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Exhibit 10.1
CONSULTING AGREEMENT
This
Consulting Agreement (the “Agreement”) is made by and
between CompuMed, Inc., a California corporation
(“CompuMed”), on the one hand, and Synthetica Ltd., a
California corporation (“Synthetica”), on the other
hand. This Agreement is effective as of the date on which it
has been signed by both parties.
ACCORDINGLY, on the basis of the representations, warranties, and
covenants contained in this Agreement, the parties agree as
follows:
ARTICLE 1
NATURE OF RETENTION AND TERM
1.1
Nature of Retention. CompuMed hereby retains
Synthetica as a management consultant and for the provision of the
services of Maurizio Vecchione (“Vecchione”) as Chief
Executive Officer (“CEO”). Synthetica hereby
accepts such retention, on the terms and conditions set forth
below. Synthetica understands and agrees that Vecchione will
provide the services of CEO and that there will be no substitution.
This Agreement will replace any prior agreement between the
parties, including, without limitation, the prior consulting
agreement dated June 30, 2006.
1.2
Term. The term of this Agreement shall commence on the
date of the execution of this Agreement by all parties and shall
continue for a period of three months thereafter unless the parties
renew this Agreement under Section 1.3 or terminate this Agreement
under Article 5 (the “Term”).
1.3
Renewal. At the end of the Term, this Agreement shall
be automatically renewed for consecutive three-month renewal terms
unless CompuMed or Synthetica provides written notice of
non-renewal at least sixty days prior to the end of the initial
Term or, if renewed for one or more three-month renewal periods
(each a “Renewal Term”), unless CompuMed or Synthetica
gives written notice of non-renewal not less than sixty days prior
to the end of the then current Renewal Term. Either party may
decide, with or without cause or reason, whether to agree to a
Renewal Term, and there is no expectation on the part of either
CompuMed or Synthetica as to whether the Agreement will or will not
be renewed.
ARTICLE 2
DUTIES OF
VECCHIONE
2.1
Duties. Vecchione
shall undertake and perform all duties as CEO of CompuMed on a
part-time basis. Vecchione shall render such services and
shall perform such duties and acts in connection with any aspect of
CompuMed's business as CompuMed's Board of Directors (the "Board of
Directors" or the "Board"), as constituted from time to time,
reasonably may require. Vecchione shall perform the services
contemplated herein faithfully, diligently, to the best of
Vecchione's ability, and in the best interests of CompuMed.
Vecchione shall at all times perform such services in
compliance with (and, to the extent of his authority, shall ensure
that CompuMed is in compliance with) any and all laws, rules,
regulations, and policies applicable to CompuMed of which Vecchione
is aware. Vecchione shall, at all times during the Term or
any Renewal Term, adhere to and obey any and all written internal
rules and regulations governing the conduct of CompuMed's
employees, as established or modified from time to time; provided,
however, that, in the event of any conflict between the provisions
of this Agreement and any such rules or regulations, the provisions
of this Agreement shall control.
2.2
Non-Exclusive Services. The parties understand and
agree that, during his retention by CompuMed, Vecchione may serve
as a consultant, officer, chairman, director, or CEO of another
entity or entities so long at such entity or entities are not
engaged in activities which are directly competitive to
CompuMed’s business. CompuMed is aware that it is
retaining the services of Vecchione on a non-exclusive basis and
CompuMed does not object to or believe there is a conflict with
Vecchione providing his services as an officer, chairman, director,
or interim CEO to another entity or entities during the course of
his retention with CompuMed so long at such entity or entities are
not engaged in activities which are directly competitive to
CompuMed’s business.
2.3
Other
Obligations. Vecchione acknowledges that CompuMed from
time to time may have agreements with other persons that impose
obligations or restrictions on CompuMed regarding inventions or
creative works made during the course of CompuMed’s work
under such agreements, or that relate to the confidential nature of
such work. Vecchione agrees to be bound by all such
obligations and restrictions of which Vecchione is informed by
CompuMed and to take all action necessary to discharge the
obligations of CompuMed thereunder.
2.4
Reporting. Vecchione shall prepare and deliver to the
Board monthly status reports and shall prepare in conjunction with
CompuMed’s CFO and outside auditors financial reports in
accordance with CompuMed’s historical accounting policies and
practices. Vecchione will be responsible under Sarbanes-Oxley
for signing certifications on CompuMed’s reporting under the
1934 Securities Act. In addition, Vecchione shall participate
with the Board in all Board meetings (expected approximately
quarterly) and with the Executive Committee meetings (expected
approximately monthly).
ARTICLE 3
OTHER
OBLIGATIONS
3.1
Mutual Indemnification . CompuMed
shall indemnify Synthetica and Vecchione from and against any
actions or claims against Synthetica and/or Vecchione which arise
from Synthetica’s and/or Vecchione’s lawful performance
of their duties under this Agreement. Synthetica and
Vecchione shall indemnify CompuMed from and against any actions or
claims against CompuMed which arise from any intentional or grossly
negligent misconduct by Synthetica or Vecchione.
3.2
Insurance . CompuMed shall maintain Directors &
Officers (“D&O”) Insurance while this Agreement is
in effect. The parties understand and agree that, during the
course of this Agreement, CompuMed will use its best efforts to
increase its D&O Insurance coverage to at least $5,000,000
total coverage. Otherwise, Synthetica represents that it is
familiar with CompuMed’s present D&O insurance policy and
accepts and agrees to its terms. The parties also understand
and agree that, during the course of this Agreement, CompuMed will
use its best efforts to obtain Employment Practices Liability
Insurance to the extent that such coverage is not already in
place.
3.3
CompuMed’s Warranties. CompuMed believes, and on
that basis represents and warrants, that it is current with all of
its taxes, including, without limitation, payroll taxes and other
payroll contributions, and that it is current with its payroll to
its employees. CompuMed further represents and warrants that
it is not presently aware of any wrongdoing, fraud, errors or
omissions, or pending or threatened litigation against CompuMed by
any person or entity, or investigations of CompuMed by any
governmental agency.
ARTICLE 4
COMPENSATION
4.1
Compensation. As the total consideration for the
services that Synthetica and Vecchione render under this Agreement,
Synthetica will be paid $15,000.00 on the first day of each month
while this Agreement is in effect, with the first payment due and
payable upon full execution of the Agreement. The payment
shall cover services provided during the ensuing month.
4.2
Warrants. CompuMed acknowledges and agrees that all
warrants issued to Synthetica and/or Vecchione pursuant to any
prior agreement between the parties are deemed to be fully vested
and exercisable in consideration for the execution of this
Agreement. In addition, CompuMed awarded 170,000 warrants to
Synthetica on May 17, 2007 at the then closing market price of $
.29 contingent upon the execution of this Agreement. One
third of the warrants will vest concurrent with the execution of
this Agreement, one third of the warrants will vest one year from
the execution of this Agreement, and one third of the warrants will
vest two years from the execution of this Agreement. The
vesting shall continue during this three-year period regardless of
whether CompuMed continues to retain the services of Synthetica
and/or Vecchione, but if CompuMed terminates the Agreement for
cause, then no further warrants will vest. These warrants
will expire 10 years after the date of execution of this Agreement
(the “Exercise Period”), and Synthetica can exercise
vested warrants at any time during the Exercise Period regardless
of whether CompuMed continues to retain the services of Synthetica
and/or Vecchione at that time. These warrants may be
transferred by Synthetica only to Synthetica’s prinicpals, to
other entities named by Synthetica which are affiliated with
Synthetica, or to other individuals or entities for legitimate
estate planning purposes. These warrants will have cashless
exercise features and will contain piggy-back registration terms.
The parties will prepare and finalize a standard warrant
agreement within 30 days of the execution of this Agreement.
4.3
Reimbursement for Expenses. CompuMed shall reimburse
Vecchione for any and all reasonable and documented actual business
expenses that Vecchione incurs from time to time in the performance
of his duties under this Agreement, provided that reimbursement
shall be made in accordance with the policies and practices of
CompuMed then in effect. Reimbursement shall be paid promptly
upon presentation of expense statements or vouchers and such other
supporting information as CompuMed from time to time may reasonably
require.
ARTICLE 5
TERMINATION AND
EXPIRATION
5.1
Termination . CompuMed shall have the right to
terminate this Agreement with cause before the expiration of the
Term or any Renewal Term, as provided below. If CompuMed
terminates the Agreement for cause or if the expiration of this
Agreement’s three-month Term or any Renewal Term is reached,
no additional compensation of any kind will be paid.
Following either termination or expiration of the Agreement,
for whatever reason, Synthetica and Vecchione shall continue to be
bound by Articles 6, 7, 8, and 9 of the Agreement.
5.2
Termination for Cause . If CompuMed terminates the
Agreement for cause, CompuMed shall pay to Synthetica any
compensation due under Article 4 of this Agreement, prorated
through the date of termination. Synthetica will not be
eligible to receive any further compensation for any period after
termination for cause. For the purposes of this Agreement,
termination for "cause" shall mean termination based on
CompuMed’s good faith belief in the existence of:
(a)
Synthetica’s and/or Vecchione’s failure or refusal
(whether intentional, reckless, or negligent) to perform their
duties under the Agreement, provided, however, that no termination
shall occur on that basis unless CompuMed first provides Synthetica
and/or Vecchione with written notice to cure. The notice to
cure shall specify the acts or omissions that allegedly constitute
Synthetica’s and/or Vecchione’s failure or refusal to
perform their duties, and Synthetica and Vecchione shall have a
reasonable opportunity (not to exceed 20 days after the date of
notice to cure) to correct the failure or refusal to perform their
duties. If Synthetica and/or Vecchione do not correct their
failure or refusal to perform their duties within that period,
termination shall be effective as of the date of written notice to
cure;
(b)
Synthetica’s and/or Vecchione’s breach of their
fiduciary duties to CompuMed;
(c)
Synthetica’s and/or Vecchione’s commission of an act
which, if prosecuted, would constitute a felony, or the commission
or conviction of any crime or act of dishonesty, moral turpitude,
or fraud;
(d)
Vecchione’s death or his disability, in accordance with
applicable state and federal law;
(e)
Vecchione’s absence from his job for reasons other than
illness or incapacity for a period in excess of any applicable
vacation and other personal time (as determined by CompuMed’s
lawful policies and this Agreement) without the consent of
CompuMed;
(f)
Vecchione’s possession or use of alcohol or of illegal drugs
on CompuMed’s premises, on work time, or at a work-related
function; or
(g)
conduct
by Vecchione that could harm CompuMed’s reputation or
goodwill or that otherwise could undermine the best interests of
CompuMed or of its officers, directors, Board, or related
individuals or entities.
5.3
Termination Date. The effective date of the
termination, in the event of a termination with cause, shall be the
date of receipt of notice of such termination.
ARTICLE 6
WAIVER OF PRIOR
AGREEMENTS
6.1
Except
as set forth in this Agreement, Synthetica and Vecchione waive any
and all retention, employment, remuneration, bonus, or severance
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