Exhibit 10.2

EMPLOYMENT AGREEMENT

This Employment Agreement (this “Agreement”) is entered into and effective as of
November 12, 2007 (the “Effective Date”), by and between InfuSystem Holdings,
Inc., a Delaware corporation (the “Company”), and Sean Whelan (the “Employee”).

WHEREAS, the Employee is presently employed by the Company; and

WHEREAS, the Company has determined to continue to employ the Employee, and the
Employee wishes to continue to be employed by the Company pursuant to the terms
and conditions set forth herein.

NOW, THEREFORE, in consideration of the promises and the mutual covenants set
forth herein, the parties hereto agree as follows:

1.    Employment.    Employee’s employment with the Company will be at-will, and
Employee and the Company may each terminate Employee’s employment at any time
for any reason or no reason without payment, penalty or further obligation
except as set forth in Section 5(c) hereof. While employed by the Company (the
“Employment Period”), Employee shall use his best efforts and devote his entire
business time and attention to advancement of the business and welfare of the
Company and its affiliates, and to the performance of Employee’s duties under
this Agreement and the duties reasonably assigned to his by the Company
hereafter. During the Employment Period, Employee shall not engage in any other
employment or business activity without the express prior written consent of the
Company.

2.    Position and Duties.    Employee shall serve as the Chief Financial
Officer of the Company, with such duties and responsibilities as are customarily
assigned to such position and such other duties and responsibilities as the
Company’s Board of Directors may from time to time assign.

3.    Compensation.

(a)    Base Salary.    During the Employment Period, the Company shall pay
Employee an annual compensation of US $200,000 per year (the “Annual Base
Salary”) for all services rendered to the Company by Employee, payable in
accordance with the Company’s regular payroll policies for similarly situated
executives, subject, however, to withholding deductions, including without
limitation social security taxes and applicable federal, state and local income
and other employment taxes. The Company shall annually review the Annual Base
Salary and based on that review, the Company may, in its sole discretion,
increase the Employee’s Annual Base Salary in an amount greater than the figure
state above.

(b)    Incentive Compensation.

(i)    Annual Cash Bonus.    For each calendar year of the Company that ends
during the Employment Period, the Employee will have the opportunity to earn a
cash bonus (the “Bonus Award”), based on satisfaction of pre-established
performance goals for each calendar year established in the sole discretion of
the Company. The Bonus Award (subject to the attainment of performance goals) in
effect as of the Effective Date is US $75,000 per

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year; provided, however, the Company, in its sole discretion, may increase the
amount of the Bonus Award the Employee may earn during a calendar year; but in
no event, shall such increased Bonus Award exceed US $ 100,000. The Bonus Award
shall be paid 60 days after the end of the applicable calendar year; provided,
however, if it is administratively impracticable to make the payment by such
date, the payment shall be made as soon as reasonably practicable thereafter.

(ii)    Long-Term Incentive Awards.    On or as soon as practicable after the
closing date of the transactions contemplated by the Stock Purchase Agreement
among I-Flow Corporation, the Company, InfuSystem, Inc., and Iceland Acquisition
Subsidiary, Inc., provided Employee is then still employed by the Company, and
subject to approval of the Company’s 2007 Incentive Compensation Plan by the
shareholders of the Company, the Employee will receive a grant of 75,000 shares
of common stock of the Company (“Restricted Shares”), of which 25% of such total
shares shall immediately vest on the date of grant, and 25% of such total shares
shall vest on each of the next three anniversaries of the grant date through
which the Employee remains employed. These Restricted Shares will be awarded
pursuant to, and subject to, the Company’s 2007 Incentive Compensation Plan, and
shall be evidenced by and subject to the terms and conditions to be set forth in
a restricted stock agreement.

(iii)    Starting Bonus.    Employee will be paid a one-time sum of $53,007.75
within 30 days of the end of the second month of his employment by the Company.

4.    Vacation, Participation in Benefit Plans, and Expenses.

(a)    Employee shall be entitled to such number of days of paid vacation each
year as is consistent with the Company’s practices, policies and programs for
executives.

(b)    During the Employment Period, the Employee shall be eligible to
participate in, and receive benefits under, those benefit plans and arrangements
provided by the Company to its similarly situated executives, subject to, and on
a basis consistent with, the terms, conditions and overall administration of
such plans and arrangements. The Company reserves the right to modify or
terminate its benefit plans and arrangements generally for employees or any
group of employees.

(c)    During the Employment Period, the Company, at its option, shall either
(i) continue to pay the premiums currently paid by the Company on the long-term
care insurance policy and disability insurance policy to which the Employee is
currently covered or (ii) pay the premiums on a long-term care insurance policy
and a disability insurance policy with comparable benefits to which the Employee
would be the insured.

(d)    During the Employment Period, the Employee shall be entitled to receive
prompt reimbursement for all reasonable expenses incurred by the Employee in
carrying out the Employee’s duties under this Agreement, provided that the
Employee complies with the policies, practices and procedures of the Company for
submission of expense reports, receipts or other similar documentation of such
expenses.

 

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(e)    During the Employment Period, the Company shall pay the Employee a
monthly automobile allowance of US $800 and reimburse the Employee for all fuel
expenses with respect to such automobile.

(f)    To assist the Employee in rendering his duties in a more efficient and
productive manner, the Company shall provide the Employee (at the Company’s sole
cost and expense) digital mobile and home telephones (and related accounts) for
the Employee’s exclusive use throughout the Employment Period.

(g)    During the Employment Period, the Employee shall be entitled to such
other benefits as approved by the Board of Directors of the Company.

5.    Termination of Employment.

(a)    Death or Disability.    The Employee’s employment shall terminate
automatically upon the Employee’s death during the Employment Period. The
Company shall, to the full extent permitted by law, be entitled to terminate
Employee’s employment because of the Employee’s Disability (as herein defined)
during the Employment Period. For purposes hereof, the term “Disability” shall
mean the inability of Employee to reasonably perform his duties or
responsibilities to the Company as a result of mental or physical ailment of
incapacity, for an aggregate period of ninety (90) calendar days during the
Employment Period (whether or not consecutive).

(b)    Cause.    For purposes hereof, the term “Cause” shall include, but is not
limited to, any one or more of the following events:

(i)    Employee’s repeated failure or inability to perform the duties and
responsibilities set forth under this Agreement or assigned from time to time by
the Company;

(ii)    Employee’s failure to comply with all material applicable laws and
regulations in performing the duties and responsibilities set forth under this
Agreement or assigned from time to time by the Company;

(iii)    Employee’s breach of any of Employee’s legal duties to the Company,
rules applicable to all Company employees generally or contractual obligations
to the Company set forth in this Agreement or any other agreement between the
Company and Employee;

(iv)    An act or acts of fraud, misappropriation, or embezzlement on the
Employee’s part which result in or are intended to result in the Employee’s or
another’s personal enrichment at the expense of the Company or its subsidiaries,
affiliates, employees, agents or customers;

(v)    Willful misconduct or gross negligence that has a material adverse effect
on the Company or its subsidiaries or affiliates;

(vi)    Employee’s conviction of a felony or of any crime involving moral
turpitude or dishonesty (or entering a plea of nolo contendere with respect to
such crime); and

 

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(vii)    Any other activity which would constitute grounds for termination for
cause by the Company or its subsidiaries or affiliates.

For purposes of this Agreement, any good faith interpretation by the Company of
the foregoing definition of “Cause” shall be conclusive on the Employee.

(c)    Termination Pay.

(i)    If Employee’s employment with the Company is terminated (A) by Employee
for any reason, (B) by the Company for Cause, or (C) by the Company upon
Employee’s Disability or as a result of Employee’s death, then Employee (or
Employee’s estate) shall be entitled to receive all Annual Base Salary,
vacation, benefits and other compensation that has accrued but is unpaid as of
the date of termination, including any Bonus Award earned in respect of the
immediately preceding calendar year but not yet paid as of the date of
termination, and no other compensation. Any payments under this provision
(except for any Bonus Award) shall be made within 30 days after the date on
which employment terminates. Any Bonus Award payable under this provision shall
be made in accordance with Section 3(b)(i) of this Agreement.

(ii)    If Employee’s employment with the Company is terminated by the Company
for any reason other than as set forth in Section 5(c)(i) above, then contingent
upon execution and delivery to the Company of an unconditional general release,
in form satisfactory to the Company, of all claims against the Company and any
of its officers, director or affiliates arising from or in connection with this
Agreement or Employee’s employment with the Company, Employee shall be entitled
to receive: (1) all Annual Base Salary, vacation, benefits and other
compensation that has accrued but is unpaid as of the date of termination,
(2) any Bonus Award earned in respect of the immediately preceding calendar year
but not yet paid as of the date of termination, (3) pro-rata vesting of the
Restricted Shares granted pursuant to Section 3(b)(ii) of this Agreement based
upon the services performed by the Employee in the year of termination, (4) a
pro-rata Bonus Award for the year of termination, calculated assuming
achievement of the target level of performance within the performance range
established with respect to such award and basing such pro-rata portion upon the
portion of the award period that has elapsed as of the date of termination, and
(5) for a period of two years following the date of termination, continued
payment of Annual Base Salary (the “Severance Benefit”). Employee’s right to
such Severance Benefit shall be conditioned upon Employee’s continuing
compliance with the restrictive covenants set forth in Section 7 of this
Agreement. If Employee fails to comply with the restrictive covenants set forth
in Section 7 of this Agreement, the Employee shall forfeit the Severance
Benefit. Any payments under subsection (1) of this Section 5(c)(ii) shall be
made within 30 days after the date on which employment terminates; any payments
under subsections (2) and (4) of this Section 5(c)(ii) shall be made in
accordance with Section 3(b)(i) of this Agreement; and any payments under
subsection (5) of this Section 5(c)(ii) shall be made in accordance with the
Company’s regular payroll policies for similarly situated executives.

6.     Change in Control.    Upon a Change in Control as herein defined, (i) all
the Restricted Shares granted pursuant to Section 3(b)(ii) of this Agreement
shall immediately vest and all restrictions with respect thereto shall lapse.

 

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For the purposes hereof, the term “Change in Control” means the following and
shall be deemed to occur if and when: (i) any person (as that term is used in
Sections 13(d) or 14(d)(2) of the Securities Exchange Act of 1934, as amended)
becomes the beneficial owner (within the meaning of Rule l3d-3 promulgated under
the Securities Exchange Act of 1934, as amended) of 50% or more of either the
then outstanding shares of common stock or the combined voting power of the
Company’s then outstanding securities entitled to vote generally in the election
of directors unless such person is already a beneficial owner on the date of
this Agreement, or (ii) individuals who, as of the date hereof, constitute the
Board of Directors of the Company (“Incumbent Board”) cease for any reason to
constitute at least a majority of the Board of Directors of the Company,
provided that any individual who becomes a director after the date hereof whose
election, or nomination for election by the Company’s shareholders, is approved
by a vote of at least a majority of the directors then comprising the Incumbent
Board shall be considered to be a member of the Incumbent Board. Notwithstanding
anything contained herein to the contrary, any merger of the Company with
InfuSystem, Inc. or a subsidiary or affiliate of InfuSystem, Inc. shall not be
deemed to be a Change in Control.

7.    Noncompetition/Confidentiality.

(a)    The Employee agrees that from the commencement of the Employment Period
until the date that is two years after the date of termination of employment for
any reason (and, as to clause (ii) of this Section 7, at any time thereafter)
Employee will not, directly or indirectly, do or suffer any of the following:

(i)    Engage in a Competitive Activity. For purposes of this Agreement, the
Employee shall be considered to have engaged in a Competitive Activity if the
Employee: (i) directly or indirectly, or by action in concert with others,
solicits, induces, or influences, or attempts to solicit, induce or influence,
any other employee or consultant of the Company or any direct or indirect
subsidiary to terminate their employment or other business arrangements with
Company or any direct or indirect subsidiary, or to engage in any Competing
Business (as hereinafter defined) or hires, employs, engages (including as a
consultant or partner) or otherwise enters into a Competing Business with any
such person, (ii) solicits any of the customers of the Company or any direct or
indirect subsidiary (or any of their employees), induces such customers or their
employees to reduce their volume of business with, terminate their relationship
with or otherwise adversely affect their relationship with, Company or any
direct or indirect subsidiary, (iii) does business with any person who was a
customer of the Company or any direct or indirect subsidiary during the
twelve-month period prior to the Employee’s date of termination if such business
would constitute a Competing Business, (iv) directly or indirectly engages in,
represents in any way, or is connected with, any Competing Business, directly
competing with the business of the Company or any direct or indirect subsidiary,
whether such engagement shall be an as officer, director, owner, employee,
partner, consultant, affiliate or other participant in any Competing Business or
(v) assists others in engaging in any Competing Business in the manner described
in the foregoing clause (iv). An activity shall be deemed to be a “Competing
Business” if it competes with any business conducted by the Company or any of
its current or future affiliates.

(ii)    Disclose Confidential Information to any third party without the prior
written consent of the Company or use such Confidential Information other than
in

 

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connection with the discharge of any duties to the Company in the Employee’s
capacity as an officer, director, employee or agent of the Company As used
herein “Confidential Information” means all information, knowledge, systems or
data relating to the business, operations, clients or finances of the Company or
its subsidiaries, except for information which at the time of disclosure was in
the public domain unless such information was placed into the public domain in
violation of any non-disclosure obligation, including, without limitation, this
Section 7.

(b)    The Employee expressly agrees and understands that the remedy at law for
any breach by his of any of the provisions of this Section 7 will be inadequate
and that damages flowing from such breach are not readily susceptible to being
measured in monetary terms. Accordingly, it is acknowledged that upon adequate
proof of the Employee’s violation of any legally enforceable provision of
Section 7, the Company shall be entitled to immediate injunctive relief and may
obtain a temporary order restraining any threatened or further breach. Nothing
in Section 7 shall be deemed to limit the Company’s remedies at law or in equity
for any breach by the Employee of any of the provisions of Section 7 which may
be pursued or availed of by the Company.

(c)    In the event the Employee shall violate any legally enforceable provision
of Section 7 as to which there is a specific time period during which she is
prohibited from taking certain actions or from engaging in certain activities,
as set forth in such provision, then, such violation shall toll the running of
such time period from the date of such violation until such violation shall
cease; provided, however, the Company shall seek appropriate remedies in a
reasonably prompt manner after discovery of a violation by the Employee.

(d)    The Employee has carefully considered the nature and extent of the
restrictions upon his and the rights and remedies conferred upon the Company
under Section 7, and hereby acknowledges and agrees that the same are reasonable
in time and territory, are designed to eliminate competition which otherwise
would be unfair to the Company, are designed to not stifle the inherent skill
and experience of the Employee, would not operate as a bar to the Employee’s
sole means of support, are fully required to protect the legitimate interests of
the Company and do not confer a benefit upon the Company disproportionate to the
detriment to the Employee.

(e)    It is expressly understood and agreed that although the parties consider
the restrictions contained in this Section 7 hereof to be reasonable for the
purpose of preserving the goodwill, proprietary rights and going concern value
of the Company, if a final determination is made by an arbitrator or a court, as
the case may be, having jurisdiction that any of the covenants contained in
Section 7, or any part thereof, is unenforceable, the provisions of this
Section 7 shall not be rendered void but shall be deemed amended to apply as to
such maximum time and territory and to such other extent as such arbitrator or
court, as the case may be, may determine or indicate to be reasonable.
Alternatively, if the arbitrator or court, as the case may be, referred to above
finds that any restriction contained in this Section 7 or any remedy provided
herein in unenforceable, and such restriction or remedy cannot be amended so as
to make it enforceable, such finding shall not affect the enforceability of any
of the other restrictions contained therein or the availability of any other
remedy.

 

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8.    No Public Statements or Disparagement.    Employee agrees that Employee
will not make any public statements regarding the Employee’s employment or the
termination of Employee’s employment (for whatever reason) that are not agreed
to by the Company. The Employee agrees that Employee will not make any public
statement that would libel, slander, or disparage the Company or any of its
respective past or present officers, directors, employees or agents.
Notwithstanding this Section, nothing contained herein shall limit or impair the
ability of any party to provide truthful testimony in response to any validly
issued subpoena.

9.    Miscellaneous.

(a)    Governing Law.    This Agreement shall be governed in all respects,
including validity, interpretation and effect, by the internal laws of the State
of Michigan.

(b)    Modifications and Amendments.    This Agreement may not be modified,
changed or supplemented, nor may any obligations hereunder be waived, except by
written instrument signed by the party to be charged.

(c)    Assignability.    This Agreement is personal to the Employee. The
Employee may not assign this Agreement or any of the rights and/or obligations
under this Agreement to any other person. The Company may, without the
Employee’s consent, assign this Agreement to any affiliate of the Company, to
any successor in interest to the business of any of the Company, or to a
purchaser of all or substantially all of the assets of any of the Company.

(d)    Entire Agreement.    This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
prior written or oral and all contemporaneous oral agreements, understandings
and negotiations between the parties with respect to the subject matter of this
Agreement.

(e)    Severability.    Should a court or other body of competent jurisdiction
determine that any provision of this Agreement is excessive in scope or
otherwise invalid or unenforceable, such provision shall be adjusted rather than
voided, if possible, so that it is enforceable to the maximum extent possible,
and all other provisions of this Agreement shall be deemed valid and enforceable
to the maximum extent possible.

(f)    Notices.    Any notice, demand or other communication required, permitted
or desired to be given hereunder shall be in writing and shall be deemed
effectively given upon personal delivery, facsimile transmission (with
confirmation of receipt), delivery by reputable overnight delivery service
(delivery, postage or freight charges prepaid) or on the fourth day following
deposit in the United States mail (if sent by certified or registered mail,
return receipt requested, delivery, postage or freight charges prepaid), in each
case duly addressed to the Company at its headquarters or to Employee at his
address of record listed with the Company for payroll purposes.

(g)    Headings.    The section headings herein are intended for reference and
shall not by themselves determine the construction or interpretation of this
Agreement.

(h)    Construction.    This Agreement shall be construed without regard to any
presumption or rule requiring construction against the party causing such
instrument or any

 

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portion thereof to be drafted. No rule of strict construction will be applied
for or against either of the parties hereto.

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

(j)    Waiver.    The waiver by the Company of a breach of any provision of this
Agreement by the Employee shall not operate or be construed as a waiver of any
subsequent breach by the Employee.

(k)    Withholding.    The Company shall have the right to deduct from any
amounts payable under this Agreement an amount necessary to satisfy its
obligation, under applicable laws, to withhold income or other taxes of the
Employee attributable to payments made hereunder.

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement effective as of the date first written above.

 

InfuSystem Holdings, Inc., a Delaware corporation By:   /s/ Steven Watkins Name:
  Steven Watkins Title:   Chief Executive Officer  

/s/ Sean Whelan Sean Whelan Employee

 

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