Exhibit 10.1
BUSINESS CONSULTING AGREEMENT
Made and entered this 3rd day of March, 1998
Between:
CSTI HI-TEC, LTD., a company incorporated
under the laws of the State of Israel,
0 Xxxxxxx xxxxxx, Xxxxxxxx,
Xxxxxxxxxx Xxxx Xxxxxxxxx, Xxxxxx
(Hereinafter: The "Company")
ON ONE PART;
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and:
Xxxxx Xxxxx,
00 Xxxxxxxx Xxxxxx,
Xxxxxx Xx Xxxx, Xxxxxx
(Hereinafter: The "Business Consultant")
ON THE SECOND PART;
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WHEREAS, the Company is in a start up and development phase and
requires significant business consulting, advice, and expertise;
WHEREAS, the Business Consultant has significant experience in the
areas of business development that will be of benefit to the Company in
completing its plans and goals;
WHEREAS, the Company therefore desires to retain the Business
Consultant to assist the Company in providing those business consulting services
and advice relating to the development of the business and operations of the
Company, both domestically in Israel and internationally, including services
relating to the areas of Business Strategy, Marketing, Sales, Personnel, Finance
(including establishing banking relationships and lines of credit particularly
in Israel and In Europe), and other such services that may be requested by the
Company from time to time (Hereinafter: "Services");
WHEREAS the Business Consultant has agreed to provide the Services to
the Company on the terms and conditions set forth in this Agreement.
NOW THEREFORE in consideration of the premises and mutual agreements
and covenants hereinafter set forth, the parties hereto agree as follows:
ARTICLE 1
1 BUSINESS CONSULTANT'S AGREEMENT
SECTION 1.1 APPOINTMENT OF BUSINESS CONSULTANT. The Company
hereby appoints the Business Consultant to perform the Services for the benefit
of the Company and the Company hereby authorizes the Business Consultant to
exercise such powers as provided under this Agreement. The Business Consultant
accepts such appointment on the terms and conditions herein set forth and agrees
to provide the Services.
SECTION 1.2 PERFORMANCE OF AGREEMENT. During the term of this
Agreement, the Business Consultant shall devote sufficient time, attention, and
ability to the business of the Company, and to any affiliate or successor
company, as is reasonably necessary for the proper performance of the Services
pursuant to this Agreement. Nothing contained herein shall be deemed to require
the Business Consultant to devote his exclusive time, attention and ability to
the business of the Company. During the term of this Agreement, the Business
Consultant shall, and shall cause each of his agents assigned to performance of
the Services on behalf of the Business Consultant, to:
a. at all times perform the Services faithfully,
diligently, to the best of his abilities and in the best interests of the
Company;
b. devote such of his time, labor and attention to the
business of the Company as is necessary for the proper performance of the
Services hereunder, and;
c. refrain from acting in any manner contrary to the best
interests of the Company or contrary to the duties of the Business Consultant as
contemplated herein.
SECTION 1.3 AUTHORITY OF BUSINESS CONSULTANT. The Business
Consultant shall have no right or authority, express or implied, to commit or
otherwise obligate the Company in any manner whatsoever except to the extent
specifically provided herein or specifically authorized in writing by the
Company.
SECTION 1.4 INDEPENDENT BUSINESS CONSULTANT. In performing the
Services, the Business Consultant shall be an independent contractor and not an
employee or agent of the Company, except that the Business Consultant shall be
the agent of the Company solely in circumstances where the Business Consultant
must be the agent to carry out his obligations as set forth in this Agreement.
Nothing in this Agreement shall be deemed to require the Business Consultant to
provide the Services exclusively to the Company and the Business Consultant
hereby acknowledges that the Company is not required and shall not be required
to make any remittances and payments required of employers under Israel law on
the Business Consultant's behalf and the Business Consultant or any of his
agents shall not be entitled to the fringe benefits required by Israel law and
provided by the Company to its employees.
ARTICLE 2
COMPANY'S AGREEMENTS
SECTION 2.1 COMPENSATION OF BUSINESS CONSULTANT. As a result of the
present inability of the Company, as a start up venture, to pay a cash fee for
the Services to be provided by the Business Consultant, the Company shall, in
lieu of a cash fee, to compensate the Business Consultant by means of granting
equity in the Company or any successor thereto. The Company agrees to issue to
the Business Consultant 4% of its Ordinary Shares (or those of any successor
company), on a fully diluted basis, upon the earlier of the occurrence of any of
the following events ("Events") during the Term of this Agreement: (a) the
Company achieving Gross Revenues of a minimum of $15,000,000, as certified by
the company auditor in accordance with general accepted accounting principles;
(b) the Company achieving Net Earnings of a minimum of $1,500,000, as certified
by the company auditor in accordance with general accepted accounting
principles; (c) an acquisition of the Company by another corporation or entity
by consolidation, merger or other reorganization in a transaction valued in
excess of $20,000,000; (d) the sale, lease or other disposition of all or
substantially all of the assets of the Company; (e) the Company completing a
public offering of its Ordinary Shares, in Israel or elsewhere, at a valuation
in excess of $20,000,000. The Business Consultant, shall not be entitled to any
cash compensation from the Company or any successor thereto if the Events
referred to in this Section 2.1 do not occur during the Term of the Agreement.
ARTICLE 3
TERM
SECTION 3.1 EFFECTIVE DATE. This Agreement shall become effective
on March 3, 1998 (the "Effective Date"), and shall continue for a period of five
(5) years from the Effective Date or until Terminated pursuant to the terms of
this Agreement ("Term").
SECTION 3.2 TERMINATION. This Agreement may be terminated by
either party by giving the other thirty (30) days written notice of such
termination; provided however that this Agreement may be immediately terminated
by the Company if the Business Consultant is in breach of any material term of
this Agreement. In such case, if the Events referred to in Section 2.1 hereof
shall not have as yet occurred, the Business Consultant shall not be entitled to
receive the Compensation set forth therein.
SECTION 3.3 DUTIES UPON TERMINATION. Upon termination of this
Agreement for any reason, the Business Consultant shall promptly deliver, in
accordance with the instructions of the Company, all documents pertaining to the
Company or this Agreement, including but not limited to, all books of account,
correspondence and contracts.
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ARTICLE 4
CONFIDENTIALITY
SECTION 4.1 CONFIDENTIALITY The Business Consultant shall not,
except as authorized or required by his duties, reveal or divulge to any person
or companies any of the trade secrets, secret or confidential operations,
processes or dealings or any information concerning the organization, business,
finances, transactions or other affairs of the Company, which may come to his
knowledge during the term of this Agreement and shall keep in complete secrecy
all confidential information entrusted to him and shall not use or attempt to
use any such information in any manner which may injure or cause loss, either
directly or indirectly, to the Company's business or may be likely so to do.
This restriction shall continue to apply after the termination of this Agreement
without limit in point of time but shall cease to apply to information or
knowledge, which may come into the public domain.
The Business Consultant shall comply, and shall cause his agents
to comply, with such directions, as the Company shall make to ensure the
safeguarding or confidentiality of all such information. The Company may require
that any agent of the Business Consultant execute an agreement with the Company
regarding the confidentiality of all such information.
SECTION 4.2 OTHER ACTIVITIES. The Business Consultant shall not be
precluded from acting in a function similar to that contemplated under this
Agreement for any other person, firm or company.
ARTICLE 5
MISCELLANEOUS
SECTION 5.1 WAIVER; CONSENTS. No consent, approval or waiver,
express or implied, by either party hereto, to or of any breach of default by
the other party in the performance by the other party of its obligations
hereunder shall be deemed or construed to be a consent or waiver to or of any
other breach or default in the performance by such other party of the same or
any other obligations of such other party or to declare the other party in
default, irrespective of how long such failure continues, shall not constitute a
general waiver by such party of its rights under this Agreement, and the
granting of any consent or approval in any one instance by or on behalf of the
Company shall not be construed to waiver or limit the need for such consent in
any other or subsequent instance.
SECTION 5.2 Governing Law; Jurisdiction. This Agreement and all
matters arising thereunder shall be governed by the laws of the State of Israel
applicable therein without giving effect to the rules respecting conflict of
law, and the parties hereby irrevocably submit to the exclusive Jurisdiction of
the courts in Tel Aviv District, Israel in respect of any dispute or matter
arising out of, or in connection with, this Agreement.
SECTION 5.3 BINDING EFFECT; ASSIGNMENT; This Agreement and all of
its provisions, rights and obligation shall be binding and shall inure to the
benefit of the parties hereto and their respective successors, heirs and legal
representatives. This Agreement may not be assigned by any party except with the
written consent of the other party hereto provided however that any benefit and
Compensation provided herein may be assigned without the consent of the other
party hereto.
SECTION 5.4 ENTIRE AGREEMENT AND MODIFICATION. This Agreement
constitutes the entire agreement between the parties hereto and supersedes all
prior agreements and undertakings, whether oral or written, relative to the
subject matter hereof. To be effective any modification of this Agreement must
be in writing and signed by the party to be charged thereby.
SECTION 5.5 SEVERABILITY. If any provision of this Agreement for
any reason shall be held to be illegal, invalid or unenforceable, such
illegality shall not affect any other provision of this Agreement, but this
Agreement shall be construed as if such illegal, invalid or unenforceable
provision had never been included therein.
SECTION 5.6 HEADINGS. The headings of the Sections and Articles of
this Agreement are inserted for convenience of reference only and shall not in
any manner affect the construction or meaning of anything herein contained or
govern the rights or liabilities of the parties hereto.
SECTION 5.7 NOTICES. All notices, requests and communications
required or permitted hereunder shall be in writing and shall be sufficiently
given and deemed to have been received upon personal delivery or, if mailed,
upon the first to occur of actual receipt or seventy two (72) hours after being
placed in the mail, registered mail, sent from a Post Office Branch within the
state of Israel, respectively addressed to the Company or the Business
Consultant as follows:
The Company: CSTI Hi-Tec, Ltd.................The Business Xxxxx Xxxxx
0 Xxxxxxx xxxxxx Consultant: 00 Xxxxxxxx xxxxxx
Xxx Xxxxxxxx, Rishon Lezion,
Industrial Park Israel
Jerusalem, Israel
Attention: Xxxxx Xxxxxxxxxx,
Chairman of the Board,
Chief Executive Officer
or such other address as may be specified in writing to the other party, but
notice of a change of address shall be effective only upon the actual receipt.
SECTION 5.8 FURTHER ASSURANCES. The parties hereto agree from time
to time after the execution hereof to make, do, execute or cause or permit to be
made, done or executed all such further and other lawful acts, deeds, things,
devices and assurances in law whatsoever as may be required to carry out the
true intention and to give full force and effect to this Agreement.
SECTION 5.9 COUNTERPARTS. This Agreement may be executed in
several counter-parts, each of which will be deemed to be an original and all of
which will together constitute one and the same instrument.
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SECTION 5.10 THIRD PARTIES. Except as specifically set forth or
referred to herein, nothing herein expressed or implied is intended or shall be
construed to confer upon or give to any person other than the parties hereto and
their permitted successors or assigns, any rights or remedies under or by reason
of this Agreement.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the day and year first above written.
CSTI HI-TEC, LTD. Xxxxx Xxxxx
By: /S/ XXXXX XXXXXXXXXX /S/ XXXXX XXXXX
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The Business Consultant
Chairman of the Board,
hief Executive Officer
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