Exhibit
10.3


 


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:

  	
  Dick Nigon

  	
   

  	
  [the “CONSULTANT”]

  
	
   

  	
   

  	
  Company:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Street 

  	
  Address:60 South 6th Street

  	
   

  	
   

  
	
   

  	
   

  	
  City, State Zip:

  	
  Minneapolis, MN 55402

  	
   

  	
   

  
	
   

  	
   

  	
  Phone:

  	
  (612) 455-5585

  	
   

  	
   

  
	
   

  	
   

  	
  Fax:

  	
  (612) 455-5719

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DATE

  	
   

  	
  June 20, 2006

  	
   

  	
   

  



 


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 official. 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, stale 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 1099-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 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 employee. 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 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 processing. 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 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
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 ADEOUATE 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 Conf1ict. CONSULTANT represents
and warrants to the COMPANY that neither entering into or 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 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.


 

















 


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/ Dick Nigon                         

  	
   

  
	
   

  	
   

  	
   

  
	
  Its: President & CEO

  	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Brian P. Brockway

  	
   

  	
   

  	
  Dick Nigon

  	
   

  
	
  (Printed Name)

  	
   

  	
  (Printed Name)

  
										



 

















 


CONSULTING AGREEMENT

TRANSOMA MEDICAL, INC.


 


EXHIBIT A


 


STATEMENT OF WORK

(“Duties”)


 


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


 


Describe activities (what, where, when).


 


Transoma Medical Board of Directors seat.


 


Start Date: 06-14-06


 


End Date:


 


For the above-described activities, CONSULTANT’S fee is listed below:


 


 


	
  Options

  	
   

  	
  75,000 shares at
  FMV. 25,000 shares are subject to 1 year cliff vesting and the balance vests
  quarterly over the next 24 months in equal increments.

  
	
  Cash
  compensation per attended full board meeting

  	
   

  	
  $2,500

  
	
  Cash
  compensation per audit committee meeting attended, serving as chair, whether
  by phone or face-to-face

  	
   

  	
  $500

  
	
  Cash
  compensation for participation in any other committee meeting attended,
  whether by phone or face-to-face

  	
   

  	
  $500

  
	
  Retainer

  	
   

  	
  none