Document:

Exhibit 10.5

 

LifeWatch Holding
Corporation

 

PERSONAL AND CONFIDENTIAL

 

	
   

  	
  December 1,
  2006

  

 

Frank Leonard

5812 North Corona

Palatine, Illinois 60067

 

 

Dear Mr. Leonard:

 

This is to confirm our mutual understanding with respect to your
employment by LifeWatch Corp. (the “Company”), as follows:

 

1.                           Employment;
Authority. The Company hereby agrees to employ you, and you hereby agree to
be employed by the Company, on the terms and conditions set forth in this
letter. You will serve as the Chief Financial Officer of the Company and, at
the request of the Company’s Board of Directors and for no additional
compensation, also any or all of its subsidiaries, reporting to the Chief
Executive Officer, or in his absence, the Chairman of the Board of Directors,
and to the Board of Directors of the Company (or, as the case may be, its
subsidiaries). You agree to perform such duties and services, and to have such
responsibilities, as the Chief Executive Officer or the Chairman of the Board
of Directors of the Company (or, as the case may be, its subsidiaries), may,
from time to time, assign to you consistent with your position. You agree that
your responsibilities and reporting relationships may be changed at the
discretion of the Board of Directors of the Company, provided, however,
that such change shall not affect your compensation and benefits as stated in
this letter. You hereby represent and warrant to the Company that you are not
now under any contractual obligation to any third party that is inconsistent
with the terms of this letter or that would prevent, limit or impair in any way
your performance of your duties under this letter.

 

2.                           Compensation.
As full compensation for all services provided and duties performed by you
during your employment by the Company under the terms of this letter, you will
be entitled to receive:

 

a. Salary. A base salary (your “Base Salary”) at the rate
of $190,000 per annum, effective as of the date hereof, payable in accordance
with the Company’s normal payroll practices. Salary increases, if any, will be
determined at the sole discretion of the Board of Directors of the Company.

 

b. Bonus. At the discretion of the Board of Directors of the
Company, you may also receive an annual performance based bonus of up to 25% of
your Base Salary, based on your individual performance as well as the financial
performance of the Company relative to targets determined by the Board of
Directors, for each year (or portion thereof) of your service to the Company.

 

 

c. Benefits. During your employment hereunder, you shall be
entitled to all benefits generally available to the Company’s senior executives
and for which you may qualify in accordance with the terms of the applicable
plan documents, inclusive of hospitalization and major medical insurance, health
and dental insurance, life insurance, disability insurance, personal days,
which includes vacation (set at 25 days per year) and 401(k) plan. In addition,
you shall be entitled to a car allowance of $500 per month. All benefits and
perquisites to which you are entitled pursuant to this paragraph are sometimes
referred to herein as your “Benefits”.

 

d. Options. You will be entitled to receive options (“Options”)
under the Company’s 2006 Stock Incentive Plan, or any amendments thereto, at
the discretion of the Company’s Board of Directors.

 

e. Tax Reporting. All payments made to you pursuant to this
letter (whether specified in this Section 2 or not) are subject to all
applicable tax withholding by the Company. In addition, you acknowledge and
agree that all payments to be made to you as Base Salary, bonus or otherwise
under this letter shall, to the extent required by law, be reported for all tax
purposes as compensation for services rendered, and you shall not state or
claim any different position in any tax return or report (or any audit
thereof).

 

f. Insurance Policy. You shall be covered by the Company’s
Directors and Officers insurance policy as such shall be amended and in effect
from time to time.

 

3.                           Expenses.
During your employment hereunder, the Company will reimburse you for your
travel and other expenses incident to your providing services and performing
duties under this letter, in conformity with the Company’s regular policies
from time to time in effect regarding reimbursement of expenses, with the
proviso that such reimbursement will only be made upon presentation of expense
vouchers in such detail as may from time to time as reasonably required by
Company policies.

 

4.                           Term.

 

a.                           The
term of your employment under this letter shall commence on December 1,
2006 and shall continue until December 31, 2009 or such other date as may
be determined in accordance with Section 4.b. below (the “scheduled
term”), unless earlier terminated by reason of death, Disability (as
defined below), termination by you or termination by the Company (with or
without Cause (as defined below)).

 

b.                          At
any time no less than three months prior to the termination of the initial or
any additional term of this letter agreement you or the Company may notify each
other, in writing, of a lack of intention to extend the term of your employment
by the Company under this letter beyond the then current scheduled term, in
which case your employment by the Company under this letter shall end upon the
expiration of such scheduled term. In the absence of such notice, at the end of
the initial or any such subsequent term, your employment (and the scheduled
term) shall be automatically extended for a twelve-month period.

 

2

 

5.                           Consequences
of Termination.

 

a.                           Death
or Disability. Anything herein to the contrary notwithstanding, if your
employment under this letter is terminated early (i.e., before expiration of
the scheduled term) by reason of your death or your Disability (as defined
below), you (or your estate, as the case may be) shall be entitled to receive
your Base Salary, vested rights (including stock options) and all other
consideration owing to you in respect of your services under this letter
through the date of such termination, but the Company shall have no further
liability or obligation whatsoever to you hereunder.

 

b.                          Termination
without Cause. If your employment under this letter is terminated by the
Company without Cause (as defined in paragraph 6 below): (i) prior to the
expiration of the scheduled term or (ii) within three months following the
occurrence of a Change in Control, and provided that you have not entered into
or accepted an employment position or any other situation or arrangement with
an organization or person or established (together with others) an entity (a) that
engages in telemedicine devices and/or services; (b) with which the
Company or any of its affiliates has an ongoing dispute; (c) which the
Company or any of its affiliates is considering (or considered at any time no
less than 12 months prior to the termination of your employment) acquiring or
entering into any other strategic transaction, or (d) otherwise in
violation of your Confidentiality/Non Competition Agreement with the Company,
you shall be entitled in lieu of any other or further compensation of any kind
from the Company (other than your accrued vested rights in any retirement, life
insurance, disability insurance, stock option plan or other pension or benefit
plan of the Company) to receive severance. In the event your employment under
this letter is terminated by the Company without Cause and there has not been a
Change in Control, your severance shall consist of continuation of your Base
Salary, payable in accordance with the Company’s normal payroll practices, and
of your Benefits (to the extent permitted by applicable law and the terms of
any applicable plans, as if you continued as an active employee) for the lesser
of six months or the remaining term of your employment (whether it is the initial
term or any extension thereof). If your employment under this letter is
terminated by the Company without cause within three months following the
occurrence of a Change in Control, your severance shall consist of continuation
of your Base Salary, payable in accordance with the Company’s normal payroll
practices, and of your Benefits (to the extent permitted by applicable law and
the terms of any applicable plans, as if you continued as an active employee)
for a period of twelve months after the date of termination of your employment.

 

c.                           Termination
with Cause. The Company may terminate your employment at any time without
prior notice for Cause (as defined in paragraph 6 below). In the event of such
termination the Company shall (without limiting any right or remedy to which it
may be entitled) be obligated to continue to pay you your Base Salary and
Benefits until the effective date of such termination, but shall have no
further liability or obligation whatsoever to you hereunder (other than your
accrued vested rights in any retirement, life insurance, disability insurance,
stock option plan or other pension or benefit plan of the Company); provided,
that nothing in this provision shall be interpreted so as to limit any Benefits
to which you or your dependents or estate are entitled according to the
specific terms of any applicable employee benefit plan, program or practice
after such termination of your employment.

 

3

 

d.                          Termination
by You. If your employment under this letter is terminated by you prior to
the expiration of the scheduled term the Company shall (without limiting any
right or remedy to which it may be entitled) be obligated to continue to pay
you your Base Salary and Benefits until the effective date of such termination,
but shall have no further liability or obligation whatsoever to you hereunder
(other than your accrued vested rights in any retirement, life insurance,
disability insurance, stock option plan or other pension or benefit plan of the
Company); provided, that nothing in this provision shall be interpreted
so as to limit any Benefits to which you or your dependents or estate are
entitled according to the specific terms of any applicable employee benefit
plan, program or practice after such termination of your employment

 

e.                           Non-Renewal.
If the Company notifies you of its decision not to extend the scheduled term
beyond the initial or any subsequent term and Cause does not exist at such
time, and provided that you have not entered into or accepted an employment
position or any other situation or arrangement with an organization or person
or established (together with others) an entity (a) that engages in
telemedicine devices and/or services; (b) with which the Company or any of
its affiliates has an ongoing dispute; (c) which the Company or any of its
affiliates is considering (or considered at any time no less than 12 months
prior to the termination of your employment) acquiring or entering into any
other strategic transaction, or (d) otherwise in violation of your
Confidentiality/Non Competition Agreement with the Company, you shall be
entitled in lieu of any other or further compensation of any kind from the
Company (other than your accrued vested rights in any retirement, life insurance,
disability insurance, stock option plan or other pension or benefit plan of the
Company) to receive a continuation of your Base Salary, payable in accordance
with the Company’s normal payroll practices, and of your Benefits (to the
extent permitted by applicable law and the terms of any applicable plans, as if
you continued as an active employee) for two months.

 

Any payment made under this Agreement in connection with the
termination of your employment is subject to and conditioned upon your execution
of a waiver and release in the form presented to you by the Company that is
substantially similar to the one annexed hereto as Exhibit A and
in conformance with then applicable law.

 

6.                           Certain
Definitions. For purposes of this letter, the following definitions shall
apply:

 

“Cause” shall be defined to include your
commission of any act of dishonesty or fraud in connection with your employment
or the appropriation of any Company funds or property, including the
intellectual property of the Company or of others; your conviction of any crime
or offense involving fraud, embezzlement, theft or dishonesty or any felony, or
the entry of any plea other than “not guilty” to any such crime, offense or
felony; your material violation of any law or rule applicable to the
Company’s business and operations; your material violation (as determined in
the Company’s sole discretion) of any Company policies or any other policy
applicable to the Company whether in the Employee Handbook or otherwise; and
your engaging in conduct which, in the Company’s reasonable judgment, is
detrimental to its business, good will or good name.

 

4

 

“Change in Control” means any of the following
events:

 

(i) any person or entity is or becomes the Beneficial
Owner (as defined in Rule 13d-3 under the Securities Exchange Act of 1934,
as amended), directly or indirectly, of securities of the Company (not
including in the securities beneficially owned by such person any securities
acquired directly from the Company or its affiliates) representing 50% or more
of the combined voting power of the Company’s then outstanding voting
securities, other than upon the occurrence of an Excluded Transaction, as such
term is defined below;

 

(ii) there is consummated a merger or
consolidation of the Company or any direct or indirect subsidiary of the
Company with any other corporation, other than an Excluded Transaction, as such
term is defined below; or

 

(iii) the stockholders of the Company approve a
plan of complete liquidation of the Company or there is consummated an
agreement for the sale or disposition by the Company of all or substantially
all of the Company’s assets (or any transaction having a similar effect), other
than a sale or disposition by the Company of all or substantially all of the
Company’s assets to an entity, at least 50% of the combined voting power of the
voting securities of which are owned by stockholders of the Company in
substantially the same proportions as their ownership of the Company immediately
prior to such sale.

 

“Disability” means your inability to perform
your duties in any material manner by reason of physical or mental disability
for a period of six consecutive months, or for a period of more than nine
months in the aggregate in any twelve-month period.

 

“Excluded Transaction” means any of the
following events:

 

(i) an acquisition, exchange, merger,
consolidation or other transaction or series of transactions, which would
result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) more than 50% of the
combined voting power of the voting securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation; or

 

(ii) an acquisition, exchange, merger,
consolidation or other transaction or series of transactions effected to
implement a recapitalization of the Company (or similar transaction) in which
no person, directly or indirectly, acquired 50% or more of the combined voting
power of the Company’s then outstanding securities (not including in the
securities beneficially owned by such person any securities acquired directly
from the Company or its affiliates).

 

7.                           Change
in Control. Upon a Change in Control, all Options then held by you that
have not vested shall immediately vest and become exercisable (together with
all vested Options), for a period of 6 months from the date of such Change in
Control.

 

5

 

8.                           Confidentiality/Non-Competition
Agreement. You agree to comply with all the provisions of the
Confidentiality/Non-Competition Agreement that you are executing concurrently
with the execution of this letter agreement.

 

9.                           Confidentiality.
You acknowledge that you now have and will have access to and become acquainted
with proprietary and confidential information regarding the Company and its
affiliates and its customers that constitute valuable assets of the Company and
its affiliates and that is not available to the public. Accordingly, you agree
that, in addition to the provisions of the Confidentiality/Non-Competition
Agreement you will not during the term of this letter or at any time
thereafter, directly or indirectly, make, or cause to be made, any statement or
publication about or concerning the Company, its affiliates or their
shareholders (or any fiduciary or beneficiary of any shareholder that is a
trust or an estate) which you reasonably believe not to be in the best
interests of, or necessary for the proper conduct of the businesses of, the
Company, its affiliates or their shareholders (or any fiduciary or beneficiary
of any shareholder that is a trust or an estate), other than statements or publications
that you reasonably believe to be necessary to protect and enforce your rights
under this letter. Nothing herein is intended to limit or affect any
responsibility you may have under any law or any generally applicable policy,
practice or procedure of the Company or its affiliates.

 

10.                     No
Disclosure. The financial arrangements contemplated hereby are sensitive
and highly confidential, and, so long as you remain employed by the Company,
you will not use, disclose or make any public announcement regarding such
financial arrangements without the prior written consent of the Company (by the
Board of Directors or its chairman), except: (i) as may be required by
applicable law; (ii) disclosure in connection with your own personal tax
or financial affairs; or (iii) as may be required in order to enforce any
term or provision hereof.

 

11.                     Injunctive
Relief. You acknowledge and agree that if any provision of the Sections 8,
9 or 10 is breached, the Company will immediately and irreparably be harmed,
will not have an adequate remedy at law and will be entitled to seek immediate
relief enjoining such violation or threatened violation (including without
limitation temporary and permanent injunctions and/or a decree for specific
performance) in any court or judicial body having jurisdiction over such claim
without the necessity of showing any actual damage or posting any bond or
furnishing any other security.

 

12.                     Litigation;
Legal Fees. Any dispute that may arise between you and the Company in
connection with your employment hereunder, including, without limitation, the
terms or interpretation of this letter as they relate to the existence of Cause
and the terms concerning termination of employment with Cause, as well as the
terms of any non-competition and non-solicitation and your entitlement to
severance, either during or following termination of your employment hereunder
shall be adjudicated solely in the applicable state or Federal court in
Chicago, Illinois without reference to such State’s principles governing
conflicts of laws and the parties waive any objections that they may now have
or hereafter have to the venue of such proceeding. You consent to the service
of process out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to you at your address set forth herein, such service to
become effective 30 days after such mailing. You waive any objection that you
may now or hereafter have to the laying of venue on any of the aforesaid
actions or proceedings brought in the aforesaid courts.

 

6

 

If the court finds
that either party has breached the substantive terms of this letter and the
breaching party in doing so acted capriciously, maliciously or in bad faith,
then the court may require the breaching party to pay for all the other party’s
costs and expenses, including reasonable attorney’s fees, arising from such
proceeding.

 

13.                     Miscellaneous.

 

a.                           Notice.
All notices and other communications provided for hereunder shall be in writing
(including by telex or facsimile transmission) and mailed or sent or delivered
at the addresses specified below. All such notices and communications shall be
given by hand, telex or facsimile transmission; provided that, in the
event that telex and facsimile transmission facilities are not operational,
such notices and communications may be given by mail, but the sender shall use
reasonable efforts to confirm facsimile transmission facilities shall become
operational. All such notices and communications shall be effective when
delivered by hand, or, in the case of mail, upon the earlier of receipt and
confirmation by telex or facsimile transmission as provided below, or, in the
case of facsimile transmission, when sent as addressed as set forth herein and
confirmation of delivery is received, or, in the case of telex, when the telex
is sent and the appropriate answer back is received. The address for you is set
forth in the beginning of this letter. The address for the Company is as
follows:

 

1351A Abbott Ct.

Buffalo Grove, IL 60089

Telecopy No.: (847) 720 2132

Attention: Chairman of the Board of Directors

 

Or, after March 31, 2007 to:

 

10255 West Higgins Rd

Rosemont, IL 60018

Attention: Chairman of the Board of Directors

 

With copies to:

 

Proskauer Rose LLP

1585 Broadway

New York, New York 10036-8299

Telecopy No: (212) 969-2900

Attention: Yuval Tal

 

Each party to this
letter may, from time to time, change its notice address, by giving notice to
the other party in the manner provided in this paragraph.

 

b.                          Entire
Agreement. This letter (inclusive of any annex hereto) contains the entire
understanding and agreement of the parties (and their affiliates) with respect
to the subject matter hereof, and all prior negotiations, proposals and
agreements (whether written or oral) between them (or their respective
affiliates) relating to the subject matter hereof, have been superseded hereby,
including, without limitation, any employment agreement(s) between you and the
Company or any of its affiliates. No agreements or representations (whether
oral

 

7

 

or otherwise,
express or implied) that are not expressly set forth in, but that relate to the
subject matter of this letter have been made by either party.

 

c.                           Amendment;
Waiver. Neither this letter nor any provision hereof may be amended or
modified except in a writing signed by the party against whom enforcement of
such amendment or modification is sought. No failure or delay of any party in
exercising any power or right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce any such right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of each party under this letter are,
unless otherwise specifically provided herein, cumulative and not exclusive of
any rights or remedies that such party may otherwise have. No waiver by either
party of any provision of this letter nor any consent by either party to any
departure by the other party from any provision of this letter shall in any
event be effective unless the same shall be in writing (by the party against
which enforcement of such waiver or consent is sought), and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which it was given. No notice or similar communication by one party
to the other shall entitle such other party to any other or further notice or
similar communication in similar or other circumstances, except as specifically
provided herein.

 

d.                          Severability.
If any one or more of the provisions of this letter or any annex hereto shall
be invalid, illegal or unenforceable in any respect, it shall be ineffective
only to the extent of such invalidity, illegality or unenforceability, and
shall not in any way affect or impair the validity, legality and enforceability
of the balance of such provision or any other provision contained herein. Each
party shall endeavor in good faith negotiations to replace the invalid, illegal
or unenforceable provision(s) (or such portion thereof) with such valid, legal
and enforceable provision(s), the economic effect of which on the respective
parties is as close as possible to that of the invalid, illegal or
unenforceable provision(s).

 

e.                           Successors
and Assigns. This letter shall be binding upon and inure to the benefit of
the respective successors and permitted assigns of the parties hereto;
provided, that no party may, without the prior written consent of the other,
assign, transfer or delegate this letter or any of such party’s rights or
obligations hereunder (whether directly or indirectly, by operation of law or
otherwise) to any other person, firm or entity. Company shall require successor
to expressly assume this Agreement.

 

f.                             Rights
of Third Parties. Anything in this letter to the contrary notwithstanding,
no person, firm or entity shall be entitled to the benefit of, or to enforce,
any provision hereof other than the parties hereto (and their heirs, successors
and permitted assigns).

 

g.                          Survival.
The respective rights and obligations of you and the Company as provided herein
shall survive the termination or expiration hereof to the extent necessary to
the intended preservation of such rights and obligations.

 

h.                          Governing
Law. This letter shall be construed and interpreted according to the laws
of the State of Illinois, without reference to such State’s principles
governing conflicts of law.

 

8

 

i.                              Headings.
The headings used herein are for convenience of reference only, are not part of
this letter and are not intended to affect the construction, or to be taken
into account in the interpretation, of this letter.

 

j.                              Counterparts;
Effect. This letter may be signed in counterparts with the same effect as
if the signatures were all upon the same instrument; provided, that no party
shall be bound hereto unless and until all parties have executed and delivered
this letter (or a counterpart).

 

[SIGNATURE PAGE FOLLOWS]

 

9

 

Please confirm your agreement with the foregoing by
signing and returning to us two copies of this Agreement.

 

	
   

  	
   

  	
  Sincerely,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  LIFEWATCH
  CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  YACOV GEVA

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  YACOV
  GEVA

  
	
   

  	
   

  	
   

  	
  Title:

  	
  CHAIRMAN
  OF THE BOARD

  
	
   

  	
   

  	
   

  
	
  AGREED
  TO AND ACCEPTED:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  FRANK LEONARD

  	
   

  	
   

  	
   

  
	
  FRANK
  LEONARD

  	
   

  	
   

  
							

 

10

 

EXHIBIT A

 

SEVERANCE AGREEMENT AND RELEASE

 

This Agreement and Release (“Release”) is made and entered into
effective as of this          day of           ,
2006, by and between                  
(“Employee”) and LifeWatch, Inc. (hereinafter “LifeWatch”).

 

1.                          Employee’s
last day of work with LifeWatch will be                     .

 

2.                          Employee
agrees to waive all claims of every kind and nature, whether known or unknown,
arising either at common law, or by virtue of any statute, that s/he may have
against LifeWatch (including its employees, officers, and directors; past,
present, and future parent companies; subsidiaries and/or affiliates, and
including, without limitation, Card Guard AG, Card Guard Scientific Survival
Ltd., Card Guard Technologies, Inc., and Card Guard USA, Inc.)
arising from his/her employment with LifeWatch and/or the termination of
employment with LifeWatch. No claim or cause of action of any sort whatsoever
is reserved, except that the Employee does not waive any claims based on events
which have not yet occurred.

 

3.                          Employee
covenants and agrees that s/he will not now or at any time in the future
commence or prosecute any claim against LifeWatch on any matter encompassed by
this Release. Employee warrants that there are no outstanding charges,
complaints, claims, grievances or actions of any nature whatsoever previously
filed or brought by him/her or on his/her behalf against LifeWatch pending
before any federal, state or local court or administrative body. If Employee
breaches this paragraph, Employee agrees that s/he shall tender back to
LifeWatch all of the monies paid to Employee by LifeWatch pursuant to paragraph
11, except for $100.00 (One Hundred Dollars), which the parties

 

 

agree is exclusively
consideration for the release of claims under the Age Discrimination in
Employment Act.

 

4.                          Employee
acknowledges that s/he was properly classified as an exempt employee and
properly paid for all time worked by LifeWatch. Employee further acknowledges
that LifeWatch did not deny or fail to accommodate any requests for leaves of
absence made by the Employee.

 

5.                          Employee
waives any rights that s/he has to reinstatement of employment or reemployment
with LifeWatch. Employee warrants that in the future s/he shall not knowingly
apply for or accept any position with LifeWatch.

 

6.                          Employee
covenants that s/he will not, at any time, disparage LifeWatch to any
employees, former employees, customers, clients, suppliers, vendors, or
competitors of LifeWatch; s/he also will not disparage LifeWatch in any media.

 

7.                          Unless
compelled to do so by judicial process or by law, Employee will not disclose to
anyone and shall treat as confidential information the terms of this Release.
However, Employee may disclose such terms and amounts of this Release to her
attorneys or accountants on a “need-to-know” basis, provided such individuals
or entities are informed of Employee’s confidentiality obligations under this
paragraph and agree to keep the disclosed information confidential. Employee
also acknowledges that disclosures by him or her of information intended to be
kept confidential pursuant to this paragraph shall constitute a material breach
of this Release for which s/he shall be liable.

 

8.                          The
Employee agrees that s/he is bound by, and will abide by, the
Confidentiality/Non-Competition Letter (“Confidentiality Letter”), signed by
the Employee
                                ,
20    . The Confidentiality Letter is attached to this
Release and the terms of that letter agreement are fully incorporated into this
Release.

 

9.                          The
Employee acknowledges that his or her continuing entitlement to payments under
Paragraph 11 of the Release shall be conditioned upon his or her continuing
compliance with this Paragraphs 6, 7, and 8 of this the Release and any
violation of Paragraphs 6, 7, or 8 by the Employee shall terminate LifeWatch's
obligation to continue to make payments under Paragraph 11.

 

10.       Employee warrants that
s/he has returned to LifeWatch all property of LifeWatch, including any and all
documents developed or provided to him or her during the course of his or her
employment with LifeWatch.

 

11.                    In
consideration for the covenants and promises made in this Release, LifeWatch
agrees that it will:

 

                                   (a)                     pay
to Employee his/her base compensation, less applicable deductions, for
         weeks (through
     , 20    ). The payments
will be made in equal installments, beginning the first payroll period after
the expiration of the 7 day revocation period described in para. 14(H).
Employee warrants that s/he is not owed any other money, including bonuses, car
allowances, and/or reimbursement of expenses, by LifeWatch; and

 

                                   (b)                    continue
Employee's benefits (to the extent permitted by applicable law and the terms of
any applicable plans, in each case as if Employee continued as an active
employee) for       months commencing on
        , unless Employee is eligible
for coverage by another plan prior to this date.

 

 

12.                    The
parties agree that all requests for references shall be directed only to
Allison Stein, Vice President of Human Resources, or her successor, and that in
response to such request for a reference, LifeWatch will supply only the
Employee’s dates of employment and positions held.

 

13.                    This
Release contains the entire agreement of the parties. It supersedes any
previous communications or understandings, whether oral or written. The parties
represent and acknowledge that no promises or agreements, except those set
forth herein have been made or relied upon by any party. This Release shall not
be changed, modified or rescinded except in writing by both parties, and any
attempt at oral modification of this Release shall be void and of no effect.

 

14.                    The
parties participated jointly in the negotiation and preparation of this
Release. Accordingly, it is agreed that no rule of construction shall
apply against any party or in favor of any party. This Release shall be
construed as if the parties jointly prepared this Release, and any uncertainty
or ambiguity shall not be interpreted against one party and in favor of the
other.

 

15.                    In
conformity with the Older Workers Benefit Protection Act, the Employee
acknowledges the following:

 

(A)                 that this Release
is written in a manner calculated to be understood by him/her;

 

(B)                   that s/he has
been advised to consult an attorney prior to executing this Release;

 

(C)                   that this
Release represents the Employee’s knowing and voluntary waiver and release of
any and all claims that s/he might have, including, but not limited to any
claims arising under the Age Discrimination in Employment Act (“ADEA”);

 

 

(D)                  that s/he has
not waived any claim under the ADEA that may arise after the date of this
Release;

 

(E)                    that the
consideration that s/he will receive in exchange for this Release in paragraph
11 is something of value to which s/he is not already entitled;

 

(F)                    that s/he has
21 days to consider this Release;

 

(G)                   that s/he has 7
days following his or her execution of the Release in which to revoke it. For
revocation to be effective, written notice of revocation must be delivered to
Allison Stein, LifeWatch, 1351 Abbott Court, Buffalo Grove, Illinois 60089, no
later than 5:00 p.m. on the seventh day after s/he has signed this
Release; and

 

(H)                  the Release will
become effective after the 7 day revocation period.

 

16.                    The
parties agree that this Release shall be governed and construed in accordance
with the laws of the State of Illinois, including the internal conflicts of
law. The Employee agrees and consents to submit to personal jurisdiction in the
State of Illinois in any state or federal court of competent subject matter
jurisdiction situated in Cook County, Illinois. The Employee further agrees
that the sole and exclusive venue for any suit arising out of, or seeking to
enforce, the terms of this Release shall be in a state or federal court of
competent subject matter jurisdiction situated in Cook County, Illinois.

 

 

	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Employee
  Signature

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Employee
  Name

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date
  of Signature:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Frederick
  J. Mindermann

  	
   

  
	
   

  	
   

  	
  President &
  CEO

  	
   

  
	
   

  	
   

  	
  for
  LifeWatch, Inc.Exhibit 10.6

 

LifeWatch Holding Corporation

 

PERSONAL
AND CONFIDENTIAL

 

	
   

  	
  December 1, 2006

  

 

Mr. Roger K.
Richardson

824 S. Ridge Avenue

Arlington Heights, IL 60005

 

Dear Mr. Richardson:

 

This is to confirm
our mutual understanding with respect to your employment by LifeWatch Corp.
(the “Company”), as follows:

 

1.         Employment; Authority. The
Company hereby agrees to employ you, and you hereby agree to be employed by the
Company, on the terms and conditions set forth in this letter. You will serve
as the Chief Operating Officer of the Company and, at the request of the
Company’s Board of Directors and for no additional compensation, also any or
all of its subsidiaries, reporting to the Chief Executive Officer, or, in his
absence, the Chairman of the Board of Directors of the Company (or, as the case
may be, its subsidiaries). You agree to perform such duties and services, and
to have such responsibilities, as the Chairman of the Board of Directors or the
Chief Executive Officer of the Company (or, as the case may be, its
subsidiaries) may, from time to time, assign to you consistent with your
position. You agree that your responsibilities and reporting relationships may
be changed at the discretion of the Board of Directors of the Company, provided,
however, that such change shall not affect your compensation and
benefits as stated in this letter. You hereby represent and warrant to the
Company that you are not now under any contractual obligation to any third
party that is inconsistent with the terms of this letter or that would prevent,
limit or impair in any way your performance of your duties under this letter.

 

2.         Compensation. As full
compensation for all services provided and duties performed by you during your
employment by the Company under the terms of this letter, you will be entitled
to receive:

 

a. Salary.
A base salary (your “Base Salary”) at the rate of $150,000 per annum,
effective as of the date hereof, payable in accordance with the Company’s
normal payroll practices. Except as provided in Section 2.g. of this letter,
salary increases, if any, will be determined at the sole discretion of the
Board of Directors of the Company.

 

b. Bonus.
At the discretion of the Board of Directors of the Company, you may also
receive an annual performance based bonus of up to 25% of your Base Salary,
based on your individual performance as well as the financial performance of
the Company relative to targets determined by the Board of Directors, for each
year (or portion thereof) of your service to the Company.

 

c. Benefits.
During your employment hereunder, you shall be entitled to all benefits
generally available to the Company’s senior executives and for which you may

 

 

qualify in accordance
with the terms of the applicable plan documents, inclusive of hospitalization
and major medical insurance, health and dental insurance, life insurance,
disability insurance, vacation days (20 Days) and 401(k) plan. All benefits and
perquisites to which you are entitled pursuant to this paragraph are sometimes
referred to herein as your “Benefits”.

 

d. Options.
You will be entitled to receive options (“Options”) under the Company’s
2006 Stock Incentive Plan, or any amendments thereto, at the discretion of the
Company’s Board of Directors.

 

e. Tax
Reporting. All payments made to you pursuant to this letter (whether
specified in this Section 2 or not) are subject to all applicable tax
withholding by the Company. In addition, you acknowledge and agree that all
payments to be made to you as Base Salary, bonus or otherwise under this letter
shall, to the extent required by law, be reported for all tax purposes as
compensation for services rendered, and you shall not state or claim any
different position in any tax return or report (or any audit thereof).

 

f. Insurance
Policy. You shall be covered by the Company’s Directors and Officers
insurance policy as such shall be amended and in effect from time to time.

 

g. Financial
Projections. In the event the Company meets or exceeds its first quarter
2007 financial projections and you have complied with and performed all of your
obligations pursuant to this letter, your Base Salary pursuant to Section 2.a.
shall be increased to $175,000 and your maximum bonus potential pursuant to
Section 2.b. shall be increased to 25% of your Base Salary.

 

3.         Expenses. During your employment
hereunder, the Company will reimburse you for your travel and other expenses
incident to your providing services and performing duties under this letter, in
conformity with the Company’s regular policies from time to time in effect
regarding reimbursement of expenses, with the proviso that such reimbursement
will only be made upon presentation of expense vouchers in such detail as may
from time to time be reasonably required by Company policies.

 

4.         Term.

 

a. The term of
your employment under this letter shall commence on the date hereof and shall
continue until December 31, 2009, or such other date as may be determined in
accordance with Section 4.b. below (the “scheduled term”), unless
earlier terminated by reason of death, Disability (as defined below),
termination by you or termination by the Company (with or without Cause (as
defined below)) which shall be effected by prior written notice.
Notwithstanding any other term in this letter agreement, the Company
acknowledges that you have been employed by the Company or any of its
subsidiaries since January 2, 2006 (the “Start Date”).

 

b. At any time no
less than three months prior to the termination of the initial or any
additional term of this letter agreement you or the Company may notify each
other, in writing, of a lack of intention to extend the term of your employment
by the Company under this letter beyond the then current scheduled term, in
which case your employment by

 

2

 

the Company under this
letter shall end upon the expiration of such scheduled term. In the absence of
such notice, at the end of the initial or any such subsequent term, your
employment (and the scheduled term) shall be automatically extended for a twelve-month
period.

 

5.         Consequences of Termination.

 

a. Death or
Disability. Anything herein to the contrary notwithstanding, if your
employment under this letter is terminated early (i.e., before expiration of
the scheduled term) by reason of your death or your Disability (as defined
below), you (or your estate, as the case may be) shall be entitled to receive
your Base Salary, vested rights (including stock options) and all other
consideration owing to you in respect of your services under this letter through
the date of such termination, but the Company shall have no further liability
or obligation whatsoever to you hereunder.

 

b. Termination
without Cause. If your employment under this letter is terminated by the
Company without Cause (as defined in paragraph 6 below): (i) prior to the
expiration of the scheduled term or (ii) within three months following the
occurrence of a Change in Control, and provided that you have not entered into
or accepted an employment position or any other situation or arrangement with
an organization or person or established (together with others) an entity (a)
that engages in telemedicine devices and/or services; (b) with which the
Company or any of its affiliates has an ongoing dispute; (c) which the Company
or any of its affiliates is considering (or considered at any time no less than
12 months prior to the termination of your employment) acquiring or entering
into any other strategic transaction, or (d) otherwise in violation of your
Confidentiality/Non Competition Agreement with the Company, you shall be
entitled in lieu of any other or further compensation of any kind from the
Company (other than your accrued vested rights in any retirement, life
insurance, disability insurance, stock option plan or other pension or benefit
plan of the Company) to receive severance. If, prior to the termination of your
employment pursuant to this Section 5.b., you have been employed by the Company
for a period of less than 90 days from the Start Date and there has not been a
Change in Control, your severance shall consist of continuation of your Base
Salary, payable in accordance with the Company’s normal payroll practices, and
of your Benefits (to the extent permitted by applicable law and the terms of
any applicable plans, as if you continued as an active employee) for the lesser
of one month or the remaining term of your employment (whether it is the
initial term or any extension thereof). If, prior to the termination of your
employment pursuant to this Section 5.b., you have been employed by the Company
for a period of at least 90 days but no more than 12 months from the Start Date
and there has not been a Change in Control, your severance shall consist of
continuation of your Base Salary, payable in accordance with the Company’s
normal payroll practices, and of your Benefits (to the extent permitted by
applicable law and the terms of any applicable plans, as if you continued as an
active employee) for the lesser of three months or the remaining term of your
employment (whether it is the initial term or any extension thereof). If, prior
to the termination of your employment pursuant to this Section 5.b., you have
been employed by the Company for a period more than 12 months from the Start
Date and there has not been a Change in Control, your severance shall consist
of continuation of your Base Salary, payable in accordance with the Company’s
normal payroll practices, and of your Benefits (to the extent permitted by
applicable law and the terms of any applicable plans, as if you continued as an
active employee) for the lesser of six months or the remaining term of your
employment (whether it is the initial term or any extension thereof). If your
employment under this letter is

 

3

 

terminated
by the Company without cause within three months following the occurrence of a
Change in Control, your severance shall consist of continuation of your Base
Salary, payable in accordance with the Company’s normal payroll practices, and
of your Benefits (to the extent permitted by applicable law and the terms of
any applicable plans, as if you continued as an active employee) for a period
of twelve months after the date of termination of your employment.

 

c. Termination
with Cause. The Company may terminate your employment at any time without
prior notice for Cause (as defined in paragraph 6 below). In the event of such
termination the Company shall (without limiting any right or remedy to which it
may be entitled) be obligated to continue to pay you your Base Salary and
Benefits until the effective date of such termination, but shall have no
further liability or obligation whatsoever to you hereunder (other than your
accrued vested rights in any retirement, life insurance, disability insurance,
stock option plan or other pension or benefit plan of the Company); provided,
that nothing in this provision shall be interpreted so as to limit any Benefits
to which you or your dependents or estate are entitled according to the
specific terms of any applicable employee benefit plan, program or practice
after such termination of your employment.

 

d. Termination
by You. If your employment under this letter is terminated by you prior to
the expiration of the scheduled term the Company shall (without limiting any
right or remedy to which it may be entitled) be obligated to continue to pay
you your Base Salary and Benefits until the effective date of such termination,
but shall have no further liability or obligation whatsoever to you hereunder
(other than your accrued vested rights in any retirement, life insurance,
disability insurance, stock option plan or other pension or benefit plan of the
Company); provided, that nothing in this provision shall be interpreted
so as to limit any Benefits to which you or your dependents or estate are
entitled according to the specific terms of any applicable employee benefit
plan, program or practice after such termination of your employment.

 

e. Non-Renewal.
If the Company notifies you of its decision not to extend the scheduled term
beyond the initial or any subsequent term and Cause does not exist at such
time, and provided that you have not entered into or accepted an employment
position or any other situation or arrangement with an organization or person
or established (together with others) an entity (a) that engages in
telemedicine devices and/or services; (b) with which the Company or any of its
affiliates has an ongoing dispute; (c) which the Company or any of its
affiliates is considering (or considered at any time no less than 12 months
prior to the termination of your employment) acquiring or entering into any
other strategic transaction, or 

 

(d) otherwise in
violation of your Confidentiality/Non Competition Agreement with the Company,
you shall be entitled in lieu of any other or further compensation of any kind
from the Company (other than your accrued vested rights in any retirement, life
insurance, disability insurance, stock option plan or other pension or benefit
plan of the Company) to receive a continuation of your Base Salary, payable in
accordance with the Company’s normal payroll practices, and of your Benefits
(to the extent permitted by applicable law and the terms of any applicable
plans, as if you continued as an active employee) for two months.

 

Any payment made under
this Agreement in connection with the termination of your employment is subject
to and conditioned upon your execution of a waiver

 

4

 

and release in the form presented to you by the
Company that is substantially similar to the one annexed hereto as Exhibit A and in conformance with then applicable law.

 

6.         Certain Definitions. For purposes of this letter, the
following definitions shall apply:

 

“Cause”
shall be defined to include your commission of any act of dishonesty or fraud
in connection with your employment or the appropriation of any Company funds or
property, including the intellectual property of the Company or of others; your
conviction of any crime or offense involving fraud, embezzlement, theft or dishonesty
or any felony, or the entry of any plea other than “not guilty” to any such
crime, offense or felony; your material violation of any law or rule applicable
to the Company’s business and operations; your material violation (as
determined in the Company’s sole discretion) of any Company policies or any
other policy applicable to the Company whether in the Employee Handbook or
otherwise; and your engaging in conduct which, in the Company’s reasonable
judgment, is detrimental to its business, good will or good name.

 

“Change
in Control” means any of the following events:

 

(i)
any person or entity is or becomes the Beneficial Owner (as defined in Rule
13d-3 under the Securities Exchange Act of 1934, as amended), directly or
indirectly, of securities of the Company (not including in the securities
beneficially owned by such person any securities acquired directly from the
Company or its affiliates) representing 50% or more of the combined voting
power of the Company’s then outstanding voting securities, other than upon the
occurrence of an Excluded Transaction, as such term is defined below;

 

(ii)
there is consummated a merger or consolidation of the Company or any direct or
indirect subsidiary of the Company with any other corporation, other than an
Excluded Transaction, as such term is defined below; or

 

(iii)
the stockholders of the Company approve a plan of complete liquidation of the
Company or there is consummated an agreement for the sale or disposition by the
Company of all or substantially all of the Company’s assets (or any transaction
having a similar effect), other than a sale or disposition by the Company of
all or substantially all of the Company’s assets to an entity, at least 50% of
the combined voting power of the voting securities of which are owned by
stockholders of the Company in substantially the same proportions as their
ownership of the Company immediately prior to such sale.

 

“Disability”
means your inability to perform your duties in any material manner by reason of
physical or mental disability for a period of six consecutive months, or for a
period of more than nine months in the aggregate in any twelve-month period.

 

5

 

“Excluded Transaction”
means any of the following events:

 

(i)
an acquisition, exchange, merger, consolidation or other transaction or series
of transactions, which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than 50% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately
after such merger or consolidation; or

 

(ii)
an acquisition, exchange, merger, consolidation or other transaction or series
of transactions effected to implement a recapitalization of the Company (or
similar transaction) in which no person, directly or indirectly, acquired 50%
or more of the combined voting power of the Company’s then outstanding
securities (not including in the securities beneficially owned by such person
any securities acquired directly from the Company or its affiliates).

 

7.         Change in Control. Upon a Change in Control, all
Options then held by you that have not vested shall immediately vest and become
exercisable (together with all vested Options), for a period of 6 months from
the date of such Change in Control.

 

8.         Confidentiality/Non-Competition Agreement. You agree
to comply with all the provisions of the Confidentiality/Non-Competition
Agreement that you are executing concurrently with the execution of this letter
agreement.

 

9.         Confidentiality. You acknowledge that you now have
and will have access to and become acquainted with proprietary and confidential
information regarding the Company and its affiliates and its customers that
constitute valuable assets of the Company and its affiliates and that is not
available to the public. Accordingly, you agree that, in addition to the
provisions of the Confidentiality/Non-Competition Agreement you will not during
the term of this letter or at any time thereafter, directly or indirectly,
make, or cause to be made, any statement or publication about or concerning the
Company, its affiliates or their shareholders (or any fiduciary or beneficiary
of any shareholder that is a trust or an estate) which you reasonably believe
not to be in the best interests of, or necessary for the proper conduct of the
businesses of, the Company, its affiliates or their shareholders (or any
fiduciary or beneficiary of any shareholder that is a trust or an estate),
other than statements or publications that you reasonably believe to be
necessary to protect and enforce your rights under this letter. Nothing herein
is intended to limit or affect any responsibility you may have under any law or
any generally applicable policy, practice or procedure of the Company or its
affiliates.

 

10.       No Disclosure. The financial
arrangements contemplated hereby are sensitive and highly confidential, and, so
long as you remain employed by the Company, you will not use, disclose or make
any public announcement regarding such financial arrangements without the prior
written consent of the Company (by the Board of Directors or its chairman),
except: (i) as may be required by applicable law; (ii) disclosure in connection
with your own personal tax or financial affairs; or (iii) as may be required in
order to enforce any term or provision hereof.

 

6

 

11.       Injunctive Relief. You acknowledge
and agree that if any provision of the Sections 8, 9 or 10 is breached, the
Company will immediately and irreparably be harmed, will not have an adequate
remedy at law and will be entitled to seek immediate relief enjoining such
violation or threatened violation (including without limitation temporary and
permanent injunctions and/or a decree for specific performance) in any court or
judicial body having jurisdiction over such claim without the necessity of
showing any actual damage or posting any bond or furnishing any other security.

 

12.       Litigation; Legal Fees. Any
dispute that may arise between you and the Company in connection with your
employment hereunder, including, without limitation, the terms or
interpretation of this letter as they relate to the existence of Cause and the
terms concerning termination of employment with Cause, as well as the terms of
any non-competition and non-solicitation and your entitlement to severance,
either during or following termination of your employment hereunder shall be
adjudicated solely in the applicable state or Federal court in Chicago,
Illinois without reference to such State’s principles governing conflicts of
laws and the parties waive any objections that they may now have or hereafter
have to the venue of such proceeding. You consent to the service of process out
of any of the aforementioned courts in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid, to
you at your address set forth herein, such service to become effective 30 days
after such mailing. You waive any objection that you may now or hereafter have
to the laying of venue on any of the aforesaid actions or proceedings brought
in the aforesaid courts. If the court finds that either party has breached the
substantive terms of this letter and the breaching party in doing so acted
capriciously, maliciously or in bad faith, then the court may require the
breaching party to pay for all the other party’s costs and expenses, including
reasonable attorney’s fees, arising from such proceeding.

 

13.       Miscellaneous.

 

a. Notice.
All notices and other communications provided for hereunder shall be in writing
(including by telex or facsimile transmission) and mailed or sent or delivered
at the addresses specified below. All such notices and communications shall be
given by hand, telex or facsimile transmission; provided that, in the
event that telex and facsimile transmission facilities are not operational,
such notices and communications may be given by mail, but the sender shall use
reasonable efforts to confirm facsimile transmission facilities shall become
operational. All such notices and communications shall be effective when
delivered by hand, or, in the case of mail, upon the earlier of receipt and
confirmation by telex or facsimile transmission as provided below, or, in the
case of facsimile transmission, when sent as addressed as set forth herein and
confirmation of delivery is received, or, in the case of telex, when the telex
is sent and the appropriate answer back is received. The address for you is set
forth in the beginning of this letter. The address for the Company is as
follows:

 

1351A Abbott Ct.

Buffalo Grove, IL 60089

Telecopy No.: (847) 720-2111

Attention: Chairman of
the Board of Directors

Or, after March
31, 2007 to:

 

7

 

10255 West Higgins
Rd

Rosemont, IL 60018

Attention:
Chairman of the Board of Directors

With copies to:

 

Proskauer Rose LLP

1585 Broadway

New York, New York
10036-8299

Telecopy No: (212)
969-2900

Attention: Yuval
Tal

 

Each party to this letter
may, from time to time, change its notice address, by giving notice to the
other party in the manner provided in this paragraph.

 

b. Entire
Agreement. This letter (inclusive of any annex hereto) contains the entire
understanding and agreement of the parties (and their affiliates) with respect
to the subject matter hereof, and all prior negotiations, proposals and
agreements (whether written or oral) between them (or their respective
affiliates) relating to the subject matter hereof, have been superseded hereby,
including, without limitation, any employment agreement(s) between you and the
Company or any of its affiliates. No agreements or representations (whether
oral or otherwise, express or implied) that are not expressly set forth in, but
that relate to the subject matter of this letter have been made by either
party.

 

c. Amendment;
Waiver. Neither this letter nor any provision hereof may be amended or
modified except in a writing signed by the party against whom enforcement of
such amendment or modification is sought. No failure or delay of any party in
exercising any power or right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce any such right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of each party under this letter are,
unless otherwise specifically provided herein, cumulative and not exclusive of
any rights or remedies that such party may otherwise have. No waiver by either
party of any provision of this letter nor any consent by either party to any
departure by the other party from any provision of this letter shall in any
event be effective unless the same shall be in writing (by the party against
which enforcement of such waiver or consent is sought), and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which it was given. No notice or similar communication by one party
to the other shall entitle such other party to any other or further notice or
similar communication in similar or other circumstances, except as specifically
provided herein.

 

d. Severability.
If any one or more of the provisions of this letter or any annex hereto shall
be invalid, illegal or unenforceable in any respect, it shall be ineffective
only to the extent of such invalidity, illegality or unenforceability, and
shall not in any way affect or impair the validity, legality and enforceability
of the balance of such provision or any other provision contained herein. Each
party shall endeavor in good faith negotiations to replace the invalid, illegal
or unenforceable provision(s) (or such portion thereof) with such valid, legal
and enforceable provision(s), the economic effect of which on the respective
parties is as close as possible to that of the invalid, illegal or unenforceable
provision(s).

 

8

 

e. Successors
and Assigns. This letter shall be binding upon and inure to the benefit of
the respective successors and permitted assigns of the parties hereto;
provided, that no party may, without the prior written consent of the other,
assign, transfer or delegate this letter or any of such party’s rights or
obligations hereunder (whether directly or indirectly, by operation of law or
otherwise) to any other person, firm or entity. Company shall require successor
to expressly assume this Agreement.

 

f. Rights of
Third Parties. Anything in this letter to the contrary notwithstanding, no
person, firm or entity shall be entitled to the benefit of, or to enforce, any
provision hereof other than the parties hereto (and their heirs, successors and
permitted assigns).

 

g. Survival.
The respective rights and obligations of you and the Company as provided herein
shall survive the termination or expiration hereof to the extent necessary to
the intended preservation of such rights and obligations.

 

h. Governing
Law. This letter shall be construed and interpreted according to the laws
of the State of Illinois, without reference to such State’s principles
governing conflicts of law.

 

i. Headings.
The headings used herein are for convenience of reference only, are not part of
this letter and are not intended to affect the construction, or to be taken
into account in the interpretation, of this letter.

 

j. Counterparts;
Effect. This letter may be signed in counterparts with the same effect as
if the signatures were all upon the same instrument; provided, that no party
shall be bound hereto unless and until all parties have executed and delivered
this letter (or a counterpart).

 

 

[SIGNATURE PAGE FOLLOWS]

 

9

 

Please confirm
your agreement with the foregoing by signing and returning to us two copies of
this Agreement.

 

	
   

  	
   

  	
  Sincerely,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  LIFEWATCH CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   /s/ Frederick J. Mindermann

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Frederick J. Mindermann

  
	
   

  	
   

  	
   

  	
  Title: 

  	
  President & CEO

  
						

 

AGREED TO AND ACCEPTED:

 

 

	
  /s/ Roger K. Richardson

  	
   

  
	
  Roger K. Richardson

  

 

	
  OFFICIAL SEAL

  PATRICIA J WALKER
NOTARY PUBLIC - STATE OF ILLINOIS

  MY COMMISSION EXPIRES:10/31/09

  	
   

  

 

Patricia J. Walker

11-22-06

 

10

 

EXHIBIT A

 

SEVERANCE AGREEMENT AND RELEASE

 

This Agreement and
Release (“Release”) is made and entered into effective as of this        
day of            ,
2006, by and between                 
(“Employee”) and LifeWatch, Inc. (hereinafter “LifeWatch”).

 

1.         Employee’s last day of work with
LifeWatch will be                 .

 

2.         Employee agrees to waive all claims of
every kind and nature, whether known or unknown, arising either at common law,
or by virtue of any statute, that s/he may have against LifeWatch (including
its employees, officers, and directors; past, present, and future parent
companies; subsidiaries and/or affiliates, and including, without limitation,
Card Guard AG, Card Guard Scientific Survival Ltd., Card Guard Technologies,
Inc., and Card Guard USA, Inc.) arising from his/her employment with LifeWatch
and/or the termination of employment with LifeWatch. No claim or cause of
action of any sort whatsoever is reserved, except that the Employee does not
waive any claims based on events which have not yet occurred.

 

3.         Employee covenants and agrees that s/he
will not now or at any time in the future commence or prosecute any claim
against LifeWatch on any matter encompassed by this Release. Employee warrants
that there are no outstanding charges, complaints, claims, grievances or
actions of any nature whatsoever previously filed or brought by him/her or on
his/her behalf against LifeWatch pending before any federal, state or local
court or administrative body. If Employee breaches this paragraph, Employee
agrees that s/he shall tender back to LifeWatch all of the monies paid to
Employee by LifeWatch pursuant to paragraph 11, except for $100.00 (One Hundred
Dollars), which the parties

 

 

agree is exclusively
consideration for the release of claims under the Age Discrimination in
Employment Act.

 

4.         Employee acknowledges that s/he was
properly classified as an exempt employee and properly paid for all time worked
by LifeWatch. Employee further acknowledges that LifeWatch did not deny or fail
to accommodate any requests for leaves of absence made by the Employee.

 

5.         Employee waives any rights that s/he
has to reinstatement of employment or reemployment with LifeWatch. Employee
warrants that in the future s/he shall not knowingly apply for or accept any
position with LifeWatch.

 

6.         Employee covenants that s/he will not,
at any time, disparage LifeWatch to any employees, former employees, customers,
clients, suppliers, vendors, or competitors of LifeWatch; s/he also will not
disparage LifeWatch in any media.

 

7.         Unless compelled to do so by judicial
process or by law, Employee will not disclose to anyone and shall treat as
confidential information the terms of this Release. However, Employee may
disclose such terms and amounts of this Release to her attorneys or accountants
on a “need-to-know” basis, provided such individuals or entities are informed
of Employee’s confidentiality obligations under this paragraph and agree to
keep the disclosed information confidential. Employee also acknowledges that
disclosures by him or her of information intended to be kept confidential
pursuant to this paragraph shall constitute a material breach of this Release
for which s/he shall be liable.

 

8.         The Employee agrees that s/he is bound
by, and will abide by, the Confidentiality/Non-Competition Letter (“Confidentiality
Letter”), signed by the

 

 

Employee on             ,
20      . The Confidentiality Letter is attached to
this Release and the terms of that letter agreement are fully incorporated into
this Release.

 

9.         The Employee acknowledges that his or
her continuing entitlement to payments under Paragraph 11 of the Release shall
be conditioned upon his or her continuing compliance with this Paragraphs 6, 7,
and 8 of this the Release and any violation of Paragraphs 6, 7, or 8 by the Employee shall
terminate LifeWatch’s obligation to continue to make payments under Paragraph
11.

 

10.       Employee warrants that s/he has returned
to LifeWatch all property of LifeWatch, including any and all documents
developed or provided to him or her during the course of his or her employment
with LifeWatch.

 

11.       In consideration for the covenants and
promises made in this Release, LifeWatch agrees that it will:

 

(a)       pay to Employee his/her base
compensation, less applicable deductions, for           
weeks (through        , 20     ).
The payments will be made in equal installments, beginning the first payroll
period after the expiration of the 7 day revocation period described in para.
14(H). Employee warrants that s/he is not owed any other money, including
bonuses, car allowances, and/or reimbursement of expenses, by LifeWatch; and

 

(b)       continue Employee’s benefits (to the
extent permitted by applicable law and the terms of any applicable plans, in
each case as if Employee continued as an active employee) for          
months commencing on           ,
unless Employee is eligible for coverage by another plan prior to this date.

 

 

12.       The parties agree that all requests for
references shall be directed only to Allison Stein, Vice President of Human
Resources, or her successor, and that in response to such request for a
reference, LifeWatch will supply only the Employee’s dates of employment and
positions held.

 

13.       This Release contains the entire
agreement of the parties. It supersedes any previous communications or
understandings, whether oral or written. The parties represent and acknowledge
that no promises or agreements, except those set forth herein have been made or
relied upon by any party. This Release shall not be changed, modified or
rescinded except in writing by both parties, and any attempt at oral
modification of this Release shall be void and of no effect.

 

14.       The parties participated jointly in the
negotiation and preparation of this Release. Accordingly, it is agreed that no
rule of construction shall apply against any party or in favor of any party.
This Release shall be construed as if the parties jointly prepared this
Release, and any uncertainty or ambiguity shall not be interpreted against one
party and in favor of the other.

 

15.       In conformity with the Older Workers
Benefit Protection Act, the Employee acknowledges the following:

 

(A)                 that this Release
is written in a manner calculated to be understood by him/her;

 

(B)                   that s/he has
been advised to consult an attorney prior to executing this Release;

 

(C)                   that this
Release represents the Employee’s knowing and voluntary waiver and release of
any and all claims that s/he might have, including, but not limited to any
claims arising under the Age Discrimination in Employment Act (“ADEA”);

 

 

(D)                  that s/he has
not waived any claim under the ADEA that may arise after the date of this
Release;

 

(E)                    that the
consideration that s/he will receive in exchange for this Release in paragraph
11 is something of value to which s/he is not already entitled;

 

(G)                   that s/he has
21 days to consider this Release;

 

(H)                  that s/he has 7
days following his or her execution of the Release in which to revoke it. For
revocation to be effective, written notice of revocation must be delivered to
Allison Stein, LifeWatch, 1351 Abbott Court, Buffalo Grove, Illinois 60089, no
later than 5:00 p.m. on the seventh day after s/he has signed this Release; and

 

(I)                       the Release
will become effective after the 7 day revocation period.

 

16.       The parties agree that this Release shall
be governed and construed in accordance with the laws of the State of Illinois,
including the internal conflicts of law. The Employee agrees and consents to
submit to personal jurisdiction in the State of Illinois in any state or
federal court of competent subject matter jurisdiction situated in Cook County,
Illinois. The Employee further agrees that the sole and exclusive venue for any
suit arising out of, or seeking to enforce, the terms of this Release shall be
in a state or federal court of competent subject matter jurisdiction situated
in Cook County, Illinois.

 

 

	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Employee Signature

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Employee Name

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date of Signature:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Frederick J. Mindermann

  
	
   

  	
   

  	
  President & CEO

  
	
   

  	
   

  	
  for LifeWatch, Inc.

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