10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2010.

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Commission File Number 1-8635

AMERICAN MEDICAL ALERT CORP.

(Exact Name of Registrant as Specified in its Charter)

New York	11-2571221
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification Number)

3265 Lawson Boulevard, Oceanside, New York 11572

(Address of principal executive offices)

(Zip Code)

(516) 536-5850

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x  No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the  preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ¨No ¨

Indicate by check mark whether registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨	Accelerated filer ¨
Non-accelerated filer ¨ (Do not check if a smaller reporting company)	Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 on the Exchange Act).

Yes ¨   No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 9,515,148 shares of $.01 par value common stock as of August 13, 2010.

AMERICAN MEDICAL ALERT CORP. AND SUBSIDIARIES

	INDEX	PAGE
Part I  Financial Information
	Report of Independent Registered Public Accounting Firm	1
	Condensed Consolidated Balance Sheets for June 30, 2010 and December 31, 2009	2
	Condensed Consolidated Statements of Income for the Six Months Ended June 30, 2010 and 2009	3
	Condensed Consolidated Statements of Income for the Three Months Ended June 30, 2010 and 2009	4
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2010 and 2009	5
	Notes to Condensed Consolidated Financial Statements	7
	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
	Quantitative and Qualitative Disclosures About Market Risk	33
	Controls and Procedures	34
Part II  Other Information		34

 

Report of Independent Registered Public Accounting Firm

Board of Directors and Shareholders

American Medical Alert Corp. and Subsidiaries

Oceanside, New York

We have reviewed the accompanying condensed consolidated balance sheet of American Medical Alert Corp. and Subsidiaries (the “Company”) as of June 30, 2010 and the related condensed consolidated statements of income for the six-month and three-month periods ended June 30, 2010 and 2009 and cash flows for the six-months ended June 30, 2010 and 2009. These interim financial statements are the responsibility of the Company's management.

We conducted our reviews in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should be made to the condensed consolidated interim financial statements referred to above for them to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of American Medical Alert Corp. and Subsidiaries as of December 31, 2009, and the related consolidated statements of income, shareholders’ equity and cash flows for the year then ended (not presented herein), and in our report dated March 31, 2010 we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2009 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

/s/ Margolin, Winer & Evens LLP

Margolin, Winer & Evens LLP

Garden City, New York

August 16, 2010

1

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

AMERICAN MEDICAL ALERT CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	June 30, 2010 (Unaudited)			Dec. 31, 2009
ASSETS
CURRENT ASSETS
Cash	$	4,073,441		$	5,498,448
Accounts receivable
(net of allowance for doubtful accounts of $581,000 and $582,500)		6,103,717			6,277,247
Inventory		1,140,308			1,105,727
Prepaid income taxes		261,150			134,081
Prepaid expenses and other current assets		484,387			345,465
Deferred income taxes		298,000			419,000
Total Current Assets		12,361,003			13,779,968
FIXED ASSETS
(net of accumulated depreciation and amortization)		7,769,189			8,756,827
OTHER ASSETS
Intangible assets
(net of accumulated amortization of $6,529,741 and $6,080,825)		1,577,095			2,026,011
Goodwill (net of accumulated amortization of $58,868)		10,294,281			10,255,983
Investment in limited liability company		4,014,604			-
Other assets (including inventory of $281,549 in 2010)		1,285,780			1,009,835
		17,171,760			13,291,829
TOTAL ASSETS	$	37,301,952		$	35,828,624
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt	$	660,000		$	1,301,667
Accounts payable		765,885			621,235
Accounts payable – acquisitions		-			35,048
Accrued expenses		1,650,890			1,698,320
Dividends payable		-			950,364
Deferred revenue		196,166			227,004
Total Current Liabilities		3,272,941			4,833,638
DEFERRED INCOME TAX LIABILITY		1,114,000			1,235,000
LONG-TERM DEBT, Net of Current Portion		2,510,000			1,195,000
CUSTOMER DEPOSITS		117,199			126,449
ACCRUED RENTAL OBLIGATION		556,750			522,154
TOTAL LIABILITIES		7,570,890			7,912,241
COMMITMENTS AND CONTINGENT LIABILITIES		-			-
SHAREHOLDERS’ EQUITY
Preferred stock, $.01 par value – authorized, 1,000,000 shares; none issued and outstanding		-			-
Common stock, $.01 par value – authorized 20,000,000 shares; issued 9,603,575 shares in 2010 and 9,568,087 shares in 2009		96,036			95,681
Additional paid-in capital		16,500,664			16,296,615
Retained earnings		13,270,939			11,660,664
		29,867,639			28,052,960
Less treasury stock, at cost (48,573 shares in 2010 and 2009)		(136,577	)		(136,577	)
Total Shareholders’ Equity		29,731,062			27,916,383
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	37,301,952		$	35,828,624

See accompanying notes to condensed financial statements.

 

2

AMERICAN MEDICAL ALERT CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Six Months Ended June 30,
	2010			2009
Revenues:
Services	$	19,264,763		$	19,016,754
Product sales		358,629			431,541
		19,623,392			19,448,295
Costs and Expenses (Income):
Costs related to services		8,878,500			8,985,373
Costs of products sold		167,830			199,134
Selling, general and administrative expenses		7,765,084			7,993,190
Interest expense		26,267			44,302
Equity in net loss from investment in limited liability company		116,127			-
Other income		(59,691	)		(116,339	)
Income before Provision for Income Taxes		2,729,275			2,342,635
Provision for Income Taxes		1,119,000			961,000
NET INCOME	$	1,610,275		$	1,381,635
Net income per share:
Basic	$	.17		$	.15
Diluted	$	.16		$	.14
Weighted average number of common shares outstanding:
Basic		9,537,894			9,461,888
Diluted		9,835,180			9,651,024

See accompanying notes to condensed financial statements.

3

AMERICAN MEDICAL ALERT CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Three Months Ended June 30,
	2010			2009
Revenues:
Services	$	9,556,032		$	9,358,248
Product sales		156,113			159,958
		9,712,145			9,518,206
Costs and Expenses (Income):
Costs related to services		4,447,545			4,469,407
Costs of products sold		75,346			78,132
Selling, general and administrative expenses		3,857,251			3,940,743
Interest expense		13,836			20,620
Equity in net loss from investment in limited liability company		116,127			-
Other income		(29,863	)		(22,081	)
Income before Provision for Income Taxes		1,231,903			1,031,385
Provision for Income Taxes		509,000			423,000
NET INCOME	$	722,903		$	608,385
Net income per share:
Basic	$	.08		$	.06
Diluted	$	.07		$	.06
Weighted average number of common shares outstanding
Basic		9,549,355			9,469,908
Diluted		9,828,473			9,720,829

See accompanying notes to condensed financial statements.

4

AMERICAN MEDICAL ALERT CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six Months Ended June 30,
	2010			2009
Cash Flows From Operating Activities:
Net income	$	1,610,275		$	1,381,635
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		1,842,231			2,041,165
Loss on write off of fixed assets		-			391
Stock compensation charge		160,419			178,507
Equity in net loss from investment in limited liability company		116,127			-
Decrease (increase) in:
Accounts receivable		173,530			433,424
Inventory		(226,445	)		4,351
Prepaid income taxes		(127,069	)		26,172
Prepaid expenses and other current assets		(206,876	)		127,439
Increase (decrease) in:
Accounts payable, accrued expenses and other		122,566			394,722
Deferred revenue		(30,838	)		(22,314	)
Net Cash Provided by Operating Activities		3,433,920			4,565,492
Cash Flows From Investing Activities:
Expenditures for fixed assets		(400,624	)		(707,475	)
Repayment of notes receivable		-			13,990
Deposit on equipment		(21,875	)		-
Purchase – other		-			(15,099	)
Payment of Investment in limited liability company		(4,130,731	)		-
Decrease in other assets		5,065			31,401
Net Cash Used In Investing Activities		(4,548,165	)		(677,183	)
Cash Flows From Financing Activities:
Proceeds from long-term debt		2,000,000			-
Repayment of long-term debt		(1,326,667	)		(1,163,282	)
Payment of accounts payable - acquisitions		(73,346	)		(151,600	)
Proceeds upon exercise of stock options		43,985			-
Payment of loan financing costs		(4,370	)		-
Dividends paid		(950,364	)		-
Net Cash Used In Financing Activities		(310,762	)		(1,314,882	)

See accompanying notes to condensed financial statements.

5

AMERICAN MEDICAL ALERT CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Unaudited)

	Six Months Ended June 30,
	2010			2009
Net Increase (decrease) in Cash	$	(1,425,007	)	$	2,573,427
Cash, Beginning of Period		5,498,448			2,473,733
Cash, End of Period	$	4,073,441		$	5,047,160
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
CASH PAID DURING THE PERIOD FOR INTEREST	$	26,014		$	44,693
CASH PAID DURING THE PERIOD FOR INCOME TAXES	$	1,274,617		$	819,830
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING
AND FINANCING ACTIVITIES:
Accounts Payable – acquisitions / additional goodwill
- American Mediconnect Inc.	$	38,298		$	203,148
Other assets, deposits on equipment transferred to
fixed assets		-			195,103
Other assets, deposits on product transferred to inventory	$	89,685			-

See accompanying notes to condensed financial statements.

6

AMERICAN MEDICAL ALERT CORP. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. General:

These financial statements should be read in conjunction with the financial statements and notes thereto for the year ended December 31, 2009 included in the Company’s Annual Report on Form 10-K.

2. Results of Operations:

The accompanying condensed consolidated financial statements include the accounts of American Medical Alert Corp. and its wholly-owned subsidiaries; together the “Company.”  All material inter-company balances and transactions have been eliminated.

In the opinion of management, the accompanying unaudited condensed financial statements contain all adjustments (consisting only of normal recurring accruals) necessary to present fairly the financial position as of June 30, 2010 and the results of operations and cash flows for the six months ended June 30, 2010 and 2009.

The accounting policies used in preparing these financial statements are the same as those described in the December 31, 2009 financial statements except as noted below.

The Company owns a minority interest of approximately 10% in an unconsolidated limited liability company.  The Company’s investment in the unconsolidated limited liability company is recorded using the equity method of accounting, whereby the original investment is recorded at cost and subsequently adjusted for contributions, distributions, and net income (loss) attributable to such limited liability company.  All income and loss are allocated to the limited liability company members in accordance with the terms of the limited liability company agreement.

Certain amounts in the 2009 condensed consolidated financial statements have been reclassified to conform to the 2010 presentation.

The results of operations for the six and three months ended June 30, 2010 are not necessarily indicative of the results to be expected for any other interim period or for the full year.

3. Recent Accounting Pronouncements:

During the third quarter of 2009, the Company adopted ASC Topic 105, Generally Accepted Accounting Principles, which establishes the FASB Accounting Standards Codification (“ASC”) as the sole source of authoritative generally accepted accounting principles ("GAAP") to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission ("SEC") under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. The codification did not change GAAP but reorganizes the literature. References for FASB guidance throughout this document have been updated for the codification.

7

4. Accounting for Stock-Based Compensation:

Stock based compensation is recorded in accordance with ASC Topic 718 (formerly SFAS No. 123 (R), Share-Based Payment), which requires the measurement and recognition of compensation expense for all share-based payments to employees, including grants of stock and employee stock options, based on estimated fair values.

No options were granted during the six month period ended June 30, 2010 and the Company granted options to purchase 15,000 shares of common stock during the six month period ended June 30, 2009.

The following tables summarize stock option activity for the six months ended June 30, 2010 and 2009.

	2010
						Weighted
						Average
				Weighted		Remaining		Aggregate
	Number of			Average		Contractual		Intrinsic
	Options			Option Price		Term (years)		Value
Balance at January 1		894,785		$	4.29
Granted		-			-
Exercised		(10,325	)		4.26
Expired/Forfeited		-			-
Balance at June 30		884,460		$	4.29		2.00	$	1,565,633
Vested and exercisable		851,760		$	4.23		1.92	$	1,561,911

 

8

	2009
						Weighted
						Average
				Weighted		Remaining		Aggregate
	Number of			Average		Contractual		Intrinsic
	Options			Option Price		Term (years)		Value
Balance at January 1		877,235		$	4.25
Granted		15,000			5.72
Exercised		-			-
Expired/Forfeited		(6,650	)		5.35
Balance at June 30		885,585		$	4.27		2.98	$	1,387,149
Vested and exercisable		870,585		$	4.24		2.95	$	1,387,149

The aggregate intrinsic value of options exercised during the six months ended June 30, 2010 was $24,560. No options were exercised during the six months ended June 30, 2009.  There were 32,700 and 15,000 nonvested stock options outstanding as of June 30, 2010 and 2009, respectively.

The following table summarizes stock-based compensation expense related to all share-based payments recognized in the condensed consolidated statements of income.

	Three Months			Three Months
	Ended June 30,			Ended June 30,
	2010			2009
Stock options	$	-		$	6,250
Stock grants – other		10,882			22,880
Service based awards		32,037			33,845
Performance based awards		37,294			29,400
Tax benefit		(33,098	)		(37,909	)
Stock-based compensation expense, net of tax	$	47,115		$	54,466

	Six Months			Six Months
	Ended June 30,			Ended June 30,
	2010			2009
Stock options	$	-		$	6,250
Stock grants – other		21,759			45,767
Service based awards		64,072			67,690
Performance based awards		74,588			58,800
Tax benefit		(65,772	)		(73,224	)
Stock-based compensation expense, net of tax	$	94,647		$	105,283

Stock Grants - Other

Effective January 1, 2010, the non-employee members of the Board of Directors have an option to elect either shares of common stock or cash at the end of each quarter as compensation for services provided as members of the Board of Directors and other committees.    Prior to 2010, the non-employee members of the Board of Directors were granted shares of common stock at the end of each quarter as compensation for services provided as members of the Board of Directors and other committees.  Share grants issued vest immediately, but are subject to a one year restriction on transfer.  In addition, stock grants may be issued to employees at the Board of Directors’ discretion.

9

Service Based Awards

In January 2006, May 2007 and January 2009 the Company granted 50,000, 22,000 and 12,000 (net of 9,500 shares waived by an executive) restricted shares, respectively, to certain executives in respect of services rendered but at no monetary cost.  These shares vest over periods ranging from 3 to 5 years, on December 31 of each year.  The Company records the compensation expense on a straight-line basis over the vesting period.  Fair value for restricted stock awards is based on the Company's closing common stock price on the date of grant.As of June 30, 2010 and 2009 there were 63,000 and 41,000 shares vested, respectively.  The aggregate grant date fair value of restricted stock grants was $547,660.As of June 30, 2010 and 2009, the Company had $68,308 and $234,171, respectively, of total unrecognized compensation costs related to nonvested restricted stock units expected to be recognized over a weighted average period of six months.

Performance Based Awards

In January 2006 and May 2007, respectively, the Company granted share awards for 90,000 shares (up to 18,000 shares per year through December 31, 2010) and 46,000 shares (up to 11,500 shares per year through December 31, 2010) to certain executives.  Vesting of such shares is contingent upon the Company achieving certain specified consolidated gross revenue and Earnings before Interest and Taxes (“EBIT”) objectives in each of the next four fiscal years ending December 31. The fair value of the performance shares (aggregate value of $909,400) is based on the closing trading value of the Company’s stock on the date of grant and assumes that performance goals will be achieved.  The fair value of the shares is expensed over the performance period for those shares that are expected to ultimately vest.  If such objectives are not met, no compensation cost is recognized and any recognized compensation cost is reversed. As of June 30, 2010 and 2009, 57,250 and 29,750 shares were vested, respectively.  As of June 30, 2010 and 2009, there was $74,588 and $300,593, respectively, of total unrecognized compensation costs related to nonvested share awards; that cost is expected to be recognized over a period of six months.

5. Earnings Per Share:

Earnings per share data for the six and three months ended June 30, 2010 and 2009 is presented in conformity with ASC Topic 250 (formerly SFAS No. 128, Earnings Per Share).

The following table is a reconciliation of the numerators and denominators in computing earnings per share:

10

	Income		Shares		Per-Share
Six Months Ended June 30, 2010	(Numerator)		(Denominator)		Amounts
Basic EPS - Income available to
common stockholders	$	1,610,275		9,537,894	$	.17
Effect of dilutive securities -
Options and warrants		-		297,286
Diluted EPS - Income available to
common stockholders and
assumed conversions	$	1,610,275		9,835,180	$	.16
Three Months Ended June 30, 2010
Basic EPS -Income available to
common stockholders	$	722,903		9,549,355	$	.08
Effect of dilutive securities -
Options and warrants		-		279,118
Diluted EPS - Income available to
common stockholders and
assumed conversions	$	722,903		9,828,473	$	.07
Six Months Ended June 30, 2009
Basic EPS - Income available to
common stockholders	$	1,381,635		9,461,888	$	.15
Effect of dilutive securities -
Options		-		189,136
Diluted EPS - Income available to
common stockholders and
assumed conversions	$	1,381,635		9,651,024	$	.14
Three Months Ended June 30, 2009
Basic EPS -Income available to
common stockholders	$	603,385		9,469,908	$	.06
Effect of dilutive securities -
Options		-		250,921
Diluted EPS - Income available to
common stockholders and
assumed conversions	$	603,385		9,720,829	$	.06

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6. Goodwill

Changes in the carrying amount of goodwill, all of which relates to the Company’s TBCS segment, for the six months ended June 30, 2010 and 2009 are as follows:

Six Months Ended June 30, 2010
Balance as of January 1, 2010	$	10,255,983
Additional Goodwill		38,298
Balance as of June 30, 2010	$	10,294,281
Six Months Ended June 30, 2009
Balance as of January 1, 2009	$	9,996,152
Additional Goodwill		203,148
Balance as of June 30, 2009	$	10,199,300

The addition to goodwill during the six months ended June 30, 2010 and 2009 relates to the additional purchase price of American Mediconnect, Inc. based on the cash receipts from the clinical trials portion of the business.

7. Investment in limited liability company

On May 12, 2010, the Company entered into a limited liability company agreement with Hughes Telematics, Inc. and Qualcomm Incorporated to design, develop, finance and operate a mobile PERS system.  The Company invested $4,000,000 and incurred $130,731 in professional fees to acquire a minority interest in the new company, Lifecomm LLC (“Lifecomm”). As part of this transaction, the Company borrowed $2,000,000 from its bank to partially finance this transaction.  See Note 8 below.

The Company recorded a loss from investment in limited liability company of $116,127 for the six months ended June 30, 2010.

In addition, pursuant to the limited liability company agreement, the Company has agreed to fund its share ($200,000) of a stand-by equity commitment for Lifecomm’s benefit, if required.

In connection with the formation of Lifecomm, the Company entered into a Value Added Reseller Agreement (“VAR Agreement”) with Lifecomm.  Under the VAR Agreement, the Company will be a reseller of the Mobile PERS Solution in the United States, as well as a preferred provider of the emergency assistance call center (“EACC”) component of the Mobile PERS Solution provided by Lifecomm to customers.  The Company will be the sole provider of the EACC to the customers to whom it resells the Mobile PERS Solution.  The term of the VAR Agreement is perpetual, subject to termination as set forth therein.  The VAR Agreement contains standard indemnification provisions for agreements of this nature.

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8. Long-term Debt:

The Company had a credit facility arrangement for $4,500,000 which included a revolving credit line which permitted borrowings of $1,500,000 (based on eligible receivables as defined) and a $3,000,000 term loan payable. The term loan is payable in equal monthly principal installments of $50,000 over five years commencing January 2006.  This term loan was paid in full during the second quarter of 2010 without any prepayment charge.  The revolving credit line was set to mature in May 2008.

In March 2006 and December 2006, the credit facility was amended whereby the Company obtained an additional $2,500,000 and $1,600,000 of term loans, the proceeds of which were utilized to finance certain acquisitions.  These term loans are payable over five years in equal monthly principal installments of $41,666.67 and $26,666.67, respectively. Additionally, certain of the covenants were amended.  The term loan which was entered into in March 2006 was paid in full during the second quarter of 2010 without any prepayment charge.

In December 2006, the credit facility was amended to reduce the interest rates charged by the bank such that borrowings under the term loan will bear interest at either (a) LIBOR plus 2.00% or (b) the prime rate or the federal funds effective rate plus .5%, whichever is greater, and the revolving credit line will bear interest at either (a) LIBOR plus 1.75% or (b) the prime rate or the federal funds effective rate plus .5%, whichever is greater.  The LIBOR interest rate charge shall be adjusted in .25% intervals based on the Company’s ratio of Consolidated Funded Debt to Consolidated EBITDA. In the third quarter of 2007, the interest rate was reduced by .25% based on this ratio.  The Company has the option to choose between the two interest rate options under the amended term loan and revolving credit line.  Borrowings under the credit facility are collateralized by substantially all of the assets of the Company.

On April 30, 2007, the Company amended its credit facility whereby the term of the revolving credit line was extended through June 2010 and the amount of credit available under the revolving credit line was increased to $2,500,000.  In June 2010, the term of the revolving credit line was extended through June 2013.

On May 12, 2010, the Company’s credit facility was amended whereby the Company obtained an additional $2,000,000 in the form of a term loan, the proceeds of which were utilized to partially finance an investment relating to the development of a mobile PERS system.  See Note 7 above.  This term loan is payable over five years in equal monthly principal installments of $33,333.33, commencing June 1, 2010.  The interest rate is consistent with the previous term loans secured by the Company.  

As of June 30, 2010 and March 31, 2010, the Company was in compliance with its financial covenants in its loan agreement.  As of June 30, 2009 and March 31, 2009, the Company was in compliance with its financial covenants in its loan agreement.

9. Dividends:

On December 16, 2009, the Company declared a dividend in the amount of $0.10 per share, or $950,364, which was accrued as of December 31, 2009.  The dividend was payable to the shareholders of record as of December 28, 2009.  The dividend was paid on January 15, 2010.

On July 19, 2010, the Company declared a dividend in the amount of $0.10 per share which will be payable to the shareholders of record as of September 13, 2010.  The dividend will be paid on or about October 1, 2010.

13

10. Segment  Reporting:

The Company has two reportable segments, (i) Health and Safety Monitoring Systems (“HSMS”) and (ii) Telephone Based Communication Services (“TBCS”).

The table below provides a reconciliation of segment information to total consolidated information for the six and three months ended June 30, 2010 and 2009:

	2010
	HSMS		TBCS		Consolidated
Six Months Ended June 30, 2010
Revenue	$	10,233,896	$	9,389,496	$	19,623,392
Income before provision for income taxes		1,906,142		823,133		2,729,275
Total assets		18,840,211		18,461,741		37,301,952
	HSMS		TBCS		Consolidated
Three Months Ended June 30, 2010
Revenue	$	5,083,836	$	4,628,309	$	9,712,145
Income before provision for income taxes		846,764		385,139		1,231,903

	2009
	HSMS		TBCS		Consolidated
Six Months Ended June 30, 2009
Revenue	$	10,135,352	$	9,312,943	$	19,448,295
Income before provision for income taxes		1,645,177		697,458		2,342,635
Total assets		14,870,915		20,370,168		35,241,083
	HSMS		TBCS		Consolidated
Three Months Ended June 30, 2009
Revenue	$	5,045,867	$	4,472,339	$	9,518,206
Income before provision for income taxes		873,147		158,238		1,031,385

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11. Commitments and Contingencies:

The Company is aware of various threatened or pending litigation claims against the Company relating to its products and services and other claims arising in the ordinary course of its business.  The Company has given its insurance carrier notice of such claims and it believes there is sufficient insurance coverage to cover any such claims.   Currently, there are no litigation claims for which an estimate of loss, if any, can be reasonably made as they are in the preliminary stages and therefore, no liability or corresponding insurance receivable has been recorded.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis provides information which management believes is relevant to an assessment and understanding of the Company’s results of operations and financial condition.  This discussion and analysis should be read in conjunction with the consolidated financial statements contained in our latest Annual Report on Form 10-K for the year ended December 31, 2009, as well as the quarterly Condensed Consolidated Financial Statements and notes thereto which appear elsewhere in this Quarterly Report on Form 10-Q.

Statements contained in this Quarterly Report on Form 10-Q include “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act, including, in particular and without limitation, statements contained herein under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”  Forward-looking statements involve known and unknown risks, uncertainties and other factors which could cause the Company’s actual results, performance and achievements, whether expressed or implied by such forward-looking statements, not to occur or be realized. These include uncertainties relating to government regulation, technological changes, our expansion plans and product liability risks.  Such forward-looking statements generally are based upon the Company’s best estimates of future results, performance or achievement, based upon current conditions and the most recent results of operations.  Forward-looking statements may be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “believe,” “estimate,” “project,” “anticipate,” “continue” or similar terms, variations of those terms or the negative of those terms.

You should carefully consider such risks, uncertainties and other information, disclosures and discussions which contain cautionary statements identifying important factors that could cause actual results to differ materially from those provided in the forward-looking statements. Readers should carefully review the risk factors and any other cautionary statements contained in the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other public filings.  The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

 

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Overview:

The Company’s primary business is the provision of healthcare communication services through (1) the development, marketing and monitoring of health and safety monitoring systems (HSMS) that include personal emergency response systems, medication management systems and objective and subjective data/ telehealth/ monitoring systems; and (2) telephony based communication services and solutions primarily for the healthcare community (“TBCS”).  The Company’s products and services are primarily marketed to the healthcare community, including hospitals, home care, durable medical equipment, medical facility, hospice, pharmacy, managed care, pharmaceutical companies and other healthcare oriented organizations.  The Company also offers certain products and services directly to consumers.

About HSMS:

Personal Emergency Response Systems (PERS)

The Company’s core business is the sales and marketing of our Personal Emergency Response System. The system consists of a console unit and a wireless activator generally worn as a pendant or on the wrist by the client. In the event of an emergency, the client is able to summon immediate assistance via the two-way voice system that connects their home telephone with the Company’s Response Center. The Company sells three PERS devices for use in either private homes or independent and assisted living facilities. The Company’s PERS is sold through its primary brand VoiceCare® and direct to consumer under Walgreens Ready Response™, Response Call™, and most recently ApriaAlert™.

MedSmart

The second component of AMAC’s remote patient monitoring (“RPM”) platform addresses another serious healthcare need-medication adherence. During 2009, the Company commercially released AMAC’s new monitored medication management tool, MedSmart™. MedSmart is a system that organizes, reminds and dispenses pills in accordance with prescribed treatment regimens. With MedSmart‘s event reporting and notification option, family caregivers and healthcare professionals can monitor a client’s adherence to their medication regimen. MedSmart’s docking base serves as the gateway for remote programming and event reporting. When connected to a household phone, MedSmart transmits device and dispensing history to a secure server supported with a web application for review by authorized individuals. Through AMAC’s personalized notification system, alerts can be sent to track adherence, address dosing errors and predict refill requirements. The Company plans to market MedSmart directly to consumers and through its national business to business network.

Telehealth systems

Rounding out AMAC’s RPM portfolio is AMAC’s telehealth delivery capability. As a distributor of the Health Buddy® System, many of the Company’s customers have successfully demonstrated the value proposition of incorporating telehealth technologies into a patient’s plan of care.  Later this year, AMAC plans to release a new low-cost telehealth solution that combines vital sign reporting and personalized questions about the patient’s health.  This AMAC operated telehealth platform is directed toward providers who require a low-cost solution, easy installation, reliable transmission of vital sign data in real-time and ease of use on the patient side. Moving forward, AMAC plans to integrate its telehealth monitoring and medication management reporting feature sets to deliver the most robust solution for our customers.

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About TBCS

Telephony Based Communication Services (TBCS)

AMAC’s TBCS division offers call center solutions that enhance the patient/provider communication experience. As part of our business development strategy, management continues to employ advanced telephony technology and information systems to develop services. In addition to technology, a critical component for expansion is the Company’s professionally trained call agent staff.  The overall infrastructure has allowed AMAC to expand its services beyond traditional telephone answering services to provide more innovative, clinically oriented call center offerings.  For the six months ended June 30, 2010, the TBCS segment accounted for 48% of the Company’s gross revenues.  The Company’s TBCS division is comprised of three service offerings:

After Hours Answering Services

AMAC’s after hours services are classified as essential call center services. Basic services in this offering include traditional after hour answer and customized message delivery options, contact lists and on-call schedule management, all of which can be updated at the client’s conveniences using the OnCall web portal.  Through this portal, clients can also access the account’s call history, specifications and messages. Enhanced ala carte services including daytime overflow and broadcast messaging services which have proven to enhance value and facilitate stronger patient provider relations.

Concierge Services/Daytime Solutions

AMAC’s Concierge Services focus on the delivery of enhanced communications and help to streamline workflow within provider organizations. These solutions primarily serve hospitals and health plans. Services range from supporting insurance eligibility verification programs; to enhancing patient self care activities via post discharge follow-up programs, to specialized Emergency Department programs with strict reach guidelines to facilitate better treatment and care. Through more efficient and effective call processing, these solutions improve patient satisfaction, reduce cost, and increase revenue by maximizing the ratio of patients to available resources.

Pharmaceutical Support and Clinical Trial Recruitment Services

Our PhoneScreen clinical trial solutions service is an integral component of our overall growth strategy to drive revenue enhancement and expand our visibility. PhoneScreen is a leader in the field of patient recruitment, retention and contact center services.  Using centralized telephone screening of potential clinical trial study subjects, PhoneScreen provides valuable data to inform advertising and patient recruitment strategies.

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In 2009, the TBCS division commenced new relationships with two premiere pharmaceutical companies. We anticipate our pharmaceutical support programs will be utilized to deliver enhanced patient-centric healthcare communication experiences on behalf of certain brands. Based upon new demand, we are recruiting for nurses, health educators and other healthcare professionals that will allow us to provide additional turn-key solutions for our clients.

The Company has completed ten acquisitions to date to facilitate growth within the TBCS division. For the remainder of 2010, the Company will focus on growing this segment through internally driven sales and marketing efforts and will also continue to search for additional acquisition opportunities.

Operating Segments

For the six months ended June 30, 2010, HSMS accounted for 52% of the Company’s revenue and TBCS accounted for 48% of the Company’s revenue.  The Company believes that the overall mix of cash flow generating businesses from HSMS and TBCS, combined with its emphasis on developing products and services to support demand from customers and the emerging, home-based monitoring market, provides the correct blend of stability and growth opportunity. The Company believes this strategy will enable it to maintain and increase its role as a national healthcare communications provider.  Based on the Company’s growth strategy and the complementary nature of if its operating divisions, management believes the Company’s outlook is very positive. Management also believes that while the details of the newly enacted healthcare legislation is awaiting regulation, the Company’s products and services should be in greater demand over the next several years.

Components of Statements of Income by Operating Segment

The following table shows the components of the Statement of Income for the six and three months ended June 30, 2010 and 2009.

In thousands (000’s)	Three Months Ended June 30,												Six Months Ended June 30,
	2010			%			2009			%			2010			%			2009			%
Revenues
HSMS		5,084			52	%		5,046			53	%		10,234			52	%		10,135			52	%
TBCS		4,628			48	%		4,472			47	%		9,389			48	%		9,314			48	%
Total Revenues		9,712			100	%		9,518			100	%		19,623			100	%		19,449			100	%
Cost of Services and Goods Sold
HSMS		2,058			40	%		2,083			41	%		4,067			40	%		4,286			42	%
TBCS		2,465			53	%		2,464			55	%		4,979			53	%		4,899			53	%
Total Cost of Services and Goods Sold		4,523			47	%		4,547			48	%		9,046			46	%		9,185			47	%
Gross Profit
HSMS		3,026			60	%		2,963			59	%		6,167			60	%		5,849			58	%
TBCS		2,163			47	%		2,008			45	%		4,410			47	%		4,415			47	%
Total Gross Profit		5,189			53	%		4,971			52	%		10,577			54	%		10,264			53	%
Selling, General & Administrative		3,857			40	%		3,941			41	%		7,765			40	%		7,993			41	%
Interest Expense		14			-	%		21			-	%		26			-	%		44			-	%
Equity in net loss from investment in limited liability company		116			1	%		-			-			116			1	%		-			-
Other Income		(30	)		-	%		(22	)		-	%		(59	)		-	%		(116	)		(1	)%
Income before Income Taxes		1,232			13	%		1,031			11	%		2,729			14	%		2,343			12	%
Provision for Income Taxes		509						423						1,119						961
Net Income		723						608						1,610						1,382

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Results of Operations:

The Company has two distinct operating business segments, which are HSMS and TBCS.

Three Months Ended June 30, 2010 Compared to Three Months Ended June 30, 2009

Revenues:

HSMS

Revenues, which consist primarily of monthly rental revenues, increased approximately $38,000, or 1%, for the three months ended June 30, 2010 as compared to the same period in 2009.  The increase is primarily attributed to the following factors:

§ The Company experienced revenue growth in its PERS business to business service of approximately $144,000 primarily from its existing long-tem care programs as well as execution of new agreements.  This increase in service revenue was partially offset by a decrease of approximately $132,000 in service revenue from a managed care organization as a result of State funding being cancelled under their program.  Nevertheless, the Company was able to maintain many of the existing subscribers who were associated with this organization at reduced rates.

§ The Company continued to realize increased revenue from its agreement with Walgreen to provide the Company’s PERS product under the Walgreen brand name directly to the consumers.  The revenue increase from this program accounted for approximately $51,000 during the three months ended June 30, 2010 as compared to the same period in 2009.  Commencing in the third quarter of 2010, the Company plans to launch an advertising campaign under the Walgreen brand name to generate increased revenue from this program.  The Company entered into another similar private label program with Apria Healthcare during 2009 and continues to pursue other opportunities within this area as the Company believes private label marketing channels facilitate greater revenue growth.

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§ In 2009, the Company commercialized its MedSmart medication and management system and for the three months ended June 30, 2010, the Company generated approximately $24,000 of increased product sales as compared to the same period in 2009.  The Company plans to launch an aggressive advertising campaign to promote its MedSmart medication and management system commencing in the second half of 2010 and as a result anticipates increased revenue being generated from this product.

These increases in service and product sales revenue were partially offset by a decrease in product sales of its enhanced senior living products of approximately $28,000 as a result of the housing and credit crisis encountered in the economy.

TBCS

The increase in revenues of approximately $156,000, or 3%, for the three months ended June 30, 2010 as compared to the same period in 2009 was primarily due to:

§ The Company realized an increase in revenue within its non-traditional day-time service offering of approximately $433,000 for the three months ended June 30, 2010 as compared to the same period in prior year primarily due to certain hospital organizations expanding their services with us.  In addition to a recently executed agreement with a new hospital organization and through further service expansion from existing hospital solution customers, the Company anticipates it will continue to realize growth in this area throughout 2010 and into 2011.

This increase in revenue was partially offset by a decrease in revenue from its traditional after hours service of approximately $335,000 for the three months ended June 30, 2010 as compared to the same period in prior year due to customer attrition.  The customer attrition was primarily the result of the general economic conditions and certain service issues whereby certain customers moved their service in-house or to other alternatives.  The Company has been performing certain re-structuring and re-organizational procedures and strategies to reduce and stabilize the attrition.

Additionally, in the second quarter of 2010, the Company executed agreements with a customer relating to pharmaceutical support service projects. The Company realized approximately $62,000 of revenue in the second quarter of 2010 from one of the projects which commenced in June 2010.  As a result of these agreements, increased revenue within the pharmaceutical support area is anticipated in the third quarter of 2010.  

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Costs Related to Services and Goods Sold:

HSMS

Costs related to services and goods sold decreased by approximately $25,000 for the three months ended June 30, 2010 as compared to the same period in 2009, a decrease of 1%, primarily due to the following:

§ The Company recorded a decrease in depreciation expense by approximately $31,000 primarily as a result of the Company purchasing its PERS equipment at reduced prices through an alternative supplier as well as purchasing less PERS equipment as compared to prior years.

TBCS

Costs related to services and goods sold increased by approximately $1,000 for the three months ended June 30, 2010 as compared to the same period in 2009, an increase of less than 1%, primarily due to the following:

§ The Company recognized an increase in payroll and related expenses associated with non-traditional after-hours service of approximately $122,000 during the three months ended June 30, 2010 primarily due to a corresponding increase in revenue in this area. As the Company continues to grow revenues in this area, it will continue closely monitor the personnel requirements to perform these services effectively.  The Company also incurred increased payroll with respect to account programming which was partially offset by a decrease in the payroll associated with the traditional day time service.

This increase was partially offset by a decrease in communication expense of approximately $57,000 which primarily due to the Company performing a detail analysis with respect to its Pager services which resulted in reduced costs.  In addition, TBCS recorded a decrease in rent expense of approximately $25,000 during the second quarter of 2010 as compared to the same period in the prior year as a result of the TBCS allocating a portion of its rent expense to the HSMS division.   In the last quarter of 2009, the Company relocated the HSMS Customer Service and Emergency Response Center (“ERC”) employees to floor space within the TBCS rented space.  The space previously occupied by the HSMS employees was sublet to an independent third party.

Selling, General and Administrative Expenses:

Selling, general and administrative expenses decreased by approximately $84,000 for the three months ended June 30, 2010 as compared to the same period in 2009, a decrease of 2%.  The decrease is primarily attributable to the following:

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§ The Company realized a decrease in consulting expense of approximately $98,000 during the second quarter of 2010 as compared to the same period in 2009.  This was primarily as a result of the Company incurring consulting expense relating to the upgrade of existing websites and accounting system as well as utilizing sales and public relation consulting firms in prior year.

§ The Company recorded a decrease in amortization expense of approximately $36,000 during the second quarter of 2010 as compared to the same period in 2009 primarily due to certain intangible assets associated with previous telephone answering service acquisitions and a license agreement being fully amortized.

§ These decreases were partially offset by an increase in sales and marketing salaries of approximately $84,000 during the second quarter of 2010 as compared to the same period in 2009 primarily due to the Company expanding its sales and marketing team during 2010 in an effort to facilitate sales growth.

There were other decreases in selling, general and administrative expenses which arose out of the normal course of business such as repairs and maintenance as well as research and development expense which were partially offset by increases in advertising and convention expenses.  Commencing in the third quarter of 2010, the Company plans to launch an advertising campaign under the PERS and MedSmart products and anticipates that advertising expense will increase significantly in the second half of 2010 and into 2011.

Interest Expense:

Interest expense for the three months ended June 30, 2010 and 2009 was approximately $14,000 and $21,000, respectively.  The decrease of $7,000 was as a result of the Company’s loan balance being less in the current year than in the prior year primarily due to the Company continuing to pay down its term loan.  The Company obtained an additional loan in May 2010 for the partial funding of the investment in a limited liability company and as a result interest expense is expected to increase.

Equity in Net Loss from Investment in Limited Liability Company:

Equity in net loss from investment in limited liability company for the three months ended June 30, 2010 of approximately $116,000 was related to the Company’s investment in Lifecomm LLC in May 2010 which represents the Company’s share of research and development cost as well as other selling, general and administrative expenses incurred for the development of the next generation mobile PERS for the quarter.  The Company anticipates it will continue to incur losses, at an increased level, over the next twelve to eighteen months, at which time it is anticipated that the next generation mobile PERS will be completed and commercialized.

Other Income:

Other income for the three months ended June 30, 2010 and 2009 was approximately $30,000 and $22,000, respectively, which primarily consists of miscellaneous non-operational income.

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Income Before Provision for Income Taxes:

The Company’s income before provision for income taxes for the three months ended June 30, 2010 was approximately $1,232,000 as compared to $1,031,000 for the same period in 2009. The increase of $201,000 for the three months ended June 30, 2010 primarily resulted from an increase in the Company's revenue as well as a decrease in the Company’s costs related to services and product sales, selling, general and administrative costs and interest expense which was partially offset by the equity in net loss from investment in limited liability company.

Six Months Ended June 30, 2010 Compared to Six Months Ended June 30, 2009

Revenues:

HSMS

Revenues, which consist primarily of monthly rental revenues, increased approximately $99,000, or 1%, for the six months ended June 30, 2010 as compared to the same period in 2009.  The increase is primarily attributed to the following factors:

§ The Company experiencing revenue growth in its PERS business to business service of approximately $339,000 primarily from its existing third party reimbursement and long-term care programs as well as execution of new agreements.  This increase in service revenue was primarily partially offset by a decrease of approximately $267,000 in service revenue from a managed care organization as a result of State funding being cancelled under their program.  Nevertheless, the Company was able to maintain many of the existing subscribers who were associated with this organization at reduced rates.

§ The Company continued to realize increased revenue from its agreement with Walgreen to provide the Company’s PERS product under the Walgreen brand name directly to the consumers.  The revenue increase from this program accounted for approximately $113,000 during the six months ended June 30, 2010 as compared to the same period in 2009.  Commencing in the third quarter of 2010, the Company plans to launch an advertising campaign under the Walgreen brand name to generate increased revenue from this program.  The Company entered into another similar private label program with Apria Healthcare during 2009 and continues to pursue other opportunities within this area as the Company believes private label marketing channels facilitate greater revenue growth.

§ In 2009, the Company commercialized its MedSmart medication and management system and for the six months ended June 30, 2010, the Company generated approximately $62,000 of increased product sales as compared to the same period in 2009.  The Company plans to launch an aggressive advertising campaign to promote its MedSmart medication and management system, commencing in the second half of 2010 and as a result anticipates increased revenue being generated from this product

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These increases in service and product revenue were partially offset by a decrease in product sales of its enhanced senior living products of approximately $126,000 as a result of the housing and credit crisis encountered in the economy.

TBCS

The increase in revenues of approximately $75,000, or 1%, for the six months ended June 30, 2010 as compared to the same period in 2009 was primarily due to:

§ The Company realized an increase in revenue within its non-traditional day-time service offering of approximately $753,000 for the six months ended June 30, 2010 as compared to the same period in the prior year primarily due to certain hospital organizations expanding their services with us.  In addition to a recently executed agreement with a hospital organization, the Company anticipates further service expansion from the existing hospital solution customers throughout 2010 and into 2011.

This increase in revenue was partially offset by a decrease in revenue from its traditional after hours service of approximately $554,000 for the six months ended June 30, 2010 as compared to the same period in the prior year due to customer attrition. The customer attrition was primarily the result of the general economic conditions and certain service issues whereby certain customers moved their service in-house or to other alternatives.  The Company has been performing certain re-structuring and re-organizational procedures and strategies to reduce and stabilize the attrition.  In addition, the Company was awarded a one-time project from a State program in the prior year whereby the Company generated approximately $119,000 in revenue which the Company did not perform in the current year.

Additionally, in the second quarter of 2010, the Company executed agreements with a customer relating to pharmaceutical support services projects.  The Company realized approximately $62,000 of revenue in the second quarter of 2010 from one of the projects which commenced in June 2010.  As a result of these agreements, increased revenue within the pharmaceutical support area is anticipated in the third quarter of 2010.  

Costs Related to Services and Goods Sold:

HSMS

Costs related to services and goods sold decreased by approximately $219,000 for the six months ended June 30, 2010 as compared to the same period in 2009, a decrease of 5%, primarily due to the following:

§ The Company recorded a decrease in depreciation expense by approximately $85,000 primarily as a result of the Company purchasing its PERS equipment at reduced prices through an alternative supplier as well as purchasing less PERS equipment as compared to prior years.

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· The Company recognized a decrease in product costs of approximately $31,000 primarily due to a corresponding reduction in sales of enhanced senior living products.  This decrease in cost of products sold was partially offset by an increase in cost of products sold related to MedSmart medication and management systems which was commercialized in 2009.

· The Company realized a decrease of approximately $57,000 in costs primarily related to testing, repairs and upgrades associated with the Company’s PERS and MedSmart devices and associated components.

TBCS:

Costs related to services increased by approximately $80,000 for the six months ended June 30, 2010 as compared to the same period in 2009, an increase of 2%, primarily due to the following:

§ The Company recognized an increase in payroll and related expenses associated with non-traditional after hours service of approximately $196,000 during the six months ended June 30, 2010 primarily due to a corresponding increase in revenue in this area in 2010 as compared to the same period in prior year.  As the Company continues to grow in this area, we will continue closely monitor the personnel requirements to perform these services effectively.  The Company also incurred increased payroll with respect to account programming which was partially offset by a decrease in the payroll associated with the traditional day time service.

This increase was partially offset by a decrease in communication expense of approximately $72,000 which primarily due to the Company performing a detail analysis with respect to its Pager services which resulted in reduced costs.  In addition, the TBCS division recorded a decrease in rent expense of approximately $50,000 during the first half of 2010 as compared to the same period in the prior year as a result of the TBCS allocating a portion of its rent expense to the HSMS division.   In the last quarter of 2009, the Company relocated the HSMS Customer Service and Emergency Response Center (“ERC”) employees to floor space within the TBCS rented space.  The space previously occupied by the HSMS employees was sublet to an independent third party.

Selling, General and Administrative Expenses:

Selling, general and administrative expenses decreased by approximately $228,000 for the six months ended June 30, 2010 as compared to the same period in 2009, a decrease of 3%.  The decrease is primarily attributable to the following:

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§ The Company realized a decrease in consulting expense of approximately $217,000 for the first six months of 2010 as compared to the same period in 2009.  This was primarily as a result of the Company incurring consulting expense relating to the upgrade of existing websites and accounting system as well as utilizing sales and public relation consulting firms in prior year.

§ The Company recognized a decrease in commission expense of approximately $86,000 for the first six months of 2010 as compared to the same period in 2009 primarily due to less commission related referrals incurred in 2010 as compared to prior year.

§ The Company recorded a decrease in amortization expense of approximately $118,000 for the first six months of 2010 as compared to the same period in 2009 primarily due to certain intangible assets associated with previous telephone answering service acquisitions and a license agreement being fully amortized.

§ The Company recorded a decrease in research and development expense of approximately $121,000 primarily as a result of the Company incurring charges relating to the research and development with respect to its MedSmart medication and management system during 2009. No such costs were recorded in 2010 as such research and development work had been completed in 2009 and MedSmart has been commercialized.

§ These decreases were partially offset by an increase in sales and marketing salaries of approximately $270,000 during the first six months of 2010 as compared to the same period in 2009 primarily due to the Company expanding its sales and marketing team during 2010 in an effort to facilitate sales growth.

There were other decreases in selling, general and administrative expenses which arose out of the normal course of business such as utility expense as well as repair and maintenance expense which were partially offset by increases in advertising and convention expenses.  Commencing in the third quarter of 2010, the Company palns to launch an advertising campaign for its PERS and MedSmart products and anticipates that advertising expense will increase significantly in the second half of 2010 and into 2011.

Interest Expense:

Interest expense for the six months ended June 30, 2010 and 2009 was approximately $26,000 and $44,000, respectively.  The decrease of $18,000 was as a result of the Company’s loan balance being less in the current year than in the prior year primarily due to the Company continuing to pay down its term loan.  The Company obtained an additional loan in May 2010 for the partial funding of the investment in a limited liability company and as a result interest expense is expected to increase.

Equity in Net Loss from Investment in Limited Liability Company:

Equity in net loss from investment in limited liability company for the six months ended June 30, 2010 of approximately $116,000 was related to the Company’s investment in Lifecomm LLC in May 2010 which represents the Company’s share of research and development cost as well as other selling, general and administrative expenses incurred for the development of the next generation mobile PERS for the six months ended June 30, 2010.  The Company anticipates it will continue to incur losses, at an increased level, over the next twelve to eighteen months, at which time it is anticipated that the next generation mobile PERS will be completed and commercialized.

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Other Income:

Other income for the six months ended June 30, 2010 and 2009 was approximately $59,000 and $116,000, respectively. The decrease in other income was primarily the result of the Company receiving approximately $73,000 with respect to a training incentive from the State of New Mexico for hiring and training employees within the State and an economic development incentive through the City of Clovis during the first six months of 2009.  These incentives were not provided for in the first six months of 2010.

Income Before Provision for Income Taxes:

The Company’s income before provision for income taxes for the six months ended June 30, 2010 was approximately $2,729,000 as compared to $2,343,000 for the same period in 2009. The increase of $386,000 for the six months ended June 30, 2010 primarily resulted from an increase in the Company's revenue as well as a decrease in the Company’s costs related to services and product sales, selling, general and administrative costs and interest expense which were partially offset by an increase in equity in net loss from investment in limited liability company and a decrease in other income.

Liquidity and Capital Resources

The Company had a credit facility arrangement for $4,500,000 which included a revolving credit line which permitted borrowings of $1,500,000 (based on eligible receivables as defined) and a $3,000,000 term loan payable in equal monthly principal installments of $50,000 over five years commencing January 2006.  This term loan was paid in full during the second quarter of 2010 without any prepayment charge.

In March 2006 and December 2006, the Company’s credit facility was amended whereby the Company obtained an additional $2,500,000 and $1,600,000 of term loans, the proceeds of which were utilized to finance certain acquisitions.  These term loans are payable over five years in equal monthly principal installments of $41,666.67 and $26,666.67, respectively. Additionally, certain of the covenants were amended.  The term loan which was entered into in March 2006 was paid in full during the second quarter of 2010 without any prepayment charge.

In December 2006, the credit facility was amended to reduce the interest rates charged by the bank such that borrowings under the term loan will bear interest at either (a) LIBOR plus 2.00% or (b) the prime rate or the federal funds effective rate plus .5%, whichever is greater, and the revolving credit line will bear interest at either (a) LIBOR plus 1.75% or (b) the prime rate or the federal funds effective rate plus .5%, whichever is greater.  The LIBOR interest rate charge shall be adjusted in .25% intervals based on the Company’s ratio of Consolidated Funded Debt to Consolidated EBITDA.  In the third quarter of 2007, the interest rate was reduced by .25% based on this ratio.  The Company has the option to choose between the two interest rate options under the amended term loan and revolving credit line.  Borrowings under the credit facility are collateralized by substantially all of the assets of the Company.

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On April 30, 2007, the Company amended its credit facility whereby the term of the revolving credit line was extended through June 2010 and the amount of credit available under the revolving credit line was increased to $2,500,000.  In June 2010, the term of the revolving credit line was extended through June 2013.

On May 12, 2010, the Company’s credit facility was amended whereby the Company obtained an additional $2,000,000 in the form of a term loan, the proceeds of which were utilized to partially finance the Company’s investment in Lifecomm, as described in more detail under Part II, Item 5 of this Form 10-Q.  This term loan is payable over five years in equal monthly principal installments of $33,333.33, commencing June 1, 2010.  The interest rate is consistent with the previous term loans secured by the Company.

As of June 30, 2010 and 2009, the Company was in compliance with its financial covenants in its loan agreement.

The following table is a summary of contractual obligations as of June 30, 2010:

	Payments Due by Period
Contractual  Obligations	Total		Less than 1 year		1-3 years		4-5 years		After 5 years
Revolving Credit Line	$	750,000			$	750,000
Debt  (a)	$	2,420,000	$	660,000	$	1,360,000	$	400,000
Operating Leases (b)	$	7,558,667	$	1,134,098	$	3,029,032	$	1,808,083	$	1,587,454
Purchase Commitments (c)	$	639,801	$	639,801
Interest Expense (d)	$	245,196	$	70,081	$	159,503	$	15,612
Total Contractual Obligations	$	11,613,664	$	2,503,980	$	5,298,535	$	2,223,695	$	1,587,454

(a) – Debt includes the Company’s aggregate outstanding term loans which mature in 2011 and 2015.

(b) –Operating leases include rental of facilities at various locations within the United States.  These operating leases include the rental of the Company’s call center, warehouse and office facilities.  These operating leases have various maturity dates.  The Company currently leases office space from the Chairman and principal shareholder pursuant to a lease. This lease expires in December 2012.  The Company also leases office space from certain telephone answering service managers.  The leases with these managers expire in December 2012 and December 2014, respectively.

(c) – Purchase commitments relate to orders for the Company’s traditional PERS system and its MedSmart pill dispenser.

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(d) – Interest expense relates to interest on the Company’s revolving credit line and debt at the Company’s current rate of interest.

The primary sources of liquidity are cash flows from operating activities.  Net cash provided by operating activities was approximately $3.4 million for the six months ended June 30, 2010, as compared to approximately $4.6 million for the same period in 2009.  During 2010, the cash provided by operating activities was primarily from net earnings of approximately $1.6 million and depreciation and amortization of approximately $1.8 million.  The components of depreciation and amortization primarily relate to the purchases of the Company’s traditional PERS equipment and the customer lists associated with the acquisition of telephone answering service businesses.  During 2009, the cash provided by operating activities was primarily from net earnings of approximately $1.4 million, depreciation and amortization of approximately $2.0 million, an increase in accounts payable and accrued expenses of approximately $0.4 million and a decrease in accounts receivable of approximately $0.4 million. The components of depreciation and amortization primarily relate to the purchases of the Company’s traditional PERS equipment and the customer lists associated with the acquisition of telephone answering service businesses.

Net cash used in investing activities was approximately $4.5 million for the six months ended June 30, 2010 as compared to approximately $0.7 million for the same period in 2009.  The primary component of net cash used in investing activities in 2010 was the $4.1 million investment in a limited liability company for the development of the next generation mobile PERS system and capital expenditures of approximately $0.4 million.  The primary component of net cash used in investing activities in 2009 was capital expenditures of approximately $.07 million, net of deposits on equipment being transferred to fixed assets.  Capital expenditures for both 2010 and 2009 primarily related to the continued production and purchase of the traditional PERS systems.

Cash flows used in financing activities for the six months ended June 30, 2010 were approximately $0.3 million compared to $1.3 million for the same period in 2009.  The components of cash flow used in financing activities in 2010 were the payment of long-term debt of approximately $1.3 million and the payment of a special dividend, which was declared on December 16, 2009, of approximately $0.9 million.  These financing cash outflow in 2010 were partially offset by the proceeds from long-term debt of $2.0 million which was obtained for the purpose of partially funding the investment in a limited liability company.  The primary component of cash flow used in financing activities in 2009 was the payment of long-term debt of approximately $1.2 million.

During the next twelve months, the Company anticipates it will make capital expenditures of approximately $1.25 – $1.75 million for the production and purchase of traditional PERS systems, MedSmart medication and management systems, and telehealth systems, as well as enhancements to its computer operating systems.  This amount is subject to fluctuations based on customer demand.  The Company plans to incur approximately $1.0 - $1.5 million of advertising expense for promotional campaigns related to its PERS and MedSmart medication and management systems.  The Company also anticipates incurring approximately $0.1 - $0.2 million of costs primarily relating to research and development of its telehealth products.

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As of June 30, 2010, the Company had approximately $4.0 million in cash and the Company’s working capital was approximately $9.0 million.  The Company believes that with its present cash balance and with operations of the business generating positive cash flow, it will be able to meet its cash flow needs for working capital and capital expenditures for at least the next twelve months. The Company also has a revolving credit line, which expires in June 2013 that permits borrowings up to $2.5 million, of which $750,000 was outstanding at June 30, 2010.

Off-Balance Sheet Arrangements:

As of June 30, 2010, the Company has not entered into any off-balance sheet arrangements that are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources  that is material to investors.

Other Factors:

On January 14, 2002, the Company entered into an operating lease agreement for space in Long Island City, New York in order to consolidate its HCI TBCS and PERS ERC/ Customer Service facilities.  The centralization of the ERC, Customer Service and H-LINK® OnCall operations has provided certain operating efficiencies and allowed for continued growth of the H-LINK and PERS divisions.  The fifteen (15) year lease term commenced in April 2003.  The lease calls for minimum annual rentals of $307,900, subject to a 3% annual increase plus reimbursement for real estate taxes.  

During 2005, the Company entered into two operating lease agreements for additional space at its Long Island City, New York location in order to consolidate its warehouse and distribution center and accounting department into this location.  The leases, which commenced in January 2006 and expire in March 2018, call for minimum annual rentals of $220,000 and $122,000, respectively, and are subject to increases in accordance with the term of the agreements.  The Company is also responsible for the reimbursement of real estate taxes.

In September 2009, the Company sublet a portion of its space under its operating lease which was entered into in 2005.  The space is being sublet to an independent third party and calls for minimum annual rentals of $125,000 and is subject to annual increases in accordance with the terms of the agreement.  The sublease expires in March 2018.

On May 12, 2010, the Company entered into a limited liability company agreement with Hughes Telematics, Inc. and Qualcomm Incorporated to design, develop, finance and operate a mobile PERS system.  The Company invested $4,000,000 to acquire a minority interest in the new company, Lifecomm LLC. As part of this transaction, the Company borrowed $2,000,000 from its bank to partially finance this transaction.

The Company recorded a loss from investment in limited liability company of $116, 127 as of June 30, 2010.  This represents the Company's share, based on the equity method, of loss relating to this investment.  The loss primarily relates to research and development as well as other selling general and administrative fees incurred for the development of the next generation mobile PERS.  As the development continue to progress, the Company expects it will continue to incur looses at greater levels over the next twelve to eighteen months, at which time it is anticipated the next generation mobile PERS will be completed and commercialized.

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In addition, pursuant to the limited liability company agreement, the Company has agreed to fund its share ($200,000) of a stand-by equity commitment for Lifecomm’s benefit, if required.

In connection with the formation of Lifecomm, the Company entered into a Value Added Reseller Agreement (“VAR Agreement”) with Lifecomm.  Under the VAR Agreement, the Company will be a reseller of the Mobile PERS Solution in the United States, as well as a preferred provider of the emergency assistance call center (“EACC”) component of the Mobile PERS Solution provided by Lifecomm to customers.  The Company will be the sole provider of the EACC to the customers to whom it resells the Mobile PERS Solution.  The term of the VAR Agreement is perpetual, subject to termination as set forth therein.  The VAR Agreement contains standard indemnification provisions for agreements of this nature

Recent Accounting Pronouncements:

During the third quarter of 2009, the Company adopted ASC Topic 105, Generally Accepted Accounting Principles, which establishes the FASB Accounting Standards Codification (“ASC”) as the sole source of authoritative generally accepted accounting principles ("GAAP") to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission ("SEC") under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. The codification did not change GAAP but reorganizes the literature. References for FASB guidance throughout this document have been updated for the codification.

Critical Accounting Policies:

In preparing the financial statements, the Company makes estimates, assumptions and judgments that can have a significant impact on our revenue, operating income and net income, as well as on the reported amounts of certain assets and liabilities on the balance sheet.  The Company believes that the estimates, assumptions and judgments involved in the accounting policies described below have the greatest potential impact on its financial statements due to the materiality of the accounts involved, and therefore, considers these to be its critical accounting policies.  Estimates in each of these areas are based on historical experience and a variety of assumptions that the Company believes are appropriate. Actual results may differ from these estimates.

Reserves for Uncollectible Accounts Receivable

The Company makes ongoing assumptions relating to the collectability of its accounts receivable.  The accounts receivable amount on the balance sheet includes a reserve for accounts that might not be paid.  In determining the amount of the reserve, the Company considers its historical level of credit losses.  The Company also makes judgments about the creditworthiness of significant customers based on ongoing credit evaluations, and it assesses current economic trends that might impact the level of credit losses in the future. The Company recorded reserves for uncollectible accounts receivable of $581,000 as of June 30, 2010, which is equal to 8.7% of total accounts receivable.  While the Company believes that the current reserves are adequate to cover potential credit losses, it cannot predict future changes in the financial stability of its customers and the Company cannot guarantee that its reserves will continue to be adequate.  For each 1% that actual credit losses exceed the reserves established, there would be an increase in general and administrative expenses and a reduction in reported net income of approximately $67,000. Conversely, for each 1% that actual credit losses are less than the reserve, this would decrease the Company’s general and administrative expenses and increase the reported net income by approximately $67,000.

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Fixed Assets

Fixed assets are stated at cost.  Depreciation for financial reporting purposes is being provided by the straight-line method over the estimated useful lives of the related assets.  The valuation and classification of these assets and the assignment of useful depreciable lives involves significant judgments and the use of estimates.  Fixed assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.  Historically, impairment losses have not been required.  Any change in the assumption of estimated useful lives could either result in a decrease or increase to the Company’s financial results.  A decrease in estimated useful life would reduce the Company’s net income and an increase in estimated useful life would increase the Company’s net income.  If the estimated useful lives of the PERS medical device were decreased by one year, the cost of goods related to services would increase and net income would decrease by approximately $160,000 per annum.  Conversely, if the estimated useful lives of the PERS medical device were increased by one year, the cost of goods related to services would decrease and net income would increase by approximately $155,000 per annum.

Valuation of Goodwill

Goodwill and indefinite life intangible assets are subject to annual impairment tests.  To date, the Company has not been required to recognize an impairment of goodwill. The Company tests goodwill for impairment annually or more frequently when events or circumstances occur indicating goodwill might be impaired. This process involves estimating fair value using discounted cash flow analyses. Considerable management judgment is necessary to estimate discounted future cash flows. Assumptions used for these estimated cash flows were based on a combination of historical results and current internal forecasts.  The Company cannot predict certain events that could adversely affect the reported value of goodwill, which totaled $10,294,281 and $10,255,983 at June 30, 2010 and December 31, 2009, respectively.  If the Company were to experience a significant adverse impact on goodwill, it would negatively impact the Company’s net income.

Accounting for Stock-Based Awards

Stock based compensation is recorded in accordance with ASC Topic 718 (formerly FASB Statement No. 123(R), Share-Based Payment), which requires the measurement and recognition of compensation expense for all share-based payments to employees, including grants of stock and employee stock options, based on estimated fair values.

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Stock-based compensation expense recognized during the period is based on the value of the portion of share-based payment awards that is ultimately expected to vest during the period.  The Company recorded a pre-tax stock-based compensation expense which is included in selling, general and administrative expense in its consolidated financial statements of approximately $160,000 and $179,000 for the six months ended June 30, 2010 and 2009, respectively.

The determination of fair value of share-based payment awards to employees and directors on the date of grant using the Black-Scholes model is affected by the Company's stock price as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to the expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors.

Item 3.   Quantitative and Qualitative Disclosures About Market Risk.

Market Risk Disclosure

The Company does not hold market risk-sensitive instruments entered into for trading purposes, nor does it hold market risk sensitive instruments entered into for other than trading purposes. All sales, operating items and balance sheet data are denominated in U.S. dollars; therefore, the Company has no significant foreign currency exchange rate risk.

In the ordinary course of its business the Company enters into commitments to purchase raw materials and finished goods over a period of time, generally six months to one year, at contracted prices. At June 30, 2010 these future commitments were not at prices in excess of current market, or in quantities in excess of normal requirements. The Company does not utilize derivative contracts either to hedge existing risks or for speculative purposes.

Interest Rate Risk

We are exposed to market risk from changes in interest rates primarily through our financing activities.  Interest on the outstanding balances on our term loans and revolving credit line under our credit facility accrues at a rate of LIBOR plus 1.75% and LIBOR plus 1.50%, respectively.  As of June 30, 2010, we had outstanding debt with an aggregate face amount of approximately $3,170,000, all of which is variable rate borrowings.  As of June 30, 2010, the hypothetical impact of a one percentage point increase in interest rates related to our outstanding variable rate debt would be to increase annual interest expense for the remainder of fiscal 2010 by approximately $15,000. Our ability to carry out our business plan to finance future working capital requirements may be impacted if the cost of carrying debt fluctuates to the point where it becomes a burden on our resources.

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Item 4T.  Controls and Procedures.

As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of its Chief Executive Officer and President and its Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, the Chief Executive Officer and President and the Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports filed by it under the Securities and Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and include controls and procedures designed to ensure that information required to be disclosed by the Company in such reports is accumulated and communicated to the Company's management, including the Chief Executive Officer and President and Chief Financial Officer of the Company, as appropriate to allow timely decisions regarding required disclosure.

There were no changes in the Company’s internal control over financial reporting that occurred during the quarter ended June 30, 2010 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1.    Legal Proceedings.

The Company is aware of various threatened or pending litigation claims against the Company relating to its products and services and other claims arising in the ordinary course of its business.  The Company has given its insurance carrier notice of such claims and it believes there is sufficient insurance coverage to cover any such claims.   Currently, there are no litigation claims for which an estimate of loss, if any, can be reasonably made as they are in the preliminary stages and therefore, no liability or corresponding insurance receivable has been recorded.

Item 1A.  Risk Factors.

Management believes that there have been no material changes in the Company’s risk factors as reported in the Annual Report on Form 10-K for the year ended December 31, 2009, which was filed on March 31, 2010 with the Securities and Exchange Commission and the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2010, which was filed with the Commission on  May 17, 2010.

Item 5. Other Information

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On August 11, 2010, the Company issued a press release announcing its financial results for the quarter ended June 30, 2010.  A copy of such press release is attached hereto as Exhibit 99.1.

On August 11, 2010, the Company issued a press release announcing guidance for the fiscal years ending December 31, 2010 and December 31, 2011.  A copy of such press release is attached hereto as Exhibit 99.2.

Also on August 11, 2010, the Company hosted a conference call and webcast (the "Call") to discuss its financial results for the quarter ended June 30, 2010, guidance for fiscal 2010, longer term outlook for 2011, and other business trends.  A copy of the transcript of the Call is attached hereto as Exhibit 99.3.

In accordance with General Instruction B.2., the foregoing information is furnished pursuant to Item 2.02 and Item 8.01 of Form 8-K and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section.  The information disclosed under Item 2.02 and Item 8.01 of Form 8-K shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by a specific reference in such filing.

On June 29, 2010, the Company entered into Amendment No. 14 and Waiver to the Credit Agreement, dated as of May 20, 2002, as thereafter amended from time to time, by and between the Company and JPMorgan Chase Bank, N.A., as successor-in-interest to The Bank of New York.   Under the terms of this amendment, the term of the revolving credit line under this credit agreement was extended through June 30, 2013.

Item 6.  Exhibits .

No.	Description
10.1	Limited Liability Company Agreement of Lifecomm LLC (confidential treatment will be requested for certain portions of this exhibit pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended, which portions have been omitted and will be filed separately with the Securities and Exchange Commission)
10.2	Value Added Reseller Agreement made and entered into as of the 12th day of May, 2010 by and between American Medical Alert Corp. and Lifecomm LLC. (confidential treatment will be requested for certain portions of this exhibit pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended, which portions have been omitted and will be filed separately with the Securities and Exchange Commission)
10.3	Amendment No. 13 and Waiver, dated as of May 12, 2010, to the Credit Agreement, dated as of May 20, 2002, as thereafter amended from time to time, by and between American Medical Alert Corp. and JPMorgan Chase Bank, N.A., as successor-in-interest to The Bank of New York.

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10.4	Amendment No. 14 and Waiver, dated June 29, 2010, to the Credit Agreement, dated as of May 20, 2002, as thereafter amended from time to time, by and between American Medical Alert Corp. and JPMorgan Chase Bank, N.A., as successor-in-interest to The Bank of New York.
10.5	Waiver, dated as of July 12, 2010 to the Credit Agreement, dated as of May 20, 2002, as thereafter amended from time to time, by and between American Medical Alert Corp. and JPMorgan Chase Bank, N.A., as successor-in-interest to The Bank of New York.
15.1	Letter from Margolin, Winer & Evens LLP, the independent accountant of the Company, acknowledging awareness of the use in a registration statement of a report on the unaudited interim financial information in this quarterly report.
31.1	Certification of CEO Pursuant to Section 302 of the Sarbanes Oxley Act of 2002
31.2	Certification of CFO Pursuant to Section 302 of the Sarbanes Oxley Act of 2002
32.1	Certification of CEO Pursuant to Section 906 of the Sarbanes Oxley Act of 2002
32.2	Certification of CFO Pursuant to Section 906 of the Sarbanes Oxley Act of 2002
99.1	Press release of American Medical Alert Corp., issued on August 11, 2010.
99.2	Press release of American Medical Alert Corp., issued on August 11, 2010.
99.3	Transcript of conference call and webcast held on August 11, 2010.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	AMERICAN MEDICAL ALERT CORP.
Dated: August 16, 2010	By:	/s/  Jack Rhian
		Name: Jack Rhian
		Title: Chief Executive Officer and President
	By:	/s/  Richard Rallo
		Name: Richard Rallo
		Title: Chief Financial Officer

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EX-10.1

EXHIBIT 10.1

EXECUTION VERSION

REDACTED COPY

LIMITED LIABILITY COMPANY AGREEMENT

OF

LIFECOMM LLC

THIS LIMITED LIABILITY COMPANY AGREEMENT of LIFECOMM LLC, a Delaware limited liability company (the “Company”), is made and entered into as of May 12, 2010 (the “Effective Date”) by and among HUGHES Telematics, Inc., a Delaware corporation (“HTI”), QUALCOMM INCORPORATED, a Delaware corporation (“QC”), and American Medical Alert Corp., a New York corporation (“AMAC”).

WITNESSETH:

WHEREAS, the Members have agreed to form the Company and to enter into this Agreement for the purpose set forth in Section 1.6, pursuant to the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the mutual promises and agreements herein made and intending to be legally bound hereby, the Members hereby agree as follows:

ARTICLE I

ORGANIZATIONAL MATTERS

1.1.                 Formation The Members hereby confirm and ratify the formation of the Company as of the Effective Date pursuant to the terms of this Agreement and the filing of the Certificate of Formation (a copy of which is attached hereto as Exhibit A) (the “Certificate of Formation”) with the Delaware Secretary of State on the Effective Date.  The Interests of the Members, and the rights and obligations of the Members with respect thereto, are subject to all of the terms and conditions of this Agreement and the Delaware LLC Act.  The General Manager (or a Person designated by the General Manager) is hereby designated as an authorized person, within the meaning of the Delaware LLC Act, to execute, deliver and file any amendments and/or restatements to the Certificate of Formation Approved with Supermajority Approval of the Members in accordance with Sections 5.6 and 14.3 of this Agreement.  From and after the date hereof, the General Manager shall cause an authorized officer of the Company or another Person designated by the General Manager to execute and file any certificate and comply with any similar requirements of any jurisdiction in which the Company shall be deemed to be doing business pursuant to applicable jurisdictional requirements.

1.2.                 Name The Company shall conduct its activities under the name of “LIFECOMM LLC” or such other name as the Members shall Approve with Supermajority Approval of the Members in accordance with Section 5.6 of this Agreement; provided, that the name shall always contain the words “Limited Liability Company” or the letters “LLC”.   Prompt notice of any such change shall be given to each Member.

1.3.                 Principal Offices The Company shall maintain its principal place of business at any location as may be selected by the Board from time to time.  The Company shall initially maintain its principal place of business at 2002 Summit Boulevard, Suite 1800, Atlanta, GA 30319.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

1.4.                 Agent for Service of Process The Company shall continuously maintain a registered office and a designated and duly qualified agent for service of process on the Company in the State of Delaware.  The name and address of the Company’s agent for service of process is National Corporate Research, Ltd., located at 615 S. DuPont Highway, Kent County, Dover, Delaware, or such other agent as the Board designates in accordance with the Delaware LLC Act.

1.5.                 Term  The Company shall commence its existence on the date that the Certificate of Formation is filed in the office of the Secretary of State of the State of Delaware.  The Company shall continue its existence until terminated in accordance with this Agreement or the Delaware LLC Act.

1.6.                 Business and Purpose of the Company

(a)               The purpose of the Company is to design, develop, finance and operate a mobile personal emergency response service (“Mobile PERS”) (and services considered ancillary thereto by the Mobile PERS industry in general as determined by Supermajority Approval of the Board), in the Territory (as such purpose may be amended, supplemented or otherwise modified from time to time, with the Supermajority Approval of the Members in accordance with Section 5.6 of this Agreement, the “Business”). The Company shall be an association among the Members only for such specifically authorized business purpose and shall not be deemed to create any association among the Members with respect to any other activities whatsoever other than the activities within such business purpose described herein.

(b)           The authority granted to the Board hereunder to bind the Company shall be limited to the actions necessary, proper, or advisable to effectuate and carry out the foregoing purpose and to operate the Business of the Company in accordance with the Business Plan or other Approved Plan.  The Company will not have any rights in or to any other business which may be engaged in by any Member or its Affiliates.

1.7.                 No Partnership Intended for Nontax Purposes The Company has been formed under the Delaware LLC Act and the Members expressly deny any intent to form a partnership under Delaware law or any other law, or a corporation under Delaware law or any other law.  The Members do not intend to be partners with each other except as provided in the next sentence, or partners with any third party.  However, the Members intend that the Company be treated as a partnership for U.S. federal, state and local tax purposes, if the Members under applicable tax law can choose the form of tax treatment for the Company.

1.8.                 Liability of Members to Third Parties Except as otherwise provided in the Delaware LLC Act, no Member shall be personally liable for any debt, obligation or liability of the Company, whether arising in contract, tort or otherwise, by reason of being a Member.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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1.9.        Reliance by Third-Party Creditors This Agreement is entered into among the Members for the exclusive benefit of the Company, its Members and their successors and permitted assigns under the terms of this Agreement.  This Agreement is expressly not intended for the benefit of any creditor of the Company or any other Person.  Except and only to the extent provided by applicable statute, no such creditor or third party shall have rights under this Agreement or any agreement between the Company and any Member with respect to any Capital Contributions or otherwise.

1.10.      Title to Property All Property shall be owned by the Company as an entity and no Member shall have any ownership interest in such Property in the Member’s individual name or right.  The Company shall hold all Property in the name of the Company.

ARTICLE II

MEMBERS AND INTERESTS; CAPITAL CONTRIBUTIONS

2.1.        Members and Interests.

(a)           Each Member’s Interest in the Company will be represented by Units.  The Units initially shall be divided into three (3) Classes:  “Class A Units,” “Class B Units,” and “Class C Units”.  As of the Effective Date, there are issued and outstanding *** Class A Units, *** Class B Units, and *** Class C Units.  Annex A hereto contains the name, Class and number of Units owned by each Member as of the Effective Date, which are being issued in exchange for such Member’s Capital Contribution and, as applicable, provision of services described in Schedule 1, pursuant to this Agreement. Annex A shall be revised from time to time to reflect the admission or withdrawal of a Member or the issuance, transfer, assignment, redemption, relinquishment to the Company or other cancellation of Units in accordance with the terms of this Agreement and other modifications to or changes in the information set forth therein.  Any Units that are relinquished to, redeemed by, or otherwise repurchased by, the Company, shall be deemed for all purposes of this Agreement to be canceled and no longer outstanding, and shall not have any rights hereunder.

(b)           The Company shall incur obligations solely under the direction and with the Approval of the Board, acting by majority (except to the extent that Supermajority Approval of the Board and/or Supermajority Approval of the Members is required as set forth herein). The Company shall not incur any obligation that, in order for the Company to pay such obligation in full when it comes due, would necessitate any of the Initial Members to contribute cash or non-cash Capital Contributions to the Company in excess of, or any sooner than, as set forth in Sections 2.2, 2.3, 2.4 or 2.9 hereof respectively.  The Initial Members acknowledge that, subject to the immediately preceding sentence and the other limitations on Board action set forth in this Agreement, the Board may Approve obligations that are not to be repaid out of Initial Member funding, but rather are to be repaid out of cash provided from the operation of the Company, provided the Board believes in good faith that such obligations can reasonably be expected to be repaid from such cash provided by operations.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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(c)           To the extent a portion of the non-cash contributions (in the form of services or otherwise) of certain Initial Members as described in Section 2.2(b) or Section 2.3(b) are to be effectively made (e.g., services are to be performed) following issuance of the Units under this Section 2, the Company will on a *** review any invoice provided pursuant to Section 2.1(d) to ensure the Company receives such non-cash contributions in full and in compliance with the applicable Transaction Agreements between the Company and each such Initial Member and reflect such non-cash Capital Contribution by each such Initial Member upon presentment of such invoice.  Each such Initial Member shall be obligated to provide all of such future non-cash contributions in accordance with Schedule 1 hereto and the applicable Transaction Agreements between the Company and such Initial Member until such time as the Company has received the full amount of non-cash contributions, provided that the Company has *** in accordance with the provisions of this Agreement.  If an Initial Member fails to fully satisfy its obligation to make its future non-cash contributions by the end of Funding Period 1 (provided that the Company has not *** prior thereto in accordance with the provisions of this Agreement), such Initial Member shall *** on the *** anniversary of the Effective Date, or if sooner, immediately prior to any Capital Event.  Notwithstanding the foregoing, except as otherwise provided in Sections 2.2(c) or 2.3(d), if during Funding Period 1 an Initial Member otherwise fails to provide or continue to provide non-cash contributions constituting all or a portion of its required contributions in accordance with Schedule 1 hereto and the applicable Transaction Agreements between the Company and such Initial Member and the timeline prescribed hereunder or thereunder for a period of *** following notice given by the Company or any other Initial Member of such failure to provide such non-cash contributions (provided that the Company has not *** prior thereto in accordance with the provisions of this Agreement), then, such Initial Member shall *** in *** intervals consistent with the in-kind schedule set forth on Schedule 1 hereto.  If such Initial Member fails *** (a “Cash Payment Default”), then, the Company or any Initial Member shall be entitled to pursue any remedies that may be available hereunder or under the applicable Transaction Agreement between the Company and such Initial Member or under applicable law against such Initial Member with respect to such Initial Member’s *** such unsatisfied non-cash contribution, including without limitation specific performance or a claim for damages hereunder or under such Transaction Agreement in the amount of any such unsatisfied non-cash contribution, provided, however, that *** for the same failure by such Initial Member to satisfy its obligation to pay cash in the amount of any such unsatisfied non-cash contribution.  If neither the Company nor any Initial Member elects to pursue any such remedy for such Cash Payment Default against such Initial Member within *** of such Cash Payment Default, then the Percentage Interest of such Initial Member shall be proportionately reduced by *** as compared to such Initial Members total Capital Contributions hereunder (e.g., if an Initial Member fails to provide $2,000,000 *** and initial and future *** hereunder are $10,000,000, then such Initial Member’s Percentage Interest would be reduced by ***).  In the event that any Member’s Percentage Interest is reduced hereunder, the Units held by such Member concurrently therewith shall be proportionately reduced, relinquished and cancelled and Annex A shall be revised to reflect such modifications in accordance with Section 2.1(a) hereof.

(d)           For all in-kind contributions of services to the Company contemplated by this Section 2.1 and Sections 2.2 and 2.3 hereof, the Initial Member providing such in-kind contribution of services shall bill the Company for such services and shall specify in such bill the amount to be paid by the Company (if any) for such services, *** as in-kind contribution of services provided to the Company (which shall be reflected in such Initial Member’s Capital Account), in each case in accordance with the *** as set forth on Schedule 1 hereto or as otherwise set forth in the applicable Transaction Agreement between the Company and such Initial Member.  The Company and each Initial Member shall have the right to request copies of accounting records as reasonably necessary for purposes of confirming an Initial Member’s actual in-kind contributions.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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2.2.         HTI Contributions.

(a)           In consideration for its *** Class A Units, HTI shall make the contributions of property and of the services specified in the HTI Infrastructure Access Agreement, each as described in Section 2.A. of Schedule 1, and shall also contribute the additional services specified in Section 2.B. of Schedule 1 pursuant to the HTI Services Agreement, subject to the dollar limitations set forth in Section 2.2(b), and HTI shall not be required to make any cash Capital Contributions in consideration for such Class A Units (except in an amount equal to any unsatisfied non-cash Capital Contribution on the sixth anniversary of the Effective Date or otherwise prior to such time in accordance with Section 2.1(c)).  The initial Gross Asset Value of the property contributions described in this Section 2.2(a) is $10,500,000.  Such initial Gross Asset Value shall be reflected in HTI’s Capital Account.

(b)           Through the end of Funding Period 1, HTI shall contribute additional services with a value in an aggregate amount of $10,900,000, in the form set forth in Section 2.B. of Schedule 1 attached hereto and subject to the terms and conditions of the HTI Services Agreement.  The aggregate value of the services to be contributed by HTI pursuant to this Section 2.2(b) (the “HTI Cumulative Contributions”) shall not exceed $10,900,000.

(c)           Notwithstanding anything herein to the contrary, HTI shall not be required to make a contribution of its services, as otherwise may be required hereunder, at any time when the Company is in material breach of its obligations under the HTI Infrastructure Access Agreement or the HTI Services Agreement and either such  Agreement is properly terminated in connection therewith, except to the extent that HTI caused the Company’s material breach of such agreement.

2.3          QC Contributions In consideration for its *** Class B Units, QC shall make cash Capital Contributions and non-cash contributions to the Company, subject to the following dollar limitations set forth below in this Section 2.3:

(a)           QC shall make a cash Capital Contribution in the amount of $6,000,000 which shall be made in full *** the Effective Date in U.S. dollars by wire transfer of immediately available funds to the Company’s account set forth on Exhibit B.  Such $6,000,000 cash contribution shall be reflected in QC’s Capital Account.

(b)           As of the Effective Date, QC also shall make non-cash Capital Contributions of *** as described in Section 1.A of Schedule 1 for licensing and contributing to the Company the rights and assets set forth in the QC Know-How License Agreement which shall have an initial Gross Asset Value of ***.  Such initial Gross Asset Value shall be reflected in QC’s Capital Account.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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(c)           Through the end of Funding Period 1, QC shall contribute additional services to the Company with a value (determined in accordance with Schedule 1) in an aggregate amount of ***, in the form set forth in Section 1.B. of Schedule 1 attached hereto and subject to the terms and conditions of the QC Services Agreement, provided that the aggregate value of the services to be contributed by QC pursuant to this Section 2.3(c) shall not exceed ***.

(d)           Notwithstanding anything herein to the contrary, QC shall not be required to make contributions at any time when ***, as applicable, is properly terminated in connection therewith, except to the extent that ***, as applicable.  The aggregate value (inclusive of the initial Gross Asset Value of any property contributed to the Company and the aggregate value of any other contributions to the Company) of contributions made to the Company by QC pursuant to this Section 2.3 (the “QC Cumulative Contributions”) shall not exceed ***.

2.3A       Gross Asset Value Attributable to Certain In-Kind Contributions.  The contributions described in Sections 2.2(b) and 2.3(c) will result in an increase in the Gross Asset Value of Company intangible property equal to the value of such contributions, as and when such contributions are made; provided however that in no event shall the aggregate value of the relevant services exceed the aggregate value of such services as set forth in Sections 2.2(b) and 2.3(c), as applicable.  Such increases in Gross Asset Value shall be taken into account in computing adjustments to Members' Capital Accounts in the manner set forth in Article III, and such contributions shall constitute Capital Contributions for purposes of Sections 2.1(a), 3.3(c) and 13.1(c), in an amount equal to the value of such contributions, as and when made; provided however that in no event shall the aggregate value of the relevant services exceed the aggregate value of such services as set forth in Sections 2.2(b) and 2.3(c), as applicable

2.4          AMAC Capital Contributions.  In consideration for its *** Class C Units, AMAC shall make Capital Contributions in the amount of $4,000,000 which shall be made in full *** the Effective Date in U.S. dollars by wire transfer of immediately available funds to the Company’s account set forth on Exhibit B.  The aggregate amount of Capital Contributions contributed by AMAC pursuant to this Section 2.4 (the “AMAC Cumulative Contributions”) shall not exceed $4,000,000.

2.4          Additional Capital Contributions The Board may elect to solicit the Members to make additional Capital Contributions to the Company beyond those set forth in Sections 2.2, 2.3 and 2.4 above for use in acquiring Company assets or in funding Company operations or reserves when the Company is in need of such funds at such times and consistent with the Business Plan or other Approved Plan.  Such solicitations for additional Capital Contributions (other than a Pre-Approved Capital Call under Section 2.9) shall be subject to the terms of Section 2.8.  Except as set forth in Sections 2.1(d), 2.2, 2.3, 2.4, 2.9 or otherwise expressly set forth in this Agreement, under no circumstances shall any Member be obligated to make Capital Contributions to the Company.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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2.5          Issuance of Additional Units Upon Supermajority Approval of the Board and subject to the terms of Section 2.8 (but expressly excluding the Pre-Approved Capital Call under Section 2.9 which shall be deemed pre-approved by, and shall require no further approval of, the Board or Members), the officers of the Company are authorized from time to time to cause the Company to issue to the Members or other Persons additional Interests in the Company(such additional Interests being represented by additional Units of a class as determined by the Board) in order to raise capital for Company’s operations or to acquire assets, to redeem or retire Company debt, or for any other valid Business purposes that is in the best interests of the Company.  Any issuance of additional Interests to a Person who is not a Member shall be conditioned on compliance with this Section 2.6 and Section 2.8 and such Person executing and delivering to the Company a written agreement in form and substance reasonably satisfactory to the Board whereby such Person agrees to be bound by the terms of this Agreement.  Upon the issuance of any additional Interests pursuant to this Section 2.6, Annex A will be amended to reflect such issuance and the Units issued in respect thereof.

2.6          Admission of Additional Members Upon Supermajority Approval of the Board and subject to the terms of Sections 2.6 and 2.8, the officers of the Company may admit one or more Persons who are strategic and/or financial investors as additional Members (“Third Party Investors”).  Each additional Member shall:  (i) agree to be bound by the provisions of this Agreement; (ii) execute and deliver such documents as the Board deems appropriate in connection therewith; and (iii) contribute to the Company the Capital Contribution agreed upon between the additional Member and the Board in exchange for Units.  The Initial Members shall coordinate with each other prior to finalizing any material term sheets relating to any such Third Party Investor’s investment in the Company, and no offer shall be made to any Third Party Investor except upon Supermajority Approval of the Board.

2.7          Preemptive Rights.

(a)           Subject to clause (f) below, the officers of the Company shall not solicit capital contributions or issue any Interests (or Units) in the Company therefor unless it first delivers to each Initial Member (each such Initial Member being referred to in this Section 2.8 as a “Buyer”) a written notice (the “Notice of Proposed Issuance”) specifying the type and amount of such capital contributions and Interests (or Units) that Company then intends to issue therefor (the “Offered Interests”), all of the material terms, including the price (cash or non-cash) upon which Company proposes to issue the Offered Interests and stating that the Buyers shall have the right to purchase the Offered Interests in the manner specified in this Section 2.8 for the same price per share and in accordance with the same terms and conditions specified in such Notice of Proposed Issuance, provided, that if such price consists of non-cash consideration, a Buyer may purchase the Offered Interest with the same type and amount of non-cash consideration described in such Notice of Proposed Issuance or, may instead (at the election of such Buyer), pay for such Offered Interests with the cash equivalent of such price.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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(b)           During the *** Business Day period commencing on the date Company delivers to all of the Buyers the Notice of Proposed Issuance (the “*** Period”), the Buyers shall have the option to purchase up to all of the Offered Interests at the same price and upon the same terms and conditions specified in the Notice of Proposed Issuance. Each Buyer electing to purchase Offered Interests must give written notice of its election to Company prior to the expiration of the *** Period.

(c)           Each Buyer shall have the right to purchase up to that percentage of the Offered Interests equal to the Percentage Interest in the Company then held by such Buyer. The amount of such Offered Interests that each Buyer is entitled to purchase under this Section 2.8 shall be referred to as its “Proportionate Share.”

(d)           In the event that any Buyer elects not to purchase its full Proportionate Share of the Offered Interests pursuant to Sections 2.8 (a), (b) and (c) above, the Company shall deliver to all of the other Buyers  a written notice (the “Oversubscription Notice”) specifying the total number of Offered Interests not so purchased (the “Remaining Offered Interests”) within *** Business Days following the expiration of the *** Period set forth in Section 2.8(b) above.   Each such Buyer shall have a right of oversubscription to purchase up to the balance of such Offered Interests not so purchased at the same price and on the same terms and conditions set forth in the original Notice of Proposed Issuance.   Each such  Buyer who receives an Oversubscription Notice must exercise its right of oversubscription by giving the Company  written notice of its election  during the *** Business Day period following its receipt of the Oversubscription Notice. If, as a result thereof, such oversubscription elections exceed the total number of the Offered Interests available in respect to such oversubscription privilege, the oversubscribing Buyers shall be cut back with respect to oversubscriptions on a pro rata basis in accordance with their relative Proportionate Shares or as they may otherwise agree among such oversubscribing Buyers.

(e)           If all of the Offered Interests have not been purchased by the Buyers pursuant to the foregoing provisions, then General Manager shall have the right, until the expiration of *** days commencing on the first day immediately following the expiration of the *** Period, to issue the Offered Interests not purchased by the Buyers at not less than, and on terms no more favorable in any material respect to the purchaser(s) thereof than, the price and terms specified in the Notice of Proposed Issuance. If such remaining Offered Interests are not issued within such period and at such price and on such terms, the right to issue in accordance with the Notice of Proposed Issuance shall expire and the provisions of this Agreement shall continue to be applicable to the Offered Interests.

(f)           Notwithstanding the foregoing, the rights described in this Section 2.8 shall not apply with respect to the issuance of Excluded Securities.  For purposes of this Section 2.8, “Excluded Securities” shall mean any Interests in the Company (i) issued in connection with the ***, whether by the *** or otherwise, which has been Approved by the Board and/or Members, to the extent that Approval of the Board and/or Approval of the Members, including Supermajority Approval of the Board and/or Supermajority Approval of the Members, is required hereunder, (ii) issued as part of an ***, and (iii) issued to financial institutions, financial syndicates or lessors in connection with bona fide commercial credit arrangements, equipment financings, or similar transactions for primarily other than equity financing purposes not exceeding cumulatively (including all prior issuances of Interests (or Units) that are Excluded Securities pursuant to this Section 2.8(f)(iii)) in the aggregate *** of the aggregate Percentage Interests then outstanding and which have been Approved by the Board and/or Members, to the extent that Supermajority Approval or Approval of the Board and/or Supermajority Approval or Approval of the Members is required hereunder.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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2.8 Stand-by Equity Commitment.

(a)           In the event the ***, the Company is hereby authorized to demand a capital increase (or series of capital increases) of up to a total of $2,000,000 in Interests in the Company (the “Pre-Approved Capital Call”) from the Initial Members.  In the event that Company demands a Pre-Approved Capital Call, Company shall deliver to each Initial Member a written notice (the “Notice of Pre-Approved Capital Call”) specifying the amount of such capital contributions demanded and the Interests that Company then intends to issue therefor.  During the *** Business Day period commencing on the date Company delivers to all of the Initial Members the Notice of Pre-Approved Capital Call, each Initial Member shall have the obligation to subscribe to its pro rata share of such capital increase (or series of increases) in cash in an amount equal to its Percentage Interest of the Interests being issued at the same price and upon the same terms and conditions specified in the Notice of Pre-Approved Capital Call.  Each Initial Member shall confirm its obligation to purchase Interests in a Pre-Approved Capital Call by giving written notice of its confirmation to the Company prior to the expiration of such *** Business Day period.

(b)           In the event any Initial Member (a “Defaulting Party”) fails to meet any such capital call associated with a Pre-Approved Capital Call as reasonably determined by the Supermajority Approval of the Board, then the Company may seek specific performance by such Defaulting Party or a claim for damages against such Defaulting Party, or the non-defaulting Initial Members may, (i) elect to cover such shortfall and subscribe pro rata in accordance with their relative Percentage Interests (as of immediately prior to the subscription provided in this Section 2.9(b)) for such number of additional Interests (represented by Units of the same class as is set forth next to such Initial Member's name in Annex A hereto) necessary to make up the shortfall caused by the Defaulting Party’s failure to subscribe for the Interests, and all such additional Interests subscribed for in the Pre-Approved Capital Call pursuant to this Section 2.9 shall be issued at an issuance price equal to a *** discount to the lower of (a) $1,000 per Unit or (b) the issue price established by Supermajority Approval of the Board for the Interests to be issued pursuant to such Pre-Approved Capital Call (determined without regard to such discount); and (ii) seek amounts paid by such non-defaulting Initial Member from the Defaulting Party.  If the other non-defaulting Initial Members do not elect to fully fund such shortfall arising from the Defaulting Party’s failure to meet such Pre-Approved Capital Call, such non-defaulting Initial Members and the Company shall have the right to wind-up the Company pursuant to Section 12.1(a) and exercise any other remedies that may be available hereunder or under applicable law and shall retain all available legal remedies as against the Defaulting Party with respect the Defaulting Party’s failure to meet its obligation to subscribe to its pro rata share of the Pre-Approved Capital Call, subject to the limitations of liability in Section 5.10.  Notwithstanding the foregoing, (i) QC shall not have any obligation to meet capital calls associated with a Pre-Approved Capital Call as described above in the event that the Company materially breaches the QC Services Agreement or the QC Know-How License Agreement, except to the extent that QC caused the Company’s material breach of the QC Engineering Services Agreement or the QC Know How License Agreement(ii) HTI shall not have any obligation to meet capital calls associated with a Pre-Approved Capital Call as described above in the event that the Company materially breaches the HTI Infrastructure Access Agreement or the HTI Services Agreement and such agreement is properly terminated in connection therewith, except to the extent that HTI caused the Company’s material breach of such agreement, and (iii) AMAC shall not have any obligation to meet capital calls associated with a Pre-Approved Capital Call as described above in the event that the Company materially breaches the AMAC Reseller Agreement, except to the extent that AMAC caused the Company’s material breach of the AMAC Reseller Agreement.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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(c)           Additional subscriptions for Interests by a Member under this Section 2.9 shall be evidenced by the issuance of additional Units to such Member (corresponding to the amount of such Interests subscribed for) in the same class as the Units set forth next to each such Member on Annex A.

2.9         Loans by Members The Board may elect to solicit Members to loan funds to the Company for use in acquiring Company assets or in funding Company operations or reserves when the Company is in need of such funds.  Under no circumstances shall Members be obligated to make loans to the Company.  The terms of a loan, including but not limited to, the interest rate, term, security and prepayment rights, shall be as agreed upon by the Supermajority Approval of the Board to the extent required pursuant to Section 5.5, the Supermajority Approval of the Members pursuant to Section 5.6 and the Members making such loans.  Any such loan or advance made by a Member shall not be an increase in the Capital Account of the Member making the loan and the aggregate amount of all such advances shall be a debt obligation of the Company to the Member.

ARTICLE III

CAPITAL ACCOUNTS; BOOK ALLOCATIONS; DISTRIBUTIONS

3.1          Capital Accounts There shall be established for each Member on the books of the Company as of the Effective Date, or such later date on which such Member is admitted to the Company, a capital account (each being a “Capital Account”).  The Capital Account of each Member shall be credited with the Capital Contributions made (or deemed to have been made) by such Member, increased by any allocation of Profits (or items thereof) or assumption of liabilities and by any additional Capital Contributions by that Member, and shall be reduced by any allocation of Losses (or items thereof), any liabilities of a Member assumed by the Company and by any distribution to that Member. Capital Accounts shall be appropriately adjusted to reflect Transfers of all or part of a Member’s Interests.  Interest shall not be payable on Capital Account balances.  Schedule 3.1 hereto lists each Member's Capital Account on the Effective Date.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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3.2          Return of Capital Contributions.  Except as provided in and subject to Section 3.3 (Distributions) and Article XII (Wind-Up Events; Termination Events), no Member shall have any right to withdraw, or receive any return of, all or any portion of such Member’s Capital Contributions.

3.3 Distributions.

(a)           Ordinary Distributions.  Subject to Sections 3.3(a)(ii) and (iii), the Company shall make Ordinary Distributions in such amounts and at such times as the Board shall determine from time to time. If Ordinary Distributions are to be made of securities or other assets owned by the Company, in kind, the Board shall determine in good faith the fair market value of such securities and other assets. Ordinary Distributions shall be made among the Members in proportion to their respective Percentage Interests.

(i)              No distributions shall be made pursuant to this Section 3.3(a), or pursuant to Sections 3.3(b) and 3.3(c) below, to the extent that, after the distribution is made, the liabilities of the Company (other than liabilities for which recourse of creditors is limited to specific assets of the Company) would exceed the fair market value of the Company’s assets (net of any liabilities to which those assets may be subject).

(ii)             Following the *** anniversary of the Effective Date, the Company’s distribution policy shall be to distribute all available free cash flow of the Company after consideration of the subsequent year’s capital and operating budgets (the “Distribution Policy”).  Any changes to the Distribution Policy shall be subject to the Supermajority Approval of the Members as provided in Section 5.6.

(iii)            Prior to the *** anniversary of the Effective Date, *** shall be made pursuant to Section 3.3(a) *** the Supermajority Approval of the Members.

(b)   Tax Distributions.  To the extent the Company has available cash (as determined by the Board), prior to any distribution pursuant to Section 3.3(a) or Section 3.3(c), the Company will make cash distributions (“Tax Distributions”) to each Member at such times during the calendar year as the Board determines (provided that the Company shall be required, so long as it has available cash, to make Tax Distributions to the Members to satisfy their estimated (as estimated by the Company in good faith) and final income tax liabilities resulting from income generated by the Company for each taxable year), in an aggregate amount equal to the product of (i) forty percent (40%) and (ii) the amount of taxable income allocated to (or reasonably expected to be allocated to) such Member in or with respect to such taxable year. All Tax Distributions made to a Member are intended to be advance distributions of amounts that otherwise would have been distributed to such Member pursuant to Sections 3.3(a) and 3.3(c).  Accordingly, once a Tax Distribution has been made to a Member under this Section 3.3(b), all amounts thereafter that otherwise would have been distributed to such Member pursuant to Sections 3.3(a) and 3.3(c) shall not be distributed to such Member until the aggregate amount of such distributions that such Member otherwise would have received pursuant to Sections 3.3(a) and 3.3(c) had no Tax Distributions been made equals the aggregate amount of the Tax Distributions made to such Member pursuant to this Section 3.3(b).  Except as described in the following sentence, the Members will have no obligation to re-contribute Tax Distributions to the Company.  Upon liquidation of the Company or liquidation of a Member’s interest in the Company (within the meaning of Section 1.704-1(b)(2)(ii)(g) of the Regulations), each Member (in the case of the liquidation of the Company) or the liquidating Member (in the case of a liquidation of a Member’s interest) is obligated to contribute cash to the Company in the amount of the excess, if any, of the aggregate amount of Tax Distributions made to such Member over the aggregate amount of the distributions that such Member otherwise would have received pursuant to Sections 3.3(a) and 3.3(c) had no Tax Distributions been made.  For the avoidance of doubt, the restrictions set forth in Section 3.3(a)(iii) shall not apply to Tax Distributions.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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(c)           Capital Event Distributions.  Subject to Section 13.1(b), any Capital Event Distributions shall be made among the Members first in the amount of and in proportion to their respective Unreturned Capital Contributions and then in proportion to their respective Percentage Interests.

3.4           Allocations of Profits and Losses         Profits.  After application of Sections 3.5, 3.6 and 3.7, Profits for each Fiscal Year or other taxable period shall be allocated among the Members in the following order and priority:

(i)           First, to the Members in proportion to and to the extent of the excess, if any, of (A) the cumulative Losses allocated to each Member pursuant to Section 3.4(b)(ii) for all prior Fiscal Years or other applicable periods over (B) the cumulative Profits allocated to such Member pursuant to this Section 3.4(a)(i) for all prior Fiscal Years or other applicable periods; and

(ii)           Thereafter, the balance of the Profits, if any, shall be allocated to the Members pro rata in accordance with their respective Percentage Interests.

(b)           Losses. After application of Sections 3.5, 3.6 and 3.7, Losses for each Fiscal Year or other taxable period shall be allocated among the Members in the following order and priority:

(i)            First, to the Members in proportion to the excess, if any, of (A) the cumulative Profits allocated to each Member pursuant to Section 3.4(a)(ii) for all prior Fiscal Years or other applicable period, over (B) the cumulative Losses allocated to each Member pursuant to this Section 3.4(b)(i) for all prior Fiscal Years or other applicable periods; and

(ii)           Then, to each Member in proportion to and in the amount of its respective ***; and

(iii)          Thereafter, the balance of the Losses, if any, shall be allocated to the Members pro rata in accordance with their respective Percentage Interests.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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3.5          Special Allocations.  The following special allocations shall be made in the following order:

(a)           Qualified Income Offset.  In the event any Member unexpectedly receives any adjustments, allocations or distributions described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5), or (6), then items of Company income and gain shall be specially allocated to such Member in an amount and manner sufficient to eliminate, to the extent required by the Regulations promulgated under Section 704(b) of the Code, the deficit balance, if any, in its Adjusted Capital Account created by such adjustments, allocations or distributions as quickly as possible unless such deficit balance is otherwise eliminated pursuant to Section 3.5(b) or (c).  This Section 3.5(a) is intended to qualify and be construed as a “qualified income offset” within the meaning of Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

(b)           Minimum Gain Chargeback.  If there is a net decrease in “partnership minimum gain” (as that term is defined in Sections 1.704-2(b)(2) and 1.704-2(d) of the Regulations) during any Fiscal Year or other taxable period, each Member shall, to the extent required by Section 1.704-2(f) of the Regulations, be specially allocated items of Company income and gain for such Fiscal Year or other taxable period (and, to the extent required by Section 1.704-2(j)(2)(iii) of the Regulations, subsequent Fiscal Years or taxable periods) in an amount equal to that Member’s share of the net decrease in partnership minimum gain.  Allocations pursuant to the previous sentence shall be made in accordance with Section 1.704-2(f)(6) of the Regulations.  This Section 3.5(a) is intended to comply with the minimum gain chargeback requirement in Section 1.704-2(f) of the Regulations and shall be interpreted consistently therewith.

(c)           Member Minimum Gain Chargeback.  If there is a net decrease in “partner nonrecourse debt minimum gain” (as that term is defined in Sections 1.704-2(i)(2) and (3) of the Regulations) during any Fiscal Year or other taxable period, each Member who has a share of that partner nonrecourse debt minimum gain as of the beginning of the Fiscal Year or other taxable period shall, to the extent required by Section 1.704-2(i)(4) of the Regulations, be specially allocated items of Company income and gain for such Fiscal Year or taxable period (and, if necessary, subsequent Fiscal Years or taxable periods) equal to that Member’s share of the net decrease in partner nonrecourse debt minimum gain.  Allocations pursuant to the previous sentence shall be made in accordance with Section 1.704-2(i)(4) of the Regulations.  This Section 3.5(b) is intended to comply with the requirement in Section 1.704-2(i)(4) of the Regulations and shall be interpreted consistently therewith.

(d)           Nonrecourse Deductions.  “Nonrecourse deductions” (as that term is defined in Sections 1.704-2(b)(1) and (c) of the Regulations) for any Fiscal Year or other taxable period shall be specially allocated to the Members in proportion to the number of Units each holds.

(e)           Member Nonrecourse Deductions.  “Partner nonrecourse deductions” (as that term is defined in Section 1.704-2(i) of the Regulations) for any Fiscal Year or other taxable period shall be specially allocated to the Member who bears the economic risk of loss with respect to the “partner nonrecourse debt” (as that term is defined in Section 1.704-2(b)(4) of the Regulations) to which such partner nonrecourse deductions are attributable, in accordance with Regulations Section 1.704-2(i)(1).

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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(f)           Section 754 Adjustments.  To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Code Section 734(b) or Code Section 743(b) is required, pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital Accounts, the amount of such adjustment to Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) and such gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Regulations.

3.6          Other Special Allocations.  For any Fiscal Year or other taxable period, each Member that makes a contribution described in Section 2.2(b) or 2.3(c) shall be specially allocated items of book gain attributable to the increases in Gross Asset Value of the Company's assets resulting from such contributions (as such increases are described in Section 2.3A) in an amount equal to the value of such contributions made by such Member.

3.7          Curative Allocations The allocations set forth in Section 3.5 (the “Regulatory Allocations”) are intended to comply with certain requirements of the Regulations.  It is the intent of the Members that, to the extent possible, all Regulatory Allocations that are made be offset either with other Regulatory Allocations or with special allocations pursuant to this Section 3.7.  Therefore, notwithstanding any other provision of this Article III (other than the Regulatory Allocations), the Board shall make such offsetting special allocations in whatever manner it determines appropriate so that, after such offsetting allocations are made, each Member’s Capital Account balance is, to the extent possible, equal to the Capital Account balance such Member would have had if the Regulatory Allocations were not part of the Agreement and all Company items were allocated pursuant to Section 3.4.  In exercising its discretion under this Section 3.7, the Board shall take into account future Regulatory Allocations under Sections 3.5(a) and 3.5(b) that, although not yet made, are likely to offset other Regulatory Allocations previously made under Sections 3.5(c) and 3.5(d).

3.8          Other Allocation Rules (a)           For purposes of determining the Profits, Losses, or any other items allocable to any taxable period, Profits, Losses, and any such other items shall be determined on a daily, monthly, or other basis, as determined by the Board using any permissible method under Code Section 706 and the Regulations thereunder.

(b)           Except as otherwise provided in this Agreement, all items of Company income, gain, loss, deduction, and any other allocations not otherwise provided for shall be divided among the Members in the same proportions as they share Profits or Losses, as the case may be, for the Fiscal Year or other taxable period.

(c)           To the extent a taxing authority successfully asserts that any deduction claimed by a Member in such Member's capacity as other than a Member of the Company is properly allowed to the Company (and not to the Member in its capacity as other than a Member), then the Member shall be treated as having made a Capital Contribution in the amount of such deduction, and shall be specially allocated such deduction in such amount.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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(d)           The Members are aware of the income tax consequences of the allocations made by Article III of the Agreement and hereby agree to be bound by such provisions in reporting their shares of Company income and loss for income tax purposes.

(e)           Solely for purpose of determining a Member’s proportionate share of the “excess nonrecourse liabilities” of the Company within the meaning of Regulation Section 1.752-3(a)(3), each Member’s interest in the Company’s profits shall be such Member’s Percentage Interest.

(f)           To the extent permitted by Regulation Section 1.704-2(h)(3), the Board shall endeavor to treat distributions as having been made from the proceeds of a nonrecourse liability or a partner nonrecourse debt only to the extent that such distributions would cause or increase a deficit in an Adjusted Capital Account for any Member.

3.9          Tax Allocations:  Code Section 704(c) (a)           In accordance with Code Section 704(c) and the Regulations thereunder, income, gain, loss, and deduction with respect to any property contributed to the capital of the Company shall, solely for tax purposes, be allocated among the Members so as to take account of any variation between the adjusted basis of such property to the Company for federal income tax purposes and its initial Gross Asset Value.

(b)           In the event the Gross Asset Value of any Company asset is adjusted pursuant to clauses (i), (ii), or (iii) of the definition of Gross Asset Value, subsequent allocations of income, gain, loss, and deduction with respect to such asset shall take account of any variation between the adjusted basis of such asset for federal income tax purposes and its Gross Asset Value in the same manner as under Code Section 704(c) and the Regulations thereunder.

(c)           Any elections or other decisions relating to such allocations shall be made by the Board.  Allocations pursuant to this Section 3.8 are solely for purposes of U.S. federal, state, and local taxes and shall not affect, or in any way be taken into account in computing, any Member’s Capital Account or share of Profits, Losses, other items, or distributions pursuant to any provision of this Agreement.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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3.10        Tax Withholding (a)           The Company shall withhold and/or pay over to the Internal Revenue Service or other applicable taxing authority all taxes or withholdings, and all interest, penalties, additions to tax, and similar liabilities in connection therewith or attributable thereto (hereinafter “Withheld Taxes”) to the extent that the Tax Matters Member in good faith determines that such withholding and/or payment is required by the Code or any other law, rule, or regulation.  The Tax Matters Member in good faith shall determine to which Member such Withheld Taxes are attributable.  For example, Withheld Taxes measured with respect to a Member’s distributive share of the Company’s income, gain, or other Company item would be attributable to such Member.  All Withheld Taxes withheld and/or paid over that are attributable to a Member shall, at the option of that Member (or the Tax Matters Member if the Member fails to exercise such option), (i) be promptly paid to the Company by the Member on whose behalf such advances of Withheld Taxes were made or (ii) be considered a loan (a “Withholding Loan”) by the Company to such Member.  Whenever the option set forth in clause (ii) of the immediately preceding sentence is selected, the borrowing Member shall repay such Withholding Loan within *** after the Tax Matters Member delivers a written demand therefor, together with interest from the date such loan was made until the date of the repayment thereof at a rate per annum equal to two percent (2%) plus the prime interest rate of JPMorgan Chase & Co. (or its successor) in effect during such period (or, if less, the maximum interest rate allowed under applicable law).  In addition to any other rights of the Company to enforce its right to receive payment of the Withholding Loan, plus any accrued interest thereon, the Company may deduct from any distribution to be made to a borrowing Member or any amount available for distribution to a borrowing Member an amount not greater than the outstanding balance of any Withholding Loan, plus any accrued interest thereon, as a payment in total or partial satisfaction thereof.  In the event that the Company deducts the amount of the Withholding Loan plus any accrued interest thereon from any actual distribution or amount otherwise available to be distributed, the amount that was so deducted shall be treated as an actual distribution to the borrowing Member for all purposes of this Agreement and the Member shall be treated as having repaid to the Company the amount withheld immediately after such distribution in satisfaction of the loan.  With respect to any amounts not offset pursuant to the immediately preceding sentence, the maturity of such Withholding Loan shall be the dissolution of the Company or *** after the delivery of a written demand for satisfaction of the loan by the Tax Matters Member.

(b)           If any amount payable to the Company is reduced because the Person paying that amount withholds and/or pays over to the Internal Revenue Service or other applicable taxing authority any amount as a result of the status of a Member, the Tax Matters Member shall make such adjustments to amounts distributed and allocated among Members as it determines to be fair and equitable.  For example, if a portion of interest income earned by the Company is withheld by the payor and paid over to the Internal Revenue Service because a particular Member is a non-U.S. Person, the Tax Matters Member shall include such withheld and paid over amount in computing amounts available for distribution to the Members pursuant to Section 3.2 and treat such withheld and paid over amount as if that amount were distributed to the Member in satisfaction of whose tax liability such amount was withheld and paid over.

3.11        Successors in Interest If a Member Transfers all or part of its Interest, references in this Article III to amounts previously contributed by such Member or to amounts previously allocated or distributed to such Member shall refer to the transferee to the extent they pertain to the Transferred Interest.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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ARTICLE IV

MEMBERS

4.1 Members Rights.

(a)           Voting Rights.  All action required or permitted to be taken by the Members pursuant to this Agreement shall be duly taken if Approved by the Members holding an aggregate of Units representing a majority of the Units entitled to vote thereon, unless Supermajority Approval of the Members is required pursuant to Section 5.6. Except with respect to matters that are expressly designated by this Agreement as class votes, each holder of Units shall be entitled to vote on all matters to come before the Members and each Unit shall be entitled to one vote.

(b)           No Authority to Bind Company.  No Member as such shall have authority or take any action to bind the Company.

(c)           No Compensation to Members.  No Member shall be entitled to receive any compensation or reimbursement from the Company with respect to the Member’s activities in connection with or on behalf of the Company, except as otherwise provided herein or in the Transaction Agreements, or as may be otherwise Approved by the Board and Approved by the Members by Supermajority Approval pursuant to Section 5.6.

4.2 Members Meetings.

(a)           Meetings.  Meetings of the Members may be called at any time upon request of an Initial Member or the Board; provided, however, that no Initial Member may request more than *** such meetings in any calendar quarter without the consent of the holders of a majority of the ***.

(b)           Quorum.  The presence of representatives of a majority of the Units entitled to vote at such meeting shall constitute a quorum for Member’s meetings.  A quorum must be present at the beginning of and throughout each meeting.

(c)           Place of Meetings.  Subject to Section 4.4, meetings of the Members shall take place at the Company’s principal place of business unless an alternate location is set forth by the General Manager upon written notice to the Members pursuant to Section 4.2 (d) below.

(d)           Notice.  Whenever Members are required or permitted to take action at a meeting, written or printed notice stating the place, date, time, and the purpose or purposes of such meeting, shall be given to each Member entitled to vote at such meeting not less than *** nor more than *** days before the date of the meeting.  All such notices shall be delivered, either personally (whether orally or in writing), by telephone, including a voice messaging system or other system or technology designed to record and communicate messages, facsimile, telegraph or telex, or by electronic mail or other electronic means, or by mail, by or at the direction of the Board or the General Manager, and if mailed, such notice shall be deemed to be delivered when deposited in the U.S. mail, postage prepaid, addressed to the Member at such Member’s address as it appears on the records of the Company.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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4.3           Action Without a Meeting Any action required or permitted to be taken by the Members may be taken without a meeting, without notice and without a vote if a consent in writing (including by electronic transmission), describing the action taken, is signed by the Members owning not less than the minimum number of Units that would be necessary to authorize or take such action at a meeting at which all Units entitled to vote thereon were present and voted; ***.  For the avoidance of doubt, being *** for purposes of this Section 4.3 and 5.4(e) means that the particular subject matter or action was *** at a meeting and not that any specific *** for such action or matter were *** the Board for *** or ***.  All actions by written consent shall be included in the minutes of the Members’ meetings.  Notwithstanding anything to the contrary herein, the Company shall provide written notice to all non-consenting Members describing any action taken by the Members without a meeting as soon as reasonably practicable after such action is taken, but in no event later than *** days after such action is taken.

4.4           Meetings by Telephone Meetings of the Members may be held by telephone conference or by any other means of communication by which all participants can hear each other simultaneously during the meeting, and such participation shall constitute presence in person at the meeting.

4.5           Minutes of Meetings A designee of the Members shall keep written minutes of any meeting of Members, including the results of any votes taken.

4.6           Waiver of Notice When any notice is required to be given to any Member, a waiver thereof in writing signed by the Member entitled to such notice, whether before, at, or after the time stated therein, shall be equivalent to the giving of such notice.  Attendance at a meeting shall constitute waiver of notice of the meeting unless the Member at the beginning of the meeting objects to holding the meeting or transacting business at the meeting.

4.7           Conflicts of Interest A Member may lend money to and transact other business with the Company subject to the Approval of the Board (or Supermajority Approval of the Board if required under Section 5.5) and the Supermajority Approval of the Members.  The rights and obligations of a Member who lends money to or transacts business with the Company are the same as those of a Person who is not a Member, subject to other applicable law.

4.8           Conflict of Interest with ***.  In the event that *** (i) acquires a direct ownership interest in excess of *** in a *** of the Company, (ii) such Member actively *** and *** (through being *** involved in the *** or *** of such *** or as the *** of the *** and *** of) such ***, and (iii) there would be a direct ***, as determined in good faith by counsel to the Company, with respect to a particular matter or action requiring Supermajority Approval of the Members as set forth in Section 5.6 or Supermajority Approval of the Board as set forth in Section 5.5 (but in each case solely to the extent that there is an actual material conflict of interest with respect to such matter or action and solely with respect to the particular item for which there is such a conflict of interest), then such Member (or its designated Director(s), as applicable) would abstain from the vote or approval with respect to such matter or action (or particular item, as appropriate) and, for purposes of Approval of such matter or action only, a majority of the remaining Members or Directors, as applicable, would constitute Supermajority Approval of the Members or Supermajority Approval of the Board, as applicable, with respect to such action or matter.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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ARTICLE V

MANAGEMENT AND OPERATIONS

5.1           Power and Authority of Members The Members shall manage the Company only through their designated Directors on the Board and, except for the right to (i) appoint Directors pursuant to Section 5.3 and (ii) vote on certain matters as provided in Section 5.6 (or as otherwise expressly provided in this Agreement), the Members, in their capacity as such, shall have no authority or right to act on behalf of or bind the Company in connection with any matter.

5.2            Power and Authority of Directors The business and affairs of the Company shall be managed by or under the direction of the Board of Directors (the “Board”), except as expressly permitted in this Agreement.  Except with respect to matters requiring Supermajority Approval of the Members as provided in Section 5.6, the Board shall have the power on behalf and in the name of the Company to carry out any and all of the objects and purposes of the Company contemplated by Section 1.6 and to perform all acts or delegate such authority which they may deem appropriate, necessary or advisable in connection therewith.  The Board shall be the “manager” of the Company for purposes of the Delaware LLC Act.  To the extent that Approval is required under this Agreement, no individual Director or Member, nor any officer, employee or agent of the Company, nor any other Person, shall take any actions on behalf of the Company without such Approval.

5.3            Board of Directors (a)           Directors shall be elected by and serve at the discretion of the Class A, Class B and Class C Members as set forth below.  The Board shall consist of not less than *** and not more than *** Directors.  Except as otherwise set forth in this Section 5.3, Board seats will in general be conferred on a pro-rata basis based on a Member’s Percentage Interest, subject to a minimum of *** for *** Percentage Interest of ***; provided that *** shall be entitled to nominate at least *** Director so long as it maintains a minimum Percentage Interest of at least *** percent *** (as adjusted for conversions, Unit splits and the like) and fulfills its *** if called upon to do so by the Board under Section 2.9 of this Agreement.  The initial Board shall have *** natural persons, *** of whom shall be designated by HTI (the “Class A Directors”), *** of whom shall be designated by QC (the “Class B Directors”) and *** of whom shall be designated by AMAC (the “Class C Director”).  In the event that an Initial Member fails to maintain its initial Percentage Interest but fulfills its pro rata portion of any Pre-Approved Capital Call if called upon to do so by the Board under Section 2.9 of this Agreement, such Initial Member shall be allowed *** so long as such Initial Member maintains a minimum Percentage Interest of at least ***.  Notwithstanding the foregoing, the Board, in the exercise of its reasonable discretion, shall have the right to recuse *** from participating in any portion of any meeting of the Board (or any committee thereof) and shall have the right to restrict *** access to any information or materials to the extent such meeting or information or materials (i) relates to issues where *** between the Initial Member who appointed such *** and the Company or any of the Company’s Subsidiaries or Affiliates or (ii) otherwise constitutes ***, information or discussion (including *** and proposals and other *** information or data) the disclosure to, or use of which by, the Member who appointed *** or any of its Affiliates could reasonably be expected to be *** to the interests of, or jeopardize in any material respect the competitive position of, the Company or any of its Affiliates or Subsidiaries, in each case as determined by the Board in its reasonable discretion.  The Directors as of the date of this Agreement are set forth on Schedule 5.3 hereto.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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(b)           The Class A, Class B and Class C Members may elect an alternate Director to act for and fulfill the obligations of their respective Directors in the event that their Director(s) is unable to attend any meeting of the Board or any committee thereof.  Any such alternates are listed on Schedule 5.3, or if appointed after the date hereof, shall be specified in writing by the electing Member to the General Manager.  Any appointment of an alternate Director or Observer may be changed by the electing Member by providing written notice of such change to the General Manager.

(c)           No Person shall be elected or appointed a Director, alternate Director or Observer if that Person is less than 18 years of age, is of unsound mind and has been found so by a court, is not an individual, or has filed for bankruptcy or for similar protection from creditors within the prior five years.  Any Director appointed pursuant to this Section 5.3, and any alternate acting for such Director, shall assume the powers, duties and obligations of a Director as provided under this Agreement and shall be subject to the terms hereof.  Any Person appointed as a Director and any alternate shall be deemed to have agreed to accept such Director’s rights and authority hereunder and to perform and discharge such Director’s duties and obligations hereunder by performing any act in the capacity of Director hereunder (including but not limited to participating in any meeting of the Board or executing any written consent of the Board), and such rights, authority, duties and obligations hereunder shall continue until such Director’s successor is designated or until such Director’s earlier resignation or removal in accordance with this Agreement.

(d)           By a majority vote of the Class A Units, (i) any one or all of the Class A Directors may at any time, by notice to the Company and the other Members, be removed, with or without cause, and (ii) any vacancy on the Board caused by the removal, resignation or death of a Class A Director may be filled. By a majority vote of the Class B Units, (i) any one or all of the Class B Directors may at any time, by notice to the Company and the other Members, be removed, with or without cause, and (ii) any vacancy on the Board caused by the removal, resignation or death of a Class B Director may be filled.  By a majority vote of the Class C Units, (i) any Class C Director may at any time, by notice to the Company and the other Members, be removed, with or without cause, and (ii) any vacancy on the Board caused by the removal, resignation or death of a Class C Director may be filled.  Upon election of a Director, the electing Member shall, in a notice to the other Members, in each case set forth that Director’s business address and telephone number. Such Member shall give notice to the other Members promptly upon being informed of any change in the business address or telephone number of any of the Directors elected by such Member.  Any director may resign at any time by giving written notice to the General Manager. Such resignation shall take effect at the time specified in such notice or, if the time be not specified, upon receipt thereof by the General Manager.  Unless otherwise specified therein, acceptance of such resignation shall not be necessary to make it effective. In the event of the death, disability, resignation or removal of any Director, the Member which designated such director shall designate his or her replacement.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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5.4           Meetings (a)           The quorum for meetings of the Board shall be at least ***.  A quorum must be present at the beginning of and throughout each meeting.  If within one hour of the time appointed for a meeting a quorum is not present, the Directors that are present may determine to reschedule such meeting.  A notice to that effect shall be given to each Director not less than *** prior to the rescheduled meeting.  Notice of the time and place of all meetings of the Board shall be delivered orally or in writing, by telephone, including a voice messaging system or other system or technology designed to record and communicate messages, facsimile, telegraph or telex, or by electronic mail or other electronic means, during normal business hours. If such notice is sent by U.S. mail, it shall be sent by first class mail, charges prepaid, at least *** before the date of the rescheduled meeting. If at such rescheduled meeting a quorum is not present within one hour from the time appointed for such rescheduled meeting, any *** Directors present in person shall constitute a quorum; provided, however, that no such quorum may take any action requiring Supermajority Approval of the Board and such quorum shall include at least ***.

(b)           The Board shall meet at a minimum on a *** basis at such venue and on the dates and at the times determined by the Board.  The Board may meet at such other times as any Class A Director or Class B Director may request; provided, however, that the Class A Directors (as a group) may not request more than *** such meetings in any calendar *** without the consent of a Class B Director and the Class B Directors (as a group) may not request more than *** such meetings in any calendar *** without the consent of a Class A Director; provided further that for *** years following the Effective Date of this Agreement, the *** may also request up to *** meetings of the Board per *** but in no event more than *** such meeting in any ***.  For *** meetings of the Board designated at the previous *** meeting, no notice is required to be given.  For all other meetings of the Board, not less than *** notice of each meeting specifying the date, time and place of the meeting and all the business to be transacted thereat shall be given to each Director, unless waived in writing by at least one (1) Class A Director and at least one (1) Class B Director (before or after a meeting).  Such notices of the time and place of all special meetings of the Board of Directors shall be delivered orally or in writing, by telephone, including a voice messaging system or other system or technology designed to record and communicate messages, facsimile, telegraph or telex, or by electronic mail or other electronic means, during normal business hours, at least *** hours before the date and time of the meeting. If notice is sent by U.S. mail, it shall be sent by first class mail, charges prepaid, at least *** days before the date of the meeting.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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(c)           No decision shall be reached at any meeting of the Board or any resolution passed on any matter which has not been specified in the agenda contained in the notice of such meeting unless a *** is present at the meeting and such matter is unanimously Approved by the Directors present.  Board meetings shall be invalid unless the requisite notice has been given or waived in writing by at least *** Class A Director and at least *** Class B Director  (before or after the meeting).  Except as required by law or elsewhere in this Agreement, questions arising at any meeting shall be decided by a majority of votes of the then incumbent Directors, provided that such decisions shall include at least *** Class A Director and at least *** Class B Director.  Directors may participate in a meeting of the Board by means of conference telephone or similar communications equipment whereby all Persons participating in the meeting can hear each other and such participation shall constitute presence in person.

(d)           If one of the Directors (or his or her alternate) elected by a Class of Members shall be absent from a meeting of the Board, the other Director or Directors (or his or her alternate(s)) appointed by such Class shall be entitled to exercise the absent Director’s voting rights at such meeting.

(e)           Any action required or permitted to be taken by the Board may be taken without a meeting if a consent in writing (including by electronic transmission), describing the action taken, is signed by the number of Directors constituting Supermajority Approval of the Board.  Such action shall be included in the minutes of the Board.  ***:

(i)          any material *** to the Business Plan or Approved Plan;

(ii)         *** in the issued and subscribed capital and/or paid in capital of the Company by more than *** beyond that set forth in any Approved Plan;

(iii)         the Initial Public Offering and the terms and conditions of the Company’s issuance thereof;

(iv)        the Company’s issuance of *** (as defined below) to any Person or group of Persons in one transaction or a series of related transactions, in each case other than (a) to an existing Member or an Affiliate of an existing Member or (b) a Person or group of Persons who will have an aggregate Percentage Interest of *** following the transaction;

(v)         any *** the Company in or *** to or *** by the Company of any Subsidiary or Affiliate, or the Company’s *** or other *** of or *** stock or equity interest in any ***, other than (1) *** in the ordinary course of Business of the Company and (2) transactions not in excess of ***;

(vi)        the Company’s *** into any *** not in the ordinary course of Company’s Business, and not contemplated in an Approved Plan, in excess of ***; and

(vii)       the appointment to or change of *** of the Company’s *** during the *** period following the Effective Date, including, without limitation, ***.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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(f)          A designee of the Board shall keep written minutes of any meeting of the Board, including the results of any votes taken.

(g)          In the event that any Initial Member believes in good faith that the Company should pursue a claim or action (whether as a claim or action through arbitration, litigation or similar proceedings and whether as a claim or action for damages, specific performance or another equitable remedy) ***, such Initial Member has notified the Company of such belief and the Company has failed to pursue such claim or actions *** within *** of the date of such notice to the Company, then the Initial Members holding a majority of the Units held by all Initial Members (excluding the Units held by the ***) may call a meeting of the Board by providing notice of such meeting in accordance with Section 5.4(b) to all the members of the Board. At any such meeting a quorum for the meeting shall be deemed to be present so long as a majority of the members of the Board not affiliated or designated *** are present, and the Company shall pursue any action or claim that a majority of the members of the Board *** may determine.

5.5          Actions Requiring Supermajority Approval of the Board Notwithstanding anything in this Agreement to the contrary, the following actions shall require the Supermajority Approval of the Board:

(i)           The Company’s initial annual budget, and any modifications to the Business Plan or other Approved Plan;

(ii)          Increases in the issued and subscribed capital and/or paid in capital of the Company beyond that set forth in any Approved Plan;

(iii)         The Initial Public Offering and the terms and conditions of the Company’s issuance thereof;

(iv)         The Company’s issuance of securities or instruments convertible into, or exchangeable or redeemable for Interests, including without limitation convertible bonds (collectively “Convertible Securities”);

(v)          The Company’s issuance of securities or other debt obligations (including, without limitation, bank facilities, vendor finance, or lease financing), other than Convertible Securities covered by clause (iv) above, in amounts in excess of ***;

(vi)         The Company’s granting of any pledge, mortgage or security interest in any assets of the Company or any other encumbrance of the assets of the Company, other than in the ordinary course of the Business of the Company and representing assets having a fair market value under an aggregate of ***;

(vii)        The Company’s entering into any material joint venture or other material partnership or material teaming arrangement with any Person (except as contemplated under the Transaction Agreements);

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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(viii)       Any investment by the Company in or capital contribution to or incorporation by the Company of any Subsidiary or Affiliate, or the Company’s purchase or other acquisition of or investment in any stock or equity interest in any Person or business, other than acquisitions or investments in the ordinary course of Business of the Company and not in excess of ***;

(ix)          The Company’s transfer to any Person of any interest in any of the Company’s trade names, trademarks or any goodwill associated with any of the foregoing;

(x)           The Company’s entering into any contract or binding arrangement in the ordinary course of Company’s Business, but not contemplated in an Approved Plan, in excess of ***;

(xi)          The institution or settlement by the Company of any arbitration, litigation or similar proceedings relating to any claim totaling more than ***, except against a Member or any Affiliate of such Member, in which case only the vote of a majority of the Board not affiliated with the Member or its Affiliate with which the Company has a dispute shall be required;

(xii)         Any material change in the Company’s accounting or tax policies, except to the extent required by changes in GAAP or applicable tax law;

(xiii)        The change of the Company’s independent Accountants from the Initial Accountants or any change to any previously Approved successor Accountants; and

(xiv)        The appointment to or change of composition of the Company’s Executive Management Team during the *** period following the Effective Date, including, without limitation, ***.

5.6          Decisions Requiring Supermajority Approval of the Members Notwithstanding anything in this Agreement to the contrary, the following actions shall require the Supermajority Approval of the Members:

(i)            Subject to Section 14.3, any amendments to or modifications of the Certificate of Formation of the Company or this Agreement, including, without limitation, any changes to the Business of the Company or the name under which the Company conducts its Business or the inclusion of any additional Member;

(ii)           Any change in the Board conferred authorities of officers comprising the Executive Management Team of the Company;

(iii)          Any modification or amendment to the Distribution Policy;

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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(iv)          Any Capital Event, amalgamation, merger or split off of the Company or Transfer by any Member or group of Members (other than to other Members and/or to Permitted Transferees of Members) in one or more related transactions of greater than *** of the total number of Units then issued and outstanding (excluding Units in the Company’s treasury (if any), provided that no such Supermajority Approval of the Members shall be required in connection with any such amalgamation, merger or split off of the Company or any such Transfer that results from a Liquidity Demand Notice in accordance with Section 8.5 that is initiated by a Demanding Member that holds  less than a majority of the issued and outstanding Units (excluding Units in the Company’s treasury (if any)).

(v)           Other than as contemplated by the Transaction Agreements, the Company’s entering into or terminating any agreement related to the Company’s intellectual property rights or the purchase or transfer of technology other than in the ordinary course of business;

(vi)           Any winding-up, dissolution or voluntary liquidation of the Company or termination of this Agreement (a) following the date *** after the Effective Date provided that the Members constituting Supermajority Approval of the Members reasonably determined in good faith that it is not commercially practicable for the Company to remain in business, taking into account the technical feasibility of the product and services offered or proposed to be offered by the Company and/or the financial feasibility of the Company’s business, including its cash needs and projected profitability (the “Company Prospects”), or (b) ***;

(vii)           The sale, transfer or other disposition of assets or property of the Company, in a single transaction or in a series of related transactions, constituting, in the aggregate, *** or more of the Company’s total assets or any transaction pursuant to which a majority of the Units is acquired by any Person or Persons if such Person or Persons acquires a majority of the outstanding Units as a result of the issuance by the Company of additional Units to such Person or Persons;

(viii)          The Company’s entering into any transaction, contract or obligation with a Member or an Affiliate of a Member, except as contemplated by the Transaction Agreements, and the Company’s amending or terminating any Transaction Agreements or any other transaction with a Member or an Affiliate of a Member (provided, that for purposes of such Approval only, (x) such interested Member shall abstain from voting and a minimum of *** of the remaining Members shall constitute Supermajority Approval of the Members and (y) if either of *** cease to own at least *** of the respective number of Units owned by each such Initial Member on the Effective Date (as adjusted for conversions, Unit splits and the like), such interested Member shall abstain from voting and a majority of the remaining Members shall constitute sufficient approval of the Members);

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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(ix)             The Company’s making any loan, advance or extension of credit other than in the ordinary course of the Company’s Business and in excess of ***;

(x)              Any capital contribution by the Company to any other Person or any investment in or incorporation by the Company of any Subsidiary or Affiliate, or the Company’s purchase or other acquisition of or investment in any stock or equity interest in any Person, other than acquisitions or investments in the ordinary course of Business of the Company and under ***;

(xi)              The increase or decrease of the number of Directors constituting the Board; and

(xii)             The terms of compensation of the Directors pursuant to Section 5.8.

5.6A       Decisions and Circumstances Requiring ***. Notwithstanding anything in this Agreement to the contrary, the *** Approval of *** shall be required for (i) any winding-up, dissolution or voluntary liquidation of the Company or termination of this Agreement *** period following the Effective Date; or (ii) any amendment or deletion of ***.  In addition, in no event may any winding-up, dissolution or liquidation of the Company take place without providing *** written notice, provided that in the case of an involuntary bankruptcy or involuntary insolvency, *** written notice of such winding-up, dissolution or liquidation.

5.7           Board Committees The Board may submit and delegate for recommendation to the Board for Board Approval, any matter, function or responsibility to any special committee established by the Board as it deems appropriate, under guidelines which it may determine.  In addition, the Board may form a compensation committee and an audit committee and may submit and delegate for approval by such Committee any matter, function or responsibility customarily delegated to such committees established by the Board as the Board deems appropriate, under guidelines which it may determine.  On any such committee the Members’ representation will be determined by the Board.  Any such committee shall include at least one Class A Director for so long as the holders of a majority of Class A Units are entitled to designate a Class A Director and at least one Class B Director for so long as the holders of a majority of Class B Units are entitled to designate a Class B Director.

5.8           Board Compensation The Members by Supermajority Approval shall have the authority to fix the compensation, if any, of the Directors, and the Company’s officers, which compensation shall be an expense of the Company incurred in the ordinary course of business.  The Directors shall be reimbursed their reasonable travel and other associated, reasonable, out-of-pocket expenses incurred in connection with their service to the Company upon submission to the Company of appropriate supporting documentation of such expenses.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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5.9 Officers; Executive Management Team.

(a)           Subject to Section 5.5(xiv), the Board by Supermajority Approval may appoint such officers and agents as it shall deem advisable, each of whom shall hold office for such term and shall exercise such powers and perform such duties within delegations of authority as shall be determined from time to time by the Board by Supermajority Approval.  Any number of offices may be held by the same Person.

(b)           The Company shall have an executive management team (the “Executive Management Team”) which shall consist of the general manager (the “General Manager”), the lead financial manager and the lead technical manager, all of whom shall be nominated by HTI, and shall be subject to Supermajority Approval of the Board pursuant to Section 5.5.  At the time of appointment, each member of the Executive Management Team may, but need not be, an employee of a Member or an Affiliate of a Member.  A member of the Executive Management may resign or be removed from office by the Board, with or without cause, at any time, subject only to the terms of any employment agreement and/or other similar agreements related to such member of the Executive Management Team.  In the event of the resignation, removal, incapacity or expiration of term of employment of any member of the Executive Management Team, a successor may be appointed by the Board by Supermajority Approval of the Board.

(c)           Except as otherwise specified in this Agreement, and subject to the Approval and Supermajority Approval of the Board and the Approval and Supermajority Approval of the Members as set forth in Sections 5.5 and 5.6 and elsewhere in this Agreement, the General Manager (together with the other officers of the Company) shall supervise and perform the day-to-day operations of the Company, subject at all times to the powers of the Board and the Members, and in compliance with the then-current Approved Plan and this Agreement.  The General Manager shall render such reports on the business and financial status and prospects of the Company as the Board or HTI or QC (provided that each such Initial Member continues to own at least fifty percent (50%) of the respective number of Units owned by each such Initial Member on the Effective Date (as adjusted for conversions, Unit splits and the like)) may reasonably request from time to time.

5.10 Limitation on Liability.

(a)           No Member shall have any fiduciary duty or obligation to the Company or any other Member.  Whenever in this Agreement a Member is permitted or required to take any action or to make a decision, such Member shall be entitled to take such action or make such decision in its sole discretion, and such Member shall be entitled to consider, and make its determination based upon, such interests and factors as it desires.  No Member shall have any liability to the Company or the other Members except as provided herein or under the Delaware LLC Act.

(b)           EXCEPT AS MAY BE EXPLICITLY SET FORTH HEREIN ***, EACH MEMBER’S MAXIMUM AGGREGATE LIABILITY TO THE COMPANY AND THE COMPANY’S EXCLUSIVE REMEDY AGAINST ANY MEMBER UNDER ANY THEORY OR FOR ANY CAUSE WHATSOEVER UNDER THIS AGREEMENT IS LIMITED AS FOLLOWS:

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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i. FOR FAILURE TO MAKE A *** INVOLVING CASH REQUIRED UNDER THIS AGREEMENT, TO ***;

ii. FOR FAILURE TO MAKE *** REQUIRED UNDER THIS AGREEMENT OR A TRANSACTION DOCUMENT, TO *** OR *** OF SUCH OBLIGATION, IN EITHER CASE TOGETHER WITH ***, SUBJECT TO SUCH PARTY’S RIGHT TO *** IN LIEU OF ANY ***; AND

iii. FOR OTHER BREACHES OF THIS AGREEMENT, TO *** TOGETHER WITH ***, WITH SUCH DAMAGES CAPPED AT ***;

PROVIDED  HOWEVER THAT ANY BREACH OF *** CAN BE ENFORCED BY *** BY SEEKING EQUITABLE REMEDIES, INCLUDING WITHOUT LIMITATION INJUNCTIVE RELIEF AND SPECIFIC PERFORMANCE.  ***.

(c)           NO MEMBER SHALL HAVE LIABILITY FOR DAMAGES TO ANOTHER MEMBER HEREUNDER, EXCEPT ***.

(d)           EXCEPT AS MAY BE EXPLICITLY SET FORTH IN ANY OF THE TRANSACTION AGREEMENTS, IN NO EVENT SHALL A MEMBER BE LIABLE TO THE COMPANY OR ANY OTHER MEMBER FOR ANY INDIRECT, INCIDENTAL, SPECIAL, OR CONSEQUENTIAL DAMAGES OF ANY KIND (INCLUDING, WITHOUT LIMITATION, ANY DAMAGES ARISING FROM BREACH OF CONTRACT OR WARRANTY OR FROM NEGLIGENCE OR STRICT LIABILITY), INCLUDING, WITHOUT LIMITATION, LOSS OF PROFITS OR REVENUE), ***.

(e)          To the extent that, at law or in equity, a Director has duties (including fiduciary duties)and liabilities relating thereto to the Company or to any Member, such Director acting under this Agreement shall not be liable to the Company or to any Member for its reasonable good faith reliance on the provisions of this Agreement.  The provisions of this Agreement, to the extent that they expand or restrict the duties and liabilities of a Member or Director otherwise existing at law or in equity, are agreed by each of the Members to modify to that extent such other duties and liabilities of the Members and the Directors.

(f)           Whenever in this Agreement the Board or a Director is permitted or required to take any action or to make a decision, the Board or Director, as applicable, shall act in good faith in a manner it believes to be in the best interests of the Company and its Members.  In furtherance of the foregoing, the Members agree that, notwithstanding anything in this Agreement, at law or in equity to the contrary, each Director shall owe to the Company and its Members the fiduciary duties that a director of a Delaware corporation owes to such corporation and its shareholders under Delaware law.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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(g)           The foregoing limitations of liability set forth in this Section 5.10 shall apply to the fullest extent permitted by applicable law.

(h)           Any Member, the Board and any Director may consult (with respect to any individual Member or Director, at such Member’s or Director’s own expense) with legal counsel and accountants selected by it and any act or omission suffered or taken by it on behalf of the Company or in furtherance of the interests of the Company in good faith in reasonable reliance upon and in accordance with the advice of such counsel or accountants shall be full justification for any such act or omission, and any Member, the Board or such Director shall be fully protected in so acting or omitting to act provided that such counsel or accountants were selected with reasonable care.

(i)            Except as  set forth in any other written agreement with the Company to which a Member or its Affiliate is a party, the Members and their respective Affiliates may engage in or possess an interest in other business ventures of every nature and description, independently or with others, whether or not similar to or in competition with the business of the Company (and whether or not such engagement or possession would be an actual or potential conflict of interest with the Company), and neither the Company nor any Member shall have, by virtue of this Agreement, at law or otherwise, any right in or to such other business ventures or to any ownership or other interest in or the income or profits derived therefrom. Except as otherwise set forth herein or in any other written agreement with the Company to which a Member or its Affiliate is a party, the Members shall not be obligated to present any particular investment or business opportunity to the Company or any Member even if such opportunity is of a character which, if presented to the Company or any Member, could be taken by the Company or any Member, and each of the Members and their respective Affiliates shall have the right to take for its own account and with others or to recommend to others any such opportunity.

5.11         Indemnification of the Indemnitees The Company shall indemnify and hold harmless each Member, Director and officer of the Company (individually, an “Indemnitee”) from and against any and all losses, claims, demands, costs, damages, liabilities, joint and several, expenses of any nature (including reasonable attorneys’ fees and disbursements), judgments, fines, settlements and other amounts arising from any and all claims, demands, actions, suits or proceedings, whether civil, criminal, administrative, arbitral or investigative, in which the Indemnitee was involved or may be involved, or threatened to be involved, as a party or otherwise, arising out of any Member’s status as a Member, any Director’s status as a Director, any officer’s status as an officer or any action taken by any officer or Director under this Agreement or otherwise on behalf of the Company (collectively, “Liabilities”), regardless of whether the Indemnitee continues to be a Member, Director or an officer, to the fullest extent permitted by the Delaware LLC Act and all other applicable laws; except a Member, Director or officer of the Company shall be entitled to indemnification hereunder only to the extent that such Member’s, Director’s or officer’s conduct did not constitute gross negligence, willful misconduct, breach of fiduciary duty, or a breach of this Agreement, any Transaction Agreement or any other agreement between the Company and such Member, Director or officer, as applicable, and such Member, Director or officer acted in good faith and in a manner reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to any criminal action or proceeding, had no reasonable cause to believe such Member’s, Director’s or officer’s conduct was unlawful.  The termination of any proceeding by settlement, judgment, order, conviction, or upon a plea of nolo contendere or its equivalent shall not, of itself, create a presumption that such Indemnitee’s conduct constituted gross negligence or willful misconduct or that such conduct otherwise constituted a breach of this Agreement, any Transaction Agreement or any other such agreement between the Company and such Member, Director or officer.  The right of any Indemnitee to the indemnification provided herein shall be cumulative of, and in addition to, any and all rights to which such Indemnitee may otherwise be entitled by contract or as a matter of law or equity and shall extend to such Indemnitee’s successors, assigns and legal representatives.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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5.12        Insurance The Company shall purchase and maintain insurance, at the Company’s expense, customary types of insurance and in such amounts as the Board shall determine, including, without limitation, insurance on behalf of the Directors and officers and such other Persons as the Board shall determine, against any liability that may be asserted against, or any expense that may be incurred by, such Person in connection with the activities of the Company and/or the Director’s or officer’s acts or omissions as a Director or an officer of the Company regardless of whether the Company would have the power to indemnify such Person against such liability under the provisions of this Agreement.

5.13        Business Plan (a)           The business plan (the “Business Plan”) for the Company in effect as of the Effective Date is attached hereto as Exhibit C.  Any modification to the Business Plan shall be subject to the Supermajority Approval of the Board as set forth in Section 5.5 and may be subject to the Supermajority Approval of the Members as set forth in Section 5.6, as applicable.

(b)           Not later than ***, the General Manager shall submit to the Board (i) a budget for ***, including the most recent balance sheet and income statement of the Company, which shall show in reasonable detail the revenues and expenses projected for the Company’s business for *** and a cash flow statement which shall show in reasonable detail the receipts and disbursements projected for the Company’s business for *** and the amount of any corresponding cash deficiency or surplus, and the projected Capital Contributions, if any, and any contemplated borrowings of the Company, and (ii) such other documents as may be reasonably requested by any Director from time to time.

ARTICLE VI

RESOLUTION OF DISPUTES

6.1          Disputes The Members shall attempt in good faith to resolve any and all controversies, disputes or claims of every kind and nature (each a “Dispute”) arising out of or in connection with the construction, validity, interpretation, performance, enforcement, operation, breach, continuance or termination of this Agreement in accordance with this Section 6.1.

(a)           Upon written request of any Member (the “Resolution Request”), the Dispute shall be submitted for resolution to a dispute resolution team which shall be comprised of *** (the “Integrated Action Team”).  The Integrated Action Team shall meet (in person or by telephone) to discuss the Dispute and use their good faith without the necessity of further action relating thereto.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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(b)           If the Dispute is not fully resolved by the Integrated Action Team within *** Business Days after the delivery of the Resolution Request, then any of the Members may request that the Dispute be *** (“Designated Officers”) of the Members.  The Designated Officers shall as soon as reasonably practicable (within at least *** Business Days after the Dispute has been referred to such Designated Officers or as such Designated Officers shall otherwise agree) meet (in person or by telephone) to discuss the Dispute and use their good faith, reasonable efforts to resolve it.  If not resolved within *** Business Days of submission to the Designated Officers, such Member may avail itself of any remedy permitted hereunder.

6.2          Remedies.  Notwithstanding the foregoing or anything in this Agreement to the contrary, the obligations contained in Section 6.1 shall not prohibit any party from proceeding at any time to exercise any other rights hereunder.

6.3          Injunctive Relief.  Notwithstanding anything in this Agreement to the contrary, any Member may resort to court action for injunctive relief at any time if the dispute resolution process set forth in this Article would permit or cause irreparable damage to such Member due to delay arising out of the dispute resolution process.

ARTICLE VII

TRANSACTION AGREEMENTS

7.1          Transaction Agreements On or prior to the Effective Date of this Agreement, the respective Initial Members and the Company shall have executed and delivered, or caused their respective Affiliates to execute and deliver, the following Transaction Agreements set forth below, which are subject to termination as provided in Article XII and as otherwise may be set forth in such Transaction Agreements:

(a)           HTI and the Company shall have executed an Infrastructure Access Agreement  (the “HTI Infrastructure Access Agreement”) in the form attached hereto as Exhibit 7.1(a).

(b)           HTI and the Company shall have executed a management and operating services agreement (the “HTI Services Agreement”) in the form attached hereto as Exhibit 7.1(b).

(c)           QC and the Company shall have executed a Know-How License and License Agreement (the “QC Know-How License Agreement”) in the form attached hereto as Exhibit 7.1(c).

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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(d)           QC and the Company shall have executed a Services Agreement (the “QC Services Agreement”) in the form attached hereto as Exhibit 7.1(d).

(e)           AMAC and the Company shall have executed a VAR/distributor agreement (the “AMAC Reseller Agreement”) in the form attached hereto as Exhibit 7.1(e).

ARTICLE VIII

DISPOSITION OF INTERESTS

8.1         Restrictions on Transfer of Interests (a)           Unless expressly permitted by this Section 8 but subject in all cases to the receipt of all required regulatory approvals (if any), no Member or its Affiliates shall, without the prior written consent of each of the Initial Members, Transfer all or any part of its Interest during the period beginning on the Effective Date and ending on the closing of an Initial Public Offering (the “Restricted Period”); provided, however, that, in the event this Agreement is terminated, then the Restricted Period shall immediately expire.

(b)           The term “Transfer”, when used in this Agreement with respect to an Interest, means any sale, exchange, assignment, transfer, pledge, encumbrance, hypothecation, mortgage, gift or other disposition of any kind (or the entering into any contract, option or other arrangement or understanding to do any of the foregoing), whether voluntary, involuntary or by operation of law, including without limitation any transfer of any securities or assets by any Member or any Affiliate of such Member if as a result of such transfer, such Member or an Affiliate shall cease to have indirect ownership of such Interest, but does not include a change of control of a Member (unless (A) the primary asset of the applicable Member (or other change of control entity) is the direct or indirect ownership of Interests or (B) the transferee (or other acquiror) in connection with such change of control is *** as reasonably determined by ***, or a party that has a *** (whether directly or indirectly and whether as a *** and such party or through ***) as reasonably determined by ***, in which case, such change of control of a Member (or other entity) shall be deemed to be a “Transfer” for purposes of this Article VIII); provided however that the transferee in connection with such change of control of a Member shall agree to be bound by the terms and conditions of this Agreement applicable to the transferring Member.

(c)           Any Transfer or purported Transfer of any Interest not made in accordance with this Article VIII shall be null and void, ab initio.

(d)           No Member or its Permitted Transferees shall Transfer all or any part of its Interest to any Person (i) without delivering to the Company an Assignment and Assumption Agreement in substantially the form attached hereto as Exhibit D, (ii) except in compliance with all applicable federal and state securities laws, (iii) without delivering to the Company in advance of such Transfer a legal opinion of counsel (to the extent reasonably requested by the Company, provided that the Company will not request such an opinion in connection with a Transfer to an Affiliate of a Member) to the effect that such Transfer would not terminate the Company for federal income tax purposes under Section 708 of the Code and (iv) to the extent prohibited under this Section 8.1.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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(e)           Notwithstanding any other provision of this Agreement, but subject to Section 8.1(d), no Member or its Affiliates shall Transfer any or all of its Interests, or take any other action, if such Transfer or action could (by itself or in conjunction with other actions) result in the Company being treated as a “publicly traded partnership” within the meaning of Section 7704 of the Code and the Regulations promulgated thereunder; and provided further that any such Transfer or action shall be null and void, ab initio; provided, that the foregoing shall not apply to Transfers occurring in connection with or subsequent to an Initial Public Offering.

(f)           Notwithstanding the restrictions set forth in Sections 8.1, 8.2, 8.3 and 8.4, (i) any Member or any of its transferees or Affiliates may at any time Transfer all or any portion of its Interest to an Affiliate of such Member if, in addition to the provisions of Section 8.1(d) and (e), no tax or regulatory consequences result that will adversely affect the Company, the other Members or their Affiliates*** pursuant to a sale of its principal business operations to such Person by way of merger, consolidation, sale of assets or other similar transaction provided that, as a condition to such Transfer, *** that actions may only be taken by Members or the Board, as applicable, by written consent if such action or matter was *** of the Board shall terminate, (E) ***, the rights of first offer described in Section 8.2,  and the rights described in the last sentence of Section 2.7, and (F) ***; (iii) the Members agreeif required by any lenders to the Company, to pledge their Interests against any Company indebtedness approved by the Supermajority Approval of the Board, subject to all Members providing such a pledge, and further subject to such pledge being permitted by any outstanding indebtedness a Member may have at the time of such Board approval (each such transferee under clauses (i), (ii) or (iii) of this Section 8.1(f), a “Permitted Transferee”).

8.2          Right of First Offer for Transfers by Members (a)           If any Member (the “Proposing Transferor”) wishes to Transfer during the Restricted Period all or any portion of its Interest (the “Offered Units”) to any Person other than its Permitted Transferee, such Proposing Transferor shall deliver a written offer (the “Conditional Transfer Notice”) to the other Members (the “Non-Transferring Members”), certifying the date of its issuance and stating: (i) the number and Class of Offered Units; and (ii) the price (the “Transfer Price”) and other material terms upon which the Proposing Transferor proposes to transfer each of such Offered Units (such offer by the Proposing Transferor to the Non-Transferring Members (together with the oversubscription privilege set forth in Section 8.2(b) below (if applicable)) is referred to herein as the “Right of First Offer”).

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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(b)           Each Non-Transferring Member shall have the right, but not the obligation, to elect to purchase all (but not less than all) of its pro rata share (based on the ratio of the then Percentage Interest of each Non-Transferring Member vis-a-vis the other Non-Transferring Members) of the Offered Units at the price and upon the terms contained in the Conditional Transfer Notice.  In the event that a Non-Transferring Member shall elect to purchase available Offered Units pursuant to the conditions set forth in the Conditional Notice and this Section 8.2 (each such Non-Transferring Member, a “Purchasing Member”), it shall deliver to the Proposing Transferor a written election (the “Acceptance Notice”) to purchase its pro rata share of the Offered Units; irrevocably indicating therein if it is prepared to purchase all or a portion of its pro rata share of the Offered Units within ***from the date of receipt of the Conditional Transfer Notice (the “*** Period”).  In the event that any Non-Transferring Member fails to elect to purchase all of its pro rata share of the Offered Units under the Conditional Transfer Notice as set forth above in this Section 8.2(b), the Company shall deliver to all of the Purchasing Members a written notice (the “Over-Allotment Notice”) specifying the total number of Offered Units not so purchased (the “Remaining Offered Units”) within *** following the expiration of the *** Period set forth above in this Section 2.8(b).   Each such Purchasing Member shall have a right of oversubscription to purchase up to the balance of such Offered Units not so purchased at the same price and on the same terms and conditions set forth in the original Conditional Transfer Notice.   Each such Purchasing Member who receives an Over-Allotment Notice must exercise its right of oversubscription by giving the Company written notice of its election during the *** period following its receipt of the Over-Allotment Notice (the “Over-Allotment Period”).  If, as a result thereof, such oversubscription elections exceed the total number of the Offered Units available in respect to such oversubscription privilege, the oversubscribing Purchasing Members shall be cut back with respect to oversubscriptions on a pro rata basis in accordance with their respective Proportionate Share or as they may otherwise agree among such oversubscribing Purchasing Members.  Each Acceptance Notice and Over-Allotment Acceptance Notice (if any) shall be irrevocable unless (a) there shall be a material adverse change in the material terms set forth in the Conditional Transfer Notice, including, but not limited to, the Transfer Price or (b) if otherwise mutually agreed to in writing by such Purchasing Member and the Proposing Transferor), and the closing of the Transfer of the Offered Units to the Purchasing Member(s) shall take place within *** from the later of (i) date of receipt of the Conditional Transfer Notice or (ii) date of receipt of the Over-Allotment Notice, if any (in each case, subject only to requisite regulatory approvals).

(c)           If, upon the expiration of the *** Period provided for in Section 8.2(b) above (or in the event an oversubscription privilege is triggered pursuant to Section 8.2(b) above, upon the expiration of the Over-Allotment Period), a Non-Transferring Member has elected not to purchase its pro rata share of the Offered Units (each such Member, a “Declining Member”), the Right of First Offer shall expire as to such Declining Member with respect to that particular offer (and as to any Member that has elected not to purchase its pro rata share of the Remaining Offered Units in any oversubscription privilege, the Right of First Offer shall expire as to such Member with respect to such  Remaining Offered Units in that particular offer), but shall remain in full force and effect with respect to all material modifications of that offer and all future offers.   The Proposing Transferor shall have the right to Transfer all (but not less than all) of such number of the Offered Units not purchased by the Purchasing Members or Overallotment Purchasing Members (if any), at a price and upon terms and conditions which are no less advantageous to the Proposing Transferor than those contained in the Conditional Transfer Notice, if that Transfer takes place in accordance with the terms of a definitive agreement or agreements (subject solely to requisite regulatory approvals (if any)) entered into not later than the later of (i) *** after the expiration of the *** Period provided for in Section 8.2(b) above or (ii) *** days after the expiration of the Over-Allotment Period (if any) provided for in Section 8.2(b) above.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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(d)           This Section 8.2 shall be inapplicable to, and shall not prohibit, restrict or limit, sales of equity interests in the Company by the Members in connection with or subsequent to an Initial Public Offering.

8.3          “Drag-Along” Rights of Members Subject to obtaining the Supermajority Approval of the Members in accordance with Section 5.6 with respect to any such proposed Transfer if required thereby, in the event that prior to the occurrence of an Initial Public Offering, any Initial Member acting alone or Initial Members acting together (a “Dragging Member” or if more than one such Initial Member, together the “Dragging Members”), propose to Transfer (other than to other Members and/or to Permitted Transferees of Members) in one or more related transactions greater than *** of the total number of Units then issued and outstanding (excluding Units in the Company’s treasury (if any)) to a non-Affiliate and on a third party arms length negotiated sale basis, the Dragging Member will have the right, exercisable upon not less than *** days’ prior written notice, to require that the other Members Transfer all or any portion of the Units owned by them on substantially similar terms and conditions as the Transfer of Units proposed to be made by the Dragging Member(s).  Such terms and conditions shall include, without limitation: the sales price paid or deemed paid per Unit; the payment of fees, commissions and expenses; and, subject to the limitations set forth below, the provision of representations, warranties and indemnifications; provided that, subject to the limitations set forth below, any indemnification provided by a Member shall (except with respect to legal title to such Member’s Units which are included in the Transfer) be pro rata in proportion with the total consideration to be received by such Member in the transfer relative to the total consideration to be received by the other Members.  Notwithstanding the foregoing, a Member will not be required to comply with this Section 8.3 in connection with any specific Transfer unless:

(a)           any representations and warranties to be made by such Member in connection with the Transfer are limited to representations and warranties related to authority, ownership of the applicable Units held by such Member and the ability to convey title to such Units;

(b)           the Member shall not be liable for the inaccuracy of any representation or warranty made by any other individual or entity in connection with the Transfer, other than the Company;

(c)           the liability for indemnification, if any, of such Member in the Transfer and for the inaccuracy of any representations and warranties made by the Company in connection with such Transfer, is several and not joint with any other Member, and is (as specified above) pro rata in proportion with the total consideration to be received by such Member in the Transfer relative to the total consideration to be received by the other Members in such Transfer;

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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(d)           such Member’s liability in connection with such Transfer shall be limited to the amount of consideration actually paid to or held in escrow for such Member in connection with such Transfer, except with respect to claims related to fraud, intentional misrepresentation or willful breach by such Member;

(e)           upon the consummation of the Transfer, each Member will receive the same amount of consideration per Unit after payment of all Unreturned Capital Contributions; and

(f)           if any holders of Units are given an option as to the form and amount of consideration to be received as a result of the Transfer, all holders of such Units will be given the same option.

An exercise of rights under 8.3 shall preclude the application of Section 8.4, but shall be subject to Section 8.2.

8.4          “Tag-Along” Rights of Members (a)           In the event that prior to the occurrence of an Initial Public Offering, after a Member has complied with the right of first offer  set forth in Section 8.2 hereof, any Member acting alone or any Members acting together propose to Transfer (other than to other Members and/or to Permitted Transferees of Members) in one or more related transactions greater than *** of the total number of Units then issued and outstanding (excluding Units in the Company’s treasury (if any)) (each such Member proposing such a Transfer, a “Proposing Member” and collectively, the “Proposing Members”), the Proposing Member(s) will notify the other Members (in such capacity, the “Tag-Along Members”) in writing (a “Tag-Along Notice”) of such proposed sale (a “Proposed Sale”) and the material terms of the Proposed Sale as of the date of the Tag-Along Notice, including, without limitation, the total number of Units to be sold in such Proposed Sale (the “Proposed Units”) and the sale price per Unit (the “Material Terms”).  The Tag-Along Notice will be delivered to the Tag-Along Members not less than *** prior to the consummation of the Proposed Sale and not more than *** after the execution of the definitive agreement relating to the Proposed Sale, if any.  If within *** of receipt by the Tag-Along Members of such Notice, the Proposing Member(s) receive from any Tag-Along Member a written request (a “Request”) to include in the Proposed Sale such number of Units owned by such Tag-Along Member as calculated in accordance with Section 8.4(c) below (which Request shall be irrevocable unless (a) there shall be a material adverse change in the Material Terms or (b) if otherwise mutually agreed to in writing by such Tag-Along Member and the Member(s) proposing to Transfer), such Tag-Along Member’s Units so requested will be so included as provided herein.

(b)           Except as may otherwise be provided herein, the Tag-Along Member’s Units subject to a Request will be included in a Proposed Sale pursuant hereto and in any agreements with purchasers relating thereto on substantially similar terms and subject to the same conditions applicable to the relevant Units which the Proposing Member(s) propose to sell in the Proposed Sale.  Such terms and conditions shall include, without limitation:  the sales price per Unit; the payment of fees, commissions and expenses; the provision of representations, warranties and indemnifications; provided that any indemnification provided by the Tag-Along Members shall (except with respect to legal title to the Units of the Tag-Along Member sold in such Transfer) be pro rata in proportion with the total consideration to be received for all of the Units to be sold.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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(c)           Each Tag-Along Member shall have the right to include in the Proposed Sale pursuant to a Request that number of Units (rounded to the nearest whole number) representing the product of (i) the total number of Proposed Units multiplied by (ii) the Percentage Interest in the Company then held by such Tag-Along Member. The amount of such Proposed Units that each Tag-Along Member is entitled to include in such Proposed Sale under this Section 8.4(c) shall be referred to as its "Tag-Along Units".  If any Tag-Along Member fails to elect to include in the Proposed Sale its full amount of Tag-Along Units, the Proposing Member(s) together with any Tag-Along Members that have elected to include Tag-Along Units in the Proposed Sale, shall, among them, on a pro rata basis in accordance with their respective Percentage Interest in the Company or as they may otherwise agree among themselves, have the right to include in the Proposed Sale an additional number of Units equal to the difference between the total number of Proposed Units minus the total number of Tag-Along Units elected to be included by all the Tag-Along Members.

(d)           The Tag-Along Members’ rights pursuant hereto to participate in a Proposed Sale shall be contingent on their strict compliance with each of the provisions hereof and their willingness to execute such documents in connection therewith as may be reasonably requested by the Proposing Member(s).

(e)           An exercise of rights under Section 8.4 shall be subject to Section 8.2.

8.5          Liquidity Event.  Upon the four (4) year anniversary of the Effective Date, any Member (or group of Members in aggregate) holding at least twenty-five percent (25%) of the issued and outstanding Units (excluding Units in the Company’s treasury (if any)) of the Company (a “Demanding Member”) shall have the right to demand at any time prior to the end of the two (2) year periodfollowing such four (4) year anniversary upon written notice to the Company and each other Member (the “Liquidity Demand Notice”) that the Company cause one the following events to occur (each a “Liquidity Event”):

A. conduct an auction for the sale of the Company that produces at least one bona fide offer to acquire the Company for cash or liquid securities; or

B. conduct an Initial Public Offering (after conversion to a corporation in accordance with Section 14.17).

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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Upon receipt of the Liquidity Demand Notice, the Company shall use its best efforts to cause a Liquidity Event and each Member shall cooperate with the Company in pursuing a Liquidity Event.  Should the Company fail to accomplish either Liquidity Event within one hundred-eighty (180) days of receiving the Liquidity Demand Notice, then to the extent at such time HTI (i) directly or indirectly owns fifty percent (50%) or more of the issued and outstanding Units (excluding Units in the Company’s treasury (if any)) of the Company and (ii) has publicly traded common stock (currently HTI’s common stock trades as HUTC), each other Member (each an “Exchanging Member” and collectively the “Exchanging Members”) shall be entitled on a one-time basis to exchange (the “Exchange”) all, but not less than all, of the Company Units which it then owns for shares of common stock of HTI, as applicable, equal to its pro rata share of the value of the aggregate Percentage Interests of the Company owned by all Exchanging Members in the aggregate and which shall include the Unreturned Capital Contributions of all Exchanging Members as if a distribution were being made as a Capital Event Distribution (the “Exchange Value”) as determined as set forth below in this Section 8.5.  For purposes of clarification, the Members agree that, notwithstanding the foregoing, (i) in the event that (A) a Liquidity Demand Notice results in a bona fide offer to acquire the Company for cash or liquid securities on terms that are not acceptable to the Demanding Member but are acceptable to and approved by HTI and (B) a Liquidity Event nevertheless is not consummated within one hundred-eighty (180) days of the Company’s receiving the Liquidity Demand Notice, then HTI shall have no obligation to effect any Exchange of HTI common stock for Company Units hereunder, and (ii) in the event that a Liquidity Demand Notice results in a bona fide offer to acquire the Company for cash or liquid securities on terms that are acceptable to and approved by a Demanding Member but are not approved by HTI, then HTI shall either (A) purchase for cash (or common stock of HTI, provided that the common stock of HTI is then publicly traded, that such issuance would be effected as an Exchange hereunder with the number of shares being determined based upon the 20-day volume weighted average closing price per share of HTI common stock in the manner and subject to the restrictions set forth below, provided further that the documentation requirements and other requirements and conditions set forth in Section 8.6A below are complied with) all, but not less than all, of the Company Units which are then held by the Demanding Member at the same effective price per Unit and aggregate consideration as such Demanding Member would have been paid or otherwise received based upon the value of the aggregate purchase price for all then outstanding Company Units reflected in such bona fide offer to acquire the Company for cash or liquid securities, or (B) approve such offer to acquire the Company and take such other actions as may be necessary in connection with such proposed acquisition as are requested by such Demanding Member as if such Demanding Member were a Dragging Member pursuant to Section 8.3.   The basis for determining the Exchange Value to be used shall be a fair value assessment (the “Assessment”) of the aggregate Percentage Interests (which shall include the Unreturned Capital Contributions of all Exchanging Members as if a distribution were being made as a Capital Event Distribution) as determined by an independent, third party, nationally-recognized investment bank contracted and paid for by the Exchanging Members, at their sole cost and expense, which investment bank shall have been Approved in advance in writing by HTI and the Exchanging Members holding a majority of the Percentage Interests held by all Exchanging Members.  The determination of such investment bank shall be conclusive and binding upon the parties hereto.  Each Exchanging Member’s pro rata share of the Exchange Value shall then be divided by the 20-day volume weighted average closing price per share of HTI’s common stock during the 20-day trading period immediately prior to the issuance of HTI shares in the exchange to determine the number of shares of common stock of HTI to be issued to each Exchanging Member in exchange for all of its Units; provided however that no Exchanging Member or its Affiliates shall itself or through any third party, directly or indirectly, take any action or encourage any third party to take any action designed to impact the price of HTI’s common stock during such period.  HTI shall issue such shares of common stock to the Exchanging Members within thirty (30) days following the conclusion of the Assessment, subject to the documentation requirements and other requirements and conditions set forth in Section 8.6A below.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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8.6A  Documentation Requirements and Other Requirements/Conditions.  Each Exchanging Member executing such documentation as may be reasonably requested by HTI including terms and conditions customary for common stock issuances of such nature.  In connection with the issuance of such shares of common stock of HTI, HTI shall only provide limited representations and warranties relating to formation, due authorization and issuance of shares, no conflicts with applicable laws, orders and contracts, securities law compliance, and no encumbrance or other restrictions (except as needed for securities law compliance) on the shares, and each Exchanging Member shall be required to execute and delivery to HTI a letter that includes representations from each Exchanging Member necessary for compliance with applicable securities laws.   Solely to the extent such shares of HTI common stock are not saleable in their entirety within *** of completion of the Exchange by any such Exchanging Member under Rule 144, promulgated by the Securities and Exchange Commission under the Securities Act, HTI shall use commercially reasonable efforts to (i) register such shares of common stock for resale on a “shelf” registration statement within *** completion of the Exchange, and (ii) cause such registration statement to remain effective, subject to customary limitations, for a period of *** months following the date such registration statement is declared effective.

8.6          Covenant Not to Withdraw or Dissolve.  Each Member hereby covenants and agrees that the Members have entered into this Agreement based on their mutual expectation that, except as otherwise expressly required or permitted hereby or otherwise with the Supermajority Approval of the Members, no Member shall withdraw or retire from the Company, be entitled to demand or receive a return of such Member’s Capital Contributions or profits (or a bond or other security for the return of such Capital Contributions or profits), or exercise any power to dissolve the Company except as provided in this Agreement.

8.7          Capital Event Transfers.  Notwithstanding anything to the contrary contained herein, if a Transfer of Units results from completion of a Capital Event, the following conditions shall apply with respect to the Class A, Class B and Class C Units:

(a)           upon the consummation of the Transfer, each holder of Class A, Class B and Class C Units will receive the same amount of consideration per Unit that it would have received under Section 13.1(b) if the Capital Event had been an asset sale; and

(b)           if any holders Class A, Class B or Class C Units are given an option as to the form of consideration to be received as a result of the Transfer, all holders of such Units will be given the same option.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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ARTICLE IX

REPRESENTATIONS AND WARRANTIES

9.1          Representations and Warranties of the Members Each Member hereby represents and warrants severally, as to itself only, to the other Members and the Company as follows:

(a)           Due Organization; Good Standing and Power.  Such Member is duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation and has full power and authority to enter into and perform its obligations under this Agreement.

(b)           Authorization and Validity of Agreement.  The execution, delivery and performance of this Agreement, and all other agreements relating hereto to which such Member is a party and the consummation by such Member of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of such Member, and no other action is necessary for the authorization, execution, delivery and performance by such Member of this Agreement and the consummation by such Member of the transactions contemplated thereby.  This Agreement has been duly executed and delivered by such Member and constitutes a valid and legally binding obligation of such Member, enforceable against it in accordance with its terms, except (i) as such enforceability may be limited by bankruptcy, insolvency, reorganization or moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (ii) that the availability of equitable remedies may be limited by equitable principles of general applicability.

(c)           No Conflict; Consents.  Neither the execution and delivery by such Member of this Agreement, the performance by such Member of its obligations hereunder nor the performance by such Member of any action contemplated hereby will violate (with or without the giving of notice or lapse of time or both) any law, rule, regulation, order, judgment or decree or any contract or other agreement to which such Member is a party, except to the extent that such violations would not (i) in the aggregate, have a Material Adverse Effect on such Member or the Company, or (ii) require the consent, approval, giving of notice to or authorization of any Person which has not been obtained or satisfied provided prior to the Effective Date.

(d)           Litigation.  Except as has been publicly disclosed by a Member in any current or periodic report filed by such Member with the Securities and Exchange Commission, there is no pending or, to the best of its knowledge, threatened, suit or administrative action against such Member which, if adversely decided, would prevent the consummation of this Agreement or be reasonably likely to have a Material Adverse Effect on such Member or the Company.

(e)           Investment Intent.  Such Member is acquiring its Interest in the Company for its own account as an investment and without an intent to distribute the Interest (this representation and warranty not limiting such Member’s right to transfer its Interest in compliance with applicable federal and state securities laws).

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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(f)           Securities Laws.  Such Member acknowledges that the Interest and any other interests it is acquiring are “restricted securities” and have not been registered under the Securities Act or any state securities laws, and may not be resold or transferred by it without registration under the Securities Act or any applicable state securities laws or the availability of an exemption from such requirements

(g)           Member Status.  At the time such Member was offered the Interest, it was, and at the date hereof it is an “accredited investor” as defined in Rule 501(a) under the Securities Act.  Such Member is not required to be registered as a broker-dealer under Section 15 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

(h)           Experience of Such Member.  Such Member, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Interest, and has so evaluated the merits and risks of such investment.  Such Member is able to bear the economic risk of an investment in the Interest and is able to afford a complete loss of such investment.

(i)           General Solicitation.  Such Member is not purchasing the Interest as a result of any advertisement, article, notice or other communication regarding the Interest published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general advertisement.

(j)           Adequate Information.  Such Member has had an opportunity to receive all information related to the Company requested by it and to ask questions of and receive answers from the Company regarding the Company, its business and the terms and conditions of the offering of the Interests, and has reviewed such information as such Member considers necessary or appropriate to evaluate the risks and merits of an investment in, and make an informed investment decision with respect to, the Interests.

9.2          Additional Representations, Warranties Covenants of the Initial Members.

(a)           Each Initial Member shall, and shall cause each of its Affiliates to, comply with and carry out its respective obligations under the Transaction Agreements to which such Initial Member is a party.

(b)           The execution, delivery and performance of the Transaction Agreements(s) to which such Affiliate is a party, and the consummation by such Affiliate of the transactions contemplated thereby, have been duly authorized by all necessary action on the part of such Affiliate, and no other action is necessary for the authorization, execution, delivery and performance by such Affiliate of such Transaction Agreements and the consummation by such Affiliate of the transactions contemplated thereby.

(c)           Neither the execution and delivery by such Affiliate of the Transaction Agreements(s) to which it is a party, the performance by such Affiliate of its obligations thereunder nor the performance by such Affiliate of any action contemplated thereby will violate (with or without the giving of notice or lapse of time or both) any law, rule, regulation, order, judgment or decree or any contract or other agreement to which such Affiliate is a party, except to the extent that such violations would not, in the aggregate, have a Material Adverse Effect, or require the consent, approval, giving of notice to or authorization of any Person.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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ARTICLE X

INDEMNIFICATION

10.1        Indemnification*** from and against any and all losses, claims, demands, costs, damages, liabilities, joint and several, expenses of any nature (including reasonable attorneys’ fees and disbursements), judgments, fines, settlements and other amounts (collectively, “Damages”) asserted by a Person (other than the Company, a Member or an Affiliate of a Member) arising out of, resulting from or based upon ***.  Each of the other Members shall be entitled to enforce any claim for indemnification pursuant to this Section 10.1 on behalf of itself, and the non-breaching Initial Member shall be entitled to enforce any claim for indemnification pursuant to this Section 10.1 on behalf of the Company.  A non-breaching Initial Member or the Company shall give written notice to the indemnifying Member as soon as practicable following discovery by such party of any matters which may give rise to a claim for indemnification from the indemnifying Member under this Section 10.1.

The provisions of this Article X shall in no way alter, amend or limit the indemnification obligations of the Members under the other Transaction Agreements, and to the extent that a Member is obligated under the other Transaction Agreements to provide any indemnification for any “losses and expenses”, any indemnity of such Member under this Article X with respect to such losses and expenses shall not apply. The right of any indemnitee to the indemnification provided herein shall be cumulative of, and in addition to, any and all rights to which such indemnitee may otherwise be entitled by contract or as a matter of law or equity and shall extend to such indemnitee’s successors, assigns and legal representatives.

10.2       Procedures for Indemnification.  Whenever a claim shall arise for indemnification under Section 10.1, the indemnified party or parties, as appropriate (the “Other Parties”), shall promptly notify the party or parties from whom indemnification is sought for such claim (the “Indemnifying Party”) and request the Indemnifying Party to defend the same.  Failure to so notify the Indemnifying Party shall not relieve the Indemnifying Party of any liability which the Indemnifying Party might have, except to the extent that such failure prejudices the Indemnifying Party’s position.  The Indemnifying Party shall have the right to defend against such liability or assertion in which event the Indemnifying Party shall give written notice to the Other Parties of acceptance of the defense of such claim and the identity of counsel selected by the Indemnifying Party.

(a)          If the Indemnifying Party assumes the defense of an action:

(A)           no settlement or compromise thereof may be effected

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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(i)           by the Indemnifying Party without the written consent of the Other Parties (which consent shall not be unreasonably conditioned, withheld or delayed) unless (x) there is no finding or admission of any violation of law or any violation of the rights of any Person by any Other Party and no adverse effect on any other claims that may be made against any Other Party and (y) all relief provided is paid or satisfied in full by the Indemnifying Party, or

(ii)           by any Other Party without the consent of the Indemnifying Party, such consent not to be unreasonably withheld or delayed, and

(B)           the Other Parties may subsequently assume the defense of such action if a court of competent jurisdiction determines that the Indemnifying Party is not vigorously defending such action.  In no event shall an Indemnifying Party be liable for any settlement effected without its written consent (which consent shall not be unreasonably withheld or delayed).

(b)          With respect to any defense accepted by the Indemnifying Party, the Other Parties shall be entitled to participate with the Indemnifying Party in such defense and also shall be entitled to employ separate counsel for such defense at their own expense.  In the event the Indemnifying Party does not accept the defense of any indemnified claim as provided above or there otherwise exists a conflict of interest such that independent counsel for the Other Parties would be appropriate for the defense of any such indemnified claim, the Other Parties shall have the right to employ counsel for such defense at the expense of the Indemnifying Party.  Each Member agrees to cooperate and to cause the Company to cooperate with the other parties in the defense of any such action and the relevant records of each party shall be available to the other parties with respect to any such defense.

ARTICLE XI

TAX MATTERS

11.1        Tax Matters (a)           The “tax matters partner” for purposes of Section 6231(a)(7) of the Code (the “Tax Matters Member”) shall be HTI. The Tax Matters Member shall take reasonable action to cause each other Member to be treated as a “notice partner” within the meaning of Section 6231(a)(8) of the Code.  All reasonable expenses incurred by a Member while acting in its capacity as Tax Matters Member shall be paid or reimbursed by the Company.

(b)          Each Initial Member shall be given at least *** days  advance notice (or such shorter period provided by the taxing agency, in which instance the Company shall provide prompt notice) from the Tax Matters Member of the time and place of, and shall have the right to participate (and the Company and the Tax Matters Member shall take such action as may be necessary to cause the tax matters partner of any Subsidiary of the Company to extend to the Initial Members the right to participate) in (i) any material aspect of any administrative proceeding relating to the determination of partnership items at the Company level (or at the level of any Subsidiary of the Company thereof) and (ii) any material discussions with the Internal Revenue Service relating to allocations pursuant to Article III of this Agreement or pursuant to any partnership agreement or limited liability company agreement of any Subsidiary of the Company.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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(c)           The Tax Matters Member shall not, and the Company shall not permit the tax matters partner of any Subsidiary of the Company to, initiate any action or proceeding in any court, extend any statute of limitations, or take any other action contemplated by Sections 6222 through 6234 of the Code that would legally bind any other Member, the Company or any Subsidiary of the Company without approval of the Initial Members, which approval may not be unreasonably withheld; provided, however, that, for this purpose, it shall not be unreasonable for an Initial Member to withhold such approval if the action proposed to be taken could affect adversely such Initial Member.  The Tax Matters Member shall cause the Company’s and any Subsidiary’s of the Company tax attorneys and accountants to confer, with the other Initial Members and their respective attorneys and accountants on any matters relating to a Company or Subsidiary of the Company tax return or any tax election.

(d)           The Tax Matters Member shall timely cause to be prepared all U.S. federal, state, local and foreign tax returns and reports (including amended returns) of the Company for each year or period that such returns or reports are required to be filed and, subject to the remainder of this subsection, shall cause such tax returns to be timely filed.

(e)           As soon as reasonably practical after the end of each Fiscal Year or other relevant taxable period, the Tax Matters Member shall prepare and send, or cause to be prepared and sent, to each Person who was a Member at any time during such Fiscal Year or taxable period copies of such information as may be required for U.S. federal, state, local and foreign income tax reporting purposes, including copies of Form 1065 and Schedule K-1 or any successor form or schedule, for such Person.  As soon as practicable following the preparation of Form 1065 and Schedule K-1 or any successor form or schedule (and in any event not later than *** days after provision of such information to any Member), the Tax Matters Member shall also provide each Member with a reasonable opportunity during ordinary business hours to review and make copies of all workpapers related to such information or to any return prepared under paragraph (b) above. As soon as practicable following the end of each quarter (and in any event not later than *** days after the end of such quarter), the Tax Matters Member shall also cause to be provided to each Member an estimate of each Member’s share of all items of income, gain, loss, deduction and credit of the Company for the Fiscal Year or other taxable period to date for federal income tax purposes.

11.2        Tax Classification The Tax Matters Member shall take such action as may be required under the Code and applicable Regulations to cause the Company to be taxable as a partnership for U.S. federal income tax purposes.  To the extent the previous sentence does not govern the state and local classification of the Company, the Tax Matters Member shall take such action as may be required under any state or local law applicable to the Company to cause the Company to be taxable as, and in a manner consistent with, a partnership for state or local income tax purposes.  Each Member shall take such actions as the Tax matters Member may reasonably request to maintain the status of the Company as a partnership to the extent provided in this Section 11.2.  No Member shall take any action inconsistent with treatment of the Company as a partnership for U.S. federal, state and local tax purposes.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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11.3        Tax Elections The Tax Matters Member shall at the request of any Member cause the Company to elect, pursuant to Section 754 of the Code, to adjust the basis of the Company’s property (and the Company shall cause the tax matters partner of any Subsidiary of the Company to make a corresponding Section 754 election with respect to such Subsidiary’s property) provided, however, that such Member shall reimburse the Company and any Subsidiary promptly for all costs associated with such basis adjustment, including bookkeeping, appraisal and other similar costs.  Except as otherwise provided herein, all other elections required or permitted to be made by the Company or any Subsidiary of the Company under the Code (or applicable foreign, state or local law) shall be made as may be determined by the Board to be in the best interest of the Members as a group. Notwithstanding the foregoing, if the Company will not otherwise qualify as a partnership under Section 6231(a)(l) of the Code which is subject to the TEFRA partnership audit rules, the Tax Matters Member shall cause the Company to make an election under Section 6231(a)(1)(B)(ii) of the Code to subject the Company to the TEFRA partnership audit rules.

ARTICLE XII

WIND-UP EVENTS; TERMINATION EVENTS

12.1.       Wind-Up Events.

(a)           If any of the following events shall occur (each, a “Wind-Up Event”):  (i) an Initial Member (A) makes a general assignment of all or substantially all of its assets for the benefit of creditors; (B) applies for, consents to, or acquiesces in the appointment of a receiver, trustee, custodian, or liquidator for its business or all or substantially all of its assets; (C) files, or consents to or acquiesces in, a petition seeking relief or reorganization under any bankruptcy or insolvency laws; or (D) has a petition seeking relief or reorganization under any bankruptcy or insolvency laws filed against it which is not dismissed within ninety (90) days after it was filed (each such Initial Member, a “Bankrupt Member”), then the Company shall immediately notify each of the Initial Members in writing of the occurrence of such Wind-Up Event (a “Wind-Up Event Notice”); and any Initial Member that is not a Bankrupt Member may, in a writing (the “Dissolution Notice”) delivered to the other Initial Members  no earlier than sixty (60) calendar days of receipt of the Wind-Up Event Notice and no later than ninety (90) calendar days following receipt of such Wind-Up Notice, (the “Dissolution Notice Deadline”), elect to wind up, dissolve and liquidate the Company in accordance with Section 12.1(c); subject to the receipt of the prior written consent of the other Initial Member who is not a Bankrupt Member.

(b)           Failure to Deliver Dissolution Notice.  If no Initial Member delivers a Dissolution Notice prior to the Dissolution Notice Deadline, then the business of the Company will continue to be operated in accordance with the Approved Plan as if the Wind-Up Event had not occurred and the Capital Contribution commitments set forth in Sections 2.2, 2.3, 2.4 and 2.9 shall remain in full force and effect.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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(c)           Effect of Dissolution Notice.  Upon delivery of a Dissolution Notice, without any further action of the Board or any Member other than the receipt of the prior written consent of the other Initial member who is not a Bankrupt Member, the Company will be wound up, dissolved and liquidated in accordance with Article XIII (with the Board acting as the Liquidator unless the Board has appointed a Liquidator), applicable law and the following: For the earlier of (1) the *** following delivery of a Dissolution Notice or (2) the earlier termination of the Transaction Agreements (the “Conversion Period”), all of the Transaction Agreements will remain in full force and effect, subject to the terms thereof and the receipt of timely payments therefor, until expiration of the Conversion Period, at which time such agreements will terminate.  During the Conversion Period:  the Board shall use its good faith efforts to maximize the liquidation value of the Company; (B) the Company shall (1) terminate all cancelable obligations, (2) minimize all costs and expenses to the fullest extent possible other than the minimum amount necessary to provide services to existing subscribers in the ordinary course of business, and (3) not incur any new obligations other than those obligations that are funded out of the operations of the Company without the prior Approval of the Initial Members; and (C) the Members agree to use commercially reasonable efforts to structure all transactions in connection with the wind-up, dissolution and liquidation of the Company, whether occurring during the Conversion Period or thereafter, in a tax efficient manner mutually agreeable to the Initial Members.

12.2.       Other Termination Events.

(a)           Upon *** notice to each Initial Member, this Agreement may be terminated upon (i) the Supermajority Approval of the Board and (ii) such approvals and notifications of such Members as may be required by Section 5.6 or Section 5.6A..

(b)           If this Agreement is terminated pursuant to this Section 12.2 (other than in connection with the conversion to a corporation as contemplated by Section 14.17), then:

(i)           each of the other Transaction Agreements shall terminate contemporaneously therewith;

(ii)          such terminations shall not release any party to any of the Transaction Agreements from any liability that (A) had accrued or arisen prior to or as of such termination, (B) may accrue in respect of any act or omission prior to termination or (C) is expressly stated to survive the termination; and

(iii)          the Company shall be dissolved (without any further action of the Board or the Members) pursuant to Article XIII.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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ARTICLE XIII

DISSOLUTION

13.1        Dissolution of the Company (a)           Upon obtaining the requisite Approval of the Members to dissolve the Company in accordance with the provisions of this Agreement (including without limitation Sections 5.6(vi) and 5.6A hereof) or in connection with the delivery of a Dissolution Notice under Article XII, the Company shall be dissolved and liquidated in accordance with the provisions of Section 13.1(b) and applicable law.

(b)          At the time the Company is dissolved, the business and affairs of the Company shall be wound up and liquidated by a liquidating trustee to be appointed by the Board (the “Liquidator”) as expeditiously as business circumstances will permit in an orderly and business-like manner and in accordance with applicable law.  Unless instructed by the Board to distribute assets owned by the Company in kind to the Members (such allocations to be reasonably specified by the Board) after the satisfaction of the items set forth in clauses (i)-(iii) below, to the extent feasible, the assets of the Company shall be sold or otherwise reduced to cash, and distributed, except as otherwise provided by law, in the following order and priority:

(i)           to pay the expenses of the winding-up and liquidation of the Company;

(ii) to pay all creditors of the Company, including Members; and

(iii)         to establish reserves, in amounts established by the Liquidator, to meet contingent or unknown liabilities of the Company.

The remaining assets of the Company shall be applied and distributed based on the Gross Asset Value of such assets, among the Members in accordance with Section 3.3(c); provided however that in the event of a dissolution or Capital Event prior to the date that is *** months following execution of this Agreement, distributions, if any, resulting from such dissolution or Capital Event shall first be paid ***.

(c)          At the termination and dissolution of the Company, neither the Company name, nor the right to its use, nor the goodwill, if any, attached thereto or to the Company shall be considered as an asset of the Company, and no valuation shall be put thereon for the purpose of liquidation or distribution, or any other purpose whatsoever.

(d)          The Gross Asset Value of the Company assets shall be redetermined in connection with the dissolution of the Company and any items of Profits and/or Losses resulting therefrom shall be allocated among the Members pursuant to Article III.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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ARTICLE XIV

MISCELLANEOUS

14.1    Confidentiality (a)           All communications between the Company and its Members, their Affiliates or their respective directors, officers, managers, employees, agents, representatives, attorneys, accountants, other professional advisors or lending institutions (collectively “Representatives”), all information which is supplied to and received by any of them from the other which is marked “confidential”, and all material information concerning the business operations, affairs or the financial arrangements of the Members, their respective Affiliates, the Company or of any Person with whom any of them is in a confidential relationship with regard to the matter in question coming to the knowledge of the recipient solely by virtue of such information having been furnished to the Company, the Members or their Affiliates, shall be kept confidential by the recipient and may be used only for the benefit of the Company, including, without limitation, the evaluation and negotiation of transactions in connection with the Company’s Business, and shall not be disclosed to any other Person except an Affiliate of the recipient, or any Representatives of the recipient on obtaining a similar undertaking as to its confidentiality from such Person, which obligation shall remain in effect unless and until (i) the recipient can reasonably demonstrate that any such communication, information and material is, or part of it is, in the public domain but through no fault of its own, whereupon, to the extent that it is in the public domain, this obligation shall cease, or (ii) the recipient is advised by legal counsel that disclosure is required by applicable laws or regulations, whereupon the recipient shall (A) immediately notify the disclosing party in writing of the existence, terms and circumstances surrounding such event, and (B) consult and cooperate with the disclosing party so that the disclosing party may seek (at its sole cost) an appropriate protective order and/or waive compliance with the provisions of this Agreement.  If, in the absence of a protective order or the receipt of a waiver hereunder, the recipient is nonetheless, in the opinion of the recipient’s legal counsel, legally required to disclose the confidential information to any court, governmental agency or tribunal or is otherwise required under applicable laws or regulations to disclose such confidential information, the recipient may disclose the confidential information to the minimum extent so required to such court, governmental agency or tribunal or as otherwise so required under applicable laws or regulation without liability hereunder.

(b)           The terms of this Agreement shall be held confidential by the Members and their Affiliates and their respective Representatives and shall not be disclosed without the Approval of the Initial Members, except as required by law, rule or regulation; provided, that if legal counsel to any Member (the “Disclosing Member”) advises that disclosure of any term or terms of this Agreement is required under any applicable law or regulation, then the Disclosing Member shall (A) immediately notify the other Members in writing of the existence, terms and circumstances surrounding such event, and (B) consult and cooperate with the other Members so that the other Members may seek (at their sole cost) an appropriate protective order and/or waive compliance with the provisions of this Agreement.  If, in the absence of a protective order or the receipt of a waiver hereunder, the recipient is nonetheless, in the opinion of the recipient’s legal counsel, legally required to disclose such term or terms to any court, governmental agency or tribunal or is otherwise required under applicable laws or regulations to disclose such term or terms, the recipient may disclose such term or terms to the minimum extent so required to such court, governmental agency or tribunal or as otherwise so required under applicable laws or regulation without liability hereunder. Each recipient shall be responsible for any improper disclosure of its Affiliates or Representatives.  Subject to the immediately preceding sentence, the timing and nature of the announcements relating to the establishment of the Company and this Agreement shall be made only with the Approval of HTI and QC.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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(c)           The Members shall use their best efforts to procure the observance of the above-mentioned restrictions by the Company and shall take all reasonable steps to minimize the risk of disclosure of confidential information by ensuring that only such employees, officers and directors whose duties will require them to possess any such information shall have access thereto, and that they will be instructed to treat the same as confidential.

(d)           Notwithstanding anything in this Section 14.1 to the contrary, in the event a Member desires to Transfer its Interest pursuant to Article VIII, the nondisclosure provisions of Section 14.1 shall not apply to a potential transferee who executes a confidentiality agreement in form and substance reasonably acceptable to the Board.

(e)           This Section 14.1 shall survive any termination of this Agreement.

(f)           This Section 14.1 is subject to Section 14.16 of this Agreement.

14.2       Accounting, Books and Records Accounting, Books and Records. The Company shall maintain at its principal office separate books of account for the Company which (i) shall fully and accurately reflect all transactions of the Company, all costs and expenses incurred, all charges made, all credits made and received, and all income derived in connection with the conduct of the Company and the operation of its business in accordance with GAAP or, to the extent inconsistent therewith, in accordance with this Agreement and (ii) shall include all documents and other materials with respect to the Company’s business as are usually entered and maintained by Persons engaged in similar businesses.  The Company shall use the accrual method of accounting in preparation of its annual reports and for tax purposes and shall keep its books and records accordingly.  Subject to subsection (c) below and to applicable law, any Member or its designated representative shall have the right, at any reasonable time and for any lawful purpose related to the affairs of the Company or the investment in the Company by such Member, (i) to have access to and to inspect and copy the contents of such books or records, (ii) to visit the facilities of the Company and (iii) to discuss the affairs of the Company with its officers, employees, attorneys, accountants, customers and suppliers.  The Company shall not charge such Member for such examination and each Member shall bear its own expenses in connection with any examination made for any such Member’s account.

(b)          Reports.

(i)           In General.  The lead financial manager of the Company (or if none, the General Manager) shall be responsible for the preparation of financial reports of the Company and the coordination of financial matters of the Company with the Accountants.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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(ii)           Periodic and Other Reports.  The Company shall cause to be delivered to each Member the financial statements listed in clauses (A) through (C) below, prepared, in each case, in accordance with GAAP (and, if required by any Member for purposes of reporting under the Securities Exchange Act of 1934, Regulation S-X) and in English, and such other reports as any Member may reasonably request from time to time, provided that, if the Board so determines within *** days thereof, such other reports shall be provided at such requesting Member’s sole cost and expense.  Such financial statements shall be accompanied by an analysis, in reasonable detail, of the variance between the financial condition and results of operations reported therein and the corresponding amounts for the applicable period or periods in the Approved Plan.  The monthly and quarterly financial statements referred to in clauses (B) and (C) below may be subject to normal year-end audit adjustments.  On an annual basis (or more frequently, if required by law or if required by any Member for purposes of reporting under the Securities Exchange Act of 1934, Regulation S-X), the Company’s financial statements shall be audited or otherwise reviewed by the Company’s Accountants.

(A) As soon as practicable following the end of each Fiscal Year (and in any event not later than *** after the end of such Fiscal Year), a balance sheet of the Company as of the end of such Fiscal Year and the related statements of operations, Members’ Capital Accounts (and Unreturned Capital Contributions) and changes therein, and cash flows for such Fiscal Year, together with appropriate notes to such financial statements, all of which shall be audited and certified by the Accountants, and in each case, to the extent the Company was in existence, setting forth in comparative form the corresponding figures for the immediately preceding Fiscal Year (in the case of the balance sheet) and the two (2) immediately preceding Fiscal Years (in the case of the statements).

(B) As soon as practicable following the end of each of the first three fiscal quarters of each Fiscal Year (and in any event not later than *** after the end of each such fiscal quarter), a balance sheet of the Company as of the end of such fiscal quarter and the related statements of operations, Members’ Capital Accounts (and Unreturned Capital Contributions) and changes therein, and cash flows for such fiscal quarter and for the Fiscal Year to date, in each case, to the extent the Company was in existence, setting forth in comparative form the corresponding figures for the prior Fiscal Year’s fiscal quarter and interim period corresponding to the fiscal quarter and interim period just completed.

(C) As soon as practicable following the end of each the first two calendar months of each fiscal quarter (and in any event not later than *** after the end of such calendar month), a balance sheet as of the end of such month and statements of operations for the interim period through such month and the monthly period then ended.

(D) The quarterly or monthly statements described in clauses (B) and (C) above shall be accompanied by a written certification of the lead financial manager of the Company (or if none, the General Manager) that such statements have been prepared in accordance with GAAP or this Agreement, as the case may be.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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(c)           Proprietary Information.  Notwithstanding anything to the contrary in this Section 14.2, and except as otherwise expressly set forth in this Agreement, a Member other than the Initial Members shall only have access to such information regarding the Company as is required by applicable law and shall not have access for such time as the Board deems reasonable to such information relating to the Company’s business which the Board reasonably believes to be in the nature of trade secrets or other information the disclosure of which the Board in good faith believes is not in the best interest of the Company or could damage the Company or its business or which the Company is required by law or by agreement with another Person to keep confidential.

14.3         Entire Agreement; Amendments This Agreement, and any annexes, schedules or exhibits hereto, and the other Transaction Agreements delivered herewith, which incorporate all prior understandings relating to the subject matter hereof and thereof, set forth the entire agreement of the parties hereto with respect to the matters set forth herein and therein and supersede any prior agreement or understanding among or between them with respect to such subject matters.  In no event shall this Agreement be modified or amended without the Supermajority Approval of the Members under Section 5.6, whether such amendment or modification is effected through an amendment adopted under this paragraph, through a merger or consolidation, or otherwise; provided, however, that if and to the extent that any modification or amendment to this Agreement has a disproportionally adverse effect on the Class C Members when compared to the effect on the Class A Members and Class B Members, such modification or amendment shall require the approval of each of the Initial Members; provided further that any amendment to Sections 5.6(vi) or 5.6A, or Articles XII or XIII shall require approval of all of the Initial Members.

14.4         [Intentionally Omitted]

14.5         Notices.  Any notice or request specifically provided for or permitted to be given under this Agreement must be in writing, but may be served by depositing the same in the mail, addressed to the party to be notified, postage prepaid, and registered or certified, with a return receipt requested.  Notice given by registered mail or certified mail shall be deemed delivered and effective on the date of delivery as shown on the return receipt.  Notice may be served by hand delivery, courier service, telegram or transmission by telecopier, but shall be deemed delivered and effective as of the time of actual delivery thereof to the addressee and, in the case of notice by telecopier, when confirmation of receipt is obtained by the addressee.  For purposes of notice, the addresses of the Members and the Company shall be as set forth in Annex A hereto.

14.6         Waiver The failure of a party to insist upon strict performance of any provision hereof, at any time or for any period of time, shall not constitute a waiver of, or estoppel against asserting, the right to require such performance in the future nor shall a waiver or estoppel with respect to a later breach of a similar nature or otherwise be inferred from such failure.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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14.7         Successors and Assigns This Agreement shall apply to, and shall be binding upon, the parties hereto, their respective permitted successors and assigns, and all Persons claiming by, through, or under any of the aforesaid Persons.

14.8         Cumulative Rights The rights and remedies provided by this Agreement are cumulative, and the use of any right or remedy by any party shall not preclude or waive its rights to use any or all other remedies.

14.9         Further Assurances Each party agrees to execute (and acknowledge, if requested) and deliver such additional documents and instruments and to perform such additional acts as may be necessary or appropriate to effectuate, carry out and perform all of the terms, provisions, conditions and purposes of this Agreement and all the transactions contemplated by this Agreement and all other agreements delivered in connection herewith.

14.10       Governing Law The Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware without regard to the conflict of laws principles thereof.

14.11       Severability If any term or provision of this Agreement or the application thereof to any party or set of circumstances shall, in any jurisdiction and to any extent, be finally held invalid or unenforceable, such term or provision shall only be ineffective as to such jurisdiction, and only to the extent of such invalidity or unenforceability, without invalidating or rendering unenforceable any other terms or provisions of this Agreement, and the parties hereto shall negotiate in good faith a substitute provision which comes as close as possible to the invalidated or unenforceable term or provision, and which puts each party in a position as nearly as comparable as possible to the position it would have been in but for the finding of invalidity or unenforceability, while remaining valid and enforceable.

14.12       Construction The headings in this Agreement are inserted for convenience and identification only and are not intended to describe, interpret, define or limit the scope, extent or intent of this Agreement or any provision hereof.  Whenever the context requires, the gender of all words used in this Agreement shall include the masculine, feminine and neuter and the number of all words shall include the singular and the plural. This Agreement will be construed simply according to its fair meaning and not strictly for or against any party.  Each of the parties hereto acknowledges and agrees that it has been represented by counsel and has fully considered the language, terms and provisions of this Agreement and, as such, no rule of construction requiring interpretation against the draftsperson will apply in the interpretation of this Agreement.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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14.13       Counterparts This Agreement may be executed in any number of counterparts with the same effect as if all the parties hereto had signed the same document.  All counterparts shall be construed together and shall constitute one and the same document.

14.14       No Third Party Rights Nothing herein expressed or implied shall confer upon any of the employees of any Member, the Company or any of their Affiliates, any rights or remedies, including without limitation, any rights to employment or continued employment, for any specified period, of any nature or kind whatsoever under or by reason of this Agreement.

14.15 Expenses.

(a)           Except for various expenses included in the Capital Contributions of the Initial Members pursuant to Article II and the Shared Costs (as set forth below in Section 14.15(b)), each Member shall bear the full costs and expenses incurred by it and its Affiliates (including, without limitation, legal fees, fees of other advisors and travel and labor costs) in connection with the negotiation, preparation and execution of the Transaction Agreements and the consummation of the transactions contemplated by the Transaction Agreements (“Individual Costs”). Such Individual Costs will not be eligible for reimbursement from the Company.

(b)           The Initial Members agree that the legal costs of the initial preparation and drafting of this Agreement as set forth on Schedule 14.15 attached hereto (the “Shared Costs”) shall be paid by the Company on the Effective Date out of the cash proceeds received by the Company for the initial issuance of Interests to the Initial Members hereunder, unless such Shared Costs have been paid previously by HTI, in which case the Company shall reimburse HTI, on the Effective Date for the amount of such Shared Costs out of the cash proceeds received by the Company for the initial issuance of Interests to the Initial Members hereunder.

14.16       Public Announcements Neither any Member or any of its Affiliates or the Company shall make a public announcement or press release with respect to the Company or this Agreement without the written consent of HTI and QC, except as may be required by law, rule or regulation and if so required the party making such public announcement or press release shall use its commercially reasonable efforts to provide the other Members with a reasonable opportunity for review and comment in advance of its release. The parties recognize that each of HTI, QC and AMAC may be required to disclose this agreement as a “Material Agreement”, in the reasonable determination of such party in consultation with their legal counsel, and, as such, may need to file it with the Securities and Exchange Commission, subject to an appropriate confidential treatment request as will be generated by such Initial Member in consultation with the other Initial Members.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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14.17       Conversion to Corporate Form (a)           In the event that the Board shall determine that the business of the Company should be conducted in the form of a corporation rather than a limited liability company (and such determination receives the Supermajority Approval of the Members), the Board shall have the power to convert the Company into a corporation or take such other action as they may deem advisable in light of such changed conditions, including, without limitation, creating one or more Subsidiaries of the Company and contributing to such Subsidiaries any or all of the assets and liabilities of the Company and distributing the capital stock of such Subsidiary or Subsidiaries pro rata to the Members, or causing the Members to contribute their Interests into a corporation.  In connection with any such incorporation of the Company, the Members shall receive, in exchange for their Interests and related Units, shares of capital stock of such corporation or its Subsidiaries having the same relative economic interest in such corporation or Subsidiaries as is set forth in this Agreement as among the holders of Interests in the Company (as if such exchange were being made in connection with a Capital Event hereunder), subject in each case to modifications to conform to the provisions set forth in the Delaware General Corporation Law. At the time of such conversion, the Members shall enter into a mutually acceptable shareholders agreement.

(b) In the event that the Members agree to convert the Company to a corporation pursuant to Section 14.17(a), the Members agree to use commercially reasonable efforts to structure such conversion in a tax efficient manner. All forms of a certificate or articles of incorporation, by-laws, stockholders’ agreement and any other governing documents proposed to be established for such corporation and its Subsidiaries, if any, must be Approved by Supermajority Approval of the Members.  In addition, each of the Members agrees to take all action necessary with respect to their Units and Interests in order to approve any conversion to corporate form that has been Approved by Supermajority Approval of the Members in accordance with this Section 14.17.

14.18       Certificates of Units (a)           Every Member’s Units shall be represented by a certificate or certificates, provided that the Board may provide by resolution or resolutions that some or all of any or all classes or series of Units shall be uncertificated.  Any such resolution shall not apply to Units represented by a certificate until such certificate is surrendered to the Company.  Notwithstanding the adoption of such a resolution by the Board, every holder of Units represented by certificates and, upon request, every holder of uncertificated Units shall be entitled to have a certificate signed by, or in the name of, the Company by the General Manager, or the President or a Vice President, and by the Treasurer or the Secretary of the Company, or as otherwise permitted by law, representing the number of Units registered in certificate form.  Any or all the signatures on the certificate may be a facsimile signature.

(b)           Transfers of Units shall be made on the books of the Company by the holder of the Units in person or by such holder’s attorney upon surrender and cancellation of certificates for a like number of Units, or as otherwise required by law or provided by this Agreement with respect to uncertificated Units.

(c)           No certificate evidencing Units shall be issued in place of any certificate alleged to have been lost, stolen or destroyed, except upon production of such evidence of such loss, theft or destruction and upon delivery to the Company of a bond of indemnity in such amount, upon such terms and secured by such surety, as the Board in its discretion may require.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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(d)           Each certificate evidencing Units shall bear the following legend on the face thereof:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS UNDER A LIMITED LIABILITY COMPANY AGREEMENT A COPY OF WHICH IS ON FILE WITH, AND MAY BE OBTAINED UPON WRITTEN REQUEST TO, THE SECRETARY OF THE COMPANY.  NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE MADE EXCEPT (A) IN ACCORDANCE WITH THE PROVISIONS OF SUCH LIMITED LIABILITY COMPANY AGREEMENT AND (B) PURSUANT TO A REGISTRATION STATEMENT EFFECTIVE UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER.  THE HOLDER OF THIS CERTIFICATE, BY ACCEPTANCE OF THIS CERTIFICATE, AGREES TO BE BOUND BY ALL OF THE PROVISIONS OF SUCH LIMITED LIABILITY COMPANY AGREEMENT.

(e)           Upon the sale of any Units pursuant to an Initial Public Offering or upon the termination or expiration of the transfer restrictions under this Agreement, the certificates representing such Units shall be replaced, at the expense of the Company, with certificates or instruments not bearing the applicable legend or legends required by this Section 14.18.

(f)           Until such time as the certificates or instruments evidencing Units are no longer required to bear either of the legends contained in Sections 14.18(d) above, each Member agrees and undertakes to cause each transferee thereof to agree that it will not Transfer any Units except (i) pursuant to an Initial Public Offering or (ii) pursuant to the terms of this Agreement.

14.19      Registered Members.  Except as expressly required by applicable law, the Company will be entitled to treat the holder of record of an Interest in the Company as the holder in fact thereof and will not be bound to recognize any equitable or other claim to or interest in such Interest on the part of any other Person, whether or not the Company has express or other notice thereof.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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ARTICLE XV

SUBMISSION TO JURISDICTION; WAIVERS

15.1         Submission To Jurisdiction; Waivers (a)           Each party to this Agreement hereby irrevocably and unconditionally, with respect to any matter or dispute (which after good faith efforts by the interested parties to resolve such dispute in a mutually satisfactory manner, including, if applicable, the dispute resolution provisions of Article VI, has not been so resolved) arising under, or in connection with, this Agreement:

(i)           submits for itself and its property in any legal action or proceeding relating to this Agreement, or for recognition and enforcement of any judgment in respect thereof, to the exclusive general jurisdiction of the courts of the State of Delaware, the courts of the United States of America for the District of Delaware, and appellate courts from any thereof (and covenants not to commence any legal action or proceeding in any other venue or jurisdiction);

(ii)          consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same;

(iii)         agrees that service of process in any such action will be in accordance with the laws of the State of Delaware;

(iv)         waives in connection with any such action any and all rights to a jury trial; and

(v)          agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law.

(b)          Each party to this Agreement agrees that notwithstanding any other remedy available at law or in equity for any breach of this Agreement, the parties hereto shall be entitled to specific performance and injunctive or other equitable relief as a remedy for any such breach.  Such remedy shall not be deemed to be the exclusive remedy for breach of this Agreement, but shall be in addition to all other remedies available at law or in equity to the parties hereto.

ARTICLE XVI

DEFINITIONS

16.1        Definitions As used herein the following terms shall have the meanings set forth below:

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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“Acceptance Notice” shall have the meaning specified in Section 8.2(b).

“Accountants” shall mean the Initial Accountants and any such successor firm of nationally recognized independent certified public accountants that, as of such time, has been appointed by the Board as the accountants for the Company pursuant to Section 5.5.

"Adjusted Capital Account" means the Capital Account maintained for each Member as of the end of each Fiscal Year or other taxable period, (a) increased by any amounts that such Member is obligated to restore under the standards set by Regulations Section 1.704-1(b)(2)(ii)(c) (or is deemed obligated to restore under Regulations Sections 1.704-2(g) and 1.704-2(i)(5)) and (b) decreased by (i) the amount of all losses and deductions that, as of the end of such Fiscal Year or taxable period, are reasonably expected to be allocated to such Member in subsequent years under Sections 704(e)(2) and 706(d) of the Code and Regulation Section 1.751-1(b)(2)(ii), and (ii) the amount of all distributions that, as of the end of such Fiscal Year or taxable period, are reasonably expected to be made to such Member in subsequent years in accordance with the terms of this Agreement or otherwise to the extent they exceed offsetting increases to such Member's Capital Account that are reasonably expected to occur during (or prior to) the year in which such distributions are reasonably expected to be made (other than increases as a result of a minimum gain chargeback pursuant to Section 3.4(b) or (c)).  The foregoing definition of Adjusted Capital Account is intended to comply with the provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

“Affiliate” shall mean with respect to any Person, any other Person that, either directly or indirectly, through one or more agents, nominees, intermediaries, trusts, or other arrangements, whether formal or informal, controls, is controlled by or is under common control with that Person.  The term “control” shall mean the possession, directly or indirectly, of the power to either (i) vote more than fifty percent (50%) of the securities having ordinary voting power for the election of directors (or comparable positions in the case of partnerships and limited liability companies), or (ii) direct or cause the direction of the management and policies of such Person whether by contract or otherwise.

“Agreement” shall mean this Limited Liability Company Agreement, as the same may be further amended, supplemented or otherwise modified from time to time.

“AMAC” shall have the meaning set forth in the preamble to this Agreement.

“AMAC Reseller Agreement” shall have the meaning set forth in Section 7.1(d).

“Approved Plan” shall mean the Business Plan attached hereto as Exhibit C and any modification thereto that is Approved by the Supermajority Approval of the Board.

“Approval”, “Approve” or “Approved” shall mean the approval by vote either by phone or in person at a Members’ meeting or a Board meeting, or by written consent of the Members or the Board, in each case, pursuant to the provisions of Articles IV and V.

“Assessment” shall have the meaning specified in Section 8.5.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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“Bankrupt Member” shall have the meaning specified in Section 12.1(a).

“Board” shall have the meaning specified in Section 5.2.

 “Business” shall have the meaning specified in Section 1.6(a).

“Business Day” shall mean any day that is not a Saturday, a Sunday or any other day on which banks are required by law to be closed in the City of New York.

“Business Plan” shall have the meaning specified in Section 5.13.

“Buyer” shall have the meaning specified in Section 2.8.

“Capital Account” shall have the meaning specified in Section 3.1.

“Capital Contributions” shall mean those contributions of cash, the agreed fair market value of other assets (net of liabilities) contributed to the capital of the Company by the Members and, for purposes of Sections 2.1(a), 3.3(c) and 13.1(c), the allocations made pursuant to Section 3.6. Contributions shall be taken into account as Capital Contributions only to the extent they have actually been made, or in the case of services, actually performed.

“Capital Event” shall mean (i) the sale, exchange or other disposition of all or substantially all of the assets of the Company, (ii) the sale, exchange or other disposition of all or substantially all of the Units, or (iii) any merger, consolidation or other business combination transaction involving the Company (other than a transaction in which the holders of the Units continue to own a majority of the total voting power represented by the ownership interests of the surviving entity in such transaction.

“Capital Event Distribution” shall mean a distribution in connection with a Capital Event.

 “Certificate of Formation” shall have the meaning specified in Section 1.1.

“Class” shall mean the classes of Units into which Interests may be classified or divided from time to time pursuant to the provisions of this Agreement.

“Class A Directors” shall have the meaning specified in Section 5.3(a).

 “Class A Member” shall mean any Member holding one or more Class A Units, in its capacity as such.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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“Class A Unit” shall mean any Unit classified as such pursuant to the provisions of this Agreement.

“Class B Directors” shall have the meaning specified in Section 5.3(a).

 “Class B Member” shall mean any Member holding one or more Class B Units, in its capacity as such.

“Class B Unit” shall mean any Unit classified as such pursuant to the provisions of this Agreement.

“Class C Director” shall have the meaning specified in Section 5.3(a).

 “Class C Member” shall mean any Member holding one or more Class C Units, in its capacity as such.

“Class C Unit” shall mean any Unit classified as such pursuant to the provisions of this Agreement.

“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Company” shall mean, LIFECOMM LLC, a Delaware limited liability company, together with its successors by conversion, merger, consolidation or sale of all or substantially all of the assets of the Company.

 “Conditional Transfer Notice” shall have the meaning specified in Section 8.2(a).

“Contribution Cure Period” shall have the meaning specified in Section 12.1(a).

“Conversion Period” shall have the meaning specified in Section 12.1(c).

“Convertible Securities” shall have the meaning specified in Section 5.5(iv).

“Cure Periods” shall have the meaning specified in Section 12.1(a).

“Damages” shall have the meaning specified in Section 10.1.

“Declining Member” shall have the meaning specified in Section 8.2(c).

 “Defaulting Party” shall have the meaning specified in Section 2.9(b).

“Delaware LLC Act” shall mean the Delaware Limited Liability Company Act, 6 Del. C. §§ 18-101, et seq., as it may be amended from time to time, and any successor to such statute.

“Designated Officers” shall have the meaning specified in Section 6.1(b) and shall consist of the following individuals: *** for HTI, *** for QC and *** for AMAC.

“Director” shall mean a member of the Board appointed and serving in accordance with the provisions of Article V.

“Dispute” shall have the meaning specified in Section 6.1.

“Dissolution Notice” shall have the meaning specified in Section 12.1(a).

“Dissolution Notice Deadline” shall have the meaning specified in Section 12.1(a).

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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“Distribution Policy” shall have the meaning specified in Section 3.2(a)(ii).

“Dragging Member” and “Dragging Members” shall have the meaning specified in Section 8.3.

“Effective Date” shall have the meaning specified in the preamble of this Agreement.

“Exchange” shall have the meaning specified in Section 8.5.

“Exchange Value” shall have the meaning specified in Section 8.5.

“Exchanging Member” and “Exchanging Members” shall have the meaning specified in Section 8.5.

“Excluded Securities” shall have the meaning specified in Section 2.8(f).

“Executive Management Team” shall have the meaning specified in Section 5.9(b).

“Fiscal Year” shall mean the calendar year and shall include any partial fiscal year at the beginning and at the end of the term of the Company.

 “Funding Period 1” means the Effective Date through the *** anniversary thereof, inclusive.

“GAAP” shall mean generally accepted accounting principles in the United States of America in effect from time to time.

“General Manager” shall mean, at any time, the chief executive officer of the Company as appointed by HTI pursuant to Section 5.9(b) and, if none, then the Board will act (by majority vote) as the General Manager.

“Gross Asset Value” shall mean, with respect to any asset, the asset’s adjusted basis for Federal income tax purposes, except as follows:

(i)           The initial Gross Asset Value of any asset contributed by a Member to the Company shall be the fair market value of such asset at the time it is accepted by the Company, unreduced by any liability secured by such asset, as determined by the Board;

(ii)           The Gross Asset Values of all Company assets shall be adjusted to equal their respective fair market values, unreduced by any liabilities secured by such assets, as determined by the Board, as of the following times:  (a) the acquisition of an additional interest in the Company by any new or existing Member in exchange for more than a de minimis capital contribution, or the grant of an interest in the Company (other than a de minimis interest) as consideration for the provision of services to or for the benefit of the Company by an existing Member acting in a Member capacity, or by a new Member acting in a Member capacity or in anticipation of being a Member; (b) the relinquishment of an Interest (or any part thereof) to the Company; (c) the distribution by the Company to a Member of more than a de minimis amount of property as consideration for an interest in the Company; and (d) the liquidation of the Company within the meaning of Treas. Regs. § 1.704-1(b)(2)(ii)(g); provided, however, that except to the extent otherwise provided in this Agreement adjustments pursuant to clauses (a), (b) and (c) above shall be made only if the Board reasonably determines that such adjustments are necessary or appropriate to reflect the relative economic interests of the Members in the Company;

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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(iii)           The Gross Asset Value of any Company asset distributed to any Member shall be adjusted to equal the fair market value of such asset, unreduced by any liability secured by such asset, on the date of distribution as determined by the Board; and

(iv)           The Gross Asset Values of Company assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Treas. Regs. § 1.704-1(b)(2)(iv)(m) and Section  11.4(f) and Section 11.4(g) hereof; provided, however, that Gross Asset Values shall not be adjusted pursuant to this paragraph (iv) to the extent the Board reasonably determines that an adjustment pursuant to paragraph (ii) hereof is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant to this paragraph (iv).

If the Gross Asset Value of an asset has been determined or adjusted pursuant to paragraphs (i), (ii), or (iv) hereof, such Gross Asset Value shall thereafter be adjusted by the depreciation taken into account with respect to such asset for purposes of computing Net Profits and Net Losses.

For purposes of clause (ii) of this definition of “Gross Asset Value”, the making of any contribution described in Section 2.2(b) or 2.3(c) shall constitute the acquisition of an additional interest in the Company for more than a de minimis capital contribution.

“HTI” shall have the meaning set forth in the preamble to this Agreement.

“HTI Infrastructure Access Agreement” shall have the meaning specified in Section 7.1(a).

“Indemnifying Party” shall have the meaning specified in Section 10.2.

“Indemnitee” shall have the meaning specified in Section 5.12.

“Individual Costs” shall have the meaning specified in Section 14.15(a).

“Initial Accountants” shall mean PricewaterhouseCoopers.

“Initial Members” shall mean HTI, QC and AMAC and their Permitted Transferees (except as otherwise set forth in Section 8.1(f)), so long as such Initial Member and/or its Permitted Transferees own, in the aggregate, at least *** of the number of Units owned by the Initial Member on the Effective Date (as adjusted for conversions, Unit splits and the like, but without taking into account any dilution as a result of the issuance of additional Units by the Company).

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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“Initial Public Offering” shall mean the initial offer for sale of Securities pursuant to an effective registration statement filed under the Securities Act which results in an active trading market in such Securities (it being understood that such an active trading market shall be deemed to exist if, among other things, such Securities are listed on the NASDAQ Stock Market or another national securities exchange).

“Integrated Action Team” shall have the meaning specified in Section 6.1(a).

“Interest” shall mean a limited liability company interest in the Company as provided in this Agreement and under the Delaware LLC Act and includes any and all rights and benefits to which the holder of such Interest may be provided under this Agreement, together with all obligations of such Person to comply with the terms and provisions of this Agreement.  Interests shall be expressed as a number of Units.  Interests shall also include any Securities which are convertible into or exchangeable or redeemable for Units of the Company.

“Liabilities” shall have the meaning specified in Section 5.11.

“Liquidator” shall have the meaning specified in Section 13.1(b).

“Liquidity Demand Notice” shall have the meaning specified in Section 8.5.

“Liquidity Event” shall have the meaning specified in Section 8.5.

“Material Adverse Effect” shall mean any circumstance, change, event, transaction, loss, failure, effect or other occurrence that is, or is reasonably likely to be, materially adverse to (i) the business, operations, condition (financial or otherwise), assets, liabilities or results of operations of (x) the applicable Member together with its Affiliates, if any, taken as a whole or (y) the Company or (ii) the applicable Member’s ability to perform its obligations under the Transaction Agreements.

“Material Terms” shall have the meaning specified in Section 8.4(a).

“Member” shall mean a Person (a) (i) who is listed as a Member on Annex A hereto as of the date hereof, (ii) who is a transferee of an Interest in accordance with the provisions of Article VIII or (iii) to whom a new Interest is issued pursuant to Section 2.8 and (b) who has not resigned or withdrawn as a Member or been dissolved.  Reference to a “Member” shall be to any one of the Members.

“Mobile PERS” shall have the meaning specified in Section 1.6(a).

“Mobile PERS ***” means any entity that ***, and whose *** is specifically *** in the Territory. For the avoidance of doubt, a Mobile PERS *** shall not include a *** Company’s mobile cellular personal emergency response products or services. Solely for purposes of this definition of“Mobile PERS *** means developing the elements of, and ***.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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“Non-Transferring Member” shall have the meaning specified in Section 8.2(a).

“Notice of Pre-Approved Capital Call” shall have the meaning specified in Section 2.9(a).

“Notice of Proposed Issuance” shall have the meaning specified in Section 2.8.

“Observer” shall have the meaning specified in Section 5.3(a).

“Offered Interests” shall have the meaning specified in Section 2.8.

“Offered Units” shall have the meaning specified in Section 8.2(a).

“Ordinary Distributions” means distributions of Company’s cash on hand and other assets from time to time as set forth in Section 3.3(a).  Ordinary Distributions shall exclude Capital Event Distributions.

“Other Parties” shall have the meaning specified in Section 10.2.

“Over-Allotment Notice” shall have the meaning specified in Section 8.2(b).

“Over-Allotment Period” shall have the meaning specified in Section 8.2(b).

“Oversubscription Notice” shall have the meaning specified in Section 2.8(d).

 “Percentage Interest” shall mean, with respect to any Member, the fraction expressed as a percentage determined by dividing the number of Units owned by such Member by the total number of Units then issued and outstanding (excluding Units in the Company’s treasury (if any)).  The Percentage Interests of the Members at any time will be determined by reference to Annex A and shall be subject to adjustment as specified in Section 2.1(c) and as otherwise set forth in this Agreement.

“Permitted Transferee” shall have the meaning specified in Section 8.1(f).

“Person” shall mean any individual, corporation, limited liability company, partnership, firm, joint venture, association, trust, joint stock company, unincorporated organization or other entity.

“Pre-Approved Capital Call” shall have the meaning specified in Section 2.9(a).

“Profits” and “Losses” means, for each Fiscal Year or other taxable period, an amount equal to the Company’s taxable income or loss for such year or period, determined in accordance with Code Section 703(a), and for this purpose, all items of income, gain, loss or deduction required to be stated separately pursuant to Code Section 703(a)(1) shall be included in taxable income or loss, with the following adjustments:

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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(i)   Any income of the Company exempt from federal income tax and not otherwise taken into account in computing Profits or Losses pursuant to this definition shall be added;

(ii)   Any items of expenditure of the Company described in Code Section 705(a)(2)(B) or items of expenditure treated as Code Section 705(a)(2)(B) expenditures pursuant to Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Profits or Losses pursuant to this definition, shall be subtracted;

(iii)   In the event the Gross Asset Value of any property is adjusted pursuant to clauses (i), (ii), or (iii) of that definition, the amount of such adjustment shall be taken into account as gain or loss from the disposition of such property for purposes of computing Profits or Losses;

(iv)   Gain or loss resulting from any disposition of property with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Gross Asset Value of the property disposed of, notwithstanding that the adjusted tax basis of such property differs from its Gross Asset Value;

(v)   In lieu of the depreciation, amortization, or cost recovery deductions allowable in computing taxable income or loss, there shall be taken into account the depreciation computed based upon the adjusted book value of the property.

(vi)   To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Code Section 734(b) or Code Section 743(b) is required pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(4) to be taken into account in determining Capital Accounts as a result of a distribution other than in liquidation of a Member’s interest in the Company, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases the basis of the asset) from the disposition of the asset and shall be taken into account for purposes of computing Profits or Losses;

Notwithstanding any other provision of this definition, any items which are specially allocated pursuant to Sections 3.4, 3.5 and 3.6 shall not be taken into account in computing Profits or Losses.

“Property” shall mean all right, title and interest of the Company in and to all or any portion of the assets of the Company and any property (real or personal) or estate acquired in exchange therefor or in connection therewith.

“Proportionate Share” shall have the meaning specified in Section 2.8.

“Proposed Sale” shall have the meaning specified in Section 8.4.

“Proposed Units” shall have the meaning specified in Section 8.4.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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“Proposing Member” and “Proposing Members” shall have the meaning specified in Section 8.4.

“Proposing Transferor” shall mean an Initial Member which intends to Transfer its Units in accordance with the provisions of Section 8.2(a).

“Purchasing Member” shall have the meaning specified in Section 8.2(b).

“QC” shall have the meaning set forth in the preamble to this Agreement.

“QC Services Agreement” shall have the meaning set for in Section 7.1(c).

“QC Know-How License Agreement” shall have the meaning set forth in Section 7.1(b).

“Regulations” means the U.S. Income Tax Regulations of the Department of the Treasury, including Temporary Regulations, promulgated under the Code, as such Regulations may be amended (including corresponding provisions of succeeding regulations).

“Regulatory Allocations” shall have the meaning specified in Section 3.6.

“Remaining Offered Interests” shall have the meaning specified in Section 2.8(d).

“Remaining Offered Units” shall have the meaning specified in Section 8.2(b).

“Remaining Tag-Along Units” shall have the meaning specified in Section 8.4(c).

“Representatives” shall have the meaning specified in Section 14.1(b).

“Request” shall have the meaning specified in Section 8.4(a).

“Resolution Request” shall have the meaning specified in Section 6.2(a).

“Restricted Period” shall have the meaning specified in Section 8.1(a).

“Right of First Offer” shall have the meaning specified in Section 8.2(a).

“Securities” shall mean shares of common stock or other equity securities of the Company.

“Securities Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder, as the same may be amended from time to time.

“Shared Costs” shall have the meaning specified in Section 14.15(b).

“Subsidiary” shall mean, as to any Person, any other Person of which shares of stock or other ownership interest having ordinary voting power (other than stock having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such Person, are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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“Supermajority Approval” shall mean (i) with respect to the Board, the Approval of *** Directors and (ii) with respect to the Members, the Approval of Members holding an aggregate Percentage Interest in excess of ***; provided that in the event that either of HTI or QC cease to own at least *** of the respective number of Units owned by each such Initial Member on the Effective Date (as adjusted for conversions, Unit splits and the like), Supermajority Approval shall be deemed to mean, with respect to the Board, Approval of a majority of the Directors of the Board with respect to the Board and, with respect to the Members, the Approval of Members holding an aggregate Percentage Interest in excess of ***.

“Tag-Along Members” shall have the meaning specified in Section 8.4(a).

“Tag-Along Notice” shall have the meaning specified in Section 8.4(a).

“Tag-Along Units” shall have the meaning specified in Section 8.4(c).

 “Tax Distributions” shall have the meaning specified in Section 3.2(b).

“Tax Matters Member” shall have the meaning specified in Section 11.1(a).

“***Period” shall have the meaning specified in Section 2.8.

“Territory” shall mean the United States of America, ***.

“Third Party Investors” shall have the meaning set forth in Section 2.7.

“*** Period” shall have the meaning set forth in Section 8.2(b).

“Transaction Agreements” shall mean the Certificate of Formation, this Agreement, the HTI Infrastructure Access Agreement, the HTI Services Agreement, the QC Know-How License Agreement, the QC Services Agreement and the AMAC Reseller Agreement.

 “Transfer” shall have the meaning specified in Section 8.1(b).

“Transfer Price” shall mean the price stated in a Transfer Notice (which price must be payable solely in cash) and is the cash price at which a Proposing Transferor offers to Transfer each of his Offered Units.

“Transferring Member” shall have the meaning specified in Section 12.5(b).

“Unit” shall mean a fractional share of the Interests of all Members holding Units of such Class.  The Classes and number of Units outstanding and the holders thereof are set forth on Annex A, as such Annex may be amended from time to time pursuant to the terms of this Agreement.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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“Unreturned Capital Contributions” shall mean, with respect to a Member, an amount (not less than zero) equal to the excess of such Member's aggregate Capital Contributions as of the time of determination over the amount of cash and Gross Asset Value of property previously distributed to the Member prior to such time pursuant to Article III.

“Wind-Up Event” shall have the meaning specified in Section 12.1(a).

“Wind-Up Event Notice” shall have the meaning specified in Section 12.1(a).

“Withheld Taxes” shall have the meaning specified in Section 3.9.

“Withholding Loan” shall have the meaning specified in Section 3.9.

(b)           The words “hereof”, “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and section, subsection, annex, schedule and exhibit references are to this Agreement unless the context shall otherwise require.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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[Signature page to LLC Agreement]

IN WITNESS WHEREOF, the Members have executed this Limited Liability Company Agreement as of the day first written above.

HUGHES TELEMATICS, INC.

By /s/ Jeffrey A. Leddy

Name:  Jeffrey A. Leddy

Title:  CEO

QUALCOMM INCORPORATED

By  /s/ David E. Wise

Name:  David E. Wise

Title:  SVP Finance & Strategy

AMERICAN MEDICAL ALERT CORP.

By /s/ Jack Rhian

Name:  Jack Rhian

Title:  CEO

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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Annex A

MEMBERS OF THE COMPANY

Members	Class and Number of Units Owned
HUGHES Telematics, Inc. 2002 Summit Boulevard, Suite 1800 Atlanta, Georgia 30319 Attention:  Jeffrey Leddy Facsimile: (404) 573-5824 with a copy to: General Counsel and a copy to:	A: ***

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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QUALCOMM INCORPORATED 5775 Morehouse Drive San Diego, CA 92121-2779 Attention: Paul Fiskness Facsimile: (858) 658-2503 with a copy to: Paul Hedtke and a copy to: General Counsel	B: ***
American Medical Alert Corp. 36-36 33rd Street, Suite 103 Long Island City, New York  11106 Attention:  Jack Rhian Facsimile: (516) 394-2701 with a copy to: Allan Grauberd, Esq. Moses & Singer, LLP 405 Lexington Ave New York, NY 10174 Facsimile: (917) 206-4381	C: ***

For purposes of notice, the address of the Company shall be as follows:

LIFECOMM LLC

2002 Summit Boulevard, Suite 1800

Atlanta, GA 30319

Attention:  General Manager

Facsimile: (404) 573-5824

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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Schedule 1

Description of Pre-closing and Post-closing

Non-Cash Capital Contributions of the Initial Members

Section 1.

A.           QC’s Initial Contributions:  QC’s initial *** non-cash contribution to the Company shall be in accordance with the Business Plan and shall include the Licensed Know How as defined and described in the QC Know-How License Agreement.

B.           QC Subsequent Contributions:  QC’s subsequent non-cash contribution to the Company consists of access to Qualcomm engineering and certain other resources at a *** per man-hour relating to such services until the aggregate value of non-cash contribution of services to the Company totals ***) in accordance with the terms and conditions, including without limitation any timetable, set forth in the QC Services Agreement and any associated statement of work. QC shall be entitled to credit for in-kind contributions pursuant to Section 2.3(c) of the LLC Agreement in an amount equal to *** set forth in Exhibit C (as such Exhibit C may be amended from time to time by QC to include additional categories of personnel providing services under the QC Services Agreement) to the QC Services Agreement ***. Qualcomm shall provide such services to the Company in accordance with the terms and conditions, including without limitation any timetable, set forth in the QC Services Agreement and any associated statement of work.

Section 2.

A.           HTI’s Initial Contributions: HTI’s initial $10,500,000 non-cash contribution to the Company shall be in accordance with the Business Plan and shall include access to and adaptation of its “Telematics Platform” and organizational infrastructure that will become the basis for the Operational Support System and Business Support Systems (OSS/BSS) with the OSS Capabilities and BSS Capabilities as defined and described in the HTI Infrastructure Access Agreement.  HTI’s business infrastructure will provide the Company BSS functions, including HR support, payroll, accounting, financial management and reporting in accordance with the Business Plan and the terms and conditions of the HTI Infrastructure Access Agreement.

B.           HTI’s Subsequent Contributions: HTI’s subsequent non-cash contribution to the Company of up to $10,900,000 consists of HTI providing the personnel to staff certain OSS and BSS functions of the Company as described in, and in accordance with the terms and conditions, including without limitation any timetable, set forth in the HTI Services Agreement and any associated statement of work. This includes the Executive Management Team during that period. HTI will also provide engineering support services to the Company during initial development of the Mobile PERS Solution and for a period of time following commercial launch of the Mobile PERS solution/service and such other services as are described in the HTI Services Agreement and any associated statement of work. HTI shall provide such services to the Company in accordance with the terms and conditions, including without limitation any timetable, set forth in the HTI Services Agreement and any associated statement of work.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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Schedule 3.1

Capital Accounts as of Effective Date

HUGHES Telematics, Inc.                                        ***

QUALCOMM INCORPORATED                           ***

American Medical Alert Corp.                                 ***

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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Schedule 5.3

Directors and Alternate Directors

Class A Directors:	***.
Alternate:	***
Class B Directors:	***
Alternates:	***
Class C Directors:	***
Alternates:	***

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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Schedule 14.15

Shared Costs

*** of legal fees and costs.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

74

Exhibit A

Certificate of Formation

***

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

75

Exhibit B

Company Wiring Instructions

***

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

76

Exhibit C

Business Plan

***

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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EXHIBIT D

ASSIGNMENT AND ASSUMPTION AGREEMENT

ASSIGNMENT AND ASSUMPTION AGREEMENT, dated as of ______ __, 201_ (this “Assignment”), between [___________________________, a _______ corporation (the “Assignor”), and _________________________________, a ____________ (the “Assignee”).

WHEREAS, Assignor is party to that certain Limited Liability Company Agreement of LIFECOMM LLC (the “Company”), dated as of May [12], 2010 (as amended, the “LLC Agreement”) by and among Assignor, ________________________ (“____”) and ______________________ (“_____”);

WHEREAS, pursuant to the Section 8.1 of the LLC Agreement, the Assignor is entitled to assign its rights under the LLC Agreement to the Assignee; and

WHEREAS, the Assignor desires to assign its rights under the LLC Agreement and the Assignee wishes to assume the obligations of the Assignor under the LLC Agreement.

NOW, THEREFORE, in consideration of the premises contained herein, the parties hereto agree as follows:

Section 1.  Defined Terms.

Capitalized terms used herein and not defined shall have the respective meanings set forth in the LLC Agreement.

Section 2.  Assignment and Assumption.

Pursuant to the Assignor’s rights under Section 8.1 of the LLC Agreement, the Assignor hereby transfers, conveys and assigns all of its right, title and interest in, to and under the LLC Agreement, and the Assignee hereby assumes and shall perform, discharge and otherwise be responsible for all obligations, responsibilities or liabilities of the Assignor under the LLC Agreement; provided, that:

a.           The Assignor and the Assignee represent for the benefit of the Company that this Assignment is in compliance with all applicable federal and state securities laws; and

b.           To the extent required by Section 8.1(d)(iii) of the LLC Agreement, prior to the effectiveness of this Assignment, the Assignor or the Assignee shall have delivered the opinion required therein.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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Section 3.  Assignment.

This Assignment shall be binding upon and inure to the benefit of the parties hereto and their successors and permitted assigns.

Section 4.  Validity.

To be valid, this Assignment must be permitted under Section 8.1 of the LLC Agreement.

Section 5.  Counterparts.

This Assignment may be executed in any number of separate counterparts (including via facsimile), each of which shall be an original and all of which taken together shall constitute one and the same agreement.

Section 6.  Applicable Law.

THIS ASSIGNMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS OF LAW PROVISIONS) OF THE STATE OF DELAWARE.

* * * * *

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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IN WITNESS WHEREOF, the parties hereto have executed this Assignment and Assumption Agreement as of the date first above written.

ASSIGNOR:
[INSERT NAME]
By:
	Name:
	Title:
ASSIGNEE:
[INSERT NAME]
By:
	Name:
	Title:

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

80

Exhibit 7.1(a)

HTI Infrastructure Access Agreement

***

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

81

Exhibit 7.1(b)

HTI Services Agreement

***

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

82

Exhibit 7.1(c)

QC Know-How License Agreement

***

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

83

Exhibit 7.1(d)

QC Services Agreement

***

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

84

Exhibit 7.1(e)

AMAC Reseller Agreement

See Exhibit 10.2

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended. Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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EX-10.2

EXHIBIT 10.2

EXECUTION VERSION

REDACTED COPY

LIFECOMM MOBILE PERS TECHNOLOGY

VALUE ADDED RESELLER AGREEMENT

This Value Added Reseller Agreement ("Agreement"), is made and entered into as of the 12th day of May, 2010 (the "Effective Date") by and between American Medical Alert Corporation ("AMAC"), a New York corporation, having a principal place of business at 3265 Lawson Boulevard, Oceanside, New York 11572, and LIFECOMM LLC, ("LIFECOMM”), a Delaware limited liability company, having a principal place of business at 2002 Summit Boulevard, Suite 1800, Atlanta, GA 30319.

BACKGROUND

A.           WHEREAS, LIFECOMM is in the business of developing certain mobile PERS solutions and related services for targeted consumer market segments, and intends to market those solutions and offer the related services commercially; and

B.           WHEREAS, AMAC is engaged in the business of providing the development, marketing, sale and distribution of healthcare solutions and monitoring systems that include, but are not limited to, Personal Emergency Response Systems, remote home monitoring products and services, and other systems and services related to the healthcare community in general; and

C.           WHEREAS, AMAC wishes to market, resell and distribute LIFECOMM’s wireless device and associated LIFECOMM operated server and third party wireless cellular connectivity service in connection with AMAC’s portfolio of PERS offerings, pursuant to the terms and provisions of this agreement,

NOW, THEREFORE, in consideration of the mutual terms and conditions hereinafter set forth, AMAC and LIFECOMM (collectively, the “Parties” and each, a “Party”)agree as follows:

1.           DEFINITIONS

1.1           “Affiliate” means any entity that controls, is controlled by, or is under common control with the relevant entity, where “control” means ownership of more than fifty percent (50%) of the voting power of the outstanding voting securities of an entity.

1.2           “AMAC Bundle” means a bundle of components sold by LIFECOMM to AMAC including a Device, the LIFECOMM Connectivity Service and the LIFECOMM Web Applications Services (and excluding the EACC, which will be provided by AMAC), including any ***.

1.3           “Approved Use” means to provide a Mobile PERS Solution.

1.4           "Change of Control" means, with respect to a Party, the occurrence of any of the following events: (a) any consolidation or merger of a Party with or into any other entity in which the holders of such Party's outstanding shares immediately before such consolidation or merger do not immediately after such consolidation or merger, retain stock representing a majority of the voting power of the surviving entity or stock representing a majority of the voting power of an entity that wholly owns, directly or indirectly, the surviving entity; (b) the sale, transfer, or assignment of securities to an acquiring party or group, following which the holders of such Party's outstanding shares immediately before such sale do not, immediately after such sale, retain securities representing a majority of the voting power of such Party; or (c) the sale of all or substantially all of such Party’s assets.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended.  Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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1.5           “Client” means any end user or subscriber to whom AMAC sells, leases or distributes the Product, whether directly or through third party distribution channels, as further provided in Section 2.1.

1.6           “*** LIFECOMM” means any entity *** and whose *** is specifically *** in the Territory. For the avoidance of doubt, *** LIFECOMM *** the Company’s mobile cellular personal emergency response products or services. Solely for purposes of this definition of “*** LIFECOMM”, ***.

1.7           “Designated Channel” means any of the third-party distribution channels or entities listed in Attachment A, as may be amended from time to time upon the mutual written agreement of the Parties.

1.8           “Device” means a LIFECOMM mobile, wireless, cellular communications enabled wearable device developed under the auspices of, and funded by, LIFECOMM that exhibits a PERS feature set and is fully compatible and fully tested with the other Mobile PERS Solution components offered by LIFECOMM.  ***

1.9           ***

1.10         “Emergency Assistance Call Center” or “EACC” means any telephony center that serves as the venue of contact and monitoring for, and dispatching assistance to, end users of a Mobile PERS Solution. EACC can also refer to a voice operations center that provides a full range of inbound and/or outbound call-handling services, including customer support, operator/concierge services, nurse triage, assistance, multilingual customer support, member services, card services, inbound and outbound telemarketing, interactive voice response and web-based services.

1.11         “Intellectual Property Rights” means all present and future worldwide copyrights, trademarks, trade secrets, patents, patent applications, mask work rights, moral rights, contract rights, and other proprietary rights recognized by the laws of any country.

1.12         “LIFECOMM Marks” means the trademarks and trade names of LIFECOMM listed in Attachment B (as such list may be updated from time to time by LIFECOMM upon notice to AMAC).

1.13         “LIFECOMM Mobile PERS API” means the application-programming interface to the LIFECOMM components furnished to AMAC by LIFECOMM.

1.14         “LIFECOMM Mobile PERS Solution” means the complete, end-to-end LIFECOMM branded Mobile PERS Solution sold, leased or distributed by LIFECOMM to end users directly or indirectly through Distributors.  It is a proprietary solution comprised of a LIFECOMM Device, the LIFECOMM Connectivity Service, LIFECOMM Web Applications Services and an EACC of LIFECOMM’s choosing.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended.  Confidential portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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1.15         “LIFECOMM Enterprise Portal” means a web-based interface designed for enterprise use that may be used to submit orders for Devices and the LIFECOMM Connectivity Service, and to activate, deactivate, test, and obtain usage reports regarding the LIFECOMM Connectivity Service.

1.16         “LIFECOMM User Portal” means a web-based interface designed for end user use that may be used to perform a variety of functions such as tracking the location of the device (using included mapping software), entering and modifying personal health data, and setting up alerts.

1.17         “LIFECOMM EACC Portal” means a web-based interface designed for use by an EACC that permits EACC personnel to interact with the other elements of the Mobile PERS Solution in order to provide EACC service to end users.

1.18         “Mobile PERS Solution” means a specific mobile PERS solution implementation that includes a specific wearable wireless mobile device, a specific EACC, a specific web applications services configuration, and a specific connectivity service configuration that enables communication between such device, and the web applications service and the EACC.

1.19         “LIFECOMM Connectivity Service" means the entire infrastructure necessary to connect a Mobile PERS Device to an EACC, including but not limited to the Wireless Carrier cellular network that enables two-way voice and data (including SMS) communication either directly or indirectly between the Devices and an EACC over a nationwide wireless network, on which LIFECOMM has the contractual right to provision Devices and use the bearer services. It also includes all other communications related elements such as routers, servers, frame relays, wireline or fiber optical infrastructure, as well as the device provisioning platform to enable Mobile PERS devices on the Wireless Carrier network, ***, all billing information elements, and any operations monitoring and reporting functions.

1.20         “LIFECOMM Web Applications Services" means the web application services operated by LIFECOMM, which includes the LIFECOMM Enterprise Portal, the LIFECOMM User Portal and the LIFECOMM EACC Portal.

1.21         “PERS” means a personal emergency response system, which consists of the complete system of elements necessary to permit an end user to (a) summon emergency medical and/or personal assistance; (b) summon non-emergency assistance; (c) obtain emergency assistance from dedicated personnel; and (d) request additional service and/or information from a live operator or through interactive voice response technology.

1.22         “Product” means that specific Mobile PERS Solution configuration comprised of AMAC’s EACC and other AMAC proprietary elements combined with the AMAC Bundle, as bundled together and sold, leased or distributed by AMAC both directly and indirectly through distributors and other third party distribution channels.

1.23         “Product Launch Date” means the date that is earlier to occur of: (a) the actual date of the first commercial shipment of the Product to a Client by AMAC or (b) the date that is ninety (90) days after LIFECOMM notifies AMAC that the AMAC Bundle is available for commercial operation pursuant to the terms and conditions set forth in this Agreement; provided, that AMAC is not then contesting in good faith that any component, or all components, of the AMAC Bundle are sufficiently functional and stable for commercial operation.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended.  Confidential portions portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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1.24         “Territory” ***

1.25         “User Documentation” means any and all documentation prepared by LIFECOMM, including user instructions, any terms and conditions, or other packaging pertaining to a Device and Web Application Services, and furnished to AMAC for distribution along with the Product, in either electronic or hardcopy form.  Device User Documentation will be hardcopy and LIFECOMM Web Application Services will be electronic.

1.26         ***

2.           APPOINTMENT AND LICENSE

2.1           Appointment.  Subject to the terms and conditions of this Agreement, LIFECOMM hereby (i) appoints AMAC (and AMAC accepts such appointment) as a non-exclusive (subject to Section 8) authorized VAR of the AMAC Bundle as incorporated into the Product throughout, and solely in the Territory for the Approved Use; (ii) grants to AMAC the non-exclusive (subject to Section 8) right to market, sell, lease and distribute, and to take all other actions reasonably necessary in order to market, sell, lease and distribute the Product, both directly and indirectly through third party distribution channels (which shall include for purposes of this Agreement the appointment and use of distributors and other agents), throughout, and solely in the Territory for the Approved Use; and (iii) and agrees to supply to AMAC the components of the AMAC Bundle, and any upgrades and/or enhancements done to the components of the AMAC Bundle through the normal course of product evolution.  Nothing in this Agreement shall be construed to limit AMAC’s right to sell the Product together with other products and services.  LIFECOMM reserves the right to sell the components of the AMAC Bundle, or components which are specifically designed for a third party, at their request in connection with a commercial relationship with such party, to other VARs as well as market, sell, lease and distribute the LIFECOMM Mobile PERS Solution to end users both inside the Territory and elsewhere, either directly or through other third party distribution channels.  ***

2.2           Marketing.  AMAC will use its commercially reasonable efforts to market and promote the Product in the Territory.  AMAC will establish the fees it charges to Clients and third party distribution channels for the Product.

2.3           Staffing.  AMAC will maintain a staff of sales and technical support personnel sufficient to meet the needs of its Clients and potential Clients.  Subject to LIFECOMM’s provision of training pursuant to the following sentence, AMAC will ensure that such personnel receive proper training with regard to the Product, in accordance with LIFECOMM’s then-current reseller training requirements.  LIFECOMM will make available such reseller training as it reasonably determines is suitable, which may include “train-the-trainer” and web-based sales and technical training.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended.  Confidential portions portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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2.4           Branding.  AMAC shall use its own branding and trademarks in connection with the Product.  At LIFECOMM’s request and direction, AMAC will prominently include a statement on the Product, its packaging, and in all advertising of the Product to the effect that the Product is “powered by LIFECOMM,” which specific statement and placement of such statement on the Product and associated packaging and advertising will be mutually agreed upon by the parties.  AMAC will cease including such statement in connection with the Product upon LIFECOMM’s request.  Subject to the terms and conditions of this Agreement, LIFECOMM hereby grants AMAC a non-exclusive, non-transferable (except as permitted in Subsection 14.7 (No Assignment)), revocable, royalty-free license (without the right to grant sublicenses, except as granted in Subsection 3.2) to use and reproduce the LIFECOMM Marks solely in connection with AMAC’s performance of its branding obligations set forth in this subsection.  AMAC agrees to state in appropriate places on all materials using the LIFECOMM Marks that the LIFECOMM Marks are trademarks of LIFECOMM and to include the symbol ™ or ® as appropriate.  LIFECOMM grants no rights in the LIFECOMM Marks other than those expressly granted in this subsection.  AMAC acknowledges LIFECOMM’s exclusive ownership of the LIFECOMM Marks.  AMAC agrees not to take any action inconsistent with such ownership and to cooperate, at LIFECOMM’s request and expense, in any action (including the conduct of legal proceedings), which LIFECOMM reasonably deems necessary or desirable to establish or preserve LIFECOMM’s exclusive rights in and to the LIFECOMM Marks.  AMAC will not adopt, use, or attempt to register any trademarks or trade names that are confusingly similar to the LIFECOMM Marks or in such a way as to create combination marks with the LIFECOMM Marks.  AMAC will provide LIFECOMM with samples of all products and materials that contain the LIFECOMM Marks prior to their public use, distribution, or display for LIFECOMM’s quality assurance purposes and will obtain LIFECOMM’s written approval before such use, distribution, or display, which approval shall not be unreasonably withheld or delayed. At LIFECOMM’s request, AMAC will modify or discontinue any use of the LIFECOMM Marks if LIFECOMM reasonably determines that such use does not comply with LIFECOMM’s then-current trademark usage policies and guidelines.

2.5           Compliance with Laws.  Each Party will at all times comply with all applicable laws and regulations, including, without limitation, regulatory clearances for any approved product labeling, and refrain from any unethical conduct or any other conduct that tends to damage the reputation of the other Party or its products or services in performing its services under this Agreement.  AMAC further agrees that all marketing and sales materials that relate to or mention LIFECOMM's products or services, or this Agreement, will be submitted to LIFECOMM for its written approval prior to the use thereof, which approval shall not be unreasonably withheld or delayed.  For avoidance of doubt, marketing and sales materials released by AMAC that do not refer to LIFECOMM's products or services are not subject to the foregoing approval requirement.

2.6           Insurance.  (a)  AMAC will maintain commercial property, casualty and liability insurance in an amount no less than ***.  All liability insurance will designate LIFECOMM as an additional insured, as its interests may appear, for any and all liability arising at any time in connection with AMAC’s performance under this Agreement.  AMAC will provide LIFECOMM with certificates or adequate proof of the foregoing insurance within thirty (30) days after the Effective Date and such insurance policies or endorsements will entitle LIFECOMM to receive notice at least thirty (30) days prior to any cancellation (including for nonrenewal) or change.

(b)           LIFECOMM will maintain commercial property, casualty and liability insurance in an amount no less than ***.  All liability insurance will designate AMAC as an additional insured, as its interests may appear, for any and all liability arising at any time in connection with LIFECOMM’s performance under this Agreement.  All such insurance must be primary and require the issuer to respond and pay prior to any other available coverage.  LIFECOMM will provide AMAC with certificates or adequate proof of the foregoing insurance within thirty (30) days after the Effective Date and such insurance policies or endorsements will entitle AMAC to receive notice at least thirty (30) days prior to any cancellation (including for nonrenewal) or change.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended.  Confidential portions portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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2.7           Material AMAC Developments.  During the term of this Agreement, if AMAC considers undertaking any affirmative act that is reasonably likely to have a material adverse impact on AMAC’s ability to act as a VAR under this Agreement, and such act is reasonably likely to occur or materialize, then AMAC will provide written notice to LIFECOMM advising LIFECOMM of the potential matter under consideration as early as reasonably practicable, in order to permit LIFECOMM to plan appropriately to avoid any adverse impact on its business, and will provide regular updates to LIFECOMM on the subject.  Any information provided by AMAC to LIFECOMM pursuant to this Section 2.7 shall be deemed to be confidential information under the Confidentiality Agreement (as defined below), and shall be protected by the terms and provisions of such agreement; provided that, if AMAC reasonably deems necessary, LIFECOMM shall execute a separate confidentiality agreement reasonably acceptable to AMAC and LIFECOMM.

2.8           EACC Preferred Provider.  LIFECOMM hereby acknowledges and agrees that (i) AMAC shall be the sole and exclusive EACC service provider with respect to the Product marketed, sold, leased or distributed by AMAC to Clients, either directly or through third party distribution channels; and (ii) ***; and (iii) ***.

3.           TECHNICAL INTEGRATION EFFORTS

3.1           Technical Interface; Integration.  LIFECOMM will (a) develop and provide AMAC with access to the LIFECOMM Mobile PERS API and the LIFECOMM Enterprise Portal; and (b) provide AMAC with integration services to be mutually determined and agreed upon, and set forth in a Statement of Work of the format described in Attachment C.

3.2           Licenses.  Subject to the terms of this Agreement, including Section 13 (Term and Termination), LIFECOMM grants to AMAC a perpetual, nonexclusive, non-transferable, in the Territory license (without the right to sublicense, except as otherwise provided in this Subsection 3.2), to (i) use and access the LIFECOMM EACC Portal and the LIFECOMM User Portal for the purpose of operating its EACC and providing the Product and related services to Clients, (ii) use and access the LIFECOMM Mobile PERS API and the LIFECOMM Enterprise Portal for the sole purpose of (a) integrating its EACC with the LIFECOMM supplied solution components; (b) submitting and managing Product related orders; and (c) activating, deactivating, testing, and obtaining usage reports with respect to the LIFECOMM Connectivity Service; and (iii) reproducing and distributing the User Documentation to Clients.  Notwithstanding the foregoing and anything to the contrary in this Agreement, and pursuant to the abovementioned license, LIFECOMM hereby grants to AMAC the right to sublicense to (A) distributors and other third party distribution channels, the right to (1) use and access the LIFECOMM Enterprise Portal as determined by AMAC in furtherance of the arrangement between AMAC and such distributors or third party distribution channel with respect to the Product, (2) reproduce and distribute User Documentation (including any LIFECOMM Marks) to Clients, and (3) reproduce and distribute the LIFECOMM Marks to Clients in connection with any of AMAC’s branding obligations under Subsection 2.4; and (B) Clients the right to use and access the LIFECOMM User Portal, each to the extent necessary and appropriate as determined by AMAC.

3.3           Ownership.  (a)  The LIFECOMM Mobile PERS Solution, LIFECOMM Mobile PERS API, LIFECOMM Enterprise Portal, LIFECOMM User Portal, LIFECOMM EACC Portal, LIFECOMM Connectivity Service, and all worldwide Intellectual Property Rights therein, are the exclusive property of LIFECOMM and its suppliers.  All rights in and to the LIFECOMM Mobile PERS Solution, LIFECOMM Mobile PERS API, LIFECOMM Enterprise Portal, LIFECOMM User Portal, LIFECOMM EACC Portal, and LIFECOMM Connectivity Service not expressly granted to AMAC in this Agreement are reserved by LIFECOMM and its suppliers.  There are no implied licenses under this Agreement.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended.  Confidential portions portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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(b)           Except for the LIFECOMM Mobile PERS API, LIFECOMM Web Application Services (which includes the LIFECOMM Enterprise, User, and EACC Portals), LIFECOMM Connectivity Service, all PERS products, solutions and services (including AMAC’s EACC), and all worldwide Intellectual Property Rights therein, heretofore or hereafter developed, marketed, sold or distributed by AMAC, shall remain the sole and exclusive property of AMAC.  Neither LIFECOMM nor any of its Affiliates (other than AMAC, if AMAC becomes an Affiliate) shall acquire any rights, express or implied, in any such PERS products, solutions and services except as expressly set out in this Agreement.  Nothing in this Agreement shall restrict in any manner AMAC’s ability to operate its business, except as expressly set out in this Agreement.

4.           PURCHASE OF DEVICES

4.1           Forecasts.  At the beginning of each month, AMAC will provide to LIFECOMM a written non-binding good-faith estimate of its *** forecast for Devices and LIFECOMM Connectivity Service that AMAC ***.  The parties agree and acknowledge that such forecasts are provided for reference purposes only and by themselves do not represent a binding commitment to purchase or sell any Device or LIFECOMM Connectivity Service.

4.2           Orders.  AMAC may order Devices for resale as permitted under this Agreement by submitting written or electronic purchase orders to LIFECOMM via the LIFECOMM Enterprise Portal in accordance with LIFECOMM’s then-current order processing procedures.  *** The terms of this Agreement will govern all such orders submitted by AMAC to LIFECOMM, and no additional or inconsistent term or condition printed in any such order will have any legal effect.  All such orders must refer to this Agreement and specify the quantities of Devices ordered, the desired shipment date and destination, and any reasonable shipping and handling instructions.

4.3           Order Acceptance.  All orders will be subject to acceptance by LIFECOMM in its sole discretion, provided that LIFECOMM uses its good-faith efforts to accept orders for Devices submitted by AMAC that specify delivery dates within the applicable lead times and are consistent with AMAC’s twelve-month rolling forecast, subject to LIFECOMM’s existing inventory of Devices.  If LIFECOMM anticipates that its inventory of the Devices will be insufficient to meet orders that LIFECOMM has accepted, then LIFECOMM shall promptly provide notice of such anticipated shortage to AMAC.  ***

4.4           Shipment, Delivery, and Acceptance.  LIFECOMM will use commercially reasonable efforts to meet desired shipment dates specified in an accepted purchase order that are consistent with applicable manufacturing lead times, and under no circumstances shall LIFECOMM be liable for any delays in shipment caused by AMAC or by third parties.  Partial shipments will be allowed in the case where LIFECOMM is unable to fulfill the full order requirements.  Delivery will be made FCA LIFECOMM (or its designated representative’s) facilities (Incoterms 2000).  Title (excluding Intellectual Property Rights) to the Devices ordered by AMAC will pass to AMAC upon delivery to a common carrier by LIFECOMM.  LIFECOMM will retain all Intellectual Property Rights in the Devices.  Without limiting the express warranties set forth in Subsection 10.2 (Warranties by LIFECOMM), all shipments will be deemed accepted upon delivery to a common carrier by LIFECOMM at the foregoing shipping point.

4.5           Cancellations and Rescheduling.  Orders may be canceled or rescheduled prior to the requested shipment date only upon mutual agreement by the parties.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended.  Confidential portions portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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4.6           User Documentation; Device Terms.  AMAC will ensure that all User Documentation accompanying the Device shipped to AMAC by LIFECOMM, including any LIFECOMM documentation, terms and conditions, or other packaging, as well as any additional disclosures, descriptions or instructions reasonably necessary for the operation of the Product and protection of the Parties, are distributed to Clients by AMAC or its third party channels.

5.           PURCHASE AND PROVISIONING OF LIFECOMM CONNECTIVITY SERVICE

5.1           Order and Activation Process.  AMAC may submit orders for and activate the LIFECOMM Connectivity Service as permitted under this Agreement using the LIFECOMM Enterprise Portal, in accordance with the documentation for the LIFECOMM Enterprise Portal and LIFECOMM’s then-current order processing procedures.  The terms of this Agreement will govern all such orders submitted by AMAC to LIFECOMM, and no additional or inconsistent term or condition printed in any such order will have any legal effect.  All such orders must specify the electronic serial number for each Device for which activation of the cellular connectivity portion of the LIFECOMM Connectivity Service is ordered.  All orders will be subject to acceptance by LIFECOMM.

5.2           Service Provisioning.  (a)  Upon acceptance of a service order, LIFECOMM will process and activate the cellular connectivity portion of the LIFECOMM Connectivity Service. The parties acknowledge and agree that LIFECOMM will purchase the cellular connectivity portion of the LIFECOMM Connectivity Service from a third-party wireless network operator (the “Wireless Carrier”) and that LIFECOMM’s provision of the cellular connectivity portion of the LIFECOMM Connectivity Service is subject to all of the terms and conditions of an agreement between such Wireless Carrier and LIFECOMM, including those terms set forth in Attachment D, which are incorporated into this Agreement by reference.

(b)           If the wireless services agreement between LIFECOMM and the Wireless Carrier terminates or expires for any reason, LIFECOMM will use commercially reasonable efforts to find a replacement Wireless Carrier to provide the cellular connectivity portion of the LIFECOMM Connectivity Service, and shall promptly notify AMAC of such termination or expiration so that AMAC may assist, as LIFECOMM and AMAC jointly deem appropriate, with finding a replacement Wireless Carrier.

5.3           Client Service Agreements.  Before activating the LIFECOMM Connectivity Service, AMAC will require, or will require that the applicable third party distribution channel require, that each Client enters into a binding, written service agreement that contains terms materially equivalent to those set forth in Attachment E, as may be amended by LIFECOMM in its reasonable discretion at any time.  AMAC will diligently enforce, or will require that the applicable third party distribution channel diligently enforce, each such agreement and will immediately notify LIFECOMM if AMAC becomes aware of any material breach of any such agreement relating to the Device, LIFECOMM Connectivity Service, Mobile PERS Web Application Services or the LIFECOMM Mobile PERS API.

6.           SUPPORT

6.1           ***

6.2           ***

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended.  Confidential portions portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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7.           FEES, PRICING, AND PAYMENT

7.1           Integration Costs.  ***

7.2           Pricing for Devices. The price paid to LIFECOMM by AMAC for each Device ordered shall be determined at the time the orders are placed subject to a quantity based pricing table to be provided to AMAC by LIFECOMM.  Pricing shall be determined based on ***.

7.3           Pricing for LIFECOMM Connectivity Service. LIFECOMM shall charge AMAC: (i) *** for the activation of each Device and the underlying LIFECOMM Connectivity Service; and (ii) a monthly fee for each active Device activated by AMAC as set forth on Attachment F.

7.4           Support Fees.  If AMAC, on one or more instances, has not complied in all material respects with its obligations under Subsection 6.1 (First-Level Support by AMAC), AMAC will pay LIFECOMM monthly fees for the support services to be provided by LIFECOMM under Subsection 6.2 (Support for Devices, LIFECOMM User Portal, and LIFECOMM Connectivity Service), as specified in Attachment F ***

7.5           Reports.  Within *** days after the end of each month, AMAC will provide LIFECOMM with a written report stating (i) the number of Devices and LIFECOMM Connectivity Service activations resold to Clients by AMAC or its third party distribution channels during such month; (ii) the identity and location of the Clients that received the Device and LIFECOMM Connectivity Service; and (iii) any other information that may be required to determine whether AMAC is paying the correct amount of fees.

7.6           Payments.  AMAC will pay to LIFECOMM all fees required under Subsections 7.2 and 7.3 simultaneously with the report required under Subsection 7.5 (Reports), for the month in which such fees accrued. AMAC will pay LIFECOMM all other amounts due under this Agreement within *** after the date of the invoice therefor.  Any amount that is not paid when due will accrue interest at *** per year or the maximum rate permitted by applicable law, whichever is less, from the due date until paid.

7.7           Taxes.  AMAC will be responsible for and will indemnify and hold LIFECOMM harmless from payment of all taxes (other than taxes based on LIFECOMM’s income), fees, duties, and other governmental charges, and any related penalties and interest, arising from the payment of fees and royalties to LIFECOMM under this Agreement or the delivery or license of the Device, LIFECOMM Connectivity Service, Mobile PERS Web Application Services, or LIFECOMM Mobile PERS API to AMAC.  AMAC will make all payments of fees and royalties to LIFECOMM free and clear of, and without reduction for, any withholding taxes; any such taxes imposed on payments of fees and royalties to LIFECOMM will be AMAC’s sole responsibility, and AMAC will provide LIFECOMM with official receipts issued by the appropriate taxing authority, or such other evidence as the LIFECOMM may reasonably request, to establish that such taxes have been paid.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended.  Confidential portions portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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7.8         Audits.

(a)           LIFECOMM will have the right, during normal business hours and upon at least *** prior notice, to have an independent audit firm, selected by LIFECOMM and reasonably acceptable to AMAC, inspect AMAC’s facilities and audit AMAC’s records relating to AMAC’s activities pursuant to this Agreement in order to verify that AMAC has paid to LIFECOMM the correct amounts owed under this Agreement and otherwise complied with the terms of this Agreement.  The audit will be conducted at LIFECOMM’s expense, unless the audit reveals that AMAC has underpaid the amounts owed to LIFECOMM by *** or more during the audited period, in which case AMAC will reimburse LIFECOMM for all reasonable costs and expenses incurred by LIFECOMM in connection with such audit.  AMAC will promptly pay to LIFECOMM any amounts shown by any such audit to be owing plus interest as provided in Subsection 7.6 (Payments).  Such audits will be conducted no more than ***.  Any confidential or proprietary information of AMAC or its customers disclosed to LIFECOMM or the independent accounting firm in the course of the audit will be subject to a confidentiality agreement reasonably acceptable to AMAC to be signed by LIFECOMMandsuch independent accounting firm.

(a)           AMAC will have the right, during normal business hours and upon at least *** prior notice, to have an independent audit firm, selected by AMAC and reasonably acceptable to LIFECOMM, inspect LIFECOMM’s facilities and audit LIFECOMM’s records relating to LIFECOMM’s activities pursuant to this Agreement in order to verify that LIFECOMM has complied with the terms of this Agreement.  The audit will be conducted at AMAC’s expense, unless the audit reveals that LIFECOMM has overcharged AMAC by *** or more during the audited period, in which case LIFECOMM will reimburse AMAC for all reasonable costs and expenses incurred by AMAC in connection with such audit.  LIFECOMM will promptly pay to AMAC any amounts shown by any such audit to be owing plus interest as provided in Subsection 7.6 (Payments).  Such audits will be conducted no more than *** in any period of twelve consecutive months.  Any confidential or proprietary information of LIFECOMM or its customers disclosed to AMAC or the independent accounting firm in the course of the audit will be subject to a confidentiality agreement reasonably acceptable to LIFECOMM to be signed by AMACandsuch independent accounting firm.

7.9           ***

8.           ***

8.1           Commitment.  For a period of *** years following the ***  For purposes of clarity, this *** commitment does not apply to ***

9.           CONFIDENTIALITY

(a)           Definition of Confidential Information.  For purposes of this Agreement, “Confidential Information” means, subject to Section 9(b) (Identification of Confidential Information), all non-public or proprietary information disclosed by one party (the “Disclosing Party”) to the other party (the “Receiving Party”) in the course of activity pursuant to this Agreement, including such information disclosed in contemplation of this Agreement prior to the Effective Date, whether disclosed in oral, written, graphic, machine recognizable model or sample form, or any derivation thereof, except as otherwise provided in Section 9(d) (Exceptions).  Confidential Information may include data, know-how, algorithms, computer programs, data bases, processes, improvements, designs, devices, systems, test results, sketches, photographs, plans, drawings, product concepts, specifications, reports, laboratory notebooks, business and financial plans, strategies, budgets, vendor, customer and distributor names, pricing information, production or manufacturing information, product sales information or forecasts, inventions and ideas.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended.  Confidential portions portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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(b)           Identification of Confidential Information.   All information as described in Section 9(a) (Definition of Confidential Information) will be deemed “Confidential Information” only if:  (i) in the case of a written disclosure, there is affixed to the document an appropriate legend, such as “Proprietary” or “Confidential;” (ii) in the case of an oral or visual disclosure, the Disclosing Party makes a contemporaneous oral statement or delivers to the Receiving Party a written statement within thirty (30) days to the effect that such disclosure is confidential or the like; or (iii) in the case of information designated as confidential by the Disclosing Party which is obtained as the result of a visit by the Receiving Party to the Disclosing Party’s facilities, the information is obtained via (a) exposure on desks, work areas, computers, or other areas in of the facilities, (b) hearing discussions among personnel or consultants, or (c) any other inadvertent disclosure of such information while the Receiving Party is at the facility.

(c)           Protection of Confidential Information.  The Receiving Party will not use any Confidential Information of the Disclosing Party for any purpose not expressly permitted by this Agreement, and will disclose such Confidential Information only to the employees, representatives and agents of the Receiving Party (i) who have a need to know such Confidential Information for purposes of this Agreement and (ii) who are under a duty of confidentiality no less restrictive than the Receiving Party’s duty hereunder.  The Receiving Party will protect the Confidential Information from unauthorized use, access, or disclosure in the same manner as the Receiving Party protects its own confidential or proprietary information of a similar nature and with no less than reasonable care.  The Receiving Party shall inform each such employee and consultant of its confidentiality obligations under this Agreement, and will be liable for any breach of confidentiality by any such employee or consultant.  The obligations provided in this section will terminate *** after the termination of this Agreement.

(d)           Exceptions.  The Receiving Party’s obligations under 9(c) (Protection of Confidential Information) with respect to any Confidential Information will terminate if such information: (i) was already known to the Receiving Party at the time of disclosure by the Disclosing Party, without any duty of confidentiality to the Disclosing Party; (ii) is disclosed to the Receiving Party by a third party who had the right to make such disclosure without any confidentiality restrictions; (iii) is, or through no fault of the Receiving Party has become, generally available to the public; or (iv) is independently developed by the Receiving Party without access to, or use of, the Confidential Information.  In addition, the Receiving Party will be allowed to use or disclose the Confidential Information to the extent that such use or disclosure is (A) approved in writing by the Disclosing Party, (B) necessary for the Receiving Party to enforce its rights under this Agreement; (C) required by law or by the order of a court or similar judicial or administrative body, provided that the Receiving Party notifies the Disclosing Party of such required disclosure promptly and in writing and cooperates with the Disclosing Party, at the Disclosing Party’s reasonable request and expense, in any lawful action to contest or limit the scope of such required disclosure; or (D) necessary to exercise any licenses granted to the Receiving Party under this Agreement.

(e)           Return of Confidential Information.  The Receiving Party will return to the Disclosing Party or destroy all Confidential Information of the Disclosing Party in the Receiving Party’s possession or control and permanently erase all electronic copies of such Confidential Information promptly upon the written request of the Disclosing Party or the expiration or termination of this Agreement, whichever comes first, unless the Receiving Party has a continuing right to use such Confidential Information.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended.  Confidential portions portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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9.2           Additional Obligations.  The parties represent that the confidentiality obligations shall include compliance with all applicable Federal, State and local laws, rules and regulations regarding confidentiality of medical records and other patient information, including, without limitation, the Health Insurance Portability and Accountability Act of 1996 (HIPAA).  Each party shall use the other party's Confidential Information (as such term is defined below in Section 9) solely for the purpose of performing its obligations under this Agreement.  The parties acknowledge that a breach of the provisions of this section may cause irreparable harm to the non-breaching party, entitling such party to seek equitable relief, including but not limited to temporary restraining orders or preliminary or permanent injunction, in addition to all other remedies.

9.3           Confidentiality of Agreement.  Subject to the last paragraph of Section 14.1, neither party will disclose any terms of this Agreement to third parties other than its attorneys, accountants, and other professional advisors under a duty of confidentiality except (i) as required by law; (ii) pursuant to a mutually agreeable press release; or (iii) in connection with a proposed merger, financing, or sale of such party’s business (provided that any third party to whom the terms of this Agreement are to be disclosed signs a confidentiality agreement reasonably satisfactory to the other party to this Agreement).

10.         WARRANTIES

10.1         Warranties by Both Parties.  Each party warrants that it has full power and authority to enter into and perform this Agreement, and the person signing this Agreement on such party’s behalf has been duly authorized and empowered to enter into this Agreement.

10.2         Warranties by LIFECOMM.  For a period of *** after shipment of the Device to AMAC pursuant to Section 4.4 (Shipment, Delivery, and Acceptance) (the “Warranty Period”), LIFECOMM warrants that the Device, when used as permitted under this Agreement and in accordance with the instructions in the User Documentation, will operate substantially as described in the User Documentation. LIFECOMM does not warrant that use of the Device will be error-free or uninterrupted, and the foregoing warranty excludes any failure of a Device caused by user error, abuse, or misuse.  LIFECOMM will, at its own expense and as its sole obligation and AMAC’s exclusive remedy for any breach of this warranty, use commercially reasonable efforts to repair any reproducible nonconformity in any Device reported to LIFECOMM by AMAC in writing during the Warranty Period or, if LIFECOMM determines that it is unable to repair any reproducible nonconformity in the Device, LIFECOMM will replace such Device.  Any such repair or replacement of a Device to AMAC will not extend the original Warranty Period.  As a condition to receiving the warranty remedies hereunder, AMAC must (a) be responsible for all communications with the Client (either directly or indirectly through a third party distribution channel); (b) return the nonconforming Device to LIFECOMM in accordance with LIFECOMM’s then-current RMA policy; and (c) provide reasonable cooperation to LIFECOMM in diagnosing and reproducing the nonconformity.  AMAC shall pay all freight and shipping costs associated with warranty returns and replacements of Devices; provided, however, that if LIFECOMM testing has confirmed that the Device in fact fails to conform to the warranty set forth in this section (i.e., the identified failure does not arise from user error, abuse, or misuse), then LIFECOMM shall issue to AMAC a credit in an amount equal to the freight and shipping costs incurred by AMAC for the return and replacement of such Device.  Such credit must be applied against the next LIFECOMM invoice; in the event that any such credit remains outstanding at the time that this Agreement expires or is terminated, LIFECOMM will remit to AMAC a payment in the amount of the outstanding credit.  LIFECOMM shall offer extended warranty protection on the same terms and conditions set forth in this Section 10.2 in accordance with the pricing schedule on Attachment F.

10.3         Warranties by AMAC.  AMAC will not make or publish any false or misleading representations, warranties, or guarantees on behalf of LIFECOMM or its suppliers concerning the Product, Device, LIFECOMM Connectivity Service, or Mobile PERS Web Application Services that are inconsistent with any warranties made by LIFECOMM.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended.  Confidential portions portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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10.4         Disclaimer of Warranty.  The express warranties in this subsection are in lieu of all other warranties, whether express, implied, or statutory, regarding the Device, LIFECOMM Connectivity Service, LIFECOMM Mobile PERS API, LIFECOMM Web Application Services, or the User Documentation, including any warranties of merchantability, fitness for a particular purpose, title, and non-infringement of third-party rights.  AMAC acknowledges that it has relied on no warranties other than the express warranties in this Agreement and that no warranties are made by any of LIFECOMM’s suppliers.  WITHOUT LIMITING THE FOREGOING, (i) LIFECOMM DOES NOT WARRANT THAT THE DEVICE, LIFECOMM CONNECTIVITY SERVICE, LIFECOMM MOBILE PERS API, LIFECOMM WEB APPLICATION SERVICES, OR ANY PART THEREOF WILL BE UNINTERRUPTED OR ERROR FREE OR WILL NOT SUFFER DOWNTIME OR OTHER OUTAGE; (ii) LIFECOMM DOES NOT WARRANT THAT THE THIRD PARTY PROVISION OF WIRELESS NETWORK SERVICES WILL NOT FAIL, MALFUNCTION, OR BE DEFECT- OR ERROR-FREE; AND (iii) AMAC DOES NOT WARRANT THAT THE PRODUCT WILL BE UNINTERRUPTED OR ERROR FREE OR WILL NOT SUFFER DOWNTIME OR OTHER OUTAGES.  EACH PARTY FURTHER UNDERSTANDS AND AGREES THAT THE OTHER PARTY IS NOT RESPONSIBLE FOR ANY HARDWARE, SOFTWARE OR OTHER PRODUCTS OR SERVICES PROVIDED BY PERSONS OTHER THAN SUCH PARTY, INCLUDING WITHOUT LIMITATION, ANY SERVICES PROVIDED BY OR ON BEHALF OF SUCH PARTY AND/OR ANY OTHER PERSON OR BUSINESS ENTITY.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended.  Confidential portions portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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11.         LIMITATION OF LIABILITY.  EXCEPT WITH RESPECT TO GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, INCLUDING AN INTENTIONAL BREACH OF THIS AGREEMENT OR THE LLC AGREEMENT, IN NO EVENT WILL EITHER PARTY BE LIABLE FOR ANY CONSEQUENTIAL, INDIRECT, EXEMPLARY, SPECIAL OR INCIDENTAL DAMAGES, INCLUDING ANY LOST DATA AND LOST PROFITS, ARISING FROM OR RELATING TO THIS AGREEMENT.  EXCEPT AS SET FORTH IN THE LLC AGREEMENT AND SECTION 12 (INDEMNIFICATION) OF THIS AGREEMENT, AND EXCEPT WITH RESPECT TO ANY GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, INCLUDING AN INTENTIONAL BREACH OF THIS AGREEMENT OR THE LLC AGREEMENT, EACH PARTY’S TOTAL LIABILITY IN CONNECTION WITH ANY CLAIM ARISING FROM OR RELATING TO THIS AGREEMENT, WHETHER IN CONTRACT OR TORT OR OTHERWISE, WILL NOT EXCEED ***.  FURTHERMORE, EXCEPT AS SET FORTH IN THE LLC AGREEMENT AND SECTION 12 (INDEMNIFICATION) OF THIS AGREEMENT, AND EXCEPT WITH RESPECT TO ANY GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, INCLUDING AN INTENTIONAL BREACH OF THIS AGREEMENT OR THE LLC AGREEMENT, EACH PARTY’S TOTAL CUMULATIVE LIABILITY FOR ALL CLAIMS ARISING FROM OR RELATING TO THIS AGREEMENT, WHETHER IN CONTRACT OR TORT OR OTHERWISE, WILL NOT EXCEED ***.  EACH PARTY ACKNOWLEDGES THAT THE FEES SET FORTH IN THIS AGREEMENT REFLECT THE ALLOCATION OF RISK SET FORTH IN THIS AGREEMENT AND THAT NEITHER PARTY WOULD ENTER INTO THIS AGREEMENT WITHOUT THESE LIMITATIONS ON ITS LIABILITY.  THE FOREGOING LIMITATIONS OF LIABILITY ARE INDEPENDENT OF ANY EXCLUSIVE REMEDIES FOR BREACH OF WARRANTY SET FORTH IN THIS AGREEMENT.

12.         INDEMNIFICATION

12.1        Indemnification by LIFECOMM.

(b)           Infringement.  LIFECOMM will defend at its own expense any action against AMAC brought by a third party to the extent that the action is based upon a claim that the Device or any other component of the AMAC Bundle infringes any copyrights or U.S. patents or misappropriates any trade secrets and LIFECOMM will pay those costs (including litigation costs and reasonable attorneys' fees) and damages finallyawarded against AMAC in any such action, that are specifically attributable to such claim or those costs and damages agreed to in a monetary settlement of such action. LIFECOMM further agrees to indemnify AMAC against any other costs and reasonable attorneys' fees incurred by AMAC, and its directors, officers, and employees in connection with such claim or action.  The foregoing obligations are conditioned on AMAC notifying LIFECOMM promptly in writing of such action, AMAC giving LIFECOMM sole control of the defense thereof and any related settlement negotiations, and AMAC cooperating and, at LIFECOMM’s reasonable request and expense, assisting in such defense; provided that a resolution of any claim that requires an admission of liability from AMAC will require AMAC’s prior written consent; and further provided that if AMAC determines that LIFECOMM has abandoned the defense of any such claim, AMAC shall have the right, in its own behalf, to adjust, settle, defend or otherwise dispose of such claim, and LIFECOMM shall indemnify AMAC and its directors, officers, and employees against any costs and damages (including reasonable attorneys' fees) incurred with respect thereto.  If the Device or any other component of the AMAC Bundle becomes, or in LIFECOMM’s opinion is likely to become, the subject of an infringement claim, LIFECOMM may, at its option and expense, either (i) procure for AMAC the right to continue exercising the rights licensed to AMAC in this Agreement; or (ii) replace or modify the Device or other component of the AMAC Bundle, as applicable, so that it becomes non-infringing and remains functionally equivalent.  This subsection states LIFECOMM’s entire liability and AMAC’s sole and exclusive remedy for infringement claims and actions.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended.  Confidential portions portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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(a)           Other Indemnification.  LIFECOMM will defend at its own expense any action against AMAC brought by a third party to the extent that the action is based on or arising from (i) the AMAC Bundle or any component thereof, or (ii) any libel, or slander based on the User Documentation or other written or electronic materials provided, or authorized in writing, by LIFECOMM, transmitted to Clients.  LIFECOMM will pay those costs (including litigation costs and reasonable attorneys' fees) and damages finally awarded against AMAC in any such action, that are specifically attributable to such claim or those costs and damages agreed to in a monetary settlement of such action that is approved by LIFECOMM. LIFECOMM further agrees to indemnify AMAC against any other costs and reasonable attorneys' fees incurred by AMAC, and its directors, officers, and employees in connection with such claim or action.  The foregoing obligations are conditioned on AMAC notifying LIFECOMM promptly in writing of such action, AMAC giving LIFECOMM sole control of the defense thereof and any related settlement negotiations, and AMAC cooperating and, at LIFECOMM’s reasonable request and expense, assisting in such defense; provided that a resolution of any claim that requires an admission of liability from AMAC will require AMAC’s prior written consent; and further provided that if AMAC determines that LIFECOMM has abandoned the defense of any such claim, AMAC shall have the right, in its own behalf, to adjust, settle, defend or otherwise dispose of such claim, and LIFECOMM shall indemnify AMAC and its directors, officers, and employees against any costs and damages (including reasonable attorneys' fees) incurred with respect thereto.

(b)           Limitations on Indemnification Obligation. Notwithstanding the foregoing, LIFECOMM will have no obligation under this subsection or otherwise with respect to any claim to the extent arising out of or resulting from (i) any unauthorized use or distribution of the AMAC Bundle by AMAC or any of its Clients;(ii) any use of the AMAC Bundle in combination with other products, equipment, software, or data not supplied by LIFECOMM that is not expressly specified in this Agreement or in the applicable User Documentation;(iii) any use or distribution of any release of the AMAC Bundle other than the most current release made available to AMAC; (iv) any unauthorized modification of the AMAC Bundle by any person other than LIFECOMM or its authorized contractors. or (v) any act or omission for which LIFECOMM would have an indemnification or other claim against AMAC under this Agreement.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended.  Confidential portions portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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12.2         Indemnification by AMAC.  AMAC will defend at its own expense any action against LIFECOMM brought by a third party to the extent that the action is based on or arising from: (i) the EACC service or any other component of the service provided by AMAC as part of the Mobile PERS Solution that is the subject of the claim; (ii) any representations, warranties, guarantees, or other written or oral statements made by or on behalf of AMAC relating to the Devices or the LIFECOMM Connectivity Service other than as required, or authorized in writing, by the most senior executive of LIFECOMM or made in the User Documentation; (iii) any claims against LIFECOMM made by Clients who receive the Devices or the LIFECOMM Connectivity Service from AMAC other than as part of a Mobile PERS Solution; (iv) any breach by a Client who receives the Devices or the LIFECOMM Connectivity Service from AMAC of the applicable Client Service Agreement or User Documentation ; (v) any failure of AMAC to have in place a binding Client Services Agreement; or (vi) any libel, slander, or infringement of copyright based on the written or electronic materials, other than the User Documentation or as otherwise authorized in writing by LIFECOMM, transmitted by AMAC to Clients.  AMAC will pay those costs (including litigation costs and reasonable attorneys' fees) and damages finallyawarded against LIFECOMM in any such action, that are specifically attributable to such claim or those costs and damages agreed to in a monetary settlement of such action that is approved by AMAC.  AMAC further agrees to indemnify LIFECOMM against any other costs and reasonable attorneys' fees incurred by LIFECOMM, and its directors, officers, and employees in connection with such claim or action.  The foregoing obligations are conditioned on LIFECOMM notifying AMAC promptly in writing of such action, LIFECOMM giving AMAC sole control of the defense thereof and any related settlement negotiations, and LIFECOMM cooperating and, at AMAC’s reasonable request and expense, assisting in such defense; provided that a resolution of any claim that requires an admission of liability from LIFECOMM will require LIFECOMM’s prior written consent; and further provided that if LIFECOMM determines that AMAC has abandoned the defense of any such claim, LIFECOMM shall have the right, in its own behalf, to adjust, settle, defend or otherwise dispose of such claim, and AMAC shall indemnify LIFECOMM and its directors, officers, and employees against any costs and damages (including reasonable attorneys' fees) incurred with respect thereto.  Notwithstanding the foregoing, AMAC will have no obligation under this subsection or otherwise with respect to any claim to the extent arising out of or resulting from any act or omission for which AMAC would have an indemnification or other claim against LIFECOMM under this Agreement.

13.         TERM AND TERMINATION

13.1        Term. Unless earlier terminated pursuant to Section 13.3 (Termination), the initial term of this Agreement will begin on the Effective Date and will conclude after a period of ***  from the Product Launch Date (the “Initial Term”).  Unless terminated earlier pursuant to Section 13.3, or ***, upon expiration of the Initial Term, the Agreement will automatically renew for successive terms (each, a “Renewal Term”) of ***; provided that ***.  The “Term” of the Agreement is the Initial Term and each Renewal Term.

13.2         Transition.  If, at any time during the Term of the Agreement, AMAC decides to discontinue its offering of a Mobile PERS Solution for sale to third parties, then (a) AMAC shall provide written notice to LIFECOMM no later than *** prior to its intended discontinuation date; (b) the *** shall terminate immediately upon such written notice; (c) the parties shall formulate and send a joint announcement to each of AMAC’s Clients notifying them that AMAC is discontinuing its Mobile PERS Solutions and informing them of any alternative solution offered by LIFECOMM; and (d) the parties shall meet to discuss and formulate a mutually-agreed upon transition plan to facilitate LIFECOMM’s offering of a Mobile PERS Solution to Clients, which plan will address, among other matters, (i) the transfer of Client contact information from AMAC to LIFECOMM; (ii) an effective means for continuing to communicate with Clients about AMAC’s exit from the Mobile PERS Solution business and the availability of any substitute LIFECOMM Mobile PERS Solution offering; and (iii) transition processes, policies, and services necessary to effect a smooth transition with minimal Client disruption.  Unless otherwise mutually agreed upon by the parties, AMAC shall not have any obligation to deliver, transfer, or disclose any Client contact information to LIFECOMM in connection with such discontinuation.  However, notwithstanding anything to the contrary in this Agreement, the parties agree and acknowledge that (1) LIFECOMM may have received certain Client contact information in the course of conducting the activities contemplated hereunder; (2) LIFECOMM shall not have the obligation to sanitize its contact databases to remove such contact information; and (3) LIFECOMM shall have the right to use any such Client contact information for the purpose of marketing, promoting, selling, and supporting a Mobile PERS Solution.

13.3         Termination

(a)           ***

(b)           Termination for Breach following Arbitration.  

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended.  Confidential portions portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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(i)           Subject to subclause (ii) of this Section 13.3(b), each Party (the “Non-breaching Party”) may terminate this Agreement, effective *** (the “Termination Effective Date”) following delivery of a written notice of termination to the other Party (the “Breaching Party”), stating that that (1) the Breaching Party has breached a material provision of this Agreement and has not cured the breach within *** after receiving written notice thereof from the Non-breaching Party and (2) this Agreement is being terminated pursuant to this Section 13.3(b).  

(ii)          Upon written demand by the Breaching Party, which demand must be delivered to the Non-breaching Party prior to the Termination Effective Date, the Parties shall submit such dispute giving rise to the written notice of termination of this Agreement to binding arbitration.  In the event of any such written demand for arbitration by the Breaching Party, any termination of this Agreement pursuant to this Section 13.3(b) shall not be effective unless and until the arbitration proceedings have concluded and the arbitrator has determined that the alleged breach of a material provision of this Agreement has occurred and has not been cured within the applicable cure period stated above.  The arbitration shall be conducted before a single arbitrator in accordance with the Commercial Arbitration Rules of the American Arbitration Association (AAA).  The validity, construction, and interpretation of this Agreement to arbitrate under this Section 13.3(b), and all procedural aspects of the arbitration conducted pursuant to this Section 13.3(b) shall be decided by the arbitrator and shall be determined in accordance with the governing law of this Agreement.  In deciding the substance of the Parties' claim(s), the arbitrator shall refer to the governing law of this Agreement.  There shall be a stenographic transcription of the arbitration proceedings, the costs thereof to be shared equally by the Parties.  It is agreed that the arbitrator shall have only the authority to determine whether or not the alleged breach of a material provision of this Agreement has occurred and has not been cured within the applicable cure period stated above, and shall have no authority to award damages of any type under any circumstances whether or not such damages may be available under state or federal law, or under the Commercial Arbitration Rules of the American Arbitration Association, and the Parties hereby waive their right, if any, to recover any such damages.  The arbitration proceeding shall be conducted in New York County, New York.  Within *** of the written demand of initiation of the arbitration procedure, the Parties shall select a neutral arbitrator, who shall be a person who has over ten years professional experience in commercial transactions of this nature and who has not previously been employed by any Party and does not have a direct or indirect interest in any Party or the subject matter of the arbitration.  At the time of appointment, the arbitrator shall be required to undertake to issue a final decision within *** of the date of the initial demand for arbitration.  Any arbitration proceeding and the arbitrator's determination shall be maintained in confidence by the parties, except to the extent disclosure is required by law or judicial proceeding having competent jurisdiction.  Other than matters in which termination is sought by the Non-breaching Party pursuant to Section 13(b)(i), arbitration shall not be required except by written consent of the Parties.

(c)           Termination for Insolvency.  Each Party may terminate this Agreement immediately upon written notice to the other if the other Party ceases conducting business, becomes insolvent, makes a general assignment for the benefit of creditors, has a receiver appointed for its business or assets, or is subject to voluntary or involuntary bankruptcy proceedings.

(d)           ***

(e)           ***

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended.  Confidential portions portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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13.4       Effects of Termination

(a)           Payment; Licenses; Licensed LIFECOMM Mobile PERS Solution.  Upon termination or expiration of this Agreement for any reason, any amounts owed to LIFECOMM under this Agreement before such termination or expiration will be immediately due and payable, all licensed rights granted in this Agreement will immediately cease to exist, and AMAC must promptly discontinue all further use of the LIFECOMM Marks and all further use and distribution of the Devices and LIFECOMM Connectivity Service.

(b)           Continuing Support.  Notwithstanding the foregoing, if AMAC is not in breach of any material provision of this Agreement, AMAC shall have the right to continue to provide Product support services to its Clients and third party distribution channels existing at the termination or expiration of this Agreement and LIFECOMM shall continue to facilitate the provision of the LIFECOMM Connectivity Service for a period of *** thereafter, subject to LIFECOMM’s ability to obtain such services from the Wireless Carrier during this period.

(c)           Termination of Wireless Carrier Agreement.  In the event that this Agreement is terminated under Subsection 13.3(e) as a result of the termination or expiration of the agreement between LIFECOMM and the Wireless Carrier: (i) LIFECOMM is not obligated to ensure that any Client is able to continue to utilize the cellular connectivity portion of the LIFECOMM Wireless Service or to arrange for any transfer of any Client’s mobile directory numbers; (ii) LIFECOMM or the Wireless Carrier may route Clients to a recording (or other message delivery system) advising that Client's mobile directory numbers are disconnected and that any requests regarding prior services and/or the disconnection should be directed to AMAC; and (iii) in such event, AMAC hereby releases and holds harmless LIFECOMM and its suppliers from any and all claims and causes of action that may arise from such communications with Clients.

13.5        Survival.  Sections 1, 3.3, 7.7, 9, 10, 11, 12, 13.4, 14, and any payment obligations incurred prior to expiration or termination of this Agreement will survive such expiration or termination.

14.         MISCELLANEOUS

14.1         Publicity.  Neither party shall issue any press release or make any other public statement concerning this Agreement without the prior written approval of the other party, not to be unreasonably withheld or delayed, except to the extent required by law or regulation.  To the extent a party is required by law or regulation to disclose the terms of this Agreement, such party may do so if both parties review and mutually agree upon such required disclosure prior to its disclosure and such party seeks to obtain confidential treatment thereof to the extent requested by such other party.

Notwithstanding the foregoing paragraph, the parties acknowledge that this Agreement, or portions thereof, and schedules thereto, and descriptions of any of the foregoing, may be required under applicable law or regulation to be disclosed in required public disclosure documents, or exhibits thereto, of AMAC filed with the United States Securities and Exchange Commission (the “SEC”) or any securities exchange on which its securities are listed for trading.  Prior to such disclosure, AMAC will inform LIFECOMM in writing and will use commercially reasonable efforts to seek approval from the SEC or other applicable regulatory authority for the confidential treatment of certain confidential information identified by the parties.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended.  Confidential portions portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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14.2         Governing Law and Venue.  This Agreement and any action related thereto will be governed and interpreted by and under the laws of the State of New York, without giving effect to any conflicts of laws principles that require the application of the law of a different state.  Except as required by Section 13(b)(ii), any legal action or proceeding concerning the validity, interpretation and enforcement of this Agreement, matters arising out of or related to this Agreement or its making, performance or breach, or related matters shall be brought exclusively in the courts of the State of New York in the County of New York or of the United States of America for the Southern District of New York, and all parties consent to the exclusive jurisdiction of those courts, waiving any objection to the propriety or convenience of such venues.  The United Nations Convention on Contracts for the International Sale of Goods does not apply to this Agreement.

14.3         Export.  AMAC agrees not to export, reexport, or transfer, directly or indirectly, any U.S. technical data acquired from LIFECOMM, or any products utilizing such data, in violation of the United States export laws or regulations.

14.4         Severability. If any provision of this Agreement is, for any reason, held to be invalid or unenforceable, the other provisions of this Agreement will remain enforceable and the invalid or unenforceable provision will be deemed modified so that it is valid and enforceable to the maximum extent permitted by law.  Without limiting the generality of the foregoing, AMAC agrees that Section 11 (Limitation of Liability) will remain in effect notwithstanding the unenforceability of any provision in Subsection 10.2 (Warranties by LIFECOMM).

14.5         Waiver.  Any waiver or failure to enforce any provision of this Agreement on one occasion will not be deemed a waiver of any other provision or of such provision on any other occasion.

14.6         Remedies.  Except as expressly provided in Sections 10 (Warranties) and 12 (Indemnification), the parties’ rights and remedies under this Agreement are cumulative.  AMAC acknowledges that the Devices, LIFECOMM Connectivity Service and LIFECOMM Mobile PERS API contain valuable trade secrets and proprietary information of LIFECOMM and its suppliers, that any actual or threatened breach of Section 9 (Confidentiality) or any other breach of its obligations with respect to Intellectual Property Rights of LIFECOMM will constitute immediate, irreparable harm to LIFECOMM for which monetary damages would be an inadequate remedy, and that injunctive relief is an appropriate remedy for such breach.  If any legal action is brought to enforce this Agreement, the prevailing party will be entitled to receive its attorneys’ fees, court costs, and other collection expenses, in addition to any other relief it may receive.

14.7         No Assignment.  This Agreement, and each Party’s rights and obligations herein, may not be assigned, subcontracted, delegated, or otherwise transferred by a Party without the other Party’s prior written consent, and any attempted assignment, subcontract, delegation, or transfer in violation of the foregoing will be null and void; provided, however, that either Party may assign this Agreement, and its rights and obligations under this Agreement in connection with a Change of Control of such Party, or to an entity into which such Party is merged in connection with a change in such Party’s State of incorporation, without the consent of the other Party, subject to ***.  The terms of this Agreement shall be binding upon successors and permitted assignees.

14.8         Force Majeure.  Any delay in the performance of any duties or obligations of either party (except the payment of money owed) will not be considered a breach of this Agreement if such delay is caused by a labor dispute, shortage of materials, fire, earthquake, flood, or any other event beyond the control of such party, provided that such party uses reasonable efforts, under the circumstances, to notify the other party of the circumstances causing the delay and to resume performance as soon as possible.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended.  Confidential portions portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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14.9         Independent Contractors.  AMAC’s relationship to LIFECOMM is that of an independent contractor, and neither party is an agent or partner of the other.  AMAC will not have, and will not represent to any third party that it has, any authority to act on behalf of LIFECOMM.

14.10       Notices. Each party must deliver all notices or other communications required or permitted under this Agreement in writing to the other party at the address listed on the signature page by courier, by certified or registered mail (postage prepaid and return receipt requested), or by a nationally-recognized express mail service.  Notice will be effective upon receipt or refusal of delivery.  If delivered by certified or registered mail, any such notice will be considered to have been given five (5) business days after it was mailed, as evidenced by the postmark.  If delivered by courier or express mail service, any such notice shall be considered to have been given on the delivery date reflected by the courier or express mail service receipt. Each party may change its address for receipt of notice by giving notice of such change to the other party.

14.11       Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which shall be taken together and deemed to be one instrument.

14.12       Entire Agreement.  This Agreement is the final, complete and exclusive agreement of the parties with respect to the subject matter hereof and supersedes and merges all prior discussions between the parties with respect to such subject matter. No modification of or amendment to this Agreement, or any waiver of any rights under this Agreement, will be effective unless in writing and signed by AMAC and LIFECOMM.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended.  Confidential portions portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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IN WITNESS WHEREOF, the undersigned are duly authorized to execute this Agreement on behalf of AMAC and LIFECOMM.

LIFECOMM	AMERICAN MEDICAL ALERT CORPORATION
By:           /s/ Jeffrey A. Leddy	By:           /s/ Jack Rhian
Print Name:       Jeffrey A. Leddy	Print Name:            Jack Rhian
Title:         CEO	Title:         CEO
Date:         May 12, 2010	Date:         May 12, 2010

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended.  Confidential portions portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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ATTACHMENT A

DESIGNATED CHANNELS

*** eleven pages omitted

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended.  Confidential portions portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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ATTACHMENT B

LIFECOMM MARKS

LIFECOMM LLC

www.LIFECOMM.com

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended.  Confidential portions portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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ATTACHMENT C

STATEMENT OF WORK

Statement of Work No. ___

This Statement of Work No. ____ (this “Statement of Work”), effective as of ___________, 2010, is entered into by and between LIFECOMM LLC (“LIFECOMM”) and American Medical Alert Corporation (“AMAC”).  This Statement of Work is a part of and subject to the terms and conditions set forth in the Services Agreement, dated as of __________ 2010, between LIFECOMM and AMAC.

1. Scope of Work

2. Deliverables

A. Deliverable Work Product

B. Non-Assignable Deliverable Work Product IP Rights

3. Milestones

4. Names and Titles of Individuals Performing Services

5. Other Provisions

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended.  Confidential portions portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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ATTACHMENT D

WIRELESS NETWORK TERMS

Brownouts.  AMAC acknowledges and agrees that Brownouts may be put in place by the Wireless Carrier and Roaming Carriers from time to time in the provision of the cellular connectivity portion of the LIFECOMM Connectivity Service and the Roaming Carrier’s CMRS and/or Data Service, or PIN codes may be required by the Roaming Carrier.  The Wireless Carrier may implement a Brownout in the Territory.  LIFECOMM will endeavor to promptly provide AMAC with notice after the commencement or occurrence of any Brownout, but LIFECOMM’s failure to provide such notice will not be considered a breach of its obligation under this Agreement.

Interference.  AMAC shall assist LIFECOMM and the Wireless Carrier in taking all actions necessary as determined by the Wireless Carrier in its sole discretion to prevent and/or terminate actual or potential Interference with Facilities, Systems and/or the cellular connectivity portion of the LIFECOMM Connectivity Service.  “Interference” shall mean causing actual or potential harm to the Facilities, Systems, LIFECOMM Connectivity Service or the performance metrics of the Wireless Carrier Facilities or Systems, and includes Fraudulent Usage.  Such harm may include, but shall not be limited to the (i) disproportionate use of the Wireless Carrier Facilities’ resources, air link, backbone network, (ii) any use that adversely affects the performance metrics, as determined by the Wireless Carrier, of Facilities, Systems or LIFECOMM Connectivity Service, or (iii) the impairment of the quality of LIFECOMM Connectivity Service provided to End Users or any Customer.  In the event that there is Interference, AMAC shall immediately cease such Interference or promptly order the End User to cease from engaging in such act(s) of Interference.  In the extent that such Interference continues despite the above, LIFECOMM shall have the right to discontinue the cellular connectivity portion of the LIFECOMM Connectivity Service to that End User or the MDN assigned thereto and/or deny AMAC’s access to Systems (in the case of Interference to Systems, in accordance with an applicable System policy), and LIFECOMM shall provide AMAC with written notification of such discontinuance promptly thereafter.  AMAC shall assist LIFECOMM in taking all actions necessary to prevent further Interference.  In the event LIFECOMM or the Wireless Carrier determines the Interference is adverse to Facilities, Systems or the cellular connectivity portion of the LIFECOMM Connectivity Service, LIFECOMM and the Wireless Carrier reserve the right to suspend any new Activation of Interfering Equipment.

Area Code Relief.  The parties agree to cooperate in good faith to implement any area code relief in a given Territory.  LIFECOMM may provide notice, if and as available, of any area code relief.  AMAC shall reprogram the Equipment and may be required to notify affected End Users of any changes in MDNs.  Any failure by AMAC to comply with such obligations may adversely affect AMAC’s ability to provide LIFECOMM Connectivity Service or to timely bill End Users, but the Wireless Carrier shall still invoice AMAC, and AMAC shall still be obligated to pay for any LIFECOMM Connectivity Service or Roaming used after the area code relief.  AMAC is responsible for obtaining area code information from NANPA (www.nanpa.com) or the applicable state public utility commission website.

Radio Frequency (RF) Enhancer.  AMAC shall not install, deploy, or use any regeneration equipment or similar mechanism (for example, a repeater) to originate, amplify, enhance, retransmit or regenerate a transmitted RF signal.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended.  Confidential portions portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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Wireless Carrier’s Right To Modify Rates, Charges, Fees and Other Amounts.

AMAC hereby acknowledges and agrees that the Wireless Carrier may change, introduce, terminate, add, adjust, and/or modify, any and all “non-Wireless Carrier” rates (e.g. Roaming), Taxes, charges, fees, tables, charts, discounts, and/or the qualification requirements (if any, for such items) upon *** prior notice to LIFECOMM, in which case LIFECOMM may make a corresponding change to the rates, taxes, charges, fees, tables, charts, discounts and/or the qualification requirements upon *** prior notice.  AMAC acknowledges and agrees that any such change, termination, adjustment and/or modification shall apply to all Active MDNs hereunder, except as expressly provided by LIFECOMM in the notice required under this paragraph.

Wireless Carrier’s Right to Modify Business Practices.  This Agreement is subject to all applicable business practices, policies, and procedures of the Wireless Carrier of which AMAC has notice.  Such procedures, policies and business practices may be modified or changed, or new business practices, policies and procedures introduced, at any time upon *** notice, which may be provided by posting on the Wireless Carrier’s website (at an address to be provided by the Wireless Carrier) or written notice to AMAC via email, USPS, or courier service, provided, that such change may not materially modify, curtail or otherwise diminish the Wireless Carrier’s or AMAC’s material obligations hereunder.

Facility Modifications.  AMAC acknowledges that CMRS and Data Service is a rapidly changing industry and technology and as such neither LIFECOMM nor the Wireless Carrier shall be liable to AMAC or to AMAC's End Users if changes in any of the Facilities, Systems, operations, equipment, procedures, or LIFECOMM Connectivity Service render obsolete any Equipment, service, software and/or applications provided by AMAC to End Users in conjunction with use of the LIFECOMM Connectivity Service.

Privacy and Security of LIFECOMM Connectivity Service.  AMAC acknowledges neither LIFECOMM, the Wireless Carrier, nor any of their Affiliates can guarantee the privacy or security of any transmission, including voice and/or data transmitted through the use of the cellular connectivity portion of the LIFECOMM Connectivity Service or Roaming.

Capacity Limitation.  The parties recognize that unusual concentrations of the cellular connectivity portion of the LIFECOMM Connectivity Service usage may occur in certain locations.  Neither LIFECOMM nor the Wireless Carrier shall incur liability for its inability to provide adequate LIFECOMM Connectivity Service hereunder if such liability is due to a lack of capacity on the Wireless Carrier Facilities or Carrier Facilities which results from the aforesaid usage concentration, and nothing herein shall require LIFECOMM or the Wireless Carrier to expend any capital or resources to ensure capacity for AMAC’s or its End Users' use of LIFECOMM Connectivity Service or Roaming.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended.  Confidential portions portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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AMAC agrees to and acknowledges the following:  The CMRS and/or Data Service are subject to transmission limitations caused by atmospheric and like conditions.  The cellular connectivity portion of the LIFECOMM Connectivity Service may be temporarily interrupted or curtailed due to government regulations, suspected fraudulent activities, network modifications, upgrades, relocations, repairs and similar activities necessary or appropriate for the proper or improved operation of the LIFECOMM Connectivity Service. The cellular connectivity portion of the LIFECOMM Connectivity Service is subject to network and transmission limitations, including cell site unavailability, particularly near boundaries and in remote areas.  Equipment, weather, topography and other environmental considerations also affect CMRS and/or Data Service and such CMRS and/or Data Service may vary significantly within buildings, or dependent upon the location of the Equipment.  With digital-only Equipment the End User can only make and receive calls and/or transmit data when CDMA digital service is available.  When CDMA digital service is not available, such Equipment will not be able to make and receive calls and/or transmit data of any kind.

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended.  Confidential portions portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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ATTACHMENT E

MINIMUM CLIENT SERVICE TERMS

Limitations of Service

Our Coverage Area

Disclaimer of Warranties

Certain Other Limitations of the including Emergency Services and Our Need for Your Cooperation

Additional Limitations and Prohibitions on Your Use of the Equipment, Service, and Website

Your Responsibilities for Insuring and Maintaining Your Equipment and for Other Important Matters

No Ownership Rights in any Numbers or Addresses

Suspending; Terminating; Changing; Transferring and Reactivating the Service

Dispute Resolution

The Laws Governing Our Relationship

Limitation of Liability

Indemnification; Release

Miscellaneous Terms

Relationship Between Parties

Third-Party Beneficiaries

Other Provisions Required by Our Third Party Vendors

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended.  Confidential portions portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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ATTACHMENT F

FEES AND PAYMENT TERMS

*** two pages omitted

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended.  Confidential portions portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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ATTACHMENT G

INTEGRATION COSTS

*** one page omitted

*** denotes language for which American Medical Alert Corp. will request confidential treatment pursuant to the rules and regulations of the Securities Act of 1933, as amended.  Confidential portions portions have been omitted and will be filed separately with the Securities and Exchange Commission.

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EX-10.3

AMENDMENT NO. 13 AND WAIVER TO CREDIT AGREEMENT

AMENDMENT NO. 13 AND WAIVER, dated as of May 12, 2010 (this “Amendment and Waiver”), with respect to the Credit Agreement, dated as of May 20, 2002 (as same has been and may be further amended, restated, supplemented or modified, from time to time, the “Credit Agreement”), by and between AMERICAN MEDICAL ALERT CORP., a New York corporation (the “Company”) and JPMORGAN CHASE BANK, N.A., as successor-in-interest to The Bank of New York, a national banking association (the “Lender”).

RECITALS

The Company has requested, and the Lender has agreed subject to the terms and conditions of this Amendment and Waiver, to provide a new acquisition loan facility, and to amend and waive certain provisions of the Credit Agreement, all as herein set forth.

Accordingly, in consideration of the premises and of the mutual covenants and agreements hereinafter set forth, the parties hereto agree as follows:

1.           Amendments.

(a)           The following definitions in Section 1.01 of the Credit Agreement are hereby amended and restated in their entirety to provide as follows:

“Commitments” shall mean, collectively, the Revolving Credit Commitment, the Term Loan Commitment, the New Term Loan Commitment, the AMI Acquisition Loan Commitment and the LCL Acquisition Loan Commitment.

“Loan Documents” shall mean, collectively, this Agreement, the Notes, the Security Documents, the Guaranties, any Hedging Agreement with the Lender and each other agreement executed in connection with the transactions contemplated hereby or thereby, as each of the same may hereafter be amended, restated, supplemented or otherwise modified from time to time.

“Loans” shall mean, collectively, the Revolving Credit Loans, the Term Loan, the New Term Loan, the AMI Acquisition Loan and the LCL Acquisition Loan.

“Notes” shall mean, collectively, the Revolving Credit Note, the Term Note, the New Term Loan Note, the AMI Acquisition Loan Note and the LCL Acquisition Loan Note.

 “Obligations” shall mean all obligations, liabilities and indebtedness of the Company to the Lender, whether now existing or hereafter created, absolute or contingent, direct or indirect, due or not, other than obligations, liabilities and indebtedness acquired by assignment from third parties, but including without limitation, all obligations, liabilities and indebtedness of the Company arising under or relating to this Agreement, the Notes or any other Loan Document, which shall include, without limitation, all obligations, liabilities and indebtedness of the Company with respect to the principal of and interest on the Loans, obligations under any Hedging Agreement, and all fees, costs, expenses and indemnity obligations of the Company and the Guarantors hereunder or under any other Loan Document (including the payment of amounts that would become due but for the operation of the automatic stay under Section 362(a) of the United States Bankruptcy Code), and interest that, but for the filing of  petition in bankruptcy with respect to the Company, would accrue on such obligations, whether or not a claim is allowed against the Company for such interest in the related bankruptcy proceeding.

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(b)           The following definitions are hereby added to Section 1.01 of the Loan Agreement, in their appropriate alphabetical order:

“Hedging Agreement” shall mean any interest rate swap, collar, cap, floor or forward rate agreement or other agreement regarding the hedging of interest rate risk exposure executed in connection with hedging the interest rate exposure of the Company or any Guarantor, and any confirming letter executed pursuant to such agreement, all as amended, supplemented, restated or otherwise modified from time to time.

“LCL” shall mean Lifecomm LLC, a Delaware limited liability company.

“LCL Acquisition” shall mean the Company’s acquisition of 4,000 Class C Membership Units of LCL, representing a 10.2% minority ownership interest in LCL.

“LCL Acquisition Loan” shall have the meaning set forth in Section 2.09.

“LCL Acquisition Loan Commitment” shall mean the Lender’s obligation to make the LCL Acquisition Loan to the Company on the LCL Effective Date, in the amount of $2,000,000.

“LCL Acquisition Loan Note” shall have the meaning set forth in Section 2.10.

“LCL Acquisition Loan Maturity Date” shall mean May 1, 2015.

“LCL Effective Date” shall mean May __, 2010.

“VAR Agreement” shall mean that certain Value Added Reseller Agreement, dated as of LCL Effective Date, between the Company and LCL.

(c)           The definition of the term “Applicable Margin” in Section 1.01 of the Credit Agreement is hereby amended by (i) amending and restating the table therein to read as follows:

Ratio of Consolidated Funded Debt to Consolidated EBITDA	LIBOR Margin For Revolving Credit Loans (360 day basis)			LIBOR Margin for the Term Loan, the New Term Loan, the AMI Acquisition Loan and the LCL Acquisition Loan (360 day basis)
Less than 1.00:1.00		1.50	%		1.75	%
Greater than or equal to 1.00:1.00 but less than 1.50:1.00		1.75	%		2.00	%
Greater than or equal to 1.50:1.00 but less than 2.00:1.00		2.00	%		2.25	%
Greater than or equal to 2.00:1.00		2.25	%		2.50	%

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and (ii) amending and restating the first sentence of the paragraph following such table to read as follows:

“Notwithstanding the foregoing, during the period commencing on the LCL Effective Date and ending on the date of reset of the Applicable Margin in accordance with this paragraph, the LIBOR Margin for (a) Revolving Credit Loans shall be 1.50% and (b) the Term Loan, the New Term Loan, the AMI Acquisition Loan and the LCL Acquisition Loan shall be 1.75%.”

(d)           Clause “(h)” of the definition of Indebtedness in Section 1.01 of the Credit Agreement is hereby amended and restated in its entirety to provide as follows:

“(h)       net liabilities of such Person under Hedging Agreements and foreign currency exchange agreements, as calculated on a basis satisfactory to the Lender and in accordance with accepted practice;”

(e)           Article II of the Credit Agreement is hereby amended to add the following new sections 2.09 and 2.10 immediately following Section 2.08 thereof:

SECTION 2.09 LCL Acquisition Loan.Subject to the terms and conditions hereof, and relying on the representations and warranties set forth herein, the Lender agrees to make a term loan (the “LCL Acquisition Loan”) to the Company available in a single drawdown on the LCL Effective Date in an amount not to exceed the LCL Acquisition Loan Commitment.  The LCL Acquisition Loan may be (i) an Adjusted Libor Loan, (ii) an Alternate Base Rate Loan or (iii) a combination thereof. The LCL Acquisition Loan Commitment shall terminate upon funding of the LCL Acquisition Loan on the LCL Effective Date.

SECTION 2.10 LCL Acquisition Note. The LCL Acquisition Loan made by the Lender shall be evidenced by a promissory note of the Company, substantially in the form of Exhibit I, with appropriate insertions (the “LCL Acquisition Note”) payable to the order of the Lender and representing the obligation of the Company to pay the unpaid principal amount of the LCL Acquisition Loan of the Lender with interest thereon as prescribed in Section 3.01.  The Lender is authorized to record the Type and the date and amount of each payment or prepayment of principal thereof in the Lender’s records or on the grid schedule annexed to the LCL Acquisition Loan Note; provided, however, that the failure of the Lender to set forth each payment and other information shall not in any manner affect the obligation of the Company to repay the LCL Acquisition Loan in accordance with the terms of the LCL Acquisition Note and this Agreement.  The LCL Acquisition Note, the grid schedule and the books and records of the Lender shall constitute conclusive evidence of the information so recorded absent manifest error.  The LCL Acquisition Note shall (a) be dated the LCL Effective Date, (b) be stated to mature on the LCL Acquisition Loan Maturity Date and (c) be payable as to principal in sixty (60) consecutive monthly principal installments of $33,333.33 each, commencing June 1, 2010, and on the first day of each month thereafter, provided that the final installment on the LCL Acquisition Loan Maturity Date shall be in an amount equal to the remaining principal amount then outstanding.  Repayments and prepayments of the LCL Acquisition Loan may not be reborrowed.  The LCL Acquisition Loan Note shall bear interest from the date thereof until paid in full on the unpaid principal amount thereof from time to time outstanding at the applicable interest rate per annum determined as provided in, and payable as specified in, Section 3.01.

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(f)           The first sentence of Section 3.01(g) of the Credit Agreement is hereby amended and restated in its entirety to provide as follows:

“No Loan which may be funded as an Adjusted Libor Loan may be converted to or continued as an Adjusted Libor Loan with an Interest Period that extends beyond the Revolving Credit Commitment Termination Date, with respect to Revolving Credit Loans, the Maturity Date, with respect to the Term Loan, the New Term Loan Maturity Date, with respect to the New Term Loan, the AMI Acquisition Loan Maturity Date, with respect to the AMI Acquisition Loan or the LCL Acquisition Loan Maturity Date, with respect to the LCL Acquisition.

(g)           The following sentence is hereby added to Section 3.02 of the Credit Agreement at the end thereof.

“The proceeds of the LCL Acquisition Loan shall be used by the Company solely in connection with the LCL Acquisition.”

(h)           Section 3.03(a) of the Credit Agreement is hereby amended to add the text “and pursuant to any Hedging Agreement with the Lender” immediately following the text “except as provided in Section 3.08” on the fourth line of such Section.

(i)            Section 3.03 of the Credit Agreement is further amended by amending and restating the second and third sentences of Section 3.03(c) thereof in their entirety to provide as follows:

“All partial prepayments of the Term Loan, the New Term Loan, the AMI Acquisition Loan and the LCL Acquisition Loan shall be applied to the remaining installments of principal thereof in inverse order of maturity.  Prepayments of the Term Loan, the New Term Loan, the AMI Acquisition Loan and the LCL Acquisition Loan may not be reborrowed.”

(j)            Section 7.02 of the Credit Agreement is hereby revised by (i) deleting the word “and” following clause “(g)”, (ii) deleting the period following clause “(g)” and replacing it with “; and” and (iii) adding a new clause “(h)” immediately following clause “(h)” as follows:

“(h)        Indebtedness with respect to Hedging Agreements entered into by the Company, provided that such Hedging Agreements shall be entered into in the ordinary course of its business with respect to its business needs and not for speculative purposes;”

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(k)           Section 7.06 is hereby amended to delete the text “and” on the tenth line thereof immediately before the text “(f)” and to add the following text at the end of such Section immediately preceding the period:

“and (g) the purchase and ownership of membership interests of LCL, in accordance with the terms of LCL Acquisition, and additional capital contributions to LCL in an amount not to exceed $500,000 in accordance with the Limited Liability Company Agreement of LCL.”

(l)            Section 7.16 of the Credit Agreement is hereby amended by adding the following text at the end thereof:

“Notwithstanding anything to the contrary herein, nothing herein shall be deemed to restrict the Company from entering into and performing the VAR Agreement.”

(m)          Article VII of the Credit Agreement is hereby further amended by adding a new Section 7.18 at the end thereof as follows:

“SECTION 7.18.   Amendment to LCL Documents.  The Company shall not cause or permit the VAR Agreement or the Limited Liability Company Agreement of LCL to be amended, restated, modified or supplemented in any way that would have a material adverse effect on the rights of the Lender under the Loan Documents.”

(n)           Exhibit I attached to this Amendment is hereby added as Exhibit I to the Credit Agreement.

2.           Waivers.

(a)           The Lender hereby waives the late receipt of (i) the management prepared consolidating interim balance sheet and the related management prepared interim consolidating statement of income of the Company and the Corporate Guarantors, each required to be delivered to the Lender pursuant to Section 6.03(b)(ii) of the Credit Agreement and (ii) the Chief Financial Officer's certificate, required to be delivered to the Bank pursuant to Section 6.03(b)(ii) and 6.03(c) of the Credit Agreement, all for the fiscal quarter ended December 31, 2009.

(b)           The Lender hereby waives compliance by the Company and LCL with Section 6.13 of the Credit Agreement, Affiliate”, solely with respect to the delivery by LCL of a Guaranty, Security Agreement and the other documents described therein, unless and until the Company shall own fifty percent (50%) or more of the outstanding principal membership interests of LCL.

3.           Conditions of Effectiveness. This Amendment and Waiver shall become effective upon receipt by (1) the Lender of (a) this Amendment and Waiver, duly executed by the Company and each Guarantor, (b) the LCL Acquisition Loan Note, in the form of Exhibit I hereto, (c) a certificate of the Secretary or Assistant Secretary of the Company, dated as of the date hereof, in the form of Exhibit 1 hereto, (d) copies of the executed Limited Liability Company Agreement of LCL and all exhibits thereto, along with copies of the membership certificates, if any, issued by LCL to the Company, (e) the duly executed Value Added Reseller Agreement between the Company and LCL, (f) copies of the resolutions of the board of directors of the Company regarding the LCL Acquisition, (g) a management forecast for the Company for the fiscal years ending December 31, 2010 and December 31, 2011, including balance sheet, income statement, cash flow statement and financial covenant calculations, and (h) such other documents, instruments and agreements that the Lender shall reasonably require with respect thereto and (2) Farrell Fritz, P.C., of its reasonable attorneys’ fees and expenses incurred in connection with the preparation, execution and delivery of this Amendment and Waiver, plus all outstanding amounts owed to Farrell Fritz, P.C. for unpaid attorney’s fees and expenses.

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4.           Miscellaneous.

(a)           This Amendment and Waiver shall be governed by and construed in accordance with the laws of the State of New York.

(b)           All terms used herein shall have the same meaning as in the Credit Agreement, as amended hereby, unless specifically defined herein.

(c)           This Amendment and Waiver shall constitute a Loan Document.

(d)           Except as expressly amended and waived hereby, the Credit Agreement remains in full force and effect in accordance with the terms thereof.  The Credit Agreement and the Loan Documents are each ratified and confirmed in all respects by the Company.  The amendments and waivers herein are limited specifically to the matters set forth above and for the specific instance and purpose for which given and do not constitute directly or by implication an amendment or waiver of any other provisions of the Credit Agreement or a waiver of any Default or Event of Default which may occur or may have occurred under the Credit Agreement or any other Loan Document.

(e)           Upon the effectiveness of this Amendment and Waiver, each reference in the Credit Agreement and the other Loan Documents to “this Agreement”, “hereunder”, “hereof”, “herein” or words of like import shall mean and be a reference to the Credit Agreement, as amended hereby.

(f)            The Company hereby represents and warrants that, (i) except with respect to the matters described in the Press Release (as defined in Amendment No. 2 to Credit Agreement, dated as of March  28, 2005 between the Company and the Lender), the representations and warranties by the Company pursuant to the Credit Agreement and each other Loan Document, as updated by the Schedules attached hereto, are true and correct, in all material respects, on the date hereof, and (ii) no Default or Event of Default exists under the Credit Agreement or any other Loan Document; provided that, the  Lender hereby acknowledges and agrees that the representations and warranties of the Company contained in the Credit Agreement and those covenants set forth in Sections 6.05, 6.06, 6.07, and 6.12 of the Credit Agreement shall not be deemed (prior to, at or after this date of this Amendment and Waiver) to be breached as a result of the matters described in the Press Release, provided that such matter or matters do not now or shall not hereafter cause a Material Adverse Effect or cause the occurrence of any other Event of Default, it being agreed and understood that the $1,500,000 charge described in the Press Release, in itself, will not be deemed to constitute a Material Adverse Effect.

(g)           The Company hereby: (a) acknowledges and confirms that, notwithstanding the consummation of the transactions contemplated by this Amendment and Waiver, (i) all terms and provisions contained in the Security Documents are, and shall remain, in full force and effect in accordance with their respective terms and (ii) the liens heretofore granted, pledged and/or assigned to the Lender as security for the Company’s obligations under the Notes (including, without limitation, the LCL Acquisition Loan Note), the Credit Agreement and the other Loan Documents shall not be impaired, limited or affected in any manner whatsoever by reason of this Amendment and Waiver and that all such liens shall be deemed granted, pledged and/or assigned to the Lender as security for the Company’s obligations to the Lender, including, without limitation, the LCL  Acquisition Loan; and (b) represents, warrants and confirms the non-existence of any offsets, defenses, or counterclaims to its obligations under the Credit Agreement or any Loan Document.

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(h)           This Amendment and Waiver may be executed in one or more counterparts, each of which shall constitute an original, but all of which, when taken together, shall constitute but one Amendment and Waiver.

[next page is signature page]

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IN WITNESS WHEREOF, the Company and the Lender have caused this Amendment and Waiver to be duly executed by their duly authorized officers as of the day and year first above written.

AMERICAN MEDICAL ALERT CORP.

By: /s/ Jack Rhian   

Name:  Jack Rhian

Title:    President

JPMORGAN CHASE BANK, N.A.

By: /s/ Carolyn Lattanzi   

Name:  Carolyn Lattanzi

Title:    Vice President

8

The undersigned, not parties to the Credit Agreement but as Guarantors under their respective Guaranties executed in favor of the Lender, dated as of May 20, 2002, and as Grantors under the Security Agreement, dated as of May 20, 2002, each hereby (a) accept and agree to the terms of the foregoing Amendment and Waiver, (b) acknowledge and confirm that all terms and provisions contained in their respective Guaranty are, and shall remain, in full force and effect in accordance with their respective terms and that its obligations thereunder include obligations of the Company owing to the Lender pursuant to the LCL Acquisition Loan, and (c) (i) all terms and provisions contained in the Security Agreement are and shall remain, in full force and effect in accordance with their respective terms and (ii) the liens heretofore granted, pledged and/or assigned to the Lender as security for the Guaranteed Obligations (as defined in the Guaranty) shall not be impaired, limited or affected in any manner whatsoever by reason of this Amendment and Waiver and that all such liens shall be deemed granted, pledged and/or assigned to the Lender as security for the Guarantee Obligations, including, without limitation, those Guaranteed Obligations related to the LCL Acquisition Loan.

HCI ACQUISITION CORP.

SAFE COM INC.

LIVE MESSAGE AMERICA ACQUISITION CORP.

NORTH SHORE ANSWERING SERVICE, INC.

ANSWER CONNECTICUT ACQUSITION CORP.

MD ONCALL ACQUISITION CORP.

AMERICAN MEDICONNECT ACQUISITION CORP.

By: /s/ Jack Rhian     

Jack Rhian, the President of each of

the foregoing corporations

9

EXHIBIT I

LCL ACQUISITION LOAN NOTE

$2,000,000 May __, 2010

FOR VALUE RECEIVED, AMERICAN MEDICAL ALERT CORP., a Delaware corporation  (the “Company”), promises to pay to the order of JPMORGAN CHASE BANK, N.A. (the “Lender”), on or before the LCL Acquisition Loan Maturity Date, the principal amount of TWO MILLION ($2,000,000) DOLLARS, in sixty (60) consecutive equal monthly installments of $33,333.33, commencing June 1, 2010 and continuing on the first day of each month thereafter; provided, however, that the last such payment on the LCL Acquisition Loan Maturity Date shall be in the amount necessary to repay in full the unpaid principal amount of the LCL Acquisition Loan.  The Company also promises to pay interest on the unpaid principal amount hereof from the date hereof until paid in full at the rates and at the times which shall be determined in accordance with the provisions of the Credit Agreement referred to below.

This Note is the “LCL Acquisition Loan Note” issued pursuant to and entitled to the benefits of the Credit Agreement dated as of May 20, 2002 by and between the Company and the Lender (as the same has been and may be further amended, restated, modified or supplemented from time to time, the “Credit Agreement”), to which reference is hereby made for a more complete statement of the terms and conditions under which the LCL Acquisition Loan evidenced hereby was made and is to be repaid.  Capitalized terms used herein without definition shall have the meanings set forth in the Credit Agreement.

Each of the Lender and any subsequent holder of this Note agrees, by its acceptance hereof, that before transferring this Note, it shall record the date and amount of each payment or prepayment of principal of the LCL Acquisition Loan previously made hereunder on the grid schedule annexed to this Note; provided, however, that the failure of the Lender or holder to set forth the LCL Acquisition Loan, payments and other information on the attached grid schedule shall not in any manner affect the obligation of the Company to repay the LCL Acquisition Loan made by the Lender in accordance with the terms of this Note.

This Note is subject to prepayment pursuant to Section 3.03 of the Credit Agreement.

Upon the occurrence of an Event of Default, the unpaid balance of the principal amount of this Note, together with all accrued but unpaid interest thereon, may become, or may be declared to be, due and payable in the manner, upon the conditions and with the effect provided in the Credit Agreement.

All payments of principal and interest in respect of this Note shall be made in lawful money of the United States of America in immediately available funds at the office of JPMorgan Chase Bank, N.A., located at 395 North Service Road, Melville, New York 11747 or at such other place as shall be designated in writing for such purpose in accordance with the terms of the Credit Agreement.

No reference herein to the Credit Agreement and no provision of this Note or the Credit Agreement shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Note at the place, at the respective times, and in the currency herein prescribed.

Except as may be expressly provided to the contrary in the Credit Agreement, the Company and endorsers of this Note waive diligence, presentment, protest, demand, and notice of any kind in connection with this Note.

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THIS NOTE SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW WHICH WOULD APPLY THE SUBSTANTIVE LAWS OF ANOTHER JURISDICTION.

IN WITNESS WHEREOF, the Company has caused this Note to be executed and delivered by its duly authorized officer as of the day and year and at the place first above written.

AMERICAN MEDICAL ALERT CORP.

By: 

Name:  Jack Rhian

Title:     President

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EX-10.4

AMENDMENT NO. 14 AND WAIVER TO CREDIT AGREEMENT

AMENDMENT NO. 14 AND WAIVER, dated as of June 29, 2010 (this “Amendment and Waiver”), with respect to the Credit Agreement, dated as of May 20, 2002 (as same has been and may be further amended, restated, supplemented or modified, from time to time, the “Credit Agreement”), by and between AMERICAN MEDICAL ALERT CORP., a New York corporation (the “Company”) and JPMORGAN CHASE BANK, N.A., as successor-in-interest to The Bank of New York, a national banking association (the “Lender”).

RECITALS

The Company has requested, and the Lender has agreed subject to the terms and conditions of this Amendment and Waiver, to amend and waive certain provisions of the Credit Agreement, all as herein set forth.

Accordingly, in consideration of the premises and of the mutual covenants and agreements hereinafter set forth, the parties hereto agree as follows:

1.           Amendment.  The definition of the term “Revolving Credit Commitment Termination Date“  in Section 1.01 of the Credit Agreement is hereby amended and restated in its entirety to provide as follows:

“Revolving Credit Commitment Termination Date” shall mean June 30, 2013.

2.           Waiver. The Lender hereby waives the late receipt of (i) the management prepared consolidating interim balance sheet and the related management prepared interim consolidating statement of income of the Company and the Corporate Guarantors, each required to be delivered to the Lender pursuant to Section 6.03(b)(ii) of the Credit Agreement and (ii) the Chief Financial Officer's certificate, required to be delivered  to the Lender pursuant to Section 6.03(b)(ii) and 6.03(c) of the Credit Agreement, all for the fiscal quarter ended March 31, 2010, provided that such statements and certificate were received by June 21, 2010.

3.           Conditions of Effectiveness. This Amendment and Waiver shall become effective upon receipt by  (i) the Lender of this Amendment and Waiver, duly executed by the Company and each Guarantor and such other documents, instruments and agreements that the Lender shall reasonably require with respect thereto and (ii) Farrell Fritz, P.C., of its reasonable attorneys’ fees and expenses incurred in connection with the preparation, execution and delivery of this Amendment and Waiver, plus all outstanding amounts owed to Farrell Fritz, P.C. for unpaid attorney’s fees and expenses.

4.           Miscellaneous.

(a)           This Amendment and Waiver shall be governed by and construed in accordance with the laws of the State of New York.

(b)           All terms used herein shall have the same meaning as in the Credit Agreement, as amended hereby, unless specifically defined herein.

(c)           This Amendment and Waiver shall constitute a Loan Document.

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(d)          Except as expressly amended and waived hereby, the Credit Agreement remains in full force and effect in accordance with the terms thereof.  The Credit Agreement and the Loan Documents are each ratified and confirmed in all respects by the Company.  The amendments and waivers herein are limited specifically to the matters set forth above and for the specific instance and purpose for which given and do not constitute directly or by implication an amendment or waiver of any other provisions of the Credit Agreement or a waiver of any Default or Event of Default which may occur or may have occurred under the Credit Agreement or any other Loan Document.

(e)           Upon the effectiveness of this Amendment and Waiver, each reference in the Credit Agreement and the other Loan Documents to “this Agreement”, “hereunder”, “hereof”, “herein” or words of like import shall mean and be a reference to the Credit Agreement, as amended hereby.

(f)           The Company hereby represents and warrants that, (i) except with respect to the matters described in the Press Release (as defined in Amendment No. 2 to Credit Agreement, dated as of March  28, 2005 between the Company and the Lender), the representations and warranties by the Company pursuant to the Credit Agreement and each other Loan Document, as updated by the Schedules attached hereto, are true and correct, in all material respects, on the date hereof, and (ii) no Default or Event of Default exists under the Credit Agreement or any other Loan Document; provided that, the  Lender hereby acknowledges and agrees that the representations and warranties of the Company contained in the Credit Agreement and those covenants set forth in Sections 6.05, 6.06, 6.07, and 6.12 of the Credit Agreement shall not be deemed (prior to, at or after this date of this Amendment and Waiver) to be breached as a result of the matters described in the Press Release, provided that such matter or matters do not now or shall not hereafter cause a Material Adverse Effect or cause the occurrence of any other Event of Default, it being agreed and understood that the $1,500,000 charge described in the Press Release, in itself, will not be deemed to constitute a Material Adverse Effect.

(g)          The Company hereby: (a) acknowledges and confirms that, notwithstanding the consummation of the transactions contemplated by this Amendment and Waiver, (i) all terms and provisions contained in the Security Documents are, and shall remain, in full force and effect in accordance with their respective terms and (ii) the liens heretofore granted, pledged and/or assigned to the Lender as security for the Company’s obligations under the Notes, the Credit Agreement and the other Loan Documents shall not be impaired, limited or affected in any manner whatsoever by reason of this Amendment and Waiver and that all such liens shall be deemed granted, pledged and/or assigned to the Lender as security for the Company’s obligations to the Lender, (b) represents, warrants and confirms the non-existence of any offsets, defenses, or counterclaims to its obligations under the Credit Agreement or any Loan Document and (c) represents and warrants that the execution, delivery and performance by the Company of this Amendment and Waiver has been duly authorized by all requisite corporate action, if any.

(h)          This Amendment and Waiver may be executed in one or more counterparts, each of which shall constitute an original, but all of which, when taken together, shall constitute but one Amendment and Waiver.

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2

IN WITNESS WHEREOF, the Company and the Lender have caused this Amendment and Waiver to be duly executed by their duly authorized officers as of the day and year first above written.

AMERICAN MEDICAL ALERT CORP.

By: /s/ Jack Rhian    

Name: Jack Rhian

Title:   President

JPMORGAN CHASE BANK, N.A.

By: /s/ Carolyn Lattanzi   

Name:  Carolyn Lattanzi

Title:    Vice President

The undersigned, not parties to the Credit Agreement but as Guarantors under their respective Guaranties executed in favor of the Lender, dated as of May 20, 2002, and as Grantors under the Security Agreement, dated as of May 20, 2002, each hereby (a) accept and agree to the terms of the foregoing Amendment and Waiver, (b) acknowledge and confirm that all terms and provisions contained in their respective Guaranty are, and shall remain, in full force and effect in accordance with their respective terms and (c) (i) all terms and provisions contained in the Security Agreement are and shall remain, in full force and effect in accordance with their respective terms and (ii) the liens heretofore granted, pledged and/or assigned to the Lender as security for the Guaranteed Obligations (as defined in the Guaranty) shall not be impaired, limited or affected in any manner whatsoever by reason of this Amendment and Waiver and that all such liens shall be deemed granted, pledged and/or assigned to the Lender as security for the Guarantee Obligations.

HCI ACQUISITION CORP.

SAFE COM INC.

LIVE MESSAGE AMERICA ACQUISITION CORP.

NORTH SHORE ANSWERING SERVICE, INC.

ANSWER CONNECTICUT ACQUSITION CORP.

MD ONCALL ACQUISITION CORP.

AMERICAN MEDICONNECT ACQUISITION CORP.

By: /s/ Jack Rhian    

Jack Rhian, the President of each

of the foregoing corporations

3

EX-10.5

WAIVER, dated as of July 12, 2010 (this “Waiver”) to the Credit Agreement, dated as of May 20, 2002 (as same has been and may be further amended, restated, supplemented or modified, from time to time, the “Credit Agreement”), by and between AMERICAN MEDICAL ALERT CORP., a New York corporation (the “Company”) and JPMORGAN CHASE BANK, N.A., as successor-in-interest to The Bank of New York, a national banking association (the “Lender”).

WHEREAS, the Company has requested and the Lender has agreed, subject to the terms and conditions of this Waiver, to waive compliance with certain provisions of the Credit Agreement as hereinafter set forth.

NOW, THEREFORE, in consideration of the premises and of the mutual agreements herein contained, the parties hereto agree as follows:

1.           Waiver.   The Lender hereby waives compliance with the provisions of Section 7.15 of the Credit Agreement solely in order to permit the Company to pay a special dividend during the months of September or October 2010 equal to ten cents ($.10) per share of the outstanding common stock of the Company as of September 13, 2010, provided that no Default or Event of Default has occurred and is then continuing, all in accordance with the resolutions approved by the Board of Directors of the Company with respect thereto.

2.           Conditions to Effectiveness.  This Waiver shall become effective upon receipt by (1) the Lender of (a) this Waiver, duly executed by the Company and (b) a copy of the resolutions adopted by the Board of Directors of the Company with respect to the dividend described in paragraph 1 above, certified by the Secretary or Assistant Secretary of the Company.

3.           Miscellaneous.

Capitalized terms used herein and not otherwise defined herein shall have the same meanings as defined in the Credit Agreement.

Except as expressly waived hereby, the Credit Agreement shall remain in full force and effect in accordance with the original terms thereof.

The waiver set forth above is limited specifically to the matter set forth above and for the specific instance and purpose given and does not constitute directly or by implication a waiver or amendment of any other provision of the Credit Agreement or a waiver of any Default or Event of Default, whether now existing or hereafter arising, which may occur or may have occurred.

Except as expressly waived hereby, the Credit Agreement shall remain in full force and effect in accordance with the original terms thereof.  The Credit Agreement is ratified and confirmed in all respects by the Company.

The Company hereby represents and warrants that, (i) the representations and warranties by the Company pursuant to the Credit Agreement and each other Loan Document are true and correct, in all material respects, on the date hereof, and (ii) no Default or Event of Default exists under the Credit Agreement or any other Loan Document.

The Company hereby: (a) acknowledges and confirms that, notwithstanding the consummation of the transactions contemplated by this Waiver, (i) all terms and provisions contained in the Security Documents are, and shall remain, in full force and effect in accordance with their respective terms and (ii) the liens heretofore granted, pledged and/or assigned to the Lender as security for the Company’s obligations under the Credit Agreement and the other Loan Documents shall not be impaired, limited or affected in any manner whatsoever by reason of this Waiver; and (b) represents, warrants and confirms the non-existence of any offsets, defenses, or counterclaims to its obligations under the Credit Agreement or any Loan Document.

1

The Company hereby further represents and warrants that the execution, delivery and performance by the Company of this Waiver, (a) have been duly authorized by all requisite corporate action, (b) will not violate or require any consent (other than consents as have been made or obtained and which are in full force and effect) under (i) any provision of law applicable to the Company, any applicable rule or regulation of any Governmental Authority, or the Certificate of Incorporation or By-laws of the Company, (ii) any order of any court or other Governmental Authority binding on the Company or (iii) any agreement or instrument binding on the Company.  Each of this Waiver and the Credit Agreement constitutes a legal, valid and binding obligation of the Company.

This Waiver may be executed in one or more counterparts, each of which shall constitute an original, but all of which when taken together shall constitute but one Waiver.

This Waiver shall constitute a Loan Document.

THIS WAIVER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.

IN WITNESS WHEREOF, the Company and the Lender have caused this Waiver to be duly executed by their duly authorized officers, all as of the day and year first above written.

AMERICAN MEDICAL ALERT CORP.

By: /s/ Jack Rhian    

Name:   Jack Rhian

Title:     President

JPMORGAN CHASE BANK, N.A.

By: /s/ Carolyn B. Lattanzi  

Name:    Carolyn B. Lattanzi

Title:      Vice President

2

EX-15.1

Exhibit 15.1

August 16, 2010

American Medical Alert Corp.

Oceanside, New York

We have reviewed, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the unaudited interim financial information of American Medical Alert Corp. and Subsidiaries for the fiscal periods ended June 30, 2010 and June 30, 2009, as indicated in our report dated August 16, 2010.  Because we did not perform an audit, we expressed no opinion on that information.

We are aware that our report referred to above, which is included in your Quarterly Report on Form 10-Q for the quarter ended June 30, 2010, is incorporated by reference in the following Registration Statements:

· Registration Statement No. 33-48385 on Form S-8;

· Registration Statement No. 33-91806 on Form S-8;

· Registration Statement No. 333-53029 on Form S-8;

· Registration Statement No. 333-70626 on Form S-8;

· Registration Statement No. 333-130811 on Form S-8; and

· Registration Statement No. 333-88192 on Form S-3.

We also are aware that the aforementioned report, pursuant to Rule 436(c) under the Securities Act of 1933, as amended, is not considered a part of the Registration Statements prepared or certified by an accountant or a report prepared or certified by an accountant within the meaning of Sections 7 and 11 of the Securities Act of 1933, as amended.

/s/ Margolin, Winer & Evens LLP

Margolin, Winer & Evens LLP

Garden City, New York

EX-31.1

 

Exhibit 31.1            

Certification

I, Jack Rhian, certify that:

1. I have reviewed this quarterly report on Form 10-Q of American Medical Alert Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 16, 2010	/s/ Jack Rhian
	Jack Rhian
	President and
	Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

Exhibit 31.2

Certification

I, Richard Rallo, certify that:

1. I have reviewed this quarterly report on Form 10-Q of American Medical Alert Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  August 16, 2010	/s/ Richard Rallo
	Richard Rallo
	Chief Financial Officer
	(Principal Financial Officer)

 

EX-32.1

Exhibit 32.1

Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the filing of the Quarterly Report on Form 10-Q for the Quarter Ended June 30, 2010 (the "Report") by American Medical Alert Corp. ("Registrant"), the undersigned hereby certifies that:

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Registrant.

Date:  August 16, 2010

/s/ Jack Rhian

Jack Rhian

Chief Executive Officer and

President

A signed original of this written statement required by Section 906 has been provided to American Medical Alert Corp. and will be retained by American Medical Alert Corp. and furnished to the Securities and Exchange Commission or its staff upon request.

 

EX-32.2

Exhibit 32.2

Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the filing of the Quarterly Report on Form 10-Q for the Quarter Ended June 30, 2010 (the "Report") by American Medical Alert Corp. ("Registrant"), the undersigned hereby certifies that:

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Registrant.

Date:  August 16, 2010

/s/ Richard Rallo

Richard Rallo

Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to American Medical Alert Corp. and will be retained by American Medical Alert Corp. and furnished to the Securities and Exchange Commission or its staff upon request.

 

EX-99.1

Contact:

Randi Baldwin

Senior Vice President,  Marketing

American Medical Alert Corp.

(516) 536-5850 ext: 3109

randi.baldwin@amac.com

AMERICAN MEDICAL ALERT CORP. REPORTS

SECOND QUARTER 2010 RESULTS

OCEANSIDE, New York. –August 11, 2010 –American Medical Alert Corp. (NASDAQ: AMAC) a provider of healthcare communication services and advanced telehealth monitoring technologies, today announced operating results for the quarter and six months ended June 30, 2010, the highlights of which are as follows:

· Company-wide net income increased approximately 22% for the six months ended June 30, 2010 and 30% for the three months ended June 30, 2010 as compared to same periods last year (before effect of minority investment charge) .

· HSMS division for the second consecutive quarter achieved a gross profit level of 60%.

· The Company declares second special dividend of $0.10 per share.

· Company sets date to commence aggressive advertising campaign to market its PERS and MedSmart product direct to consumers.

Revenues for the quarter ended June 30, 2010, consisting primarily of monthly recurring revenues (MRR), increased 2% to $9,712,145 as compared to $9,518,206 for the same period in 2009.  Net income for the quarter ended June 30, 2010 increased 30% to $791,418 or $.08 per diluted share as compared to $608,385 or $.06 per diluted share for the same period in 2009.  Net income for the quarter ended June 30, 2010 excludes $68,515 of net expense, net of income taxes, incurred with respect to the Company’s joint venture with Qualcomm and Hughes Telematics, Inc. (known as “Lifecomm”).  This net expense represents the Company’s share of R&D and other selling, general and administrative expenses incurred  for the development of the next generation mobile PERS.  This expense, which is expected to increase over the next several quarters, is not related to the Company’s business operations.  The Company’s net income for the quarter ended June 30, 2010 after taking into effect of this charge was $722,903, or $.07 per diluted share.

Revenues for the six months ended June 30, 2010 increased 1% to $19,623,392, as compared to $19,448,295 for the same period in 2009.  Net income for the six months ended June 30, 2010 increased 22% to $1,678,790 or $0.17 per diluted share as compared to net income of $1,381,635 or $0.14 per diluted share for the previous year. Net income for the six months ended June 30, 2010 excludes $68,515 of net expense, net of income taxes, incurred with respect to the Company’s joint venture with Qualcomm and Hughes Telematics, Inc. as discussed above.  Net income for the six months ended June 30, 2010 after taking into effect of this charge was $1,610,275, or $0.16 per diluted share, which would represent a 17% increase over the prior year. Net Income for the trailing twelve months increased 31% to $3,186,668 as compared to $2,432,480 for the same period in 2009. This 31% growth rate excludes a one time non operating charge of $521,627 for loss on abandonment incurred in 2008 (which affects the results for the twelve months ended June 30, 2009), and thereby more accurately reflects the growth from an operational perspective. The trailing twelve month net income also excludes $68,515 of net expense, net of income taxes, incurred with respect to the Company’s joint venture with Qualcomm and Hughes Telematics, Inc. as discussed above.

    

Earnings before interest, taxes and depreciation and amortization (“EBITDA”) for the six months ended June 30, 2010 increased 4% to $4,597,773 as compared to $4,428,102 for the same period in 2009.  EBITDA for the trailing twelve months ended June 30, 2010 and 2009 was $9,163,465 and $7,683,194, respectively.

The Company continues to demonstrate financial strength within its balance sheet even after taking into effect its $4,000,000 investment in a joint venture with Qualcomm, Inc. and Hughes Telematics, Inc. to develop a next generation mobile PERS system.  The Company had cash in excess of $4,000,000 at June 30, 2010, had working capital of $9,088,062, representing a ratio of 3.78 to 1, and a debt to equity ratio of .11 to 1.  As a result of its continued trend of generating positive cash flow from operations, the Company recently announced its second special dividend of $0.10 per share, following its first dividend in the same amount paid in January of this year. This dividend will be paid on or about October 1, 2010, to shareholders of record on September 13, 2010. Notwithstanding the issuance of these special cash dividends, the company’s ongoing cash flow generation will also allow us to take advantage of potential strategic acquisitions and fund our advertising campaigns which are central to our growth strategy.  In addition, as discussed in today’s guidance report, due to the tax benefit associated with the investment made in our Lifecomm joint venture, we expect to save approximately $1.6 million in taxes over the next eighteen months which will help fuel the cash flow requirements in support of our aggressive business development expansion.

Jack Rhian, AMAC’s Chief Executive Officer and President, explained, “The guidance provided today, is consistent with statements I made earlier this year that the pace of new revenue generation would increase beginning in the second half of the year. We believe these increases in revenues will continue over the next eighteen months and have a compounding affect due to the nature of our recurring revenue model.  We are particularly pleased with the business development activities observed within our TBCS division which had been trailing behind that of our HSMS division.

During the past several months we have recruited a variety of seasoned sales and marketing personnel and have reorganized our sales personnel into four distinct teams with primary and secondary channel objectives within both divisions. With respect to our HSMS division, we are reactivating our Walgreens direct to consumer TV/Web advertising campaign beginning in September and, with our enhanced sales and marketing team in place, pursuing large volume PERS business-to-business channel opportunities. I am also pleased to report that development work on our cellular based Mobile PERS solution, under our Lifecomm joint venture arrangement with Qualcomm and Hughes Telmatics, is progressing well. With regard to MedSmart, our medication management system, we remain bullish that this product can become a material contributor to our HSMS division over time. In addition to the previously reported MedSmart pilot study programs we are in talks with several other national provider organizations that have expressed interest in piloting MedSmart. As we plan to launch our direct to consumer TV/Web advertising program pilots in September, we believe the collateral benefit of this advertising campaign will provide greater product awareness for our B2B sales effort. Within our TBCS group, our hospital solutions and PhoneScreen Pharmaceutical support programs continue to gain traction while the awards announced earlier this year have begun full scale implementation and related revenue generation.

    

We have a seasoned management team with the depth of knowledge capable of creating and executing on the opportunities arising from both our TBCS and HSMS divisions.  Our product and service offerings are advanced and complementary while remaining cost sensitive. AMAC is a recognized solutions provider and we are capable of partnering and providing service to the largest and most respected healthcare and technology companies. As we execute on our plan, I am confident we can meet or exceed our guidance issued today.”

As previously announced, the Company will host a webcast on Wednesday, August 11, 2010 to discuss its financial results for the quarter ended June 30, 2010, guidance for fiscal 2010, longer term outlook for 2011, and other business trends.  The Company invites investors and others to listen to the conference call live over the Internet or by dialing in to (877) 407-9205 at 10:00 a.m. ET.

What:	American Medical Alert Corp. Second Quarter 2010 Results
When:	Wednesday,  August 11,  2010 at 10:00 a.m. ET
Where:	http://www.investorcalendar.com/IC/CEPage.asp?ID=160924
How:	Log on to the web at the address above, and click on the audio link or dial in 877-407-9205 to participate.

Following the conference call, the webcast will be available on the VCall website at http://www.investorcalendar.com/IC/CEPage.asp?ID=160924. The financial information presented in the webcast will also be available at http://amac.com/press.cfm.

About American Medical Alert Corp.

AMAC is a healthcare communications company dedicated to the provision of support services to the healthcare community. AMAC's product and service portfolio includes Personal Emergency Response Systems (PERS) and emergency response monitoring, electronic medication reminder devices, disease management monitoring appliances and healthcare communication solutions services. AMAC operates eight US based communication centers under local trade names: HLINK OnCall, North Shore TAS, Live Message America, ACT Teleservice, MD OnCall, Capitol Medical Bureau, American MediConnect and Phone Screen to support the delivery of high quality, healthcare communications.

Use of Non-GAAP Financial Information

In addition to the results reported in accordance with accounting principles generally accepted in the United States (“GAAP”) included in this press release, the Company has provided information regarding certain non-GAAP financial measure.  This measure is “earnings before interest, taxes and depreciation and amortization (“EBITDA”)” and “Net Income before Equity in net loss from investment in a limited liability company and Loss on Abandonment”.  Such information is reconciled to its closest GAAP measure in accordance with the Securities and Exchange Commission rules and is included in the attached supplemental data.

Management believes that the non-GAAP financial measures used in this press release is useful to both management and investors in their analysis of the Company’s financial position and results of operations.  Management believes that EBITDA is a useful measure of the Company's financial performance as it is an indicator of the Company's ability to generate cash flow to make acquisitions, declare and pay dividends, reinvest in new telehealth products and liquidate liabilities. Management also uses EBITDA for planning purposes to determine appropriate levels of operating and capital investments. Management also believes reporting Net Income before Equity in net loss from investment in a limited liability company and Loss on Abandonment more accurately reflects the performance of the Company’s core operations and excludes a non-operational item which may skew the analysis of management or outside investors in evaluating the Company.

EBITDA and Net Income before Equity in net loss from investment in a limited liability company and Loss on Abandonment are non-GAAP financial measures and although management and some members of the investment community utilize it to measure financial performance, EBITDA and Net Income before Equity in net loss from investment in a limited liability company and Loss on Abandonment should not be viewed as a substitute for financial data prepared in accordance with GAAP or as a measure of profitability.  Additionally, the non-GAAP financial measure as presented by AMAC may not be comparable to similarly titled measures reported by other companies.

Forward Looking Statements

This press release contains forward-looking statements that involve a number of risks and uncertainties. Forward-looking statements may be identified by the use of forward-looking terminology such as "may," "will," "expect," "believe," "estimate," "anticipate," "continue," or similar terms, variations of those terms or the negative of those terms. Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are set forth in the Company's filings with the Securities and Exchange Commission (SEC), including the Company's Annual Report on Form 10-K, the Company's Quarterly Reports on Forms 10-Q, and other filings and releases. These include uncertainties relating to government regulation, technological changes and product liability risks. In addition, certain statements related to the future expectations and timing for the development and commercialization of Lifecomm’s mobile PERS solution, constitute forward-looking statements.  Important factors which might cause a difference between actual and expected events include: (i) greater than expected and/or increased costs or unexpected delays associated with the development and commercialization of Lifecomm’s mobile PERS solution, (ii) inability to successfully develop the technology to support Lifecomm’s mobile PERS solution, (iii) uncertainty relating to consumer interest in and acceptance of Lifecomm’s mobile PERS solution, (iv) risks associated with changes in the competitive or regulatory environment in which Lifecomm operates; and (v) risks associated with prosecuting or defending allegations or claims of infringement of intellectual property rights.  The Company does not undertake any obligation to update these forward-looking statements for events occurring after the date of this press release.

Statements of income for the three and six months ended June 30, 2010 and 2009 and balance sheets as of June 30, 2010 and December 31, 2009 are attached.

AMAC SELECTED FINANCIAL DATA

	Three Months Ended						Six Months Ended
	6/30/2010			6/30/2009			6/30/2010			6/30/2009
Revenues	$	9,712,145		$	9,518,206		$	19,623,392		$	19,448,295
Cost of Goods Sold		4,522,891			4,547,539			9,046,330			9,184,507
Selling, General & Administrative Costs		3,857,251			3,940,743			7,765,084			7,993,190
Interest Expense		13,836			20,620			26,267			44,302
Equity in net loss from investment in a  limited liability company		116,127			-			116,127			-
Other Expenses (Income)		(29,863	)		(22,081	)		(59,691	)		(116,339	)
Income before Provision for Income Taxes		1,231,903			1,031,385			2,729,275			2,342,635
Net Income	$	722,903		$	608,385		$	1,610,275		$	1,381,635
Net Income per Share
Basic	$	0.08		$	0.06		$	0.17		$	0.15
Diluted	$	0.07		$	0.06		$	0.16		$	0.14
Basic Weighted Average
Shares Outstanding		9,549,355			9,469,908			9,537,894			9,461,888
Diluted Weighted Average
Shares Outstanding		9,828,473			9,720,829			9, 835,180			9,651,024

CONDENSED BALANCE SHEET

	June 30,		December 31,
	2010		2009
	(Unaudited)
ASSETS
Current Assets	$	12,361,003	$	13,779,968
Fixed Assets – Net		7,769,189		8,756,827
Other Assets		17,171,760		13,291,829
Total Assets	$	37,301,952	$	35,828,624
Current Liabilities	$	3,272,941	$	4,833,638
Deferred Income Tax		1,114,000		1,235,000
Long-term Debt		2,510,000		1,195,000
Other Liabilities		673,949		648,603
Total Liabilities	$	7,570,890	$	7,912,241
Stockholders’ Equity		29,731,062		27,916,383
Total Liabilities and Stockholders’ Equity	$	37,301,952	$	35,828,624

Net Income before Equity in net loss from investment in a limited liability company for the three and six months ended June 30, 2010 and 2009 reconciled to net income.

	Three Months Ended				Six Months Ended
	6/30/2010		6/30/2009		6/30/2010		6/30/2009
Net Income		722,903		608,385		1,610,275		1,381,635
Add Backs:
Equity in net loss from investment in a limited liability company		68,515		-		68,515		-
Net Income before Equity in net loss from  investment in a limited liability		791,418		608,385		1,678,790		1,381,635

    

Net Income before Loss on Abandonment and Equity in net loss from  investment in a limited liability company for the trailing twelve month period ended June 30, 2010 and 2009 reconciled to net income.

	6/30/2010		6/30/2009
Net Income		3,118,153		1,910,853
Add Backs:
Loss on Abandonment		-		521,627
Equity in net loss from investment in a  limited liability company		68,515		-
Net Income before Equity in net loss from  investment in a limited liability company and Loss on Abandonment		3,186,668		2,432,480

Earnings before interest, taxes and depreciation and amortization for the six months and trailing twelve months ended June 30, 2010 and 2009.

			Add:				Less:
	6/30/10		12/31/2009		Subtotal		6/30/2009		Total
Net Income		1,610,275		2,889,513		4,499,788		1,381,635		3,118,153
Add Backs:
Taxes		1,119,000		1,925,000		3,044,000		961,000		2,083,000
Interest		26,267		76,181		102,448		44,302		58,146
Depreciation & Amort.		1,842,231		4,103,100		5,945,331		2,041,165		3,904,166
EBITDA		4,597,773								9,163,465
			Add:				Less:
	6/30/09		12/31/2008		Subtotal		6/30/2008		Total
Net Income		1,381,635		1,439,601		2,821,236		910,383		1,910,853
Add Backs:
Taxes		961,000		1,007,000		1,968,000		633,000		1,335,000
Interest		44,302		279,451		323,753		166,868		156,885
Depreciation & Amort.		2,041,165		4,376,317		6,417,482		2,137,026		4,280,456
EBITDA		4,428,102								7,683,194

###

EX-99.2

Contact:

Randi Baldwin

Senior Vice President Marketing

American Medical Alert Corp.

(516) 536-5850 ext: 3109

randi.baldwin@amac.com

American Medical Alert Corp. Issues Guidance for Fiscal 2010 and 2011

Oceanside NY–August 11, 2010 American Medical Alert Corp. (NASDAQ: AMAC) announced its guidance for 2010 and longer term outlook for 2011. The Company projects that gross revenues, consisting primarily of monthly recurring revenue (MRR), will increase by approximately 3% to $40,500,000 for 2010 as compared to 2009.  The Company is also projecting that gross revenues will increase from 8% to 11% in 2011 as compared to projected 2010 results.  The Company believes starting with the third quarter of 2010, revenues, within both segments, will increase at a greater pace over the next eighteen months.

As a result of the Company’s plan to increase advertising expenditures by approximately $450,000 to $600,000, net of taxes, as compared to 2009, as part of a comprehensive plan to drive an accelerated pace of new revenue growth, the Company is projecting net income ranging from $2,850,000 to $3,000,000, or $0.29 to $0.31 per diluted share based on the fully diluted shares as of June 30, 2010, for the year ending December 31, 2010. The net income projection excludes the impact of the net loss allocated to the Company in relation to its minority investment in Lifecomm, LLC, a joint venture with Qualcomm, Inc. and Hughes Telematics, Inc, as discussed below (the “Lifecomm Joint Venture”).

The Company is projecting net income ranging from $3,550,000 - $3,850,000, or $0.36 to $0.39 per diluted share based on the fully diluted shares as of June 30, 2010, for the year ending December 31, 2011. As part of this projection, the Company has forecast to spend from $600,000 to $900,000, net of taxes, in advertising dollars to continue its efforts to drive accelerated revenue growth. This net income calculation also excludes the impact of the net loss allocated to the Company on connection with the Lifecomm Joint Venture.

During 2010, as previously announced, the Company made an investment into the Lifecomm Joint Venture, which was formed as a limited liability company, for the development of the next generation mobile PERS. The Company anticipates it will continue to be allocated net losses from the Lifecomm Joint Venture until the product is completed and commercialized. In accordance with accounting rules and regulations, the Company is required to record its portion of net income or net loss associated with the Lifecomm Joint Venture.  The Company estimates its share of the net loss after taxes for 2010 to range from $960,000 to $1,050,000.  The Company’s projected net income for 2010 after taking into effect this charge would range from $1,800,000 to $2,040,000, or $0.18 to $0.21 per diluted share based on the fully diluted shares as of June 30, 2010.  The 2011 projection also excludes the Company’s portion of the net income (loss) associated with the Lifecomm Joint Venture, which the Company estimates to range from $1,350,000 to $1,440,000.  The projected net income for 2011 after taking into effect this charge would range from $2,110,000 to $2,500,000, or $0.21 to $0.25 per diluted share based on the fully diluted shares as of June 30, 2010.

As a result of these projected charges, the Company would realize a tax benefit of $640,000 to $700,000 for the year ended December 31, 2010 and $900,000 to $960,000 for the year ended December 31, 2011. This cash savings from the tax benefit will be utilized to further support the cash requirements of our aggressive business development expansion and to fund potential acquisitions.

Additionally, once the next generation mobile PERS is completed and commercialized, it is anticipated that the Lifecomm Joint Venture will begin to become profitable and the Company’s net income will be enhanced by its portion of the joint venture profits.

Commencing in the second quarter of 2010, the Company will report net income before and after the impact of the Lifecomm Joint Venture, to better illustrate the results from operations of itscore business.

As previously announced, the Company will host a webcast on Wednesday, August 11, 2010 to discuss its financial results for the quarter ended June 30, 2010, guidance for fiscal 2010, longer term outlook for 2011, and other business trends.  The Company invites investors and others to listen to the conference call live over the Internet or by dialing in to (877) 407-9205 at 10:00 a.m. ET.

What:	American Medical Alert Corp. Second Quarter 2010 Results
When:	Wednesday, August 11, 2010 at 10:00 a.m. ET
Where:	http://www.investorcalendar.com/IC/CEPage.asp?ID=160924
How:	Log on to the web at the address above, and click on the audio link or dial in 877-407-9205 to participate.

Following the conference call, the webcast will be available on the VCall website at http://www.investorcalendar.com/IC/CEPage.asp?ID=160924. The financial information presented in the webcast will also be available at http://amac.com/press.cfm.

About American Medical Alert Corp. (www.amac.com)

AMAC is a healthcare communications company dedicated to the provision of support services to the healthcare community. AMAC's product and service portfolio includes Personal Emergency Response Systems (PERS) and emergency response monitoring, electronic medication reminder devices, disease management monitoring appliances and healthcare communication solutions services. AMAC operates eight US based communication centers under local trade names: HLINK OnCall, North Shore TAS, Live Message America, ACT Teleservice, MD OnCall, Capitol Medical Bureau, American MediConnect and Phone Screen to support the delivery of high quality, healthcare communications.

Use of Non-GAAP Financial Information

In addition to the results reported in accordance with accounting principles generally accepted in the United States (“GAAP”) included in this press release, the Company has provided information regarding certain non-GAAP financial measure.  This measure is “Equity in net loss from investment in a limited liability company”.  Such information is reconciled to its closest GAAP measure in accordance with the Securities and Exchange Commission rules and is included in the attached supplemental data.

Management believes that the non-GAAP financial measure used in this press release is useful to both management and investors in their analysis of the Company’s financial position and results of operations.  Management believes that earnings before Equity in net loss from investment in a limited liability company is a more concise measure of the Company's operating financial results as it excludes a non-operational item which may skew the analysis of management or outside investors in evaluating the Company..

This press release contains forward-looking statements that involve a number of risks and uncertainties. Forward-looking statements may be identified by the use of forward-looking terminology such as "may," "will," "expect," "believe," "estimate," "anticipate," "continue," or similar terms, variations of those terms or the negative of those terms. Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are set forth in the Company's filings with the Securities and Exchange Commission (SEC), including the Company's Annual Report on Form 10-K, the Company's Quarterly Reports on Forms 10-Q, and other filings and releases.  These include uncertainties relating to government regulation, technological changes and product liability risks.  In addition, certain statements related to the future expectations and timing for the development and commercialization of Lifecomm’s mobile PERS solution, constitute forward-looking statements.  Important factors which might cause a difference between actual and expected events include: (i) greater than expected and/or increased costs or unexpected delays associated with the development and commercialization of Lifecomm’s mobile PERS solution, (ii) inability to successfully develop the technology to support Lifecomm’s mobile PERS solution, (iii) uncertainty relating to consumer interest in and acceptance of Lifecomm’s mobile PERS solution, (iv) risks associated with changes in the competitive or regulatory environment in which Lifecomm operates; and (v) risks associated with prosecuting or defending allegations or claims of infringement of intellectual property rights.  The Company does not undertake any obligation to update these forward-looking statements for events occurring after the date of this press release.

This press release also contain financial projections that are necessarily based upon a variety of estimates and assumptions which may not be realized and are inherently subject, in addition to the risks identified in the forward-looking statement disclaimer, to business, economic, competitive, industry, regulatory, market and financial uncertainties, many of which are beyond the Company’s control.  There can be no assurance that the assumptions made in preparing the projected financial impact will prove accurate.  Accordingly, actual results may differ materially from the projected financial impact.

Earnings before Equity in net loss from investment in a limited liability company:

	Year Ended		Year Ended
	Projected Range 12/31/2010		Projected Range 12/31/2011
Net Income	$	1,800,000– 2,040,000	$	2,110,000– 2,500,000
Add Backs:
Loss allocated from investment in unconsolidated affiliate	$	960,000 – 1,050,000	$	1,350,000 – 1,440,000
Net Income Before Equity in net loss from investment in a limited liability company	$	2,850,000 - $3,000,000	$	3,550,000 - 3,850,000

###

EX-99.3

Conference Call and Webcast Transcript

Wednesday, August 11, 2010

RANDI BALDWIN: Thank you operator. Good morning, everyone and thank you for joining us today for AMAC’s second quarter 2010 conference call.   We apologize for the technology based delay with the release this morning.  This conference call contains forward-looking statements that involve a number of risks and uncertainties. Forward-looking statements may be identified by the use of forward-looking terminology such as "may," "will," "expect," "believe," "estimate," "anticipate," "continue," or similar terms, variations of those terms or the negative of those terms. Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are set forth in the Company's filings with the Securities and Exchange Commission (SEC), including the Company's Annual Report on Form 10-K, the Company's Quarterly Reports on Forms 10-Q, and other filings and releases. These include uncertainties relating to government regulation, technological changes and product liability risks. In addition, certain statements related to the future expectations and timing for the development and commercialization of Lifecomm’s mobile PERS solution, constitute forward-looking statements.  Important factors which might cause a difference between actual and expected events include: (i) greater than expected and/or increased costs or unexpected delays associated with the development and commercialization of Lifecomm’s mobile PERS solution, (ii) inability to successfully develop the technology to support Lifecomm’s mobile PERS solution, (iii) uncertainty relating to consumer interest in and acceptance of Lifecomm’s mobile PERS solution, (iv) risks associated with changes in the competitive or regulatory environment in which Lifecomm operates; and (v) risks associated with prosecuting or defending allegations or claims of infringement of intellectual property rights.  The Company does not undertake any obligation to update these forward-looking statements for events occurring after the date of this conference call.  And now I would now like to turn the call over to Jack Rhian, President and CEO of AMAC

JACK RHIAN: Thanks, Randi and good morning, ladies and gentlemen. Thank you for attending AMAC’s 2010- 2nd Quarter Earnings Conference call. Joining me this morning are the other members of the executive management team: Richard Rallo, our Chief Financial Officer and Randi Baldwin, Senior Vice President. Fred Siegel is travelling today. By way of format this morning, Richard Rallo will discuss the financial results for the second quarter of 2010. Thereafter, I will provide management’s observations regarding our business plan for the remainder of 2010 and an early outlook at 2011.  Subsequently, our team will be ready to respond to questions from conference participants. Also on today’s call, we intend to spend extra time explaining the multiple and significant benefits of our joint venture investment in Lifecomm. At this time, I’d like to turn the call over to Richard Rallo.

Richard Rallo:  Thank you Jack and good morning everyone.

On today’s call I will discuss our results of operations for the three and six months ended June 30, 2010 as well as some Balance Sheet items.  Before getting into the detailed numbers, I would just like to mention a couple of financial highlights:

· The Company-wide net income increased approximately 22% for the six months ended June 30, 2010 and 30% for the three months ended June 30, 2010 as compared to same periods last year and this is before the effect of the minority interest charge.

· The HSMS division for the second consecutive quarter achieved a gross profit level of 60% and

· The Company recently declared a second special cash dividend of $0.10 per share.

With respect to the Results of Operations:

Revenues:

Revenues for the quarter ended June 30, 2010 were $9,712,000, as compared to $9,518,000 for the same period in 2009, which represents a 2% increase.

Revenues for the six months ended June 30, 2010 were $19,623,000 as compared to $19,448,000 for the same period in 2009, representing a 1% increase. 

The growth in revenues for the 2nd quarter was primarily generated through the Company’s TBCS division. The growth was realized through:

· An increase in revenue within the Company’s non-traditional day-time service offering. The increase is primarily the result of certain hospital organizations expanding their services with us.  Further expansion is anticipated to continue throughout 2010 and into 2011 from these hospital organizations as well as from a recently executed agreement with another hospital organization.

Gross Profit

With respect to Gross Profit, the Company’s overall Gross Profit percentage for the quarter ended June 30, 2010 improved by over 1% to 53% as compared to 52% for the same period in the prior year.  This improvement was related to improved gross profit margins within both segments.  Additionally, as previously highlighted, the HSMS division delivered a strong gross profit percentage of 60% for the second consecutive quarter.

Net Income

Net income for the quarter ended June 30, 2010 increased 30% to $791,000 or $.08 per diluted share as compared to $608,000 or $.06 per diluted share for the same period in 2009.  Net income for the quarter ended June 30, 2010 excludes the Company’s share of the net loss of $69,000 in relation to the Company’s investment in Lifecomm, Inc., the joint venture with Qualcomm and Hughes Telematics, Inc.  In accordance with accounting rules and regulations, the Company is required to record its portion of net income or net loss associated with this joint venture.  This net loss primarily represents the Company’s share of R&D and other selling, general and administrative expenses incurred by the joint venture through June 30, 2010 for the development of the next generation mobile PERS.  The Company’s income for the quarter ended June 30, 2010 after taking into effect this charge was $723,000, or $0.07 per diluted share. 

As the joint venture continues to develop this next generation mobile PERS, it is anticipated that the Company’s share of net loss over the next several quarters will increase significantly and continue until the product is completed and commercialized.   As a result of these net losses, the Company will experience a decrease in its net income.  At the same time the Company will realize a significant tax benefit and have less cash outlay relating to income taxes.  Once the product is completed and commercialized, it is anticipated that the joint venture will begin to become profitable and AMAC’s net income will be enhanced by AMAC’s share of the joint ventures profit.

Net Income for the six months ended June 30, 2010 was $1,679,000 or $0.17 per diluted share as compared to $1,382,000 or $.14 per diluted share for the same period in 2009.  This represented a 22% increase.  The net income excludes the Company’s share of net loss associated with its joint venture with Qualcomm and Hughes Telematics, Inc., as described above.  The Company’s net income for the six months ended June 30, 2010 after taking into effect this charge was $1,610,000 or $0.16 per diluted share.

The increase in Net Income was attributable to:

Ø An increase in the revenues

Ø An increase in the overall gross profit.

Ø A decrease in consulting expenses.

Ø A reduction in commission expenses

Ø A decrease in depreciation expense primarily as a result of purchasing its PERS product at reduced rates and

Ø A decrease in amortization expense as certain assets, Customer Lists and license agreements have now been fully amortized.

The reduced expenses were partially offset by an increase in Sales salaries, which was primarily related to the Company hiring additional sales and marketing personnel to facilitate sales growth.  In addition, the Company also recognized a decrease in other income as a result of certain economic incentives being received from the City of Clovis and State of New Mexico in 2009 which were not received in 2010.

EBITDA

Earnings before Interest, taxes, depreciation and amortization (“EBITDA”) for the six months ended June 30, 2010 was $4,598,000 as compared to $4,428,000 for the six months ended June 30, 2009.

EBITDA for the trailing twelve months ended June 30, 2010 was $9,163,000 as compared to $8,570,000 for the trailing twelve months ended June 30, 2009, representing a 7% increase.  The trailing twelve month EBITDA for 2009 reflects the pre-tax exclusion of a onetime non operating charge incurred in the 4th quarter of 2008 in the amount of approximately $887,000.  Without this exclusion, EBITDA growth for the twelve months ended June 30, 2010 as compared to 2009 would have been 19%.

Other

With respect to the Balance Sheet, the Company continues to demonstrate financial strength even after taking into effect the cash dividend paid in the amount of $950,000 in January 2010 and its $4,000,000 cash investment in the joint venture with Qualcomm, Inc. and Hughes Telematics, Inc. during 2010. 

· At June 30, 2010, the Company had cash in excess of $4,000,000. The cash is targeted for the following items:

· To fund a second special cash dividend, as previously mentioned.

· To launch an aggressive advertising campaign to market its MedSmart and PERS products direct to consumer. This is anticipated to start at the end of the 3rd quarter.

· To fund potential strategic acquisitions.

· To purchase PERS and health care related products.

· To continue to pay down debt on its credit facilities.

The Company had working capital of $9,088,000, representing a ratio of 3.78 to 1, at June 30, 2010.  The Company also still maintained a very favorable debt to equity ratio of .11 to 1. 

CONCLUSION

Before turning the call back to Jack, I would just like to take a few more minutes to discuss certain aspects of the Lifecomm joint venture arrangement as this is a significant transaction for the Company and we believe a very positive one.

1. This joint venture provides us with an extraordinary important technology to move forward into the future.

2. We believe our joint venture partners Qualcomm and Hughes Telematics are the right partners for the development of the mobile PERS. 

3. Within this agreement, not only have we made an investment in the new technology but we have also been provided with certain first mover advantages.

4. From an accounting perspective, as previously mentioned, the joint venture has been structured in a way which will allow us to receive the maximum tax benefit during the start-up period.  These tax benefits could over 2010 and 2011 equate to approximately $1,600,000 which is approximately 40% of our initial investment.  This cash savings can be redeployed into the Company’s business expansion.

At this time I would like to turn the call back over to Jack.

JACK RHIAN: Thanks, Richard. Richard Rallo’s, detailed review of our financial performance allows me to direct most of my comments towards the continuing execution of our business plan. Today’s earnings report continues to affirm that AMAC has built a sustainable and profitable business model. We stand by our decision to focus our management effort during the past three years primarily on earnings. Now that our business model has demonstrated we can deliver high margin profits, recognition that the revenue growth in existing and newly acquired or developed business lines must now take priority for the company to expand and grow in a manner we believe possible.

The guidance issued today and my comments expressed in the q2 earnings announcement, illustrate with great clarity the expansion of our business development plan. We recognize that future improvements to earnings will come primarily from new revenue. Accelerating the pace of new revenue growth will be a key to our long term success. We have stated that we believe the pace of new revenue generation would increase beginning in the second half of the year and continue forward for the next eighteen months.

When issuing our guidance this morning we derived our confidence from the fundamental belief in the value proposition of our products and services.  Economic indicators and trend data affirms that AMAC’s solutions should be in greater demand in the years to come.

First and foremost, technology to help people age in place is more readily available and at a more reasonable cost than ever before.

Next, baby boomers will skew the population distribution beginning in 2011. With the first of this population beginning to turn 65, our aging process will change dramatically given that this population group owns and accesses more technology daily than any other previous generation. Studies show that seniors and caregivers are interested in technology but are not necessarily aware of options available.  An AARP Healthy at home study revealed that 40% of people 65+ would use an electronic medication reminder, but only 13% were aware they existed.

Pursuant to our plan to drive top line growth, we are investing significant resources to support direct to consumer TV/Web advertising campaigns to accelerate both our PERS and MedSmart products with the anticipation that the return on investment will follow shortly behind the investment.

Moreover, we believe the timing and commitment of these direct to consumer programs are an excellent adjunct to our traditional B2B focus because it will create even greater product awareness.

With regard to MedSmart, our medication management system, I can say from personal experience with my 85 year old mom who has been a MedSmart client for over six months that MedSmart can make the difference between giving a loved one the option to remain independent or being forced into some type of less desirable and more costly institutional environment. It is my personal and profoundly positive experience with this product, as well as feedback from our first customers, that give me such conviction about MedSmart and its potential to become a material contributor to the HSMS division.

 We also believe that investing in the development of new next generation cellular based Mobile PERS technology is a mandate because our PERS service is, and should remain, a core product offering of the Company. Moreover, I believe our Lifecomm joint venture arrangement with Qualcomm and Hughes Telematics is an opportunity to not only attain this technology but may provide us with an opportunity to become the leader in the provision of  mobile PERS.

 

As also mentioned previously, we are  pleased with the business development activities observed within our TBCS division because—  not only are we  seeing a positive trend of new hospital solutions and PhoneScreen Pharmaceutical support program awards, but we are also seeing the service implementation and related revenue generation arising from these awards.    As emerging trends in reimbursement point towards reducing readmissions through medication adherence tracking and enhanced post discharge communication, our medication management system and hospital solutions offerings will be in greater demand. Equally, pharmaceutical manufacturers are putting emphasis on patient support programs to ensure utilization and adherence.  Based on these observations we believe our complementary nature of our portfolio will continue to have increasing value to our customers.

Notwithstanding our enhanced plan for top line generation, we maintain our focus and conviction that optimal earnings and cash flow generation is the mandate and that both are deliverable over time. We also believe that our free cash flow generation will allow us to fund a substantial portion of our business development activities, thereby making our business expansion plan relatively low risk.

 In closing, it is my belief that management has either built or acquired access to some of the most innovative and appropriate technology available in the marketplace today, thereby positioning AMAC to lead and be recognized by the healthcare community as the “go to” company for their RPM and communication needs.

That concludes our prepared remarks.  We are now prepared to take questions from conference participants and we thank you for your time this morning. Operator.

Operator:

Operator:  Thank you.  We will now begin conducting the question and answer session.

Chris Lahiji from LD Micro:  Gentlemen. Good morning

Jack Rhian:       Good morning Chris

CL:  I have a question; do the guidance moving forward, do they showcase any amount of growth from the telematics, the new division with Qualcomm and Hughes?

Jack Rhian:  No, because, Chris the anticipated commercialization of the product is anticipated for the later part of 2011 and frankly not having an absolute launch date and some anticipation that there will be some start up time to get awareness on this product we did not put anything in for that.  However, to that point it is our plan that over the next several quarters we will be updating and trying to narrow the range and get more specific about how we see top line generation shaping up.  It is our belief that both with MedSmart and even with Mobile PERS as we see the evidence that these products are moving forward and being deployed in a way and fashion and at the volume levels we anticipate we are hopeful that we will able to come back to you and give you more accurate information and possibly even increase that based on the results of our marketing efforts.

CL:           I see.  Can you give us, Jack, a little bit more color on Walgreens and how’s that going?

Jack Rhian:  Walgreens has been going consistently for an extended period of time, as we’ve mentioned. Over the period that we have been under contract I believe we have put on close to 11,000 units on and off. We don’t indicate the exact number we have on at any given time.  What we have invested in, and part of this entire investment in direct to consumer, does in a large way revolve around the Walgreens program, because it is the Walgreens program that is direct to consumer.  So what we are doing, starting in September, that’s next month, we are going to be (a) reigniting and getting back onto TV and with commercials and other support material.  We also plan to and are in the process of revamping and revitalizing our website that support the TV advertising.  So we believe that the Walgreens direct to consumer program is going to have a pretty significant uptick because of the investment and we believe that’s part of the overall aggressive program we are talking about.  We are also looking at, with respect to MedSmart, at multiple ways in which we are going to be advertising the MedSmart program direct to consumer and it is our belief, that in a very short period of time,  one of the ways in which we do advertise direct to consumer with MedSmart will be working with Walgreens.

 

CL:  I see.  In terms of MedSmart, are you guys pleased with what you are seeing internally in terms of growth?

Jack Rhian:  Well, a straightforward answer is no.  We believe that we would have been a little bit further along by now.  However, as you have seen between releases and our talking about it in our talking points, you are seeing a major commitment and major push to MedSmart.  So with respect to the delay getting the advertising program out that was something that we felt necessary to get right and then once we were ready to go frankly we did not want to advertise in the dog days of summer, in July and August, so we have been scheduling a September release, which we think is a perfect time.  September through December, when people are back in their homes, they are not running around doing all kinds of things during the good weather and we believe we are going to go out at the right time and we are really confident that the advertising group that we are working with is going to be able to portray the value and significance of this product in the market place.  We really like the idea that unlike some other mature products that we are involved with MedSmart is a fresh product, it is extremely helpful, and I cannot tell you how much it has helped my relationship with my mom and our ability to manage her condition.  Having personal experience with this product, I feel a very strong conviction that this is a valuable tool to keep people living independent at home and we intend to showcase the ethicacy of this product in as many ways as possible and we are not, in answer your pointed question, we are not happy with the timing but we believe it’s right in front of us and for the second half of the year going into 2011 we see this product as becoming a core product.  Let me not also lead you to believe that we are only going at this from a direct to consumer campaign but rather part of the teams that we have added to our sales and marketing groups are there specifically dedicated to promoting on a B2B level MedSmart.

CL:  I see. Last question.  Are we generating any meaningful revenues from Apria Healthcare yet or no?

Jack Rhian:  That’s a very good question.  We are very pleased and we have some information that we are going to be publicly announcing in about a week or so to give you a complete update on Apria, but my response to that general question is that we are seeing good movement forward on behalf of Apria and as I said there will be a public announcement around Apria within a couple of weeks.

CL:  Excellent. Thank you guys.

Jack Rhian:          Thanks Chris

Operator:  Our next question is from Mike Petusky with Noble Research.  Please proceed with your question,

Mike Petusky:    Good morning guys, just a quick question, and forgive me, maybe I could figure this out, but I’m still going through the releases.  What is the pre-tax income assumption for 2011?

Richard Rallo:    The pre-tax income, and I will give it to you from a range prospective, we are looking at about $6,000,000. Again that’s before the application or applying the affect of the joint venture

MP:           OK

RR:           Once you take that into effect it certainly will

MP:          Ok, so the pretax income, so essentially then, maybe I do not understand, what do you expect your effective tax rate to be in 2011?

RR:           I anticipate, and then again projecting, at 40%

MP:          Ok and cash taxes will look like approximately what?

 

RR:           I will tell you, depending on certain things, but the cash will be to me significant.   Again, and I will say for a target, in the range of $8-10 million dollars in 2011 and that is a target.  Again I have not gone through details and that is a target based on the items we have put together.

MP:           OK I was actually asking about your cash taxes?

RR:           OK, are you taking into consideration the Lifecomm

MP:           Yes, essentially that is what I am trying to get out, if your effective tax rate is 40% I am assuming your cash taxes are considerably less than that?

RR:           Yes, our taxes will be.  And that will be probably be 28-30%, our cash taxes.

MP:           Ok very good, thanks guys

Jack Rhian:          Thanks Mike

Operator:  There are no further questions and you may disconnect your lines at this time.