EXHIBIT 10.9.1
AMENDMENT NO. 2 TO
SERVICE AGREEMENT
CardioDynamics International Corporation (the "Company") and Rivertek Medical
Systems, Inc. ("Rivertek") entered into a Service Agreement dated as of July 1,
1995 which was amended on July 25, 1997 (the "Agreement"). This Amendment No. 2
further amends the Agreement. Xxxxxx X. Xxxx ("Xxxx") is also a party to this
Amendment No. 2. Capitalized terms not otherwise defined herein shall have the
meanings given in the Agreement.
1. As part of the Services, Rivertek shall make Xxxx available to provide
engineering and management services including on-site hours through October 16,
2001 (extendable upon agreement of all parties) to accomplish certain
Engineering and Product Development objectives.
2. Xxxx shall be a Company officer with the title of Chief Technology Officer
and with the powers and duties of such officer position. The Company shall
provide coverage for Xxxx under its directors and officers liability insurance
policy. The Company shall indemnify Xxxx against claims as it would any other
Company officer.
3. Xxxx shall provide all services as a Rivertek Employee, and shall for all
purposes not be, and shall not be treated as being, a Company employee. He
shall receive no Company fringe benefits. Payments with respect to his hours
worked shall be to Rivertek (which shall be solely responsible for cash
compensation to Xxxx as its employee, and for all tax withholding on Rivertek's
cash compensation to Xxxx).
4. To avoid conflict of interest, Xxxx shall not be responsible, within the
Company, for awarding work to or approving payment to Rivertek. These functions
shall be handled by the Company's Chief Executive Officer.
5. The hourly rate payable by the Company to Rivertek for Xxxx'x time for the
duration of the special arrangement contemplated by this Amendment No. 2 shall
be Rivertek's rate for Xxxx'x time on Rivertek's standard hourly rate list.
Although the average rate list may be changed quarterly, in no event will Xxxx'x
full list rate exceed the average rate Rivertek then actually charges other
Rivertek clients for Xxxx'x time. Xxxx'x travel time is billable to the Company
unless he works for other Rivertek clients while traveling.
6. To further incentivize Xxxx, the Company shall on October 16, 1998 xxxxx
Xxxx a nonqualified stock option under the Company's 1995 Stock Option/Stock
Issuance Plan to purchase 90,000 shares of Company Common Stock at an exercise
price equal to that day's fair market value of the Company Common Stock. The
Option shall expire on the earlier of October 16, 2008, or 90 days after
successful completion of contracted service to the Company. The Option shall
vest in a series of successive equal annual installments over each of the first
three (3) years of service completed by the Optionee commencing October 16,
1998. Vesting shall continue unless, in the Company's opinion, Optionee
declines to accept substantially all fair and reasonable services requested by
CDIC, does not perform satisfactorily, does not comply with Company's security
requirements or other applicable rules and regulations, or if the Company, for
other good cause relating to the performance of services by Xxxx, terminates
this Service Agreement between the Company and Rivertek Medical Systems, Inc.
7. Xxxx shall enter into a Company Consulting Services Agreement, which
contains proprietary-information and intellectual-property-assignment provisions
consistent with those applicable to Rivertek in the Agreement.
8. Rivertek's agreement in Section 8.10 of the Agreement shall expire no
sooner than nine months after the end of Xxxx'x tenure as Chief Technology
Officer. Such agreement shall also apply to Xxxx, as if he were Rivertek, from
now until nine months after the end of Xxxx'x tenure as Chief Technology
Officer.
9. The parties agree that Xxxx shall benefit from and be bound by Article
VIII of the Agreement, with respect to this Agreement No. 1. Xxxx'x address for
notice is c/o Rivertek.
10. Except as expressly set forth herein, the Agreement remains unchanged and
in full force and effect.
Dated: October 16, 1998
CARDIODYNAMICS INTERNATIONAL
CORPORATION
/s/ Xxxxxxx X. Xxxxx
By: ________________________________
Xxxxxxx X. Xxxxx
Chief Executive Officer
RIVERTEK MEDICAL SYSTEMS, INC.
/s/ Xxxxxx X. Xxxx
By: ________________________________
Xxxxxx X. Xxxx
Managing Director
