Exhibit 10.2
CONSULTING
AGREEMENT
THIS CONSULTING AGREEMENT is made
this 9th day of April, 2007 (“ Consulting Agreement
”), by and between INFOLOGIX, INC., a Delaware corporation
(the “ Company ”), LM Consulting LLC, a Delaware
limited liability company (“ Consultant ”), and
Louis Heidelberger and Mark Niemiec (the “ Representatives ”
and, together with Consultant, “ Consultants
”) , individuals residing in the Commonwealth of
Pennsylvania and State of Florida, respectively, and the owners of
all of the outstanding membership interests of
Consultant.
WITNESSETH:
WHEREAS, the Company, InfoLogix-DDMS, Inc., DDMS
Holdings, LLC, and the Representatives entered into an Agreement
and Plan of Merger, dated April 9, 2007 (the “ Merger
Agreement ”) pursuant to which DDMS Holdings, LLC will
merge with and into InfoLogix-DDMS, Inc. (the “
Merger ”);
WHEREAS, the
Representatives have unique expertise with respect to the patents
and other intellectual property acquired by the Company in
connection with the Merger;
WHEREAS, the
Merger Agreement requires the Company to enter into this Consulting
Agreement with Consultant, and the Company desires to retain Consultant to
provide the Services (as defined below), and Consultant is willing
to be engaged by the Company in a consulting capacity as an
independent contractor, upon and subject to the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of
the mutual covenants and agreements contained herein, the parties
hereto, intending to be legally bound hereby, agree as
follows:
1.
Certain Terms . Capitalized terms used in this Consulting
Agreement and not otherwise defined herein shall have the
respective meanings set forth in the Merger
Agreement.
2.
Engagement .
The Company hereby engages Consultant, and Consultant hereby
accepts such engagement, on and subject to the terms and conditions
set forth herein, to serve the Company in a consulting
capacity.
3.
Term .
(a)
The period of service of Consultant to the Company will be for a
term of ten years commencing on April 9, 2007 and terminating on
April 9, 2017, unless earlier terminated as set forth herein (the
“ Consulting Period ”).
(b)
The Company will be entitled to
terminate this Consulting Agreement at any time, for cause, if any
of the following events shall occur:
(i)
Consultant or either Representative is convicted of a felony or a
crime involving monies or fraud by any court or governmental agency
of competent jurisdiction;
(ii)
neither of the Representatives are able to perform the duties
required of them hereunder due their death, disability or
otherwise;
(iii)
Consultant’s or either Representative’s gross
negligence or willful misconduct in the performance of the Services
(as defined below); or
(iv)
intentional refusal by Consultant or either Representative to
perform any duty required of them hereunder for a continuous period
of three (3) calendar days after delivery of written notice thereof
to Consultant by the Company.
(c)
This Consulting Agreement may be terminated at any time by mutual
written consent of the Company, Consultant and each of the
Representatives.
(d)
Upon termination of this Consulting Agreement, Consultant shall be
entitled only to the consulting fee payable under Section 5
of this Consulting Agreement accruing through the date of
termination.
4.
Duties .
(a)
Subject to the terms and conditions hereinafter provided, the
Company engages Consultant and the Representatives to provide the
services specified below (the “ Services ”)
related to the commercialization and development of certain
patents, patent applications, and other intellectual property
acquired by the Company in connection with the Merger, and
Consultant and the Representatives agree to provide the Services in
accordance with the terms of this Consulting Agreement. The
Services shall consist of:
(i)
identifying suppliers of components, containers and packaging
for drug delivery embodiments relating to the Patents;
(ii)
identifying potential licensees of the Patents;
(iii)
advising and assisting the Company with respect to the
implementation of the Patent Expansion Plan; and
(iv)
such additional or different duties and services relating to the
Patents as reasonably requested by the Company and appropriate to
Consultants’ abilities;
provided, however, that the Services
provided under this Consulting Agreement shall not include any
legal services performed by Louis Heidelberger or the law firm of
Reed Smith LLP.
(b)
During the Consulting Period, the Consultants shall work with and
report directly to the President or Chief Financial Officer of the
Company or other parties designated by the President or Chief
Financial Officer of the Company.
(c)
During the Consulting Period, the Consultants shall at all times
comply with, and be subject to, such reasonable policies,
procedures, rules and regulations as the Company may establish from
time to time.
(d)
In connection with providing the Services during the Consulting
Period, Consultant shall make the Representatives available by
telephone, email, or in person at the offices of the Company,
during normal business hours of the Company as reasonably requested
by the President or Chief Financial Officer. At all times
during the Consulting Period, Consultant shall cause the
Representatives to commit no less than an aggregate of 20 hours per
month to the provision of the Services.
(e)
During the Consulting Period, Consultant shall use its best efforts
to preserve and promote the name, reputation and business of the
Company. Consultant agrees that at all times during and after
the Consulting Period, it shall take no action that could adversely
affect the name, reputation or business of the Company.
5.
Consulting Fee .
(a)
As consideration for the services to be performed by Consultant
hereunder, the Company shall pay to Consultant, no later than 30
days after the end of each fiscal quarter following the Effective
Time, a consulting fee equal to 36% of the Net Income (as defined
below), if any, as of the end of such fiscal quarter
(the
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“
Consulting Fee ”). Each payment of the
Consulting Fee shall be accompanied by a reasonably detailed
description supporting the calculation (the “ Company
Calculation ”) of the amount to be paid. Consultant
shall be entitled to review each of the calculations and all
supporting documentation, if any, furnished to Consultant by the
Company with respect to the Consulting Fee. No more than two
times per calendar year, upon 10 days prior written notice to the
Company, Consultant shall be entitled, at Consultant’s
expense, to complete an accounting of the Consulting Fee with
reasonable access during the Company’s normal business hours
to the staff, books and records of the Company relating to the
calculation of the Consulting Fee (upon execution of an appropriate
confidentiality agreement) to determine the accuracy of the Company
Calculation. If Consultant objects to the Company Calculation
of the Consulting Fee, Consultant shall notify the Company in
writing within 20 business days of receipt of the Company
Calculation, which notice shall be accompanied by a reasonably
detailed calculation (the “ Consultant Calculation
”) of the amount Consultant believes should be paid. In
the event Consultant objects to the Company Calculation, the
Company and Consultant shall jointly select an independent
accounting firm to determine the appropriate amount of the
Consulting Fee. The determination of the independent
accounting firm shall be final and binding on the parties and shall
not exceed the Consultant Calculation nor be less than the Company
Calculation. All costs related to the work of the independent
accounting firm shall be borne equally by Consultant and the
Company.
(b)
As used in Section 5(a) , the term “ Net Income
” means an amount calculated pursuant to the following
formulas:
Until the aggregate amount of the
Patent Expansion Funds expended by InfoLogix during the term of
this Consulting Agreement exceeds $500,000 :
Net Income = R — EXP
— .5 (PEF)
After the aggregate amount of the
Patent Expansion Funds expended by InfoLogix during the term of
this Consulting Agreement exceeds $500,000:
Net Income = R — EXP
— .25 (PEF)
Where:
R =
The aggregate amount of all (i)
Settlement Income (as defined below) plus (ii) royalties or
prepaid licensing fees generated from in-force licenses of the
Patents (the “ Patent Royalties ”) received in
cash by the Company during the period starting on the first day of
the fiscal quarter immediately following the last fiscal quarter
for which a payment of the Consulting Fee was made pursuant to this
Section 5(b) and ending on the last day of the fiscal
quarter for which the calculation of Net Income is being made (such
period, the “ Measurement Period ”); provided,
that with respect to any calculation of Net Income made before the
first payment of Consulting Fee under this Section 5(b) ,
the Measurement Period shall be deemed to have begun at the
Effective Time. “ Settlement Income ”
shall mean income received by the Company from the settlement of
any claim, lawsuit, proceeding or similar action (an “
Action ”) by the Company against any person asserting
a claim for infringement upon the Patents.
EXP =
During the applicable Measurement
Period the aggregate of (i) all costs, fees and expenses incurred
by the Company or its Affiliates in connection with the generation
of the Patent Royalties, including, without limitation, all legal
fees incurred related to the licensing of Patents plus (ii)
all costs, fees and expenses incurred by the Company in connection
with an Action by the Company that results in any Settlement Income
being received by the Company plus (iii) all costs, fees and
expenses (including legal fees and any amounts paid in settlement
or as damages) incurred by the Company in connection with an Action
against the Company asserting that the
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Patents infringe upon a third
party’s intellectual property plus (iv) any sales and
use taxes incurred by the Company in connection with any Patent
Royalties or any Settlement Income.
PEF =
The aggregate Patent Expansion Funds
expended by InfoLogix or its Affiliates during the applicable
Measurement Period.
6.
Confidentiality . Consultant and each Representative
covenants and agrees that it will not, and will cause its advisors,
employees and agents not, to the detriment of the Company, at any
time during or after the termination of the Consulting Period, (a)
reveal, divulge or make known or accessible to any person or
business entity (other than the Company or
