Document:

Exhibit
10.7

 

HARBOR

HILLS

PARTNERS

 

June 27, 2006

 

Yacov Geva

Chairman

Life Watch Holding Corporation

1351 Abbott Court #A

Buffalo Grove, IL 60089

 

Dear Yacov,

 

Further to our meetings
in Chicago last May 9 and 10, we are pleased to confirm the terms of our
engagement as financial advisor to Life Watch Holding Corporation (“Life Watch”
or the “Company”) in connection with its proposed restructuring (the “Restructuring”)
and the sale of its equity securities in an underwritten public offering
pursuant to a registration statement on Form S-1 under the Securities Act of
1933, as amended (the “IPO”).

 

Scope of
the Advisory Assignment

 

Subject to the terms and
conditions of this agreement (the “Agreement”), we will assist the Company in
implementing the Action Plan detailed in that certain confidential document
dated May 2006 and titled “Project Heartbeat – Unlocking Shareholder Value” in
connection with the proposed Restructuring and IPO of the Company.

 

In particular we will
assist the Company in:

 

a.                         Restructuring
the Company and/or its affiliates in a manner consistent with its stated
objectives

b.                        Preparing
the Company for the proposed IPO including without limitation reviewing the
Company’s and/or its affiliates’ financial condition, operations, competitive environment,
prospects and related matters

c.                         Selecting
and retaining the lead underwriter for the IPO

d.                        Any other
matters related to the stated objectives as maybe reasonably necessary to
accomplish the foregoing objectives

 

In performing our
services we will be coordinating a team of Life Watch and its affiliates’
officers specifically assigned to this project (codenamed Project Heartbeat).

 

Harbor Hills Partners, LLC

909 Third Avenue, 26th Floor, New York, N.Y. 10022

Phone (212) 609-2550  Fax (212) 207-8427

 

 

HARBOR

HILLS

PARTNERS

 

Compensation

 

The Professional Fees
payable to HHP by the Company for the aforementioned services shall be:

 

a.                         A monthly
retainer fee of $10,000, payable monthly in advance, starting on June 1, 2006

b.                        Upon the
successful completion of the IPO, HHP shall receive 1% of any gross proceeds of
the IPO prior to the deduction of the underwriting discounts and commissions or
any other expenses up to $50,000,000 and 0.75% of any gross proceeds of the IPO
prior to the deduction of the underwriting discounts and commissions or any
other expenses in excess of $50,000,000 (the “Success Fee”).

 

In addition to our
Professional Fees, the Company will reimburse us for all reasonable
out-of-pocket expenses incurred by us in connection with this engagement. We
agree that such expenses will be incurred in accordance with Company policies
and we will receive advance approval of all expenses.

 

All fees and expenses
payable hereunder are nonrefundable.

 

Term

 

This agreement will be
effective as of May 12, 2006 (the “Effective Date”) and will expire on June 30,
2007. Our services hereunder may be earlier terminated with or without cause by
you or with cause by us at any time and without cause by us on 90 days advance
written notice, in each case without liability or continuing obligation to you
or to us (except for any expenses incurred by us to the date of termination);
provided that the provisions of the sections Information and Confidentiality
and Indemnity below shall survive any termination or expiration of this
agreement. Cause shall be defined as the breach of this Agreement, willful
misconduct, gross negligence, or a material violation of any applicable law by
the non-terminating party.

 

No Success Fee shall be
payable by the Company unless this Agreement is in effect at the time the IPO
is consummated, provided however, that a Success Fee shall be due if (i) this
Agreement expires or is terminated without cause by the Company; (ii) the IPO
is consummated within one year of the date of such expiration or termination;
and (iii) the

 

 

Harbor Hills Partners, LLC

909 Third Avenue, 26th Floor, New York, N.Y. 10022

Phone (212) 609-2550  Fax (212) 207-8427

 

 

HARBOR

HILLS

PARTNERS

 

IPO is consummated with
(a) the underwriters which are acting as book runners or co-managers at the
time of such termination or expiration or (b) any other underwriters with whom
the Company had physical meetings during the term of this Agreement.

 

Information and
Confidentiality

 

The Company will furnish
HHP with such information regarding the business and financial condition of the
Company and/or its affiliates as is reasonably requested and will provide
reasonable access to its and its affiliates’ employees and directors. HHP
acknowledges that, in connection with the services to be provided pursuant to
this Agreement, certain confidential, non-public and proprietary information
concerning the Company (“Confidential Information”) has been or may be
disclosed to HHP or its employees, attorneys and advisors (collectively, “Representatives”).
HHP agrees that no Confidential Information will be disclosed, in whole or in
part, to any other person (other than to any potential party to a transaction
approved by the Company under appropriate written assurances of
confidentiality, to those Representatives who need access to any Confidential
Information for purposes of performing the services to be provided hereunder,
or as may be required by legal process), without the Company’s prior consent.
The term “Confidential Information” does not include any information: (a) that
was already in HHP’s possession, or that was available to HHP on a
non-confidential basis, prior to the time of disclosure by the Company to HHP,
in each case, as can be demonstrated by written documentation; (b) obtained by
HHP from a third person which, insofar as is known to HHP, is not subject to
any prohibition against disclosure; or (c) which is or becomes generally
available to the public through no fault of HHP or any of its Representatives.
HHP shall be liable to the Company if any of its Representatives disclose any
Confidential Information in breach of the foregoing provisions. If HHP is
required by any applicable law or regulation, or by any order by any court or
other governmental and regulatory agencies to disclose any Confidential
Information, prompt notice thereof shall be given to the Company, and HHP
agrees to provide only such information as is so required. Without prejudice to
any other rights or remedies the Company may have, HHP acknowledges and agrees
that money damages would not be an adequate remedy for any breach of these
provisions (it being understood that in no event shall HHP be responsible for
any special, indirect or consequential damages), and that the Company shall be
entitled to an injunction, specific performance and other equitable relief for
any threatened or actual breach hereof. HHP’s obligations under this Section
shall remain in effect for a period of two years after the termination of this
Agreement.

 

 

Harbor Hills Partners, LLC

909 Third Avenue, 26th Floor, New York, N.Y. 10022

Phone (212) 609-2550  Fax (212) 207-8427

 

 

HARBOR

HILLS

PARTNERS

 

Indemnification

 

The Company agrees (i) to
indemnify and hold harmless HHP and its affiliates, and the respective
directors, officers, agents, and employees of HHP and its affiliates (HHP and
each such entity or person being referred to as an “Indemnified Person”), from
and against any losses, claims, demands, damages or liabilities of any kind
(collectively, “Liabilities”) relating to or arising out of activities
performed or services furnished pursuant to the Agreement, and (ii) to
reimburse each Indemnified Person for all reasonable expenses (including
reasonable fees and disbursements of counsel) incurred by such Indemnified
Person in connection with investigating, preparing or defending any
investigative, administrative, judicial or regulatory action or proceeding in
any jurisdiction related to or arising out of such activities, whether or not
in connection with pending or threatened litigation to which any Indemnified
Person is a party, in each case as such expenses are incurred or paid. The
Company will not, however, be responsible for any such Liabilities or expenses
to the extent that they are finally judicially determined to have resulted
primarily from HHP’s bad faith, gross negligence, willful misconduct, or
material breach of this Agreement. The Company also agrees that no Indemnified
Person shall have any liability (whether direct or indirect, in contract, tort
or otherwise) to the Company or any of its security holders or creditors for or
in connection with this Agreement or HHP’s role or services in connection
therewith, except to the extent that any such Liabilities or expenses incurred
by the Company are finally judicially determined to have resulted primarily
from HHP’s bad faith, gross negligence, willful misconduct or material breach
of this agreement. In no event shall the Company be responsible for any
special, indirect or consequential damages.

 

Miscellaneous

 

This agreement may not be
assigned by the Company or HHP without the prior written consent of the other.
This agreement constitutes the entire understanding of the parties with respect
to the subject matter thereof and supersedes all prior agreements with respect
thereto.

 

Each party represents and
warrants to each other party that such party has the full legal right, power
and authority to execute and deliver this Agreement. Each party hereto
represents and warrants as to such party that this Agreement has been duly
executed and constitutes a valid and binding obligation of such party
enforceable in accordance with its terms. Each party represents and warrants to
each other party that no governmental or other third party consents,
authorizations, filings or approvals are required (other than any already given
or obtained) for the due execution, delivery and performance of this Agreement
by such party.

 

 

Harbor Hills Partners, LLC

909 Third Avenue, 26th Floor, New York, N.Y. 10022

Phone (212) 609-2550  Fax (212) 207-8427

 

 

HARBOR

HILLS

PARTNERS

 

This Agreement shall be
binding upon the parties hereto and their respective successors and permitted
assigns. Nothing in this Agreement, express or implied, however, is intended to
confer or does confer on any person or entity, other than the parties hereto
and their respective successors and permitted assigns and, to the extent
expressly set forth in the Indemnification section, any rights or remedies
under or by reason of this Agreement or as a result of the services to be rendered
by HHP hereunder.

 

The invalidity or
unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement, which
shall remain in full force and effect pursuant to the terms hereof.

 

This Agreement may not be
amended, and no portion hereof may be waived, except in a writing duly executed
by the parties.

 

It is understood that HHP
has no authority to bind the Company or its affiliates to any transaction. The
structure and other terms of any transaction must be approved by the Company
and/or its stockholders in its or their sole and absolute discretion, and the
Company shall be under no obligation to HHP to enter into any transaction
contemplated hereby. HHP understands that the Company and its stockholders may
at any time, and at its or their sole and absolute discretion, refuse to
discuss or negotiate any transaction with any party for any reason or for no
reason, and may in its or their sole and absolute discretion terminate or
suspend any negotiations with any party at any time.

 

THIS AGREEMENT SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO SUCH STATE’S
RULES CONCERNING CONFLICTS OF LAWS. EACH OF HHP AND THE COMPANY (ON ITS OWN
BEHALF AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ON BEHALF OF ITS EQUITY
HOLDERS) WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) RELATED TO OR
ARISING OUT OF THE ENGAGEMENT OF HHP.

 

 

Harbor Hills Partners, LLC

909 Third Avenue, 26th Floor, New York, N.Y. 10022

Phone (212) 609-2550  Fax (212) 207-8427

 

 

HARBOR

HILLS

PARTNERS

 

If this letter accurately
reflects the terms of our agreement, please sign the two enclosed copies and
forward one to us via courier.

 

Sincerely,

 

 

	
  /s/ Victor
  Josebachvili

  	
   

  
	
  Victor
  Josebachvili

  
	
  Managing Partner

  

 

 

Accepted and agreed

Life Watch Holding
Corporation

 

 

	
  /s/ Jacob Geva

  	
   

  
	
  Name:   Jacob Geva

  
	
  Title:

  
	
   

  
	
  Date:     28/6/2006

  

 

 

Harbor Hills
Partners, LLC

909 Third Avenue, 26th Floor, New York, N.Y. 10022

Phone (212) 609-2550  Fax (212) 207-8427Exhibit 10.8

 

DISTRIBUTION AGREEMENT

 

Dated: September 7, 1999

 

This DISTRIBUTION
AGREEMENT (“Agreement”) is made as of the date set forth above by and between
the following parties:

 

	
  Manufacturer:

  	
   

  	
   

  	
  CARD GUARD SCIENTIFIC SURVIVAL LTD.

  2 Pekeris St.

  Rehovot

  ISRAEL

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  and

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Distributor:

  	
   

  	
   

  	
  CARD GUARD USA, INC./CORDIGITAL

  TELEMEDICINE SOLUTIONS

  333 North Main Street #201

  Stillwater, MN 55082

  USA

  

 

and covers the
distribution and marketing of the “Products” and sublicensing the operation of
the “Monitoring Centers” as set forth in Annex A attached hereto in the “Territory”
described on Annex B attached hereto.

 

In consideration
of the mutual covenants set forth below, the parties hereby agree as follows:

 

1.                        Appointment

 

Manufacturer
hereby appoints Distributor, and Distributor hereby accepts such appointment,
in the Territory and on the terms and conditions provided in this Agreement, as
Manufacturer’s (a) exclusive distributor for the resale of Products and (b)
exclusive sublicense of the rights to operate the Monitoring Centers.

 

Nothing is this
Agreement shall be construed to grant Distributor any right or license to
manufacture, modify, duplicate or otherwise copy or reproduce any of the
Products, in and outside the Territory, and nothing in this Agreement shall be
construed to grant Distributor any title, right or interest, whether express or
implied, in any product or any technology other than the Products, except as
specifically stated in this Agreement.

 

2.                        Term

 

Unless sooner
terminated as expressly provided elsewhere herein, the initial term of this
Agreement (the “Term”) shall commence on the date first written above and
continue

 

 

through December 31,
2004, and shall be automatically renewed for renewal terms of one (1) year each
commencing on January 1, 2005, and on January 1 of each succeeding year
thereafter.

 

3.                        Orders

 

All products will
be purchased from Manufacturer according to its standard terms and conditions
of sale, as stated on the sale acknowledgment form attached as Annex C
hereto. All orders by Distributor will include purchase price delivery
schedule, destination and payment terms and shall be subject to acceptance by
Manufacturer. Orders may be placed via facsimile telephone transmission. All
orders shall be delivered F.O.B. Manufacturer’s factory in Israel and shall be
shipped at Distributor’s expense, and title and risk of loss shall pass to
Distributor upon Manufacturer’s delivery of Product(s) to the carrier.

 

4.                        Prices
and Payment

 

The prices charged
by Manufacturer to Distributor shall be those stated in Annex D attached
hereto, as such may be amended from time to time; provided, that
Distributor expressly acknowledges that Manufacturer reserves the right to
change such prices (other than with respect to accepted orders) once each
calendar year to reflect changes in direct costs of manufacturing. Manufacturer
shall provide Distributor with written notice of any price increase within
sixty (60) days after the end of each calendar year. All prices quoted in this
Agreement or any other related agreements, invoices, purchase orders, or other
documentation are F.O.B. Manufacturer’s factory in Israel, and are exclusive of
any governmental taxes (including, without limitation, sales, use, withholding
and value added taxes) or duties imposed by an governmental agency (including,
without limitation, any export, import or purchase duties), such taxes and
duties to be born by Distributor. When Manufacturer has the legal obligation to
collect and/or pay such taxes, they shall be added to Distributor’s invoice,
unless Distributor provides Manufacturer with a valid tax exemption
certificate.

 

5.                        Inspection
and Acceptance

 

Distributor shall
have the right to inspect any Product(s) delivered. Distributor shall either
accept or reject Product(s) within sixty (60) days after receiving such
Product(s). At Distributor’s option, Distributor may return non-conforming
Product(s) or deliverables to Manufacturer, freight prepaid, in accordance with
the procedures of Manufacturer’s Merchandising and Quality System Policy
described in Annex E hereto. Manufacturer shall have the right to
provide substitute Products for any Products determined (by inspection) not to
be in compliance, and, if Manufacturer is unable to provide substitute
Products, Distributor shall be entitled to a set off of the cost of the
rejected goods against any amounts otherwise due from Distributor to
Manufacturer hereunder.

 

6.                        Intellectual
Property

 

a.         Intellectual Property
License. Manufacturer hereby grants to Distributor a non-exclusive license
to use all patent rights, trademarks, copyrights and other intellectual and
industrial property rights, including without limitation trade dress and other
materials

 

2

 

incorporated into the
design or packaging of the Products, owned or held by Manufacturer
(collectively, the “Intangibles”) in the Territory for the sole purpose of
Distributor’s performance of its duties hereunder and in accordance with
Manufacturer’s policies as in effect from time to time; provided, that in no
event shall Distributor: (i) use the Intangibles for any purpose except as
specifically permitted hereby; (ii) use the Intangibles in connection with any
product or service of Distributor (Other than the Products) or any other
person, firm or entity; (iii) use the Intangibles as a mark (including
trademark), logo or company name, corporate or otherwise; (iv) seek to register
any of the Intangibles to any other person in or out of the Territory; (vi)
reverse engineer, disassemble, decompile, or otherwise attempt to derive source
code from the Intangibles; or (vii) attempt to copy and/or use any of the
Intangibles for any other purpose.

 

b.         Rights Upon
Termination. All rights to use Intangibles shall cease upon termination or
expiration of this Agreement, and all signs, advertising and promotional
material bearing any of the Intangibles shall be removed from public display
and destroyed (or, if requested by Manufacturer, returned to it) within 10 days
after any such termination or expiration.

 

c.         Effect of License.
The license granted to Distributor hereby is not intended, and shall not be
deemed, to confer upon or create in Distributor any property rights with
respect to any of the Intangibles. Distributor will only use the Intangibles as
provided herein or as specifically directed by Manufacturer in writing, and
Distributor will not, at any time, contest or object to the existence,
ownership or validity of any of the Intangibles.

 

7.                        Confidentiality

 

Each party agrees
to hold in strict confidence any confidential and/or proprietary information
concerning the other party (the “Disclosing Party”) or its business that it
receives from the other party (the “Receiving Party”), or to which it gains
access to as a result of the execution or performance of this agreement,
including, without limitation, information (technical or other) concerning any
of the Products, their operation, the business of any of the parties and any
information concerning clients and client lists (the “Confidential Information”).
Each party agrees not to use Confidential Information for any purpose other
than those described in this Agreement. Each party agrees to treat any
Confidential Information with at least the degree of care it treats its own
Confidential Information, and to refrain from disclosing any Confidential
Information to any employee except where such disclosures are necessary for the
performance of that party’s obligations under this Agreement. Notwithstanding
the above, Confidential Information shall not include information which the
Disclosing party can document: (1) at the time of execution of this Agreement,
was in the public domain, or entered the public domain later through no breach
of this provision; (2) was already known to the Receiving Party prior to
receipt of such information from the Disclosing Party; or (3) was developed
independently the Receiving Party, without the use of the Disclosing party’s
Confidential Information.

 

8.                        Termination

 

Distributor’s
appointment as exclusive distributor of the Products as sublicensee of rights
to operate the Monitoring Centers may be terminated as follows:

 

3

 

a.         Termination For Cause. Either party shall have the right, in its discretion and
in addition to any other rights and remedies in law, equity or under this
Agreement, to terminate this Agreement immediately upon written notice to the
other party, if any of the following events occurs: (1) a material breach or
failure to perform any of the duties and obligations under this Agreement and
failure to cure such breach or failure within 30 days after written notice
thereof from the other party which describes the alleged breach in reasonable
detail is received; (2) if the other party (i) files or has filed against it
any proceeding in bankruptcy or insolvency, or (ii) makes a general assignment
for the benefit of its creditors; or (3) a party commits any act of fraud,
dishonesty, unethical conduct or similar gross misconduct injurious to the
business interests of the other party.

 

b.         Termination Based Upon
Performance. Subject to the terms and conditions of this subparagraph 8.b,
Manufacturer shall have the right, but not the obligation, to terminate this
Agreement if Distributor fails to accomplish minimum sales and revenue quotas
(the “Quotas”). The Quotas shall be established on a calendar year basis and
shall be subject to the mutual, written agreement of the parties. If the
parties fail to reach mutual agreement on the Quotas, then Manufacturer shall
have no termination rights under this subparagraph 8.b. Manufacturer shall
provide Distributor with written notice of whether Distributor has accomplished
the Quotas (the “Quota Notice”) within thirty (30) days after the end of each
year. If Manufacturer fails to provide Distributor with a timely Quota Notice,
then Manufacturer shall have no termination rights under this subparagraph 8.b.
for the year related to such notice. If Distributor fails to accomplish the
Quotas, then Manufacturer may terminate this Agreement by providing Distributor
with written notice of termination based upon performance (the “Termination
Notice”) within thirty (30) days after Distributor’s receipt of the Quota
Notice. The Termination Notice shall provide for at least ninety (90) days
advance notice of the effective date of termination of this Agreement, and this
Agreement shall terminate upon the expiration of such notice period, unless,
during such ninety (90) day period, Distributor makes additional purchases of
Products in an amount equal to the Quota deficiency.

 

c.         Obligations After
Termination. Subsequent to the termination of this Agreement, Distributor
shall continue to provide service and Manufacturer shall continue to provide
replacements parts for all Products sold prior to such termination, until the
third anniversary of such termination, unless Manufacturer transfers such
rights and obligations to another Distributor in the Territory and notifies
Distributor of such action, in writing.

 

9.                        Licenses
and Approvals

 

Distributor represents
and warrants to Manufacturer that Distributor has obtained all licenses,
permits, certificates, approvals or other documentation (“Licenses and
Approvals”) necessary to permit it to perform its duties hereunder, whether
domestic or foreign (such term to include such Licenses and Approvals required
by any country including, but not limited to, Israel) and is duly
qualified to transact business in any jurisdiction where such qualification is
required (“Qualifications”). Distributor further represents and warrants that
its performance of this Agreement will not violate any applicable statute,
regulation, order, writ, injunction, decree

 

4

 

or law, or any agreement,
instrument or writing by which Distributor or any of its assets are found or
affected.

 

10.                 No Agency or
Partnership

 

Distributor may
hold itself out to the public as an “Authorized Distributor” of Manufacturer’s
Products, but Distributor is and shall act solely as an independent contractor
operating and performing its obligations hereunder, and nothing herein is
intended to, or shall be deemed to, make either arty an agent, legal
representative, joint venturer, partner, employee or servant of the other for
any purpose whatsoever.

 

11.                 Audit Reports

 

Distributor shall,
through its authorized representatives, have the right to inspect the books and
records of Manufacturer related to (a) increases in Manufacturer’s direct costs
that result in a price increase under Paragraph 4 and (b) accomplishment of the
Quotas described in subparagraph 8(b) once during each calendar year at any
time reasonably requested by Distributor.

 

12.                 Disputes

 

a. Choice of
Law. This Agreement shall be governed by, interpreted according to, and
enforced in accordance with, the laws of the State of Israel, without giving
effect to such State’s principles governing conflicts of laws and excluding any
(otherwise) applicable international rules or conventions.

 

b. Choice of
Forum. The courts of the State of Israel, in the Tel Aviv-Jaffa district
shall have exclusive jurisdiction over the parties (and the subject matter) in
connection with any action or proceeding arising out of or relating to this
Agreement or any document or instrument delivered pursuant to or in connection
with this Agreement. The parties designate such forum as their sole choice and
no other forum shall be qualified to conduct any hering concerning or resolve
such disputes.

 

13.                 Warranties

 

MANUFACTURER’S
PRODUCTS ARE DISTRIBUTED AND LICENSED IN ACCORDANCE WITH THE PUBLISHED
DOCUMENTATION. ALL WARRANTIES, EITHER EXPRESSED ORIMPLIED, EXCEPT AS EXPRESSLY
STATED HEREIN ARE DISCLAIMED AS TO THE PRODUCTS AND THEIR QUALITY, PERFORMANCE,
MERCHANTABILITY OR FITNESS FOR ANY BUSINESS OR PARTICULARPURPOSE. IN NO EVENT
WILL MANUFACTURER BE LIABLE FOR DIRECT OR INDIRECT, INCIDENT OR CONSEQUENTIAL
DAMAGES OR LOSS OR PROFIT RESULTING FROM ANY DEFECT IN THE PRODUCTS OR
NEGLIGENCE ON THE PART OF MANUFACTURER. MANUFACTURER WARRANTIES THE PRODUCTS TO
BE FREE OF DESIGN, MANUFACTURE, MATERIAL AND WORKMANSHIP DEFECTS UNDER NORMAL
USE FOR 24

 

5

 

MONTHS
FROM THE DATE OF SHIPMENT FROM ISRAEL. THIS WARRANTY SHALL NOT APPLY TO
PRODUCTS WHICH HAVE BEEN ALTERED, IMPROPERLY STORED, TRANSPORTED OR MAINTAINED
OR PUT TO A USE TO WHICH THEY WERE NOT INTENDED.

 

14.                 Force Majeure

 

Neither party
shall be held responsible for any delay or failure in performance of any part
of this Agreement or any order, to the extent such delay or failure is caused
by fire, flood, explosion, war, strike, embargo, new and unexpected government
intervention(s), civil or military authority, act of God, or other similar
causes beyond its control and without the fault or negligence of the delayed or
nonperforming party (“Force Majeure”).

 

15.                 Miscellaneous

 

a.         Entire Agreement.
This Agreement (together with purchase orders, invoices, terms of sale, etc.
Relating to sales of the products to Distributor) sets forth the entire
agreement between the parties, and supersedes any prior written or oral
arrangements or understandings. This Agreement may not be amended, modified or
terminated in any respect except in a written document signed by both parties.

 

b.         Severability. If
any of the provisions of this Agreement shall be invalid or unenforceable, such
invalidity or unenforcability shall not invalidate or render unenforceable the
entire Agreement, but rather the entire Agreement shall be construed as if not
containing the particular invalid or unenforceable provision or provisions, and
the rights and obligations of the parties shall be construed and enforced
accordingly.

 

c.         Parties Benefited.
This Agreement will bind and inure to the benefit of each party hereto and its
respective successors and permitted assigns, except that Distributor will not
assign any of its rights or delegate any of its duties and obligations
hereunder without Manufacturer’s prior written consent.

 

d.         Counterparts. This
agreement may be executed in two or more counterparts which together shall
constitute the same instrument.

 

 

[END
OF TEXT]

 

6

 

[EXECUTION
PAGE]

 

 

IN WITNESS
WHEREOF, the undersigned have caused this Agreement to be executed as of the
date first set forth above.

 

	
  Manufacturer:

  	
   

  	
  CARD GUARD SCIENTIFIC SURVIVAL LTD

  
	
   

  	
   

  	
   

  
	
   

  	
  

  	
   

  	
  By: 

  	
  

  /s/ Illegible

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
   

  	
  Title: C.E.O

  

 

 

	
  Distributor:

  	
   

  	
  CARD GUARD USA, INC./

  
	
   

  	
   

  	
  CORDIGITAL TELEMEDICINE SOLUTIONS

  
	
   

  	
   

  	
   

  
	
   

  	
  

  	
   

  	
  By: 

  	
  

  /s/ Bruce E Rollie

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name: BRUCE ROLLIE

  
	
   

  	
   

  	
   

  	
   

  	
  Title: PRESIDENT

  

 

 

Annexes

 

A                        List of
products and Description of the Product

B                          Territory

C                          Form of
Sales Acknowledgment

D                         Manufacturer
Prices

E                           Manufacturer’s
Merchandising and Quality System Policy

 

7

 

ANNEX A

 

 

To DISTRIBUTION
AGREEMENT WITH CARD GUARD SCIENTIFIC SURVIVAL
LTD. dated September 7, 1999

 

 

List
of products and Description of the Product

 

 

Attached Card Guard
Product Catalogs

 

8

 

ANNEX B

 

 

To DISTRIBUTION
AGREEMENT WITH CARD GUARD SCIENTIFIC SURVIVAL
LTD. dated September 7, 1999

 

 

Territory

 

 

USA and Canada

 

9

 

ANNEX C

 

 

To DISTRIBUTION
AGREEMENT WITH CARD GUARD SCIENTIFIC SURVIVAL
LTD. dated September 7, 1999

 

 

Form
of Sales Acknowledgment

 

 

Signed Card Guard Order
Confirmation Form

 

10

 

ANNEX D

 

 

To DISTRIBUTION
AGREEMENT WITH CARD GUARD SCIENTIFIC SURVIVAL
LTD. dated September 7, 1999

 

Manufacturer
Prices

 

Part I

List of Products

 

 

	
  Cardiology/Pulmonology

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CG-303

  	
   

  	
  A personal trans-telephonic portable spirometer.

  	
   

  	
  $

  	
  260

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CG-2206

  	
   

  	
  A personal 1-lead ECG transmitter that stores up to
  6 events in its memory.

  	
   

  	
  $

  	
  220

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CG-4000

  	
   

  	
  A personal pacemaker data transmitter.

  	
   

  	
  $

  	
  63

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CG-6106

  	
   

  	
  A personal 1-lead ECG loop recorder that stores up
  to 6 events in its memory.

  	
   

  	
  $

  	
  270

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CG-6106

  	
   

  	
  A personal 1-lead ECG loop recorder that stores up
  to 6 events in its memory.

  	
   

  	
  $

  	
  270

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CG-7100

  	
   

  	
  A personal 12-lead ECG transmitter with memory.

  	
   

  	
  $

  	
  335

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CG-7000D

  	
   

  	
  A portable 12-lead ECG with memory for a physician’s
  use.

  	
   

  	
  $

  	
  740

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CG-3100

  	
   

  	
  Telephone Adapter, Receiver

  	
   

  	
  $

  	
  450

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CG-6106

  	
   

  	
  Wires

  	
   

  	
  $

  	
  6

  	
   

  

 

and replacement parts
therefor

 

11

 

ANNEX E

 

 

To DISTRIBUTION
AGREEMENT WITH CARD GUARD SCIENTIFIC SURVIVAL
LTD. dated September 7, 1999

 

 

Manufacturer’s
Merchandising and Quality System Policy

 

 

Card
Guard seeks to be the world leader in the field of
Telemedicine. This goal will be achieved by implementing the following
principles:

 

Card
Guard hold the Quality of products and services to be of the
highest importance in all its activities. The company’s commitment to Quality
starts with top management and extends throughout the entire employee staff.

 

Card
Guard will place customer’s satisfaction as its first
priority and will ensure that the products and services it supplies conform to
the customer and regulatory requirements.

 

Card
Guard will focus on the prevention of defects and on
continuous improvement of its products, processes and services. This will be
achieved by working in cooperation with customers and suppliers.

 

Card
Guard will develop its human resources, will invest in the
improvement of knowledge and skills of workers and managers and will motivate
them towards excellence in their performance.

 

Card
Guard will operate its Quality System in conformance with the
ISO 9002 and EN 46002 standards, as this is the Royal Way to fulfill our
commitment to Quality.

 

I undertake the
responsibility to provide the resources, guidance and leadership needed to
ensure that this Quality Policy is applied in the company’s daily activities.

 

 

Jacob Geva 

President & ECO

 

12

 

AMENDMENT TO AGREEMENT

 

Dated: As of November 30, 2006

 

This AMENDMENT TO
AGREEMENT (“Amendment”) is made as of the date set forth above by and
between the following parties, and amends that Distribution Agreement (the “Distribution
Agreement”), dated September 7, 1999, between Card Guard Scientific
Survival Ltd. and Card Guard USA, Inc. (which assigned its rights to Card Guard
Technologies, Inc. effective March 31, 2001).

 

 

	
  Manufacturer:

  	
  CARD GUARD SCIENTIFIC SURVIVAL LTD.

  2 PEKERIS ST. RABIN SCIENCE PARK

  REHOVOT 76100

  ISRAEL

  FAX: (972) 8.948.4044

  ATTN: CHAIRMAN

  
	
   

  	
   

  
	
  and

  	
   

  
	
   

  	
   

  
	
  Distributor:

  	
  CARD GUARD TECHNOLOGIES, INC.

  6779 MESA RIDGE ROAD, SUITE 200

  SAN DIEGO, CA 92121-2909

  FAX: 858-450-9718

  ATTN: CHIEF EXECUTIVE OFFICER

  

 

In consideration
of the mutual covenants set forth below, the parties hereby agree to amend the
Distribution Agreement as follows (capitalized terms used but not defined
herein shall have the meaning ascribed to them in the Distribution Agreement):

 

1.        Additional Appointment

 

Section 1 of the
Distribution Agreement is hereby amended and restated in its entirety to read
as follows:

 

Manufacturer
hereby appoints Distributor, and Distributor hereby accepts such appointment,
on the terms and conditions provided in this Amendment and in the Distribution
Agreement, as: (i) Manufacturer’s exclusive distributor for the resale of the
products listed on Annex A attached hereto (the “Products”) in
the United States and non-exclusive distributor for the resale of the Products
in Mexico and Canada (Mexico, Canada and the United States, collectively, “North
America”); (ii) Manufacturer’s non-exclusive distributor for the resale of
the products listed on Annex B attached hereto (the “Additional
Products”) to healthcare providers and for employee health programs (but
not with respect to sales to consumers) in North America; and (iii)
Manufacturer’s non-exclusive distributor in North America for any other
products that the parties agree

 

 

Distributor will
distribute and that shall be added, from time to time, to Annex C
attached hereto (the “Non-Exclusive Products”).

 

2.        Term

 

Section 2 of the
Distribution Agreement is hereby amended and restated in its entirety to read
as follows:

 

The term of this
agreement (the “Term”) shall continue through December 31, 2016. The
Term will automatically be renewed for consecutive twenty four month periods
thereafter unless a written notice of termination is given by either party to
the other at its address set forth above at least 90 days prior to the
scheduled end of the Term. This Agreement is also subject to termination by
written notice upon the occurrence of certain events, as described below.

 

3.        Application of
Distribution Agreement

 

Except as
expressly set forth herein and except for Section 1 above, the term “Products”
as used in the Distribution Agreement and in this Amendment shall also apply to
Additional Products and Non-Exclusive Products.

 

4.        Intellectual Property

 

Section 6 of the
Distribution Agreement is hereby amended and restated in its entirety to read
as follows:

 

a.         Throughout the Term and
thereafter, Manufacturer shall have and maintain any and all patent rights,
trademarks, copyrights and other intellectual and industrial property rights,
including without limitation, know-how, trade secret, trade dress and other
rights or materials included in any of the Products and any derivatives,
improvements and developments thereof or otherwise incorporated into the design
or packaging of any Products, including, without limitation, any existing and
future versions, upgrades and improvements (collectively, the “Rights”).

 

b.         During the Term,
Distributor may use the Rights as necessary solely in order to distribute the
Products (and may not use the Products to provide any services) in North
America and as otherwise described in the Distribution Agreement.

 

c.         Distributor shall
promptly, on request, execute and deliver to Manufacturer any agreements,
instruments or documents that Manufacturer may reasonably request to enable or
assist Manufacturer to obtain or protect the Rights in North America. If either
party receives or discovers any information regarding any actual or alleged
unauthorized use of the Rights or the Products, such party shall immediately
provide written notice to such effect to the other party. Manufacturer may take
any necessary actions to enforce its rights in the Rights in North America and
prevent any other person from infringing upon such rights.

 

2

 

d.         Manufacturer warrants,
represents and covenants that it owns (free and clear of any liens or charges)
or has the valid right to grant to Distributor the right to use the Rights in
connection with distributing the Products. Notwithstanding the above, this
warranty and representations does not apply to any Products altered or repaired
by anyone other than Manufacturer or combined with any other products or
intellectual property.

 

5.        Termination

 

Section 8 of the
Distribution Agreement is hereby amended and restated in its entirety to read
as follows:

 

a.         In addition to any other
provisions concerning termination in this Amendment or in the Distribution
Agreement, either party shall have the right, in its discretion and in addition
to any other rights and remedies in law, equity or under this Agreement, to
terminate the Distribution Agreement immediately upon written notice to the
other party, if any of the following events occur, each of which both parties
hereby expressly acknowledge will adversely and substantially affect the
interests of the other party:

 

(1)        a material breach or failure to perform
any of the duties and obligations under this Agreement and failure to cure such
breach or failure within 30 days after written notice thereof from the other
party is received;

 

(2)        if the other party (i) files or has
filed against it any proceeding in bankruptcy or insolvency, or (ii) makes a
general assignment for the benefit of its creditors; or

 

(3)        if the other party becomes controlled by
a competitor of such terminating party.

 

b.         Subsequent to the
termination of the Distribution Agreement, Distributor shall continue to
provide service and Manufacturer shall continue to provide replacement parts
for all Products sold prior to such termination, until the third anniversary of
such termination, unless manufacturer transfers such rights and obligations to
another distributor in North America and notifies Distributor of such action in
writing.

 

6.        No Changes to Products

 

Distributor shall
not have the right to make modifications to any of the Products, but may
request Manufacturer to make such modifications. Manufacturer shall respond
within 30 days to any such proposed modification with a definitive written
proposal, which will include schedules describing the impact of such modifications
on cost and delivery schedules of the Products. Manufacturer shall act
reasonably in order to accommodate Distributor’s requests and negotiate
reasonable cost and timetable adjustments. Manufacturer shall be the owner of
any intellectual property rights incorporated into any such modifications (and
the right to register the same with any applicable authority).

 

3

 

7.        No Other Changes

 

Except as
otherwise set forth in this Amendment, all other terms of the Distribution
Agreement shall remain in full force and effect.

 

4

 

IN WITNESS
WHEREOF, the undersigned have caused this Amendment to be executed as of the
date first set forth above.

 

 

	
  CARD
  GUARD SCIENTIFIC SURVIVAL LTD.

  
	
   

  
	
  By: 

  	
  

  /s/ Illegible

  	
   

  
	
  Name: 

  	
  Illegible

  
	
  Title: 

  	
  CHAIRMAN & CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
  CARD
  GUARD TECHNOLOGIES, INC.

  
	
   

  
	
  By: 

  	
  

  /s/ Illegible

  	
   

  
	
  Name: 

  	
  Illegible

  
	
  Title: 

  	
  President & CEO

  

 

Annexes

 

	
  Annex A

  	
  Products

  
	
  Annex B

  	
  Additional Products

  
	
  Annex C

  	
  Non-Exclusive Products

  

 

5

 

ANNEX A

PRODUCTS

 

6

 

Annex A:

 

 

Transtelephonic
Cardio Products

 

CG-2100

CG-2206

CG-5000

CG-5000-D

CG 6106

CG-6206

CG-6550 AT

CG-6550 AT EASI

CG-6550 HOLTER

CG-7000DA

CG-7000DX

CG-7100

 

 

Receivers
and Interface Products

 

CG-3250

Konnex Tel. Adap.

Konnex Tel. Adap.

CG-3700

CG-3800UM

CG-3850

CG-3100M

 

 

Pulmonary
Monitors

 

CG-303A

CG-303B

 

 

ANNEX B

ADDITIONAL PRODUCTS

 

7

 

Annex B:

 

 

Transtelephonic
Cardio Products

 

CG-7000DA-BT

CG-7000DX-BT

CG-7100G

 

 

Receivers
and Interface Products

 

CG-3800BT

 

 

Obstetric

 

CG-900P

 

 

SW for
Transtelephonic Products

 

CG-8000NT

TM2000-NS

TM2000-NC

TM2000-ETP

TM2000-FTP&ETP

CG-TTM

TM2000-ETR

TM2000-ETR

 

 

Wireless
Products – PMP

 

PMP4-SeIfCheck
BP

PMP4 - BP Pro

PMP4-SelfCheck ECG1

PMP4-SelfCheck ECG1/12

PMP4-OXY PRO

PMP4-Spiro Pro

PMP4-SelfCheck Weight Scale

 

Physician
Set

 

 

SW for
Wireless Products – PMP

 

PMP4 SW Application

PMP4 web medical center

 

 

ANNEX C

NON EXCLUSIVE PRODUCTS

 

8

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