Exhibit 10.16


 


TENON MEDICAL, INC.


 


CONSULTING AGREEMENT


 


This Consulting Agreement (the “Agreement”)
is entered into on May 7, 2021 (the “Effective Date”) by and between Tenon Medical, Inc. (the “Company”)
and Richard Ferrari, an individual with an address at 19575 Three Oaks Way, Saratoga, CA 95070 (“Consultant”).
Company and Consultant are sometimes individually referred to as the “Party” and collectively as the “Parties.”


 


WHEREAS, Company desires to retain Consultant
as an independent contractor to perform consulting services for the Company and Consultant is willing to provide such services;


 


NOW THEREFORE, in consideration of the mutual
covenants and promises set forth below and for good and valuable consideration, sufficiency of which is acknowledged, the Parties
agree as follows:


 


1.           Consulting
Relationship. During the term of this agreement, Consultant will provide consulting services (the “Services”)
to the Company as described on Exhibit A attached to this Agreement. Consultant shall use Consultant’s best efforts
to perform the Services in a professional manner and in accordance with the degree of skill, care and diligence normally exercised
by recognized professional person or firms that supply services of similar nature.


 


2.           Fees.
As consideration for the Services to be provided by Consultant and other obligations, the Company will compensate Consultant
as described in Exhibit A to this Agreement. The Parties acknowledge and agree that the compensation set forth in Exhibit
A represents the fair market value of the Services provided by Consultant to the Company negotiated in an arms-length transaction.
As additional consideration for the Services, the Company will provide Consultant with such support facilities and space as may
be required in the Company’s judgment to enable Consultant to properly perform the Services.


 


3.           Expenses.
Consultant shall not be authorized to incur on behalf of the Company any expenses, without the prior written consent of the
Company’s President or the supervisor designated in Section 6 below. As a condition of receipt of reimbursement, Consultant
shall be required to submit to the Company reasonable evidence that the amount involved was expended and related to Services provided
under this Agreement.


 


4.           Term
and Termination. The term of this Agreement shall be for a period of three years from the Effective Date of this Agreement,
and may be renewed by mutual agreement of the parties; provided, however, that this Agreement may be terminated by either party,
with or without cause, upon written notice.


 


5.           Independent
Contractor. Consultant’s relationship with the Company will be that of an independent contractor and not that of
an employee or agent. Consultant will not be eligible for any employee benefits, nor will the Company make deductions from payments
made indemnify and hold the Company harmless from any liability for, or assessment of, any such taxes imposed on the Company by
relevant taxing authorities. Consultant will have no authority to enter into contracts that bind the Company or create any obligations
on the part of the Company without the prior written authorization of the Company.


 




    	 	 	 



     


    

  


6.           Supervision
of Consultant’s Services. All services to be performed by Consultant, including but not limited to the Services,
will be as agreed between Consultant and a supervisor designated by the Company, who initially shall be Rich Ferrari. Consultant
will be required to report to such supervisor concerning the Services performed under this Agreement. The nature and frequency
of these reports will be left to the discretion of the supervisor.


 


7.           Consulting
or Other Services for Competitors. Consultant represents and warrants that Consultant will not, during the term of this
Agreement, perform any consulting or other services for any company, person or entity whose business or proposed business in any
way involves products or services which could reasonably be determined to be competitive with the products or services or proposed
products or services of the Company. Areas considered to be competitive with the Company are those involving sacroiliac joint fusion.


 


8.           Confidential
Information.


 


a)          As
used in this Agreement, the term “Confidential Information” means information pertaining to any aspects of the
Company’s business which is either information not in the public domain or is proprietary information of the Company or its
customers or suppliers, whether of a technical nature or otherwise, the disclosure of which would cause material injury to the
Company and impair its good will and competitive position. Confidential Information includes, without limitation, information regarding
existing or contemplated Company products, processes, techniques, or know-how, or any information or data developed pursuant to
the performance of the Services.


 


b)          Consultant
recognizes and acknowledges that in the course of providing the Services under this Agreement, Consultant may acquire Confidential
Information. Consultant also recognizes that the Company has received and in the future will receive from third parties their
confidential or proprietary information subject to a duty on the Company’s part to maintain the confidentiality of such
information and to use it only for certain limited purposes. Consultant agrees to hold in confidence and not directly or indirectly
use or disclose, either during or after termination of consulting relationship with the Company, any Confidential Information
of the Company or the above-mentioned third parties obtained or created during the period of consulting relationship, except to
the extent authorized by the Company. In the event that Consultant is an entity or otherwise will be causing individuals in its
employ or under its supervision to participate in the rendering of the Services, Consultant warrants that it shall cause each
of such individuals to execute a nondisclosure agreement containing provisions substantially similar to the confidentiality obligations
of this Agreement.


 


c)          The
obligations set forth in this Section 8 shall not apply to any Confidential Information which: (1) is in or becomes part of the
public domain by means other than Consultant’s breach of Consultant’s obligations under this Agreement; (2) was already
known to Consultant at the time of disclosure by the Company as evidenced by written records of Consultant at the time of disclosure
by the Company as evidenced by written records of Consultant; (3) has been rightfully received by Consultant from a third party
who is authorized to make such disclosure. Nothing in this Agreement shall be read to limit any obligation of confidentiality Consultant
may have had by virtue of Consultant’s previous relationship or confidentiality agreements with the Company.


 




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d)          Upon
termination of consulting relationship or upon an earlier request of the Company, Consultant shall promptly return or deliver to
the Company all tangible forms of such Confidential Information that Consultant may have in possession, including but not limited
to drawings, specifications, documents, records, devices, models or any other material and copies or reproductions thereof.


 


9.           Ownership
of Intellectual Property.


 


a)          As
used in this Agreement, the term “Inventions” means designs, drawings, formulae, processes, manufacturing techniques,
trade secrets, discoveries, inventions, improvements, developments, ideas or copyrightable works, including all rights to obtain,
register, perfect and enforce these proprietary interests.


 


b)          Without
further compensation, Consultant agrees promptly to disclose to the Company, and hereby assigns and agrees to assign to the Company
or its designee, Consultant’s entire right, title, and interest in and to all Inventions which Consultant may, solely or
in collaboration with others, conceive, make, develop or reduce to practice during the period of this Agreement and in connection
with or during the performance of any Services under this Agreement, whether or not during working hours. Any copyrightable work,
whether published or unpublished, created by Consultant in connection with or during the performance of any Services, shall be
deemed “works made for hire” as that term is defined in the United States Copyright Act, and all right, title
and interest therein, including without limitation, worldwide copyrights, shall be the property of the Company as the party specially
commissioning such work. In the event that any such copyrightable work or portion thereof shall not be legally qualified as a work
made for hire, or shall subsequently be so held to not be a work made for hire, Consultant agrees to assign, and does hereby so
assign to the Company, Consultant’s entire right, title and interest in and to such work or portion thereof, including, but
not limited to, the worldwide rights to reproduce the copyrighted work, to prepare derivative works based on the copyrighted work,
to distribute copies of the copyrighted work, to perform and to display the copyrighted work publicly, and to register the claim
of copyright therein.


 


c)          Consultant
agrees to perform, during and after termination of this Agreement, all acts deemed necessary or desirable by the Company to permit
and assist it, at Company’s expense, in obtaining and enforcing the full benefits, enjoyment, rights and title throughout
the world in the Inventions assigned to the Company as set forth in this Section 9 above. Such acts may include, but are not limited
to, execution of documents, assignments, provision of all necessary information, records, materials or testimony, and assistance
or cooperation in legal proceedings. Company shall bear all costs of such actions as may be reasonably incurred by Consultant.
All obligations of this Section 9 shall survive termination of this Agreement. Consultant hereby irrevocably designates the Company
and its duly authorized officers and agents as Consultant’s agent and attorney in fact, to execute and file on Consultant’s
behalf any such applications and to do all other lawful acts to further the prosecution and issuance of patents, copyright and
mask work registrations related to such Inventions. This power of attorney shall not be affected by any subsequent incapacity of
Consultant.


 




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d)          Section
2870. This Agreement does not apply to an Invention which qualifies fully under the provisions of Section 2870 of the Labor
Code, a copy of which is attached hereto as Exhibit B. Consultant agrees to disclose promptly any and all Inventions that
may reasonably be subject to this Section 9 in confidence to the Company to permit a determination as to whether or not the Inventions
should be the property of the Company.


 


10.         Conflicts
with this Agreement.


 


a)          Consultant
represents and warrants that Consultant shall at all times during the term of this Agreement act in the best interest of the Company
and take no action or engage in any activity which is or might be detrimental to the interest of the Company. Consultant further
represents and warrants that neither Consultant nor any of Consultant’s partners, employees or agents is under any pre-existing
obligation in conflict or in any way inconsistent with the provisions of this Agreement, and Consultant is not a party to any other
agreement which will interfere with Consultant’s full compliance with this Agreement. Consultant agrees not to enter into
any written or oral agreement or obligation that conflict with any of the provisions of this Agreement.


 


b)          Consultant
represents and warrants that Consultant’s performance of all the terms of this Agreement and as a consultant to the Company
do not and will not breach any agreement to keep in confidence proprietary information, knowledge or data acquired by Consultant
in confidence or in trust prior to becoming a consultant of the Company, and Consultant will not disclose to the Company, or induce
the Company to use, any confidential or proprietary information or material belonging to any previous employer or others. Consultant
further represents and warrants that Consultant has the right to disclose or use all ideas, processes, techniques and other information,
if any, which Consultant has gained from third parties, and which Consultant discloses to the Company in the course of performance
of this Agreement, without liability to such third parties. Consultant represents and warrants that Consultant has not granted
any rights or licenses to any intellectual property or technology that would conflict with Consultant’s obligations under
this Agreement. Consultant will not knowingly infringe upon any copyright, patent, trade secret or other property right of any
former client, employer or third party in the performance of the services required by this Agreement.


 


11.         Solicitation
of Employees, Consultants and Other Parties. Consultant agrees that during the term of this Agreement, and for a period
of 6 months following the termination of the Agreement for any reason, Consultant shall not directly or indirectly solicit, induce,
recruit or encourage any of the Company’s employees or consultants to terminate their relationship with the Company, or attempt
any of the foregoing, either for Consultant or any other person or entity.


 




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12.         Miscellaneous.


 


(a)          Amendments
and Waivers. Any term of this Agreement may be amended or waived only with the prior written consent of the Parties.


 


(b)          Sole
Agreement. This Agreement, including the Exhibits hereto, constitutes the sole agreement of the Parties and supersedes
all oral negotiations and prior writings with respect to the subject matter hereof.


 


(c)          Notices.
Any notice required or permitted by this Agreement shallbe in


writing and shall be deemed sufficient upon receipt,
when delivered personally or by courier, overnight delivery service or confirmed facsimile, or forty-eight (48) hours after being
deposited in the regular mail as certified or registered mail (airmail if sent internationally) with postage prepaid, if such notice
is addressed to the party to be notified at such party’s address or facsimile number as set forth below, or as subsequently
modified by written notice.


 


(d)          Choice
of Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the
State of California, without giving effect to the principles of conflict of laws.


 


(e)          Severability.
If one or more provisions of this Agreement are held to be unenforceable under applicable law, the parties agree to renegotiate
such provision in good faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such
provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance of the Agreement shall be interpreted
as if such provision were so excluded and (iii) the balance of the Agreement shall be enforceable in accordance with its terms.


 


(f)          Counterparts.
This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together will constitute
one and the same instrument.


 


(g)          Assignment.
Neither this Agreement nor any right hereunder or interest herein may be assigned or transferred by Consultant without the express
written consent of the Company.


 


(h)          Arbitration.
Any dispute or claim arising out of or in connection with any provision of this Agreement, excluding Sections 8, 9 and 10 hereof,
will be finally settled by binding arbitration in San Jose, California in accordance with the rules of the American Arbitration
Association by one arbitrator appointed in accordance with said rules. The arbitrator shall apply California law, without reference
to rules of conflicts of law or rules of statutory arbitration, to the resolution of any dispute. Judgment on the award rendered
by the arbitrator may be entered in any court having jurisdiction thereof. Notwithstanding the foregoing, Consultant agrees that
it would be impossible or inadequate to measure and calculate the Company’s damages from any breach of the covenants set
forth in Sections 8-10, therefore the Company may apply to any court of competent jurisdiction for preliminary or interim equitable
relief, for example, injunction restraining such breach or threatened breach, or specific performance of any such provision.


 




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(i)          Advice
of Counsel. EACH PARTY ACKNOWLEDGES THAT, IN EXECUTING THIS AGREEMENT, SUCH PARTY HAS HAD THE OPPORTUNITY TO SEEK THE ADVICE
OF INDEPENDENT LEGAL COUNSEL, AND HAS READ AND UNDERSTOOD ALL OF THE TERMS AND PROVISIONS OF THIS AGREEMENT. THIS AGREEMENT SHALL
NOT BE CONSTRUED AGAINST ANY PARTY BY REASON OF THE DRAFTING OR PREPARATION HEREOF.


 


[Signature Page Follows]


 




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IN WITNESS WHEREOF, The Parties have executed
this Agreement as of the Effective Date of this Agreement.


 


	 	TENON MEDICAL, INC.
	 	 
	 	/s/ Steve Van Dick
	 	By: Steve Van Dick
	 	Title: Chief Financial Officer
	 	 
	 	CONSULTANT
	 	 
	 	/s/ Richard Ferrari
	 	Name: Richard Ferrari
	 	Address: 19575 Three Oaks Way, Saratoga,
	 	CA 95070
	 	Email: rich@denovovc.com
	 	Phone: 408-712-3313


 


SIGNATURE PAGE TO TENON MEDICAL, INC, CONSULTING
AGREEMENT


 




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EXHIBIT A


 


DESCRIPTION OF CONSULTING SERVICES AND
COMPENSATION


 


		a)	Consultant’s duties under this Agreement shall be to assume the role of Executive Chairman of Tenon Medical.



 


		b)	For Services rendered by Consultant under this Agreement, the Company will pay Richard Ferrari $22,500 a month starting on
the first month following and initial public offering. The company will also pay a success payment of $350,000 upon the completion
of an initial public offering where the market cap of the company exceeds $50 million either at the time of the IPO or anytime
thereafter. If there is no IPO the success payment will be earned upon a subsequent round of equity financing.



 




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EXHIBIT B


 


Section 2870 of the California Labor Code
is as follows:


 


“(a)          Any
provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights
in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time
without using the employer’s equipment, supplies, facilities, or trade secret information except for those inventions that
either:


 


(1)         Relate
at the time of conception or reduction to practice of the invention to the employer’s business, or actual or demonstrably
anticipated research or development of the employer.


 


(2)         Result
from any work performed by the employee for the employer.


 


(b)          To
the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from
being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable.”


 




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