CONSULTING
AGREEMENT
THIS CONSULTING AGREEMENT (“
Agreement ”) is made on July 21, 2009 by and between
Cardio Vascular Medical Device Corp, a company incorporated under
the laws of the State of Delaware, U.S.A. (the " Company ")
and N.D.Raz Business and Project Development Ltd., a company formed
under the laws of Israel, located at Neot
Golf Cesarea ,Cesarea, Israel (hereinafter "N.D. Raz") and
Mr. Yossi Raz, I.D. 005512355, residing at Neot Golf Caesarea
(hereinafter “ Mr. Raz ”). N.D
Raz and Mr. Raz are jointly and severally liable and are
hereinafter jointly and severally referred to as
“Consultant”.
WITNESSETH
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the Company is
in the business of utilizing existing and new technologies;
and
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the Company is
negotiating Exclusive Marketing Agreement with Elgressy Engineering
Services (1987) Ltd. (hereinafter: the " Exclusive Marketing
Agreement "); and
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Subject to the
execution of the Exclusive Marketing Agreement the Company desires
to engage the services of the Consultant and the Consultant desires
to provide such consulting services to the Company as a
nonexclusive independent contractor on such matters within the
experience and expertise of the Consultant, under the terms and
conditions contained herein; and
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the Consultant
is ready, qualified, willing and able to carry out his obligations
and undertakings towards the Company pursuant hereto;
and
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the parties
hereto wish to regulate their relationship in accordance with the
terms and conditions set forth under this Agreement, which will
commence upon the entering into effect of the Exclusive Marketing
Agreement (the: " Effective Date ");
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NOW, THEREFORE,
in consideration of the foregoing premises, representations,
warranties, covenants and agreements herein contained, and
intending to be legally bound hereby, the parties do hereby
mutually agree as follows:
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Commencing on
the Effective Date, the Consultant shall provide the Company with
managing services, business development services and marketing
services, subject to the specifications set forth by the Company as
may be amended by the Company from time to time and other
appropriate duties and responsibilities as required and delegated
to him from time to time by the CEO or by the Company Board of
Directors (the: “ Consulting Services ").
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The Consultant
shall perform his obligations hereunder solely and exclusively
through Mr. Raz and may not use any other persons or entities to
perform the duties under this Agreement without prior written
approval of the Company.
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The Consultant
shall report to the CEO and to the Board of Directors of the
Company with respect to all matters relating to the Consulting
Services.
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The Consultant
will provide the Consulting Services as directed and instructed by
the CEO or by the Company Board of Directors in accordance with
Company’s needs.
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The Consultant
shall devote his full business time, attention, best efforts and
ability to the performance of the Consulting Services. While
rendering the Consulting Services to the Company, the Consultant
will not engage in any other gainful employment, business or
activity without the written consent of the Company, including
serving as a board member of private or public
companies.
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Notwithstanding
the above mentioned in Section 1.5, the Company acknowledges and
approves hereby that the Consultant serves as a consultant to
International Power Group, and as a partner in Drinking Water Wells
contract with the government of Israel for the next 15 years. The
Company's approval is based on the Consultant's declaration that
the scope of these services is limited and shall not exceed 40
hours per month cumulative and no more than 20% of Mr.
Raz business time and on the Consultant's obligation
that these services shall not in any way interfere with the
Consulting Services provided by him to the Company under this
Agreement and shall not cause any conflict of interest with the
Company current or future activities or with the execution and
promotion of the Exclusive Marketing Agreement .
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During the
first six months of Consulting Services the Consultant shall
provide the Company's CEO and Board of Directors with a written
outline of his planned events for each following month, at least 7
days prior to the beginning of the month, in order to allow both
parties to plan the Consultant's activities for each month.
Following the first six months of Consulting Services the
Consultant shall provide the Company's CEO and Board of Directors
with a quarterly written outline of his planned events for each
following quarter.
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In addition the
Consultant will report to the Company's CEO and Board of Directors
the result of the Consulting Services on a monthly basis and as may
be requested by the Company from time to time.
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In carrying out
the Consulting Services the Consultant shall not use or disclose to
the Company any proprietary or confidential information belonging
to any third party unless he has first received a written approval
of that third party and present it to the Company.
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Representations and
warranties
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The Consultant
represents and warrants that he has the requisite knowledge, skills
and experience for providing the Consulting Services. The
Consultant undertakes to perform his duties and obligations under
this Agreement with the highest degree of professionalism and to
the full satisfaction of the Company. The Consultant further
undertakes to comply with all the Company’s internal
procedures and regulations.
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The Consultant
represents and warrants that he has no outstanding agreement or
obligation that is in conflict with any of the provisions of this
Agreement or the performance thereof, or that would preclude the
Consultant from complying with the provisions hereof, or that would
create a conflict of interests with the provisions hereof,
including his engagement with International Power Group, and with
the government of Israel and further represents and warrants that
he will not enter into any such conflicting agreement or obligation
during the term of this Agreement.
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The Consultant
represents and warrants that he has received all required
authorizations and consent (if needed) from the International Power
Group and from the Israeli government, with respect to the
Consulting Services provided by him to the Company under this
Agreement.
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The Consultant
shall inform the Company, immediately upon becoming aware, of every
matter in which he or his immediate family has a personal interest
and which might give rise to a conflict of interest with his duties
under the terms of this Agreement.
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In carrying out
his duties under this Agreement, the Consultant shall not make any
representations or give any guarantees on behalf of the Company,
except as the Consultant is authorized to do so by the Company
Board of Directors .
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The Consultant
shall not receive any payment and/or benefit from any third party,
directly or indirectly in connection with his engagement by the
Company. In the event the Consultant breaches this Sub-section,
without derogating from any of the Company’s rights by law or
contract, such benefit or payment shall become the sole property of
the Company and the Company may set-off such amount from any sums
due to the Consultant.
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The Consultant
undertakes to use the Company’s equipment and facilities only
for the purpose of the Consulting Services. The Consultant
acknowledges that the Company is permitted to have access to any
files and transmissions stored or held in the Company’s
computers and that such content is owned by the Company.
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Subject to the
fulfillment of the Consultant's tasks and obligations under this
Agreement, the Company shall pay the Consultant a monthly fee of
USD 10,000 (the “Monthly Retainer”).
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The Consultant
may take up to 28 days off per year of service, without reduction
in the Monthly Retainer. The days off will include all types of
absence excluding Jewish Holidays. The Monthly Retainer will be
reduced if the Consultant takes more than 28 days off. The
Consultant will not be entitled to accumulate the unused balance of
the days off or to redeem the days off.
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12 months
following the Effective Date the Consultant will be eligible to
receive in addition to the Monthly Retainer an annual success bonus
if the Company through the Consultant reaches the total aggregate
sales under the “Short Marketing Plan” of the Exclusive
Marketing Agreement (the: " Short Marketing Plan ") of
US$1,900,000 as determined under the Company's annual
financial reports as approved by the Company’s Board of
Directors and the Company’s accountant. (the:
“Company's Annual Financial Reports”) The annual
success bonus will be 7% of the Company net profits from the
Exclusive Marketing Agreement income up to a maximum bonus
of 150,000$. (the: “Annual Success
Bonus”).
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The
Annual Success Bonus for the following years of service
will determined by the Company each year according to
the same principles under sections 3.2(a), 3.2(c) and according to
the fulfillment of the required 75% sales targets under
the "Five Year Marketing Plan" of the Exclusive Marketing Agreement
(the: " Five Year Marketing Plan ").
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The Annual
Success Bonus will be paid out of the Company net profits 30 days
following the approval of the Company's Annual Financial
Reports.
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In the event
that six months following the Effective Date, the Consultant closed
deals and sales, in the aggregate value of at least 700,000$ and
install 4 pilots (2 in the USA and 2 in hotels) , the
Consultant will be paid a monthly advance payment of 2,500 USD on
account of the first year Annual Success Bonus
which will be offset from any amount of Annual Success
Bonus to which the Consultant may be entitled to.
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In the event
that twelve months following the Effective Date the Company through
the Consultant reaches the total sales under the Short Marketing
Plan of US$1,900,000 as determined under the Company's
Annual Financial Reports, the Consultant will be paid a monthly
advance payment of 5000 USD on account of the second year Annual
Success Bonus which will be offset from any amount of Annual
Success Bonus to which the Consultant may be entitled to. This
advance payment will cease if the semi-annual sales results
indicate that the annual sales target under the Exclusive Marketing
Agreement will not be reached.
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Upon execution
of the Exclusive Marketing Agreement and following the Effective
Date, the Consultant shall receive a one time signing bonus in the
amount of 6,300 US dollar for his efforts in
connection with the execution of the Exclusive Marketing
Agreement.
The Company
shall reimburse the Consultant for all reasonable business expenses
actually incurred by Consultant directly in performing the
Consulting Services, within an advance approved budget, and subject
to an itemized account of such expenses substantiated by
appropriate receipts, all in accordance with the Company’s
policy from time to time.
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All Payments to
the Consultant shall be made in US dollar, and shall be wired to
N.D. Raz bank account.
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All payments
shall be made against proper invoices in accordance with an
applicable law and shall include V.A.T., if required by law, which
shall be added to the amounts set forth above.
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The Consultant
is aware that the consideration set forth in this Section 3
constitutes the Company’s whole obligation towards the
Consultant and he shall not be entitled to any other remuneration
or payment whatsoever.
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Mr. Raz will be
granted options to purchase 5,000,000 shares of common stock of the
Company at an exercise price per share equal to the par value of
the shares which is 0.05 USD [the “Options”]. The
Options will be granted in accordance with Section 3(i) of the
Israeli Tax Ordinance and will be subject to the following
terms:
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12 months of
service following the Effective Date if the Company through the
Consultant reaches the total sales under the Short Marketing Plan
of US$1,900,000 as determined under the Company's annual
financial reports, 1,250,000 out of the 5,000,000 shares granted
will be vested and exercisable.
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The remainder
75% of the Options (3,750,000 of the Options) will vest annually
over a period of 3 years, so that at the end of each year,
1,250,000 of the Options will become fully vested and exercisable,
subject to Consultant's continuing to provide the Consulting
Services to the Company through such dates and subject to the
validity of the Exclusive Marketing Agreement, and the Company's
achievement through the Consultant 75% of the Sales Targets set for
each year as determined under the Five Year Marketing
Plan.
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In the event
that the Company does not succeed in maintaining its exclusive
marketing rights for any territory or for any field under the
Exclusive Marketing Agreement, for each lost territory or for each
lost field 1,250,000 out of the Options whether vested or not shall
ipso facto terminate and Mr. Raz or the Consultant shall
have no further rights with respect to such Options, including,
without limitation, to purchase the shares subject
thereto.
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In the event
that the Consultant ceases to be a service provider for any reason
other than termination for Justifiable Cause (as defined
below ), the outstanding vested Options on the date of such
termination of engagement shall be exercisable for 6 months after
the date of such termination following which any unexercised Option
(whether vested or not) shall expire immediately.
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Notwithstanding
the above, if the Consultant ceases to be a service provider for
Justifiable Cause (as defined below), the entire unexercised
Options (whether vested or not) shall ipso facto terminate
and Mr. Raz or the Consultant shall have no further rights with
respect to such Options, including, without limitation, to purchase
the shares subject thereto.
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In the event
the Company decides to terminate the engagement with the Consultant
for reasons unrelated to the Company's achievement of the Sales
Targets determined under the Five Year Marketing Plan and not for
Justifiable Cause (as defined below), the Consultant will be
entitled, in addition to the Options which have already vested by
this date in accordance with the vesting schedule outlined above,
to 50% of the Options which have not yet vested upon the date of
the termination of engagement. These vested Options granted to the
Consultant shall be exercisable during 6 months, following which,
any unexercised Option (whether vested or not) shall expire
immediately. To prevent any doubt Mr. Raz or the Consultant shall
have no rights for any of the unvested Options on termination if
the Company did not reach the any of the sales targets under the
Exclusive Marketing Agreement or the Consultant did
not reach any of the sales targets under the Annual
Success Bonus herein or the semi annual targets as described herein
under section 3.2 (d).
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Any
tax consequences including V.A.T arising from the grant
or exercise of any Option, from the payment for shares covered
thereby, from the sale or disposition of such Shares or from any
other event or act (of Mr. Raz or the Company),
shal
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