Exhibit 10.7
CONSULTING AGREEMENT
This
Agreement dated this 27 th day of June,
2008, is executed by and between MiddleBrook Pharmaceuticals, Inc.,
a Delaware corporation (the “ Company ”),
located at 20425 Seneca Meadows Parkway, Germantown, MD 20876, and
Edward M. Rudnic, Ph.D. (“ Consultant ”),
located at 13517 Maidstone Lane, Potomac, MD 20854 (the “
Agreement ”).
WHEREAS,
Consultant holds the position of President and Chief Executive
Officer of the Company and, in connection with an expected change
in the Company’s management, Consultant’s employment
with the Company will terminate effective with the closing of the
EGI transaction;
WHEREAS,
in the event of such termination of employment, the Company desires
to obtain consulting services from Consultant commencing on the day
following the close of the EGI transaction (the “
Effective Date ”), pursuant to the terms and
conditions set forth in this Agreement;
WHEREAS,
Consultant possesses the requisite skills, training and experience
to perform the services called for under this Agreement, and wishes
to perform the services based on the terms and conditions herein;
and
WHEREAS,
based on the nature of the relationship that the parties intend to
establish, the Company hereby engages the Consultant as an
independent contractor.
NOW,
THEREFORE, in consideration of the mutual promises and covenants of
the parties as herein contained, the parties hereto agree and
contract as follows:
| 1) |
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This Agreement shall be effective on the Effective Date. Other
than as contemplated by the immediately following proviso, this
Agreement shall be of no force or effect and neither party shall
have any rights or obligations hereunder until the Effective Date;
provided, however, that (i) no party may terminate, modify or
amend this Agreement prior to the Effective Date unless in a
writing signed by the Company and Consultant, and (ii) the
provisions of this Paragraph 1, and any definitions in this
Agreement, shall be effective upon execution of this Agreement by
the parties hereto. If the termination of Consultant’s
employment with the Company does not occur, this Agreement shall be
null and void and of no force or effect. |
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| 2) |
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The original term of this Agreement shall be for 24-months
commencing on the Effective Date. This Agreement may be renewed for
additional 12-month periods by mutual agreement of the parties
hereto. |
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| 3) |
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Commencing on the Effective Date, the Consultant shall be
available on a mutually agreeable schedule to provide such
consulting services with respect to the business of the Company as
the Company reasonably requests. The consulting services that may
be requested of Consultant shall be of a nature that reflects and
is consistent with Consultant’s skills, |
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experience, expertise and services provided by Consultant to
the Company prior to the Effective Date. The Consultant shall
perform such services in a thorough, efficient, and workmanlike
manner, promptly and with due diligence and care, and in accordance
with that standard of care and skill ordinarily exercised by
members of the profession performing similar services. In addition,
Consultant shall comply with all applicable federal, state and
local statutes, ordinances and regulations in the course of
performing such objectives. |
| 4) |
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The Company enters in this Agreement based on
Consultant’s experience with the business of the Company and
his demonstrated ability to accomplish the objectives of such
business. Consequently, the Company will not provide Consultant
with any training or instructions with respect to the services to
be provided hereunder. Similarly, Consultant is responsible for
providing any equipment, materials or supplies that Consultant
determines are necessary to accomplish the objectives. |
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| 5) |
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Consistent with the parties’ intent that the relationship
created by this Agreement be that of service recipient and
independent contractor, Consultant shall retain the exclusive right
to control and direct all details of the services that Consultant
performs hereunder, including where, when and how the services are
to be performed. Consultant’s failure to accomplish the
services by the mutually agreed deadline, however, shall constitute
a material breach of this Agreement, unless the Company agrees to
an extended deadline. |
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| 6) |
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Other than with respect to the Options granted pursuant to
Paragraph 10 and the changes to the Prior Employment Options
pursuant to Paragraph 11, Consultant shall not be eligible to
participate in any benefit programs that the Company now or
hereafter maintains for its employees with respect to services
performed hereunder, and Consultant hereby waives any such right to
participate in the programs. This waiver of any right to
participate in Company-sponsored employee benefit programs
represents a material component of the terms of compensation agreed
to by these parties and is not in any way conditioned on any
representation or assumption concerning status of Consultant with
respect to the Company as an employee or independent
contractor. |
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| 7) |
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For all purposes, including but not limited to the Federal
Insurance Contributions Act (“FICA”), the Social
Security Act, the Federal Unemployment Tax Act
(“FUTA”), income tax withholding and any and all other
federal, state and local laws, rules and regulations, Consultant
shall be treated as an independent contractor and not as an
employee with respect to the Company. |
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| 8) |
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Consultant acknowledges and agrees that Consultant shall be
responsible (as a self-employed individual) for filing all tax
returns, tax declarations and tax schedules, and for the payment of
all taxes required, when due, with respect to any and all
compensation earned by Consultant under this Agreement. The Company
will neither pay nor withhold any employment taxes with respect to
the compensation it pays Consultant. Rather, the Company will
report the amounts it pays Consultant on IRS Forms 1099, to the
extent required to do so under applicable Internal Revenue Code
provisions. |
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| 9) |
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Consultant’s fees for services provided under this
Agreement shall be Three Thousand Dollars ($3,000) per day or
Fifteen Hundred Dollars ($1,500) per half-day, plus reasonable
travel expenses. The Company shall have no obligation to pay a fee
prior to receipt of an |
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invoice from Consultant requesting payment of the same. The
Company will not reimburse Consultant for any other expenses
incurred in connection with the performance of services hereunder
unless otherwise agreed by the Company. For purposes of satisfying
Section 409A of the Internal Revenue Code of 1986, as amended,
the parties agree that any amount reimbursed hereunder for one
calendar year shall not affect the amounts reimbursed for other
calendar years, and all reimbursement payments, if any, shall in
all events be made no later than the end of the calendar year
following the calendar year in which the applicable expense is
incurred. |
| 10) |
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The Company shall take all action necessary to grant to
Consultant, on the Effective Date, a stock option (the “
Option ”) pursuant to the terms of the Amended
and Restated Middlebrook Pharmaceuticals, Inc. Stock Incentive Plan
(the “ Option Plan ”) to purchase 100,000
shares of Company common stock at an option price equal to the Fair
Market Value of such Common stock on the date of grant as
determined pursuant to the terms of the Option Plan. The Option
shall vest, in its entirety, upon expiration of the original term
of this Agreement or, if earlier, upon a material breach of the
Agreement by the Company; provided, however, that such vesting
shall not otherwise limit |
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