This Consulting
Agreement (the “ Agreement ”) is made effective
as of April 19, 2009, by and between TopSpin Medical
(Israel) Ltd. (the “ Company ”) of 53 Derech
Hashalom, Givataim, Israel, and Top-Notch Consultancy 2009 Ltd.
(the “ Consultant ”).
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WHEREAS
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Mr. Ehud Gilboa, the
controlling shareholder of the Consultant (“ Gilboa
”), is a director at the Company, as well as a director at
TopSpin Medical Inc., its parent company (the “ Parent
”); and
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WHEREAS
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The Company wishes the Consultant,
solely through Gilboa, to perform certain Services (as defined
below) and the Consultant is willing to provide such Services
through Gilboa, all subject to the terms and conditions of this
Agreement.
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NOW, THEREFORE,
the parties hereby agree as follows:
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1.1
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Consulting
Period . The Consultant shall serve as a
consultant to the Company and the Parent (collectively, together
with any other subsidiary of the Company or the Parent, the, the
“ Group ”) in respect of the
Services for a period commencing on the date of this Agreement and
continuing until termination of this Agreement in accordance with
Section 7 below (the “ Consulting Period
”).
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1.2
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Experience
. The Consultant
represents that it (including Gilboa) has the capability, know-how,
expertise and experience necessary to perform the Services. The
Consultant, through Gilboa, will devote sufficient time and efforts
to performing the Services under this Agreement, as may be required
to accomplish the duties described below.
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1.3
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No
Conflicts . The Consultant represents that the
performance of the Services or any other duties and obligations of
the Consultant hereunder do not and will not conflict with, or
breach, any prior agreement, contract, patent disclosure agreement,
non-competition agreement, any restrictive covenant relating to the
involvement whatsoever of each of the Consultant and Gilboa with
the Company or any other instrument to which the Consultant or
Gilboa are a party or by which they are bound. Consultant shall
immediately and without delay inform the Company’s Chairman
of the Board of Directors (the “
Board ”) of
any affairs and/or matters that might constitute a conflict of
interest with the provision of Services. Consultant will inform the
Company of any other potential conflict of interests with its
business at the relevant time.
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1.4
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Reliance
. Consultant
understands that the Company is relying on the representations made
by Consultant in this Section 1 in making its decision to
enter into this Agreement.
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2
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Services .
The Consultant
agrees and undertakes to provide the Services exclusively through
Gilboa. During the Consulting Period, Consultant, solely through
Gilboa, shall provide services functionally equivalent to the
position of an interim CEO of the Group, as may reasonably be
requested by the Board (the “ Services ”). The Consultant
shall provide at least [80] hours of Services per month. The
Consultant undertakes to perform its duties and obligations under
this Agreement with the highest degree of professionalism. The
Consultant shall devote his know-how, expertise, talent, experience
and best efforts to the performance of the Services, and shall act
to promote the Group’s business and affairs, and performs and
discharges the Services faithfully, with devotion, honesty and
fidelity. The parties agree that during the consulting period
neither the Consultant nor Gilboa shall engage in any business or
professional activity, other than current activities of the
Consultant and/or Gilboa as disclosed to the Board by the
Consultant prior to th adate hereof, unless: (i) the
Consultant provided the Company with a prior written notice and
acquired the consent of the Board to such additional activity; and
(ii) such additional activity does not breach this Agreement,
its Annexes or any other agreement between the Company and the
Consultant and/or Gilboa, including, without limitation, the
provisions of Exhibit A . The Consultant shall
report to, and provide its services under the direction of, the
Company’s Board. Gilboa shall use the title of ‘Chief
Executive Officer’ on all business related materials and
interactions with individuals and entities during the course of his
Services.
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3
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Legal Relationship; Independent
Contractor . The parties hereto acknowledge
that the legal relation between the Company and Consultant’s
employees, including Gilboa (the " Employees ”), is limited
in the manner expressly provided herein. Notwithstanding anything
contained herein to the contrary, the parties hereto acknowledge
and agree that neither shall be deemed to be an employee, partner
or a joint venturer of the other. Without limiting the foregoing,
the Consultant shall be solely responsible for all its federal,
state and local income taxes, unemployment insurance tax, social
security tax and cell-phone related taxes. Both parties agree to
the following:
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3.1
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The Consultant (including its
Employees) is an independent contractor, not an employee of the
Company or any other member of the Group. The Company shall not be
responsible for the Consultant or its Employees’ acts while
performing the Services hereunder, whether on the Company’s
premises or elsewhere. By signing this Agreement, the Consultant
acknowledges and agrees that as a Consultant to the Company neither
the Consultant nor it’s Employees’ are entitled to
receive from the Company or any other member of the Group any
social benefits (including without limitation, paid vacation days,
paid sick leave, severance payments, pension funds,
etc.).
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3.2
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Gilboa was offered by the Company
the option to be engaged by the Company as its employee, in
consideration for salary and other benefits (including, without
limitation paid vacation days, paid sick leave, severance payments,
managers’ insurance, recreation pay and advanced notice
fees), such that the total cost to the Company of such employment
will be equal to the Fees. Gilboa declined such offer and demanded
from the Company that no employer-employee relations be established
between himself and the Company, and that the Consultant provides
the Services, at his own initiative and free will and based on the
Gilboa’s and Consultant’s sole
considerations.
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3.3
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Each of the Company and the
Consultant (including any of its Employees) is estopped from making
any claim regarding the existence of employer-employee relations
between the Consultant’s Employees and the Company or any
other member of the Group.
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3.4
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If, despite the parties’
express representations and agreements hereunder, it shall, at any
time, be determined by a court of competent jurisdiction or by any
other governmental authority, that employer-employee relations
exist between the Company (or any other member of the Group) and
the Consultant’s Employees and, the Consultant’s
Employees shall become entitled to any rights and/or payments
resulting from the existence of such relations, and/or the Company
(or any other member of the Group) shall be required to bear any
additional expenses or costs (specifically including any taxes or
obligatory payments to the tax authorities, the National Insurance
authorities, etc.), the parties agree and undertake that the
aggregated “salary” to which the Consultant’s
Employees are entitled for their services as an such deemed
employee of the Company hereunder shall be equal to 60% of the Fees
(together, the “Compensation”), and the Consultant
undertakes in such event to immediately repay and return to the
Company any amounts in excess of said Compensation received by its
employee from the Company. The Consultant further undertakes to
indemnify the Company for any loss, payment, expense or damage
caused to the Company (or any other member of the Group) as a
result of such determination
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4
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Compensation
. In consideration
for the Services, the Consultant shall be entitled to a monthly fee
of NIS34,105, plus VAT, against an
invoice furnished by it to the Company (the “Monthly
Consideration”). In recognition of its efforts and
contribution to the Group, through Gilboa, the Consultant shall be
entitled to receive the Monthly Consideration retroactively from
January 1, 2009 (the “Effective Date”).
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5
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Additional Benefits
. The Company shall
bear up to 50% of all fixed and variable maintenance costs of
the cellular phone used by the Consultant.
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6
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Confidentiality and
Assignment .
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6.1
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Consultant and each of its
Employees providing the Services shall execute the Proprietary
Information and Confidentiality Agreement, in the form attached
hereto as Exhibit A
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6.2
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Consultant acknowledges that the
Parent Company is a publicly traded company and as such Consultant
and each of its Employees providing the Services shall abide by all
applicable laws in connection therewith, including relating to
insider trading and the like.
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7.1
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Either party may terminate this
Agreement at any time, and for any reason or for no reason, upon
45 days prior written notice to the other
party.
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7.2
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This Agreement may be terminated
immediately by the Company in the event of:
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7.2.1
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Breach by the Consultant of any
material provision of this Agreement which is not curable or is not
cured by the Consultant within 7 days after its receipt of
notice thereof from the Company containing a description of the
breach or breaches alleged to have oc
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