Exhibit
10.2


 


CONSULTING AGREEMENT


 


	
  PARTIES

  	
   

  	
  TRANSOMA
  MEDICAL, INC.

  	
   

  	
  [the
  “COMPANY”]

  
	
   

  	
   

  	
  4211 Lexington
  Avenue North, Suite 2244

  	
   

  	
   

  
	
   

  	
   

  	
  St. Paul, MN
  55126-6164

  	
   

  	
   

  
	
   

  	
   

  	
  Phone:
  651-481-7410

  	
   

  	
   

  
	
   

  	
   

  	
  Fax:
  651-481-7417

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  K. James Ehlen

  	
   

  	
  [the
  “CONSULTANT”]

  
	
   

  	
   

  	
  Company:

  	
   

  	
   

  
	
   

  	
   

  	
  Street Address:
  4221 Woodland Trail

  	
   

  	
   

  
	
   

  	
   

  	
  City, State Zip:
  Golden Valley, MN 55422

  	
   

  	
   

  
	
   

  	
   

  	
  Phone:

  	
  763-588-2201

  	
   

  	
   

  
	
   

  	
   

  	
  Fax:

  	
  612-588-0222

  	
   

  	
   

  
	
   

  	
   

  	
  Email:

  	
  jehlen@halleland.com

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DATE

  	
   

  	
  July 23, 2003

  	
   

  	
   

  
							



 


RECITALS


 


A.           The parties wish to
provide for the engagement of CONSULTANT by the COMPANY.


 


B.                                    CONSULTANT
wishes to receive compensation from the COMPANY for CONSULTANT’s services, and
the COMPANY desires reasonable protection of its confidential business and
technical information, which has been acquired and is being developed by the
COMPANY at substantial expense.


 


AGREEMENT


 


The COMPANY and
CONSULTANT, each intending to be legally bound, agree as follows:


 


1.                                      ENGAGEMENT.
Subject to all of the terms and conditions of this Agreement, the COMPANY agrees
to engage CONSULTANT as requested from time to time by an authorized officer of
the COMPANY during the term of this Agreement and CONSULTANT agrees to consider
acceptance of such engagement.


 


CONSULTANT’S relationship with COMPANY is that of an
independent contractor, and nothing in this Agreement is intended to, or should
be construed to, create a partnership, agency, joint venture or employment
relationship. CONSULTANT will not be entitled to any of the benefits which
COMPANY may make available to its employees, including, but not limited to,
group health or life insurance, profit-sharing or retirement benefits.
CONSULTANT is not authorized to make any representation, contract or commitment
on behalf of COMPANY unless specifically requested or authorized in writing to
do so by a COMPANY officer. CONSULTANT is 


 

















 


solely responsible for, and will file, on a timely
basis, all tax returns and payments required to be filed with, or made to, any
federal, state or local tax authority with respect to the performance of
services and receipt of fees under this Agreement. CONSULTANT is solely
responsible for, and must maintain adequate records of, expenses incurred in
the course of performing services under this Agreement. No part of CONSULTANT’S
compensation will be subject to withholding by COMPANY for the payment of any
social security, federal, state or any other employee payroll taxes. COMPANY
will regularly report amounts paid to CONSULTANT by filing Form l099-MISC with
the Internal Revenue Service as required by law.


 


2.                                      DUTIES.
CONSULTANT shall perform tasks as are set forth in the Statement of Work
attached hereto as Exhibit A (“Duties). CONSULTANT will diligently and
conscientiously perform his duties to the best of his ability. Services will be
performed under the direction of BRIAN BROCKWAY, the COMPANY’s President and
CEO, or his duly authorized representative.


 


3.                                      TIME
COMMITMENT. CONSULTANT shall devote such time to perform his Duties as the
parties may mutually agree.


 


4.                                      EFFECTIVE
DATE. This Agreement shall become effective on the date set forth above.


 


5.                                      TERMINATION;
SURVIVAL. Either party may terminate this Agreement for any reason upon
thirty (30) calendar days’ written notice to the other party. The definitions
contained in this Agreement and the rights and obligations contained in under
Sections 7, 8, 9, 12, 14 and 15 below will survive any termination or
expiration of this Agreement.


 


6.                                      COMPENSATION.
In consideration for CONSULTANT’S services under this Agreement, the COMPANY
agrees to pay CONSULTANT a fee as set forth in the Statement of Work for
CONSULTANT’S activities as may be requested from time to time by the COMPANY.


 


7.             INVENTIONS;
COMPANY INVENTIONS.


 


(a)                                 “Inventions”
include processes, machines, compositions of matter, improvements, inventions
(whether or not protectable under patent laws), works of authorship,
information fixed in any tangible medium of expression (whether or not
protectable under copyright laws), moral rights, mask works, trademarks, trade
names, trade dress, trade secrets, know-how, ideas (whether or not protectable
under trade secret laws), and all other subject matter protectable under
patent, copyright, moral right, mask work, trademark, trade secret or other
laws, and includes without limitation all new or useful art, combinations,
discoveries, formulae, manufacturing techniques, technical developments,
discoveries, artwork, software, and designs.


 


(b)                                “Company
Inventions” are Inventions that CONSULTANT, solely or jointly with others,
conceives, reduces to practice, creates, derives, develops or makes within the
scope of CONSULTANT’S work for COMPANY under this Agreement.


 


(c)                                 CONSULTANT
agrees that all Company Inventions made by CONSULTANT during or within eighteen
(18) months after the term of this Agreement will be the 


 


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COMPANY’S sole and exclusive property. CONSULTANT
will, with respect to any Company Invention:


 


(i)                                    keep
current, accurate and complete records, which will belong to the COMPANY and,
upon the COMPANY’S request, be kept and stored on the COMPANY’S premises;


 


(ii)                                 promptly
and fully disclose the existence and describe the nature of the Company
Invention to the COMPANY in writing (and without request);


 


(iii)                              assign
and does hereby assign to COMPANY or COMPANY”S designee CONSULTANT’S entire
worldwide right, title and interest in and to all Company Inventions and all
associated records and intellectual property rights and the complete right to
exploit or otherwise use the Company Inventions or any portion thereof, in any
form of medium, expression or technology now known or hereafter known or
developed, all contract and licensing rights, and all claims and causes of
action with respect to any of the foregoing, whether now known or hereafter to
become known during the entire term of such rights and any extension thereto;


 


(iv)                             acknowledge
and deliver promptly to the COMPANY any written instruments, and perform any other
acts necessary in the COMPANY’S opinion to obtain, perfect and enforce, for
COMPANY’S benefit, COMPANY’S rights, title and interest in any and all
countries, in and to all patents, copyrights, moral rights, mask works, trade
secrets, and other property rights in each of the Company Inventions.


 


If CONSULTANT has any rights to the Company Inventions
that cannot be assigned as described above, CONSULTANT agrees to waive
enforcement world-wide of such rights against COMPANY, its officers, directors,
shareholders, agents and employees. If CONSULTANT has any rights to the Company
Inventions that cannot be assigned nor waived as described above, CONSULTANT
hereby grants and agrees to grant to COMPANY an exclusive, irrevocable,
paid-up, and royalty free license, in perpetuity and world-wide, to fully
exercise such rights, including rights to sublicense through multiple tiers of
sublicenses. These rights are assignable by COMPANY. CONSULTANT also waives and
agrees never to assert any moral rights, or the equivalent thereof, against
COMPANY with respect to any of the rights described above.


 


(d)                                CONSULTANT
represents that, except as previously disclosed to the COMPANY in writing, as
of the date of this Agreement, CONSULTANT has no rights under, and will make no
claims against the COMPANY with respect to, any Inventions which would be
Company Inventions if made, conceived or acquired by CONSULTANT during the term
of this Agreement.


 


(e)                                 With
respect to any obligations performed by CONSULTANT under subsection 7(b)
following termination of this Agreement, the COMPANY will pay 


 


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CONSULTANT an hourly fee as set forth in the last
Statement of Work, and will pay or reimburse all reasonable out-of-pocket
expenses.


 


8.                                      PUBLICATIONS.
The COMPANY shall have the right to publish the results of CONSULTANT’S work under
this Agreement at any time the COMPANY determines to be appropriate and
desirable. CONSULTANT grants and agrees to grant to the COMPANY the perpetual,
irrevocable, nonexclusive, worldwide, royalty-free right to copy, republish,
reproduce, prepare derivative works, perform, display, distribute and use, in
whole or in part, any material published by CONSULTANT, whether copyrighted or
not, based on any information, conclusions or developments resulting from work under this Agreement. Any
works of original authorship, including computer programs produced by
CONSULTANT in the performance of the work called for by this Agreement shall be
considered as “work made for hire” as that term is used in the Copyright Act.


 


9.                                      CONFIDENTIAL
INFORMATION.


 


(a)                                 “Confidential
Information,” as used in this Section 9, means information that is not
generally known and that is proprietary to the COMPANY or that the COMPANY is
obligated to treat as proprietary. Specifically, Confidential Information shall
include but not be limited to the COMPANY’S customer or prospect lists,
marketing and selling tactics or strategies planned or employed by the COMPANY,
sales figures, market projections, product designs, materials used in products
and manufacturing processes. CONSULTANT’S duties shall apply only to
Confidential Information that is: (i) disclosed by the COMPANY in writing and
is marked to indicate it is confidential at the time of disclosure; or that is
(ii) disclosed by the COMPANY in any other manner including oral disclosure and
is indicated to be confidential at the time of disclosure; or that is
(iii) disclosed in the form of tangible products or materials transmitted
to the CONSULTANT with an accompanying written memorandum.


 


(b)                                Except
as specifically authorized by an authorized officer of the COMPANY or by
written COMPANY policies, CONSULTANT will not use or disclose Confidential
Information to any person who is not an employee of the COMPANY. Upon
termination of this Agreement, CONSULTANT will promptly deliver to the COMPANY
all records and any compositions, articles, devices, apparatus and other items
that disclose, describe or embody Confidential Information or any Invention,
including all copies, reproductions and specimens of the Confidential
Information in CONSULTANT’S possession, regardless of who prepared them, and
will promptly deliver any other property of the COMPANY in CONSULTANT’S
possession, whether or not Confidential Information.


 


(c)                                 This
Agreement imposes no obligation upon CONSULTANT with respect to Confidential Information
that: (i) was in the CONSULTANT’S possession before receipt from the COMPANY;
(ii) is or becomes available to the public through no fault of the CONSULTANT; (iii)
is received in good faith by the CONSULTANT 


 


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from a third party who had the right to provide it and
is not subject to an obligation of confidentiality owed to the third party; or
(iv) is independently developed by the CONSULTANT without reference to
Confidential Information received hereunder.


 


(d)                                CONSULTANT’S
duties with respect to Confidential Information under this Section 9 shall
continue for so long as the information does not become publicly available to
persons outside of the COMPANY.


 


(e)                                 CONSULTANT
shall protect Confidential Information by using the same degree of care, but no
less than a reasonable degree of care, to prevent the unauthorized disclosure
of Confidential Information, as the CONSULTANT uses to protect his own
confidential information of a like nature.


 


(f)                                   In
the event that CONSULTANT is required by judicial or administrative process to
disclose Confidential Information, CONSULTANT shall promptly notify the COMPANY
and allow the COMPANY a reasonable time to oppose such process. If required under
force of law, CONSULTANT must use best efforts to maintain the confidentiality
of the Confidential Information by providing such Confidential Information
under seal, protective order or under equivalent procedure.


 


10.           NON-COMPETE


 


(a)                                 “Conflicting
Product,” as used in this Section 10, means any product, method or process,
system or service of any person or organization other than the COMPANY, in
existence or under development, which is the same as or similar to or competes
with or has a usage allied to, a product, method or process, system or service
upon which CONSULTANT works (in either a sales or nonsales capacity) during the
last three years of his employment by the COMPANY, or about which CONSULTANT
acquires Confidential Information.


 


(b)                                “Conflicting
Organization” means any person or organization which is engaged in or about to
become engaged in, the development, production, marketing, leasing, selling or
servicing of a Conflicting Product.


 


(c)                                 CONSULTANT
agrees that during the term of this Agreement and for a period of eighteen (18)
months after the termination of this Agreement, CONSULTANT will not render
services, directly or indirectly, in the United States, or in any other
country, to any Conflicting Organization.


 


(d)                                CONSULTANT
will not, directly or indirectly, as an agent, consultant, or in any other
capacity, participate in any way whatsoever in inducing or attempting to induce
any employee of COMPANY to terminate employment with COMPANY.


 


11.                                EXPENSES.
The COMPANY will reimburse CONSULTANT for all usual, reasonable and necessary
expenses paid or incurred by CONSULTANT in the performance of CONSULTANT’S
duties, provided that (i) the COMPANY shall have given its prior approval for
such expenses, (ii) such expenses shall be incurred in accordance with all 


 


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applicable COMPANY policies and (iii) CONSULTANT shall
have submitted all receipts and other documentation required by such policies.


 


12.                                OWNERSHIP
AND RETURN OF COMPANY PROPERTY. All materials (including, without
limitation, documents, drawings, models, apparatus, sketches, designs, lists,
and all other tangible media of expression) furnished to CONSULTANT by COMPANY,
whether delivered to CONSULTANT by COMPANY or made by CONSULTANT in the
performance of services under this Agreement (collectively, the “Company
Property”) are the sole and exclusive property of COMPANY or COMPANY’S suppliers
or customers, and CONSULTANT hereby does and will assign to COMPANY all rights,
title and interest CONSULTANT may have or acquire in the Company Property;
CONSULTANT agrees to keep all Company Property at the COMPANY’S or CONSULTANT’S
premises unless otherwise permitted in writing by COMPANY. At COMPANY’S request
and no later than five (5) days after such request, CONSULTANT shall destroy or
deliver to COMPANY, at COMPANY’S option, (a) all Company Property, (b) all
tangible media of expression in CONSUTANT’S possession or control which
incorporate or in which are fixed any Confidential Information, and (c) written
certification of CONSULTANT’S compliance with CONSULTANT’S obligations under
this sentence.


 


13.                                OBSERVANCE
OF COMPANY RULES. At all times while on COMPANY’S premises, CONSULTANT will
observe COMPANY’S rules and regulations with respect to conduct, health and
safety and protection of persons and property.


 


14.                                NO
ADEQUATE REMEDY. CONSULTANT understands that if CONSULTANT fails to fulfill
CONSULTANT’S obligations under this Agreement, the damages to the COMPANY might
be difficult to determine. Therefore, in addition to any other rights or
remedies available to the COMPANY at law, in equity, or by statute, CONSULTANT
hereby consents to the specific enforcement of this Agreement by the COMPANY
through an injunction or restraining order issued by an appropriate court.


 


15.           MISCELLANEOUS.


 


(a)                                 No
Conflicts. CONSULTANT represents and warrants to the COMPANY that neither
entering into of this Agreement nor the performance of any of CONSULTANT’S
obligations hereunder will conflict with or constitute a breach under any
obligation or CONSULTANT under any agreement or contract to which CONSULTANT is
a party or any other obligation by which CONSULTANT is bound. Without limiting
the foregoing, CONSULTANT agrees that at no time will CONSULTANT utilize any
trade secrets or other intellectual property of any third party while
performing services hereunder.


 


(b)                                Successors
and Assigns. This Agreement is binding on and inures to the benefit of the
COMPANY’S successors and assigns; provided, however, that the COMPANY may
assign this Agreement only in connection with a merger, consolidation,
assignment, sale or other disposition of substantially all of its assets 


 


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or business. This Agreement is also binding on
CONSULTANT’S heirs, successors, assigns and legal representatives.


 


(c)                                 Modification.
This Agreement may be modified or amended only by a writing signed by both the COMPANY
and CONSULTANT.


 


(d)                                Governing
Law. The laws of Minnesota will govern the validity, construction and
performance of this Agreement. Any legal proceeding related to this Agreement
will be brought in an appropriate Minnesota court, and both the COMPANY and
CONSULTANT hereby consent to the exclusive jurisdiction of that court for this
purpose.


 


(e)                                 Construction.
Wherever possible, each provision of this Agreement will be interpreted so that
it is valid under the applicable law. If any provision of this Agreement will
be interpreted so that it is valid by a court of competent jurisdiction under
the applicable law, that provision will remain effective to the extent not
declared invalid. The remainder of this Agreement also will continue to be
valid, and the entire Agreement will continue to be valid in other
jurisdictions.


 


(f)                                   Waivers.
No failure or delay by either the COMPANY or CONSULTANT in exercising any right
or remedy under this Agreement will waive any provision of the Agreement. No
single or partial exercise by either the COMPANY or CONSULTANT of any right or
remedy under this Agreement will preclude either of them from otherwise or
further exercising these rights or remedies, or any other rights or remedies
granted by any law or any related document.


 


(g)                                Captions.
The headings in this Agreement are for convenience only and do not affect this
Agreement’s interpretation.


 


(h)                                Entire
Agreement. This Agreement supersedes all previous and contemporaneous oral
negotiations, commitments, writing and understanding between the parties
concerning the matters in this Agreement, including without limitation, any
policy or personnel manuals of the COMPANY.


 


(i)                                    Notices.
All notices and other communications required or permitted under this Agreement
shall be in writing and either sent by certified First-Class mail, postage
prepaid, or delivered in person, and shall be effective five (5) working days
after mailing or on the next business work day if delivered in person, to the
addresses stated at the beginning of this Agreement. These addresses may be
changed at any time by like notice or delivery in person.


 


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IN WITNESS WHEREOF, the COMPANY and CONSULTANT have
executed this Agreement as of the date first above shown.


 


	
  FOR: TRANSOMA MEDICAL, INC.

  	
   

  	
   

  	
  FOR: CONSULTANT

  
	
   

  	
   

  	
   

  	
   

  
	
  By 

  	
  /s/ Brian P. Brockway

  	
   

  	
   

  	
   

  	
  By 

  	
  /s/ K. James Ehlen    

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Its: President & CEO

  	
   

  	
   

  	
  Its: Director

  
	
   

  	
   

  	
   

  	
   

  
	
  Date: 8/18/03

  	
   

  	
   

  	
  Date: 8/14/03

  
	
   

  	
   

  	
   

  	
   

  
	
  Brian P. Brockway

  	
   

  	
   

  	
   

  	
  K. James Ehlen

  	
   

  
	
  (Printed Name)

  	
   

  	
   

  	
  (Printed Name)

  
										



 


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CONSULTING
AGREEMENT

TRANSOMA MEDICAL, INC.


 


EXHIBIT A


 


STATEMENT OF WORK

(“Duties”)


 


CONSULTANT’S work
under this Agreement shall include the following:


 


Member of the Transoma Medical Board of Directors


 


For the
above-described activities, CONSULTANT’S hourly fee shall be $290.


 


Terms: 30 days
unless other terms arranged.


 


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