notice. Capitalized terms not defined in this Agreement but defined in the Plan have the
same definitions as in the Plan.

 

The
details of the Option are as follows:

 

1.                  
Vesting and Exercisability. Subject to the limitations contained herein, the Option will vest and become exercisable as provided
in your Grant Notice, provided that vesting will cease upon your Termination of Service and the unvested portion of the Option
will terminate.

 

2.                  
Securities Law Compliance. Notwithstanding any other provision of this Agreement, you may not exercise the Option unless the
Shares issuable upon exercise are registered under the Securities Act or, if such Shares are not then so registered, the Company
has determined that such exercise and issuance would be exempt from the registration requirements of the Securities Act. The exercise
of the Option must also comply with other applicable laws and regulations governing the Option, and you may not exercise the Option
if the Company determines that such exercise would not be in material compliance with such laws and regulations.

 

3.                  
Incentive Stock Option Qualification. If so designated in your Grant Notice, all or a portion of the Option is intended to
qualify as an Incentive Stock Option under federal income tax law, but the Company does not represent or guarantee that the Option
qualifies as such.

 

If
the Option has been designated as an Incentive Stock Option and the aggregate Fair Market Value (determined as of the grant date)
of the Shares subject to the portions of the Option and all other Incentive Stock Options you hold that first become exercisable
during any calendar year exceeds $100,000, any excess portion will be treated as a Nonqualified Stock Option, unless the Internal
Revenue Service changes the rules and regulations governing the $100,000 limit for Incentive Stock Options. A portion of the Option
may be treated as a Nonqualified Stock Option if certain events cause exercisability of the Option to accelerate.

 

4.                  
Notice of Disqualifying Disposition. To the extent the Option has been designated as an Incentive Stock Option, to obtain
certain tax benefits afforded to Incentive Stock Options, you must hold the Shares issued upon the exercise of the Option for
two years after the Grant Date and one year after the date of exercise. You may be subject to the alternative minimum tax at the
time of exercise. By accepting the Option, you agree to promptly notify the Company if you dispose of any of the Shares within
one year from the date you exercise all or part of the Option or within two years from the Grant Date.

 

5.                  
Independent Tax Advice. You should obtain tax advice when exercising the Option and prior to the disposition of the Shares.
By accepting the Option, you agree to promptly notify the Company if you dispose of any of the Shares within one year from the
date you exercise all or part of the Option or within two years from the Grant Date.

 

     

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6.                 
Method of Exercise. You may exercise the Option by giving written notice to the Company (or other Company-approved party),
in form and substance satisfactory to the Company, which will state your election to exercise the Option and the number of Shares
for which you are exercising the Option. The written notice must be accompanied by full payment of the exercise price for the
number of Shares you are purchasing. You may make this payment in any combination of the following: (a) by cash; (b) by check
acceptable to the Company; (c) if permitted by the Committee for Nonqualified Stock Options, by having the Company withhold Shares
that would otherwise be issued on exercise of the Option that have a Fair Market Value on the date of exercise of the Option equal
to the exercise price of the Option; (d) if permitted by the Committee, by using Shares you already own; (e) if the Shares are
registered under the Exchange Act and to the extent permitted by law, by instructing a broker to deliver to the Company the total
payment required, all in accordance with the regulations of the Federal Reserve Board; or (f) by any other method permitted by
the Committee.

 

7.                 
Treatment upon Termination of Employment or Service Relationship. The unvested portion of the Option will terminate automatically
and without further notice immediately upon your Termination of Service. You may exercise the vested portion of the Option as
follows:

 

(a)            
General Rule. You must exercise the vested portion of the Option on or before the earlier of (i) three months after your Termination
of Service and (ii) the Option Expiration Date;

 

(b)            
Retirement or Disability. In the event of your Termination of Service due to Retirement or Disability, you must exercise the
vested portion of the Option on or before the earlier of (i) one year after your Termination of Service and (ii) the Option Expiration
Date;

 

(c)            
Death. In the event of your Termination of Service due to your death, the vested portion of the Option must be exercised on
or before the earlier of (i) one year after your Termination of Service and (ii) the Option Expiration Date. If you die after
your Termination of Service but while the Option is still exercisable, the vested portion of the Option may be exercised until
the earlier of (x) one year after the date of death and (y) the Option Expiration Date; and

 

(d)            
Cause. The vested portion of the Option will automatically expire at the time the Company first notifies you of your Termination
of Service for Cause, unless the Committee determines otherwise. If your employment or service relationship is suspended pending
an investigation of whether you will be terminated for Cause, all your rights under the Option likewise will be suspended during
the period of investigation. If any facts that would constitute termination for Cause are discovered after your Termination of
Service, any Option you then hold may be immediately terminated by the Committee. Notwithstanding the foregoing, if exercise of
the vested portion of the Option following your Termination of Service would be prohibited solely because the issuance of Shares
upon exercise of the Option would violate the registration requirements under the Securities Act or the Company's insider trading
policy requirements, then the Option will remain exercisable until the earlier of (i) the Option Expiration Date and (ii) expiration
of a period of three months after your Termination of Service during which exercise of the Option would not be in violation of
the Securities Act or the Company's insider trading policy requirements (provided that in the event of Retirement, Disability
or death, this additional three-month period will apply only following an initial election by a Participant or his or her estate
or beneficiary to exercise the Option and will serve only to extend, not shorten, the one year post-termination exercise periods
set forth in subsections 10(b) and 10(c) above).

 

The
Option must be exercised within three months after termination of employment for reasons other than death or Disability and one
year after termination of employment due to Disability to qualify for the beneficial tax treatment afforded Incentive Stock Options.

 

     

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It
is your responsibility to be aware of the date the Option terminates.

 

8.                 
Limited Transferability. During your lifetime only you can exercise the Option. The Option is not transferable except by will
or by the applicable laws of descent and distribution. The Plan provides for exercise of the Option by a beneficiary designated
on a Company-approved form or the personal representative of your estate. Notwithstanding the foregoing and to the extent permitted
by Section 422 of the Internal Revenue Code of 1986, the Committee, in its sole discretion, may permit you to assign or transfer
the Option, subject to such terms and conditions as specified by the Committee.

 

9.                 
Withholding Taxes. As a condition to the exercise of any portion of the Option, you must make such arrangements as the Company
may require for the satisfaction of any federal, state, local or foreign withholding tax obligations that may arise in connection
with such exercise.

 

10.             
Option Not an Employment or Service Contract. Nothing in the Plan or this Agreement will be deemed to constitute an employment
contract or confer or be deemed to confer any right for you to continue in the employ of, or to continue any other relationship
with, the Company or any Related Company or limit in any way the right of the Company or any Related Company to terminate your
employment or other relationship at any time, with or without Cause.

 

11.             
No Right to Damages. You will have no right to bring a claim or to receive damages if you are required to exercise the vested
portion of the Option within three months (one year in the case of Retirement, Disability or death) of your Termination of Service
or if any portion of the Option is cancelled or expires unexercised. The loss of existing or potential profit in the Option will
not constitute an element of damages in the event of your Termination of Service for any reason even if the termination is in
violation of an obligation of the Company or a Related Company to you.

 

12.             
Binding Effect. This Agreement will inure to the benefit of the successors and assigns of the Company and be binding upon
you and your heirs, executors, administrators, successors and assigns.

 

13.             
Section 409A Compliance. Notwithstanding any provision in the Plan or this Agreement to the contrary, the Committee may, at
any time and without your consent, modify the terms of the Option as it determines appropriate to avoid the imposition of interest
or penalties under Section 409A of the Code; provided, however, that the Committee makes no representations that the Option will
be exempt from or comply with Section 409A of the Code and makes no undertaking to preclude Section 409A of the Code from applying
to the Option.

 

 

	 	OPTIMIZERX CORP.
	 	 	 
	 	By:	 
	 	Name:	Douglas Baker
	 	Its:	Chief Financial Officer
	 	 	 
	 	PARTICIPANT:
	 	 
	 	 
	 	[Name]	 

 

     

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Attachment
C 

EMPLOYEE
CONFIDENTIALITY, INVENTION 

ASSIGNMENT AND NON-COMPETE AGREEMENT

 

THIS
EMPLOYEE CONFIDENTIALITY, INVENTION ASSIGNMENT AND NON-COMPETE AGREEMENT ("Agreement") is made as of the date set forth
on the signature page below between OptimizeRx Corp. ("OptimizeRx"), and the person whose name is set forth on the signature
page below as Employee ("Employee").

 

In
consideration of Employee's employment or continued employment by OptimizeRx, with the intention that this Agreement shall apply
to the entire period of Employee's employment with OptimizeRx (including the period prior to the date of this Agreement), Employee
hereby agrees as follows:

 

1.
CONFIDENTIAL INFORMATION DEFINED. "Confidential Information" means trade secrets, proprietary information and materials,
and confidential knowledge and information which includes, but is not limited to, matters of a technical nature (such as discoveries,
ideas, concepts, designs, drawings, specifications, techniques, models, diagrams, test data, scientific methods and know-how,
and materials such as reagents, substances, chemical compounds, subcellular constituents, cell or cell lines, organisms and progeny,
and mutants, derivatives or replications derived from or relating to any of the foregoing materials), and matters of a business
nature (such as the identity of customers and prospective customers, the nature of work being done for or discussed with customers
or prospective customers, suppliers, marketing techniques and materials, marketing and development plans, pricing or pricing policies,
financial information, plans for further development, and any other information of a similar nature not available to the public).

 

"Confidential
Information" shall not include information that: (a) was in Employee's possession or in the public domain before receipt
from the Company, as evidenced by the then existing publication or other public dissemination of such information in written or
other documentary form; (b) becomes available to the public through no fault of Employee; (c) is received in good faith by Employee
from a third party who is not subject to an obligation of confidentiality to the Company or any other party; or (d) is required
by a judicial or administrative authority or court having competent jurisdiction to be disclosed by Employee, provided that Employee
shall promptly notify the Company and allow the Company a reasonable time to oppose or limit such order.

 

2.
NON-DISCLOSURE OF CONFIDENTIAL INFORMATION OF OPTIMIZERX. Employee acknowledges that, during the period of Employee's employment
with OptimizeRx, Employee has had or will have access to Confidential Information of OptimizeRx. Therefore, Employee agrees that
both during and after the period of Employee's employment with OptimizeRx, Employee shall not, without the prior written approval
of OptimizeRx, directly or indirectly (a) reveal, report, publish, disclose or transfer any Confidential Information of OptimizeRx
to any person or entity, or (b) use any Confidential Information of OptimizeRx for any purpose or for the benefit of any person
or entity, except as may be necessary in the performance of Employee's work for OptimizeRx.

 

3.NON-DISCLOSURE
OF CONFIDENTIAL INFORMATION OF OTHERS. Employee acknowledges that, during the period of Employee's employment with OptimizeRx,
Employee may have had or will have access to Confidential Information of third parties who have given OptimizeRx the right to
use such Confidential Information, subject to a non-disclosure agreement between OptimizeRx and such third party. Therefore, Employee
agrees that both during and after the period of Employee's employment with OptimizeRx, Employee shall not, without the prior written
approval of OptimizeRx, directly or indirectly (a) reveal, report, publish, disclose or transfer any Confidential Information
of such third parties to any person or entity, or (b) use any Confidential Information of such third parties for any purpose or
for the benefit of any person or entity, except as may be necessary in the performance of Employee's work for OptimizeRx.

 

     

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4. 
PROPERTY OF OPTIMIZERX. Employee acknowledges and agrees that all Confidential Information of OptimizeRx and all reports, drawings,
blueprints, materials, data, code, notes and other documents and records, whether printed, typed, handwritten, videotaped, transmitted
or transcribed on data files or on any other type of media, and whether or not labeled or identified as confidential or proprietary,
made or compiled by Employee, or made available to Employee, during the period of Employee employment with OptimizeRx (including
the period prior to the date of this Agreement) concerning OptimizeRx's Confidential Information are and shall remain OptimizeRx's
property and shall be delivered to OptimizeRx within five (5) business days after the termination of such employment with OptimizeRx
or at any earlier time on request of OptimizeRx. Employee shall not retain copies of such Confidential Information, documents
and records.

 

5. 
PROPRIETARY NOTICES. Employee shall not, and shall not permit any other person to, remove any proprietary or other legends or
restrictive notices contained in or included in any Confidential Information.

 

6. 
INVENTIONS.

 

(a)
Employee shall promptly, from time to time, fully inform and disclose to OptimizeRx in writing all inventions, copyrightable material,
designs, improvements and discoveries of any kind which Employee now has made, conceived or developed (including prior to the
date of this Agreement), or which Employee may later make, conceive or develop, during the period of Employee's employment with
OptimizeRx, which pertain to or relate to OptimizeRx's business or any of the work or businesses carried on by OptimizeRx ("Inventions").
This covenant applies to all such Inventions, whether or not they are eligible for patent, copyright, trademark, trade secret
or other legal protection; and whether or not they are conceived and/or developed by Employee alone or with others; and whether
or not they are conceived and/or developed during regular working hours; and whether or not they are conceived and/or developed
at OptimizeRx's facility or not.

 

(b)
Inventions shall not include any inventions made, conceived or developed by Employee prior to Employee's employment with OptimizeRx,
a complete list of which is set forth on Schedule A attached.

 

(c)
All Inventions shall be the sole and exclusive property of OptimizeRx, and shall be deemed part of the Confidential Information
of OptimizeRx for purposes of this Agreement, whether or not fixed in a tangible medium of expression. Employee hereby assigns
all Employee's rights in all Inventions and in all related patents, copyrights and trademarks, trade secrets and other proprietary
rights therein to OptimizeRx. Without limiting the foregoing, Employee agrees that any copyrightable material shall be deemed
to be "works made for hire" and that OptimizeRx shall be deemed the author of such works under the United States Copyright
Act, provided that in the event and to the extent such works are determined not to constitute "works made for hire",
Employee hereby irrevocably assigns and transfers to OptimizeRx all right, title and interest in such works.

 

(d)
Employee shall assist and cooperate with OptimizeRx, both during and after the period of Employee's employment with OptimizeRx,
at OptimizeRx's sole expense, to allow OptimizeRx to obtain, maintain and enforce patent, copyright, trademark, trade secret and
other legal protection for the Inventions. Employee shall sign such documents, and do such things necessary, to obtain such protection
and to vest OptimizeRx with full and exclusive title in all Inventions against infringement by others. Employee hereby appoints
the Secretary of OptimizeRx as Employee's attorney-in-fact to execute documents on Employee's behalf for this purpose.

 

 

     

    	14
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(e)
Employee shall not be entitled to any additional compensation for any and all Inventions made during the period of Employee's
employment with OptimizeRx.

 

7.
COVENANT NOT TO COMPETE. If Employee is, at any time during Employee's period of employment with OptimizeRx, employed in the discovery
or development areas of the Company in a non-clerical position, or as a director level or higher level senior manager of the Company,
then this Section 7 shall apply. Employee and OptimizeRx agree that the services rendered by the Employee are unique and irreplaceable,
and that competitive use and knowledge of any Confidential Information would substantially and irreparably injure OptimizeRx's
business, prospects and good will. Employee and OptimizeRx also agree that OptimizeRx's business is global in nature due to the
type of products and/or services being provided. Therefore, Employee agrees that during the period of Employee's employment with
OptimizeRx and for a period of one (1) year thereafter, Employee shall not, directly or indirectly, through any other person,
firm, corporation or other entity (whether as an officer, director, employee, partner, consultant, holder of equity or debt investment,
lender or in any other manner or capacity):

 

(a)
develop, sell, market, offer to sell products and/or services anywhere in the world that have the same or similartechnology platform,
offered or sold by OptimizeRx on the date of the termination of Employee's employment with OptimizeRx for any reason;

 

(b)
solicit, induce, encourage or attempt to induce or encourage any employee or consultant of OptimizeRx to terminate his or her
employment or consulting relationship with OptimizeRx, or to breach any other obligation to OptimizeRx;

 

(c)
solicit, interfere with, disrupt, alter or attempt to disrupt or alter the relationship, contractual or otherwise, between OptimizeRx
and any consultant, contractor, customer, potential customer, or supplier of OptimizeRx; or

 

(d)
engage in or participate in any business in the same industry as OptimizeRx which is conducted under any name that shall be the
same as or similar to the name of OptimizeRx or any trade name used by OptimizeRx.

 

Employee
acknowledges that the foregoing geographic, activity and time limitations contained in this Section 7 are reasonable and properly
required for the adequate protection of OptimizeRx's business. In the event that any such geographic, activity or time limitation
is deemed to be unreasonable by a court, Employee shall submit to the reduction of either said activity or time limitation to
such activity or period as the court shall deem reasonable. In the event that Employee is in violation of the aforementioned restrictive
covenants, then the time limitation thereof shall be extended for a period of time equal to the pendency of such proceedings,
including appeals.

 

8.
REPRESENTATIONS. Employee represents that Employee has the right to enter into this Agreement, and that Employee's performance
of all the terms of this Agreement and his duties as an employee of OptimizeRx will not breach any confidential information agreement,
non-competition agreement or other agreement with any former employer of his services, either as an employee, consultant, contractor
or independent contractor, or with any other party. Employee represents that Employee will not disclose to OptimizeRx any trade
secrets or confidential or proprietary information of any third party that are not generally available to the public.

 

9.
DISCLOSURE OF THIS AGREEMENT. Employee hereby authorizes OptimizeRx to notify others, including but not limited to customers of
OptimizeRx and any of Employee's future employers, of the terms of this Agreement and Employee's responsibilities under this Agreement.

 

     

    	15
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10.
SPECIFIC PERFORMANCE. Employee acknowledges that money damages alone would not adequately compensate OptimizeRx in the event of
a breach or threatened breach by Employee of this Agreement, and that, in addition to all other remedies available to OptimizeRx
at law or in equity, OptimizeRx shall be entitled to injunctive relief for the enforcement of its rights and to an accounting
of profits made during the period of such breach.

 

11.
NO RIGHTS GRANTED. Employee understands that nothing in this Agreement shall be deemed to constitute, by implication or otherwise,
the grant by OptimizeRx to the employee of any license or other right under any patent, patent application or other intellectual
property right or interest belonging to OptimizeRx.

 

12.
SEVERABILITY.

 

(a)
Each of the covenants provided in this Agreement are separate and independent covenants. If any provision of this Agreement shall
be determined to be invalid or unenforceable, the remainder of this Agreement shall not be affected thereby and any such invalid
or unenforceable provision shall be reformed so as to be valid and enforceable to the fullest extent permitted by law.

 

(b)
It is not a defense to the enforcement of any provision of this Agreement that OptimizeRx has breached or failed to perform any
obligation or covenant hereunder or under any other agreement or understanding between Employee and OptimizeRx.

 

13.
GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of Michigan without
regard to conflict of law rules. All suits and claims shall be made only in state or federal courts located in Detroit, Michigan.

 

14.
SUPERSEDES OTHER AGREEMENTS. This Agreement contains the entire agreement of the parties with respect to subject matter hereof
and supersedes all previous agreements and understandings between the parties with respect to its subject matter.

 

15.
AMENDMENTS. This Agreement may not be changed, modified, released, discharged, abandoned or otherwise terminated in whole or in
part except by an instrument in writing, agreed to and signed by the Employee and a duly authorized officer of OptimizeRx.

 

16.
ACKNOWLEDGEMENTS. THE EMPLOYEE ACKNOWLEDGES THAT (i) THE EMPLOYEE HAS READ AND FULLY UNDERSTANDS THIS AGREEMENT; (ii) THE EMPLOYEE
HAS BEEN GIVEN THE OPPORTUNITY TO ASK QUESTIONS; (iii) THE EMPLOYEE HAS RECEIVED A COPY OF THIS AGREEMENT, THE ORIGINAL OF WHICH
WILL BE RETAINED IN THE EMPLOYEE'S PERSONNEL FILE; AND (iv) THE EMPLOYEE'S OBLIGATIONS UNDER THIS AGREEMENT SURVIVE THE TERMINATION
OF THE EMPLOYEE'S EMPLOYMENT WITH OPTIMIZERX FOR ANY REASON.

 

     

    	16
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IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth below.  

 

	OptimizeRx Corp.	 
	 	 
	/s/
    David Harrell	 
	David Harrell	 
	Chief Executive Officer	 
	OptimizeRx, Corporation.	 
	 	 
	 	 
	Date	 

 

	Employee	 
	 	 
	/s/
    William J Febbo	 
	Signature	 
	 	 
	William
    J Febbo	 
	Name Printed	 
	 	 
	2-12-16	 
	Dateexh1014

EXHIBIT 10.1.4                                                     AGGREGATE CATASTROPHE EXCESS OF LOSS AND    PER OCCURRENCE CATASTROPHE EXCESS OF LOSS    REINSURANCE CONTRACT   Issued to   EMC REINSURANCE COMPANY                

 

   Effective: January 1, 2016        2 of 15        AGGREGATE CATASTROPHE EXCESS OF LOSS AND PER OCCURRENCE   CATASTROPHE EXCESS OF LOSS REINSURANCE CONTRACT      TABLE OF CONTENTS   Article  Page          Preamble  3    1  Agreement  4    2  Retentions and Limits  4    3  Term (Continuous Contract)  4    4  Commutation  5    5  Territory  5    6  Exclusions  5    7  Trade and Economic Sanctions 5    8  Premium  5    9  Definitions 6    10  Commencement & Termination 7     11  Extra Contractual Obligations/Excess of Policy Limits  8    12  Net Retained Liability 8    13  Original Conditions 9    14  No Third Party Rights 9    15  Disputes 9    16  Jurisdiction 9    17  Currency 9    18  Indemnification and Errors and Omissions 10    19  Insolvency  10    20  Savings/Severability 11    21  Offset 11    22  Governing Law 11    23  Entire Agreement 11    24  Non-Waiver 12    25  Mode of Execution 12      Company Signing Block 13                                Attachments        Nuclear Incident Exclusion Clause - Physical Damage -   Reinsurance - U.S.A.  14                 

 

   Effective: January 1, 2016        3 of 15        AGGREGATE CATASTROPHE EXCESS OF LOSS AND PER OCCURRENCE   CATASTROPHE EXCESS OF LOSS REINSURANCE CONTRACT                           This Aggregate Catastrophe Excess of Loss and Per Occurrence Catastrophe Excess of Loss   Reinsurance Contract (the “Contract”) is hereby made by and between Employers Mutual   Casualty Company ("EMCC") as the Reinsurer and EMC Reinsurance Company ("EMC Re") as   the Reinsured or Company.                                                                                                            

 

   Effective: January 1, 2016        4 of 15              ARTICLE 1   AGREEMENT   The Reinsured (EMC Re) agrees to cede and the Reinsurer (EMCC) agrees to accept premium   and liability that may accrue as a result of Ultimate Net Loss to the extent further defined as follows   involving loss or losses caused by any natural or man caused perils, including North American   crop losses, on business in force at the inception date of this Contract, or written or renewed   during the term of this Contract, subject to the terms and conditions herein contained.    ARTICLE 2   RETENTIONS AND LIMITS   A. Annual Catastrophe Aggregate.  The Reinsurer shall be liable in respect of Cat Loss   Occurrences and excess North American crop losses during the Contract Year for Ultimate   Net Loss over and above an initial Ultimate Net Loss of Twenty Million Dollars   ($20,000,000.00) (the “Catastrophe Aggregate Retention”), subject to a limit of liability to the   Reinsurer of 80% of One Hundred Million Dollars ($100,000,000.00) of Ultimate Net Loss   (the “Annual Catastrophe Aggregate Limit”).  Thus, the Reinsurer’s maximum liability under   this annual catastrophe aggregate coverage is Eighty Million Dollars ($80,000,000.00) of   Ultimate Net Loss.       B. Per Occurrence.  The Reinsurer shall be liable in respect of each Cat Loss Occurrence   during the Contract Year for Ultimate Net Loss over and above an initial Ultimate Net Loss   of Ten Million Dollars ($10,000,000.00) (the “Per Occurrence Retention”), subject to a limit   of liability to the Reinsurer of 80% of Ten Million Dollars ($10,000,000.00) of Ultimate Net   Loss from each Cat Loss Occurrence (the “Per Occurrence Limit”).  The limit of liability to   the Reinsurer from Ultimate Net Loss under this per occurrence reinsurance is Eight Million   Dollars ($8,000,000.00), regardless of the number of Cat Loss Occurrences.    Any amount retained by the Reinsured under the per occurrence reinsurance (including the   Reinsured’s 20% co-participation) described in Article 2 Section B will be counted as   Ultimate Net Loss under the annual catastrophe aggregate reinsurance in Article 2 Section   A.     ARTICLE 3   TERM (CONTINUOUS CONTRACT)      This Contract shall take effect at 12:01 A.M. on January 1, 2016, for (a) Cat Loss Occurrences   commencing during the term of this Contract and for (b) North American Crop losses for which   crops were intended to be harvested or were harvested during the term of this Contract. The   Contract shall remain in effect for each Contract Year thereafter until cancelled.                 

 

   Effective: January 1, 2016        5 of 15        ARTICLE 4   COMMUTATION   Commutation of amounts due under this Contract will be accomplished through mutual   agreement of the parties within 2 years of the Contract inception, and subsequent annual   renewal(s).      ARTICLE 5   TERRITORY   The territorial limits of this Contract shall be identical to the territory limits of the original   Reinsurance Treaties.   ARTICLE 6   EXCLUSIONS   This Contract shall not apply to and specifically excludes:   A. Loss or damage occasioned by war, invasion, hostilities, acts of foreign enemies, civil war,   rebellion, insurrection, military or usurped power, martial law or confiscation by order of any   government or public authority, but not excluding loss or damage which would be covered   under a standard form of Policy containing a standard war exclusion clause or specific War   Coverage provided in Marine policies;   B. Mold, other than as a result of a covered peril.      ARTICLE 7   TRADE AND ECONOMIC SANCTIONS   Whenever potential coverage provided by this Contract is considered in violation of any   applicable economic or trade sanctions, any such coverage will be modified to conform to   applicable law.      ARTICLE 8   PREMIUM   A. The Company shall pay the Reinsurer a premium of Three Million One Hundred Forty   Thousand Dollars ($3,140,000.00) for the annual catastrophe aggregate reinsurance   protection provided under Article 2 Section A of this Contract (the “Annual Catastrophe   Aggregate Premium”).  The Annual Catastrophe Aggregate Premium will be renegotiated   on an annual basis for each Contract Year the Contract remains in place.  The Annual   Catastrophe Aggregate Premium is to be paid quarterly.  Balances will be settled during the   duration of the Contract via intercompany balance transfers.     

 

   Effective: January 1, 2016        6 of 15        B. The Company shall pay the Reinsurer a premium of One Million Nine Hundred Forty   Thousand Dollars ($1,940,000.00) for the per occurrence reinsurance protection provided   under Article 2 Section B of this Contract (the “Per Occurrence Premium”).  The Per   Occurrence Premium will be renegotiated on an annual basis for each Contract Year the   Contract remains in place.  The Per Occurrence Premium is to be paid quarterly.  Balances   will be settled during the duration of the Contract via intercompany balance transfers.   C. The Company shall furnish the Reinsurer with such information as may be required by the   Reinsurer for completion of its financial statements.      ARTICLE 9   DEFINITIONS   A. 1. “Ultimate Net Loss” means the catastrophe losses paid by the Reinsured or which the   Reinsured becomes liable to pay arising out of "Reinsurance Treaties."  Such loss   includes Loss Adjustment Expense, Extra Contractual Obligations and any Loss in   Excess of Policy Limits as defined in the Extra Contractual Obligations/Excess of   Policy Limits Article, less any reinsurance recoveries.      Additionally, “Ultimate Net Loss” to the annual catastrophe aggregate coverage set   out in Article 2 Section A includes only Cat Loss Occurrences in which the Reinsured’s   ultimate net loss exceeds $500,000 (“Franchise Deductible”), it being understood that   once a Cat Loss Occurrence exceeds $500,000 of net loss, the entire amount of net   loss from that Cat Loss Occurrence shall be included in the definition.  “Ultimate Net   Loss” to the annual catastrophe aggregate coverage set out in Article 2 Section A also   includes North American crop losses incurred by the Reinsured in excess of a   $10,000,000 crop loss deductible.        2. Salvages and all recoveries (including amounts due from all other reinsurance   contracts that inure to the benefit of this Contract), shall be first deducted from such   loss to arrive at the amount of liability attaching hereunder.   3. All salvages, recoveries or payments recovered or received subsequent to loss   settlement hereunder shall be applied as if recovered or received prior to the aforesaid   settlement, and all necessary adjustments shall be made by the parties hereto.   4. The Company shall be deemed to be “liable to pay” a loss when a judgment has been   rendered that neither the Company [for direct reinsurance business] nor EMCC [for   assumed reinsurance business] plans to appeal, and/or the Company or EMCC has   obtained a release, and/or the Company or EMCC has accepted a proof of loss.   5. Nothing in this clause shall be construed to mean that losses are not recoverable   hereunder until the Company’s Ultimate Net Loss has been ascertained.   B. “Loss Adjustment Expense” means costs and expenses incurred or assumed by the   Company in connection with the investigation, appraisal, adjustment, settlement, litigation,   defense or appeal of a specific claim or loss, or alleged loss, including but not limited to:   1. court costs;     

 

   Effective: January 1, 2016        7 of 15        2. costs of supersedeas and appeal bonds;   3. monitoring counsel expenses;   4. legal expenses and costs incurred in connection with coverage questions and legal   actions connected thereto, including but not limited to declaratory judgment actions;   5. post-judgment interest;   6. pre-judgment interest, unless included as part of an award or judgment; and   7. subrogation, salvage and recovery expenses.   “Loss Adjustment Expense” does not include salaries and expenses of EMCC’s employees,   and office and other overhead expenses.   C. 1. "Cat Loss Occurrence(s)" shall mean any one accident, casualty, disaster, or   occurrence or series of accidents, casualties, disasters or occurrences arising out of   or following from one event and coded as such in EMCC’s claims and/or accounting   system records.            2      A “Cat Loss Occurrence” must be composed of more than one Reinsurance Treaty.         D.     “Contract Year” means the period from January 1, 2016 through December 31, 2016, and   each respective 12-month period thereafter that this Contract continues in force shall be a   separate Contract Year.  If this Contract is terminated, however, the final Contract Year shall be   from the beginning of the then current Contract Year through the date of termination.  In the event   this Contract expires or is terminated on a run-off basis, the run-off period shall be considered   part of the Contract Year ending on the date of expiration or termination.   E “Reinsurance Treaty(ies)” means any binder or contract of reinsurance issued,              accepted or held covered provisionally or otherwise, by or on behalf of the Company, and any   reinsurance business assumed by the Company through its quota share agreement with EMCC.       ARTICLE 10   COMMENCEMENT AND TERMINATION   A. This Contract shall take effect at 12:01 A.M. on January 1, 2016, applying to losses   occurring, or claims made, as applicable, during the term of this Contract and shall remain in   force for an indefinite period but may be terminated on any January 1 by either party giving to   the other party 90 days’ prior notice.   B. At termination of this Contract, the Reinsurer shall be released from liability for losses   occurring after termination.   C. In the event that this Contract is terminated for any reason, the Reinsurer shall notify the   Iowa Insurance Division.       

 

   Effective: January 1, 2016        8 of 15           ARTICLE 11   EXTRA CONTRACTUAL OBLIGATIONS/EXCESS OF POLICY LIMITS   A. This Contract shall cover Extra Contractual Obligations, as provided in the definition of   Ultimate Net Loss.  “Extra Contractual Obligations” shall be defined as those liabilities not   covered under any other provision of this Contract and that arise from the handling of any   claim on business covered hereunder, such liabilities arising because of, but not limited to,   the following:  failure by the Company or EMCC to settle within the policy limit, or by reason   of alleged or actual negligence, fraud or bad faith in rejecting an offer of settlement, or in the   preparation of the defense or in the trial of any action against its insured or reinsured, or in   the preparation or prosecution of an appeal consequent upon such action.   B. This Contract shall cover Loss in Excess of Policy Limits, as provided in the definition of   Ultimate Net Loss.  “Loss in Excess of Policy Limits” shall be defined as Loss in excess of   the policy limit, having been incurred because of, but not limited to, failure by the Company   or EMCC to settle within the policy limit or by reason of alleged or actual negligence, fraud   or bad faith in rejecting an offer of settlement, or in the preparation of the defense or in the   trial of any action against its insured or reinsured, or in the preparation or prosecution of an   appeal consequent upon such action.   C. An Extra Contractual Obligation and/or Loss in Excess of Policy Limits shall be deemed to   have occurred on the same date as the loss covered under the Company's or EMCC’s   policy, and shall constitute part of the original loss.   D. For the purposes of the Loss in Excess of Policy Limits coverage hereunder, the word “Loss”   shall mean any amounts for which the Company or EMCC would have been contractually   liable to pay had it not been for the limit of the original policy.   E. Loss Adjustment Expense in respect of Extra Contractual Obligations and/or Loss in Excess   of Policy Limits shall be covered hereunder in the same manner as other Loss Adjustment   Expense.   F. However, this Article shall not apply where the loss has been incurred due to final legal   adjudication of fraud of a member of the Board of Directors or a corporate officer of the   Company or EMCC acting individually, collectively or in collusion with any individual or   corporation or any other organization or party involved in the presentation, defense or   settlement of any claim covered hereunder.   G. In no event shall coverage be provided to the extent not permitted under law.      ARTICLE 12   NET RETAINED LIABILITY   This Contract applies only to that portion of any loss that the Company retains net for its own   account.     

 

   Effective: January 1, 2016        9 of 15           ARTICLE 13   ORIGINAL CONDITIONS   All reinsurance under this Contract shall be subject to the same terms, conditions, waivers and   interpretations, and to the same modifications and alterations as the respective Reinsurance   Treaties of EMCC and the Reinsured.  However, in no event shall this be construed in any way   to provide coverage outside the terms and conditions set forth in this Contract.   ARTICLE 14   NO THIRD PARTY RIGHTS   This Contract is solely between the Reinsured and the Reinsurer, and in no instance shall any   insured, claimant or other third party have any rights under this Contract except as may be   expressly provided otherwise herein.   ARTICLE 15   DISPUTES   Any disputes arising out of the interpretation of this Contract shall be submitted to the respective   Inter-Company Committees of the boards of directors of EMCC and EMC Insurance Group Inc.   pursuant to the terms of the charters of the Inter-Company Committees then in effect for final   and binding resolution.      ARTICLE 16   JURISDICTION   If EMCC, as the assuming reinsurer, fails to perform its obligations under the terms of this Contract   then EMCC, at EMC Re’s request, shall agree (a) to submit itself to the jurisdiction of any state   court in the State of Iowa, as state courts in the State of Iowa shall have jurisdiction over any   dispute between the parties related to this Contract, (b) to comply with all requirements necessary   to give the court jurisdiction, and (c) to abide by the final decision of the court or any appellate   court if there is an appeal.      ARTICLE 17   CURRENCY   A. Where the word “Dollars” and/or the sign “$” appear in this Contract, they shall mean United   States Dollars, and all payments hereunder shall be in United States Dollars.   B. For purposes of this Contract, where the Company or EMCC receives premiums or pays   losses in currencies other than United States Dollars, such premiums or losses shall be   converted into United States Dollars at the actual rates of exchange at which these   premiums or losses are entered in EMCC’s books.     

 

   Effective: January 1, 2016        10 of 15           ARTICLE 18   INDEMNIFICATION AND ERRORS AND OMISSIONS   A. The Reinsurer is reinsuring, subject to the terms and conditions of this Contract, the   obligations assumed by the Reinsured under any Reinsurance Treaties.  The Reinsurer   shall be bound by the judgment of the Company as to the obligation(s) and liability(ies) of   the Company under any Reinsurance Treaties.   B. Any inadvertent error, omission or delay in complying with the terms and conditions of this   Contract shall not be held to relieve either party hereto from any liability that would attach to   it hereunder if such error, omission or delay had not been made, provided such error,   omission or delay is rectified immediately upon discovery.      ARTICLE 19   INSOLVENCY   A. In the event of insolvency and the appointment of a conservator, liquidator or statutory   successor of the Company, the portion of any risk or obligation assumed by the Reinsurer   shall be payable to the conservator, liquidator or statutory successor on the basis of claims   allowed against the insolvent Company by any court of competent jurisdiction or by any   conservator, liquidator or statutory successor of the Company having authority to allow such   claims, without diminution because of that insolvency, or because the conservator, liquidator   or statutory successor has failed to pay all or a portion of any claims.      B. Payments by the Reinsurer as above set forth shall be made directly to the Company or to its   conservator, liquidator or statutory successor, except as provided by applicable law and   regulation in the event of the insolvency of the Company.      C. In the event of the insolvency of the Reinsurer, the liquidator, receiver, conservator or statutory   successor of the Reinsurer shall notify the Company of the pendency of a claim against the   insolvent Reinsurer on the Contract or contracts reinsured within a reasonable time after such   claim is filed in the insolvency proceeding and, during the pendency of such claim, the   Company may investigate such claim and interpose, at its own expense, in the proceeding   where such claim is to be adjudicated any defense or defenses which it may deem available   to the Reinsurer or its liquidator, receiver, conservator or statutory successor.        D. The original reinsured or policyholder shall not have any rights against the Reinsurer which   are not specifically set forth in this Contract, or in a specific agreement between the Reinsurer   and the original reinsured or policyholder.          

 

   Effective: January 1, 2016        11 of 15        ARTICLE 20   SAVINGS/SEVERABILITY   If any provision of this Contract shall be rendered illegal or unenforceable by the laws, regulations   or public policy of any state, such provision shall be considered void in such state, but this shall   not affect the validity or enforceability of any other provision of this Contract, nor the enforceability   of such provision in any other jurisdiction.  In no event shall coverage be provided to the extent   that such coverage is not permitted under Iowa law.  However, no provisions under this Article   shall render any provisions of paragraph B of the Exclusions Article inoperable.       ARTICLE 21   OFFSET   EMCC and EMC Re shall have the right to offset any balance or amounts due from one party to   the other under the terms of this Contract and the quota share agreement described in Article 9   Section E of this Contract.  The party asserting the right of offset may exercise such right any time   whether the balances due are on account of premiums or losses or otherwise. In the event of the   insolvency of any party, offset shall be as permitted by applicable law.      ARTICLE 22   GOVERNING LAW   This Contract shall be governed as to performance, administration and interpretation by the laws   of the State of Iowa, exclusive of conflict of law rules.  However, with respect to credit for   reinsurance, the rules of all applicable states shall apply.      ARTICLE 23   ENTIRE AGREEMENT   This Contract sets forth all of the duties and obligations between the Company and the Reinsurer   and supersedes any and all prior or contemporaneous written agreements with respect to matters   referred to in this Contract.  This Contract may not be modified or changed except by an   amendment to this Contract in writing signed by both parties, and any modification or amendment   to this Contract must receive prior approval from the Iowa Insurance Division to be effective.    However, this Article shall not be construed as limiting the admissibility of evidence regarding the   formation, interpretation, purpose or intent of this Contract.     

 

   Effective: January 1, 2016        12 of 15        ARTICLE 24   NON-WAIVER   The failure of the Company or the Reinsurer to insist on compliance with this Contract or to   exercise any right or remedy shall not constitute a waiver of any rights contained in this Contract   nor prevent either party from thereafter demanding full and complete compliance nor prevent   either party from exercising such remedy in the future.      ARTICLE 25   MODE OF EXECUTION   A. This Contract may be executed by:   1. an original written ink signature of paper documents;   2. an exchange of facsimile copies showing the original written ink signature of paper   documents;   3. electronic signature technology employing computer software and a digital signature   or digitizer pen pad to capture a person’s handwritten signature in such a manner that   the signature is unique to the person signing, is under the sole control of the person   signing, is capable of verification to authenticate the signature and is linked to the   document signed in such a manner that if the data is changed, such signature is   invalidated.   B. The use of any one or a combination of these methods of execution shall constitute a legally   binding and valid signing of this Contract.  This Contract may be executed in one or more   counterparts, each of which, when duly executed, shall be deemed an original.                                

 

   Effective: January 1, 2016        13 of 15        In WITNESS WHEREOF, the parties hereto, by their respective duly authorized officers, have   executed this Aggregate Catastrophe Excess of Loss and Per Occurrence Catastrophe Excess   of Loss Reinsurance Contract on the dates recorded below.      EMC Reinsurance Company                               Employers Mutual Casualty Company               By:      /s/ Ron D. Hallenbeck                            By:     /s/ Bruce G. Kelley                                    Ron D. Hallenbeck     Bruce G. Kelley    President      President & CEO         Date:   February 15, 2016                                 Date:       February 15, 2016                                                              

 

   Effective: January 1, 2016        14 of 15        NUCLEAR INCIDENT EXCLUSION CLAUSE - PHYSICAL DAMAGE - REINSURANCE -   U.S.A.   1. This Reinsurance does not cover any loss or liability accruing to the Reassured, directly or   indirectly, and whether as Insurer or Reinsurer, from any Pool of Insurers or Reinsurers   formed for the purpose of covering Atomic or Nuclear Energy risks.   2. Without in any way restricting the operation of paragraph (1) of this clause, this Reinsurance   does not cover any loss or liability accruing to the Reassured, directly or indirectly and   whether as Insurer or Reinsurer, from any insurance against Physical Damage (including   business interruption or consequential loss arising out of such Physical Damage) to:   I. Nuclear reactor power plants including all auxiliary property on the site, or   II. Any other nuclear reactor installation, including laboratories handling radioactive   materials in connection with reactor installations, and “critical facilities” as such, or   III. Installations for fabricating complete fuel elements or for processing substantial   quantities of “special nuclear material”, and for reprocessing, salvaging, chemically   separating, storing or disposing of “spent” nuclear fuel or waste materials, or   IV. Installations other than those listed in paragraph (2) III above using substantial   quantities of radioactive isotopes or other products of nuclear fission.   3. Without in any way restricting the operations of paragraphs (1) and (2) hereof, this   Reinsurance does not cover any loss or liability by radioactive contamination accruing to the   Reassured, directly or indirectly, and whether as Insurer or Reinsurer, from any insurance   on property which is on the same site as a nuclear reactor power plant or other nuclear   installation and which normally would be insured therewith except that this paragraph (3)   shall not operate:   (a) where Reassured does not have knowledge of such nuclear reactor power plant or   nuclear installation, or   (b) where said insurance contains a provision excluding coverage for damage to property   caused by or resulting from radioactive contamination, however caused. However on   and after 1st January 1960 this sub-paragraph (b) shall only apply provided the said   radioactive contamination exclusion provision has been approved by the   Governmental Authority having jurisdiction thereof.   4. Without in any way restricting the operations of paragraphs (1), (2) and (3) hereof, this   Reinsurance does not cover any loss or liability by radioactive contamination accruing to the   Reassured, directly or indirectly, and whether as Insurer or Reinsurer, when such   radioactive contamination is a named hazard specifically insured against.   5. It is understood and agreed that this clause shall not extend to risks using radioactive   isotopes in any form where the nuclear exposure is not considered by the Reassured to be   the primary hazard.   6. The term “special nuclear material” shall have the meaning given it in the Atomic Energy Act   of 1954 or by any law amendatory thereof.   7. Reassured to be sole judge of what constitutes:     

 

   Effective: January 1, 2016        15 of 15        (a) substantial quantities, and   (b) the extent of installation, plant or site.   Note:  Without in any way restricting the operation of paragraph (1) hereof, it is understood and   agreed that   (a) all policies issued by the Reassured on or before 31st December 1957 shall be free   from the application of the other provisions of this Clause until expiry date or   31st December 1960 whichever first occurs whereupon all the provisions of this Clause   shall apply.   (b) with respect to any risk located in Canada policies issued by the Reassured on or   before 31st December 1958 shall be free from the application of the other provisions   of this Clause until expiry date or 31st December 1960 whichever first occurs   whereupon all the provisions of this Clause shall apply.   12/12/57   NMA 1119      NOTES: Wherever used herein the terms:   “Reassured” shall be understood to mean “Company”, “Reinsured”, “Reassured”   or whatever other term is used in the attached reinsurance   document to designate the reinsured company or companies.    “Reinsurers” shall be understood to mean “Reinsurers”, “Underwriters” or   whatever other term is used in the attached reinsurance document   to designate the reinsurer or reinsurers.

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