EXHIBIT 10.1

 
SEPARATION AGREEMENT AND GENERAL RELEASE
 
This Separation Agreement and General Release (“Agreement”) dated February 28,
2009 is between Eric Walters (for himself, his spouse, family, agents and
attorneys collectively,  “Executive” or “You”)), and AdvanSource Biomaterials
Corporation (the “Company”).
WHEREAS, Executive and the Company previously entered into an Employment
Agreement dated as of the 3rd day of April, 2006 and an amendment thereto dated
10th day of July 2007, which was effective on the 1st day of April 2007
(collectively, all of the foregoing agreements shall be referred to as the
“Previous Agreements”);
 
WHEREAS, Executive and the Company desire for this Agreement to supersede all
Previous Agreements as of the effective date of Executive’s resignation; and
 
WHEREAS, Executive and the Company acknowledge that this Agreement is desirable
and would not otherwise be entered into unless the Agreement supersedes the
Previous Agreements as of the effective date of Executive’s resignation;
 
WHEREAS, Executive and the Company desire for this Agreement to resolve amicably
and on mutually satisfactory terms any and all issues relating to the
Executive’s resignation from employment with the Company;
 
WHEREAS, Executive desires to resign his position as Vice President and Chief
Financial Officer and the Company recognizes Executive’s valuable service to the
Company;
 
NOW, THEREFORE, in consideration of the mutual promises and forbearances set
forth in this Agreement, and other good and valuable consideration which
Executive and the Company hereby acknowledge, Executive and the Company agree as
follows:
 
1. Terms and Conditions.
 
 

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a. Background and Recitals.  The foregoing Background and Recitals are
incorporated into and made a part of the Terms and Conditions of the Agreement.
 
b. Resignation of Employment.  Executive resigns his position with the Company
as Vice President and Chief Financial Officer as of the date of this Agreement.
 
2. Severance Benefit.  In connection with the termination of Executive’s
employment with the Company effective February 28, 2009, if Executive sign and
does not revoke this Agreement, Executive will receive the following Severance
Benefits:
 
a.  
34 weeks of Salary Continuation, paid on regularly scheduled Company paydays,
less legally required federal and state payroll deductions (also referred to the
“Severance Pay”).

 
b.  
If Executive was enrolled in the Company’s medical, dental, and vision plans on
his termination date, he may elect to continue his participation and that of his
eligible dependents in those plans under the federal law known as COBRA.  If
Executive does so by signing and returning the COBRA election form no later than
the date he signs and returns this Agreement, then the Company will pay the
Company’s share of premiums for his coverage and that of his eligible dependents
for 34 weeks, or until he becomes eligible for equivalent coverage through a new
employer, whichever is shorter.  At the conclusion of 34 weeks, if Executive
remains eligible for COBRA, he may continue his enrollment in these plans but
will be responsible for all premiums.  In no event will he be eligible for
coverage longer than the period provided for under COBRA.

 
Severance Benefits will begin on the first regularly scheduled payday after the
Effective Date of this Agreement, as defined in paragraph 13 below.
 
3. General Release.  In exchange for the Severance Benefits described in
paragraph 2, by signing this Agreement, Executive is are waiving and releasing
all known or unknown claims of every kind and nature he have or may have, as of
the day he signs this Agreement, against the Company, its parent, subsidiaries,
predecessors, successors, affiliates, trustees, officers, directors,
fiduciaries, insurers, employees and agents (jointly “the Released Parties”)
arising out of your employment, including the termination of his
employment.  The claims
 
 
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Executive is  releasing include, but are not limited to, any and all allegations
that the Released Parties:
 
*  
discriminated against Executive in violation of the Age Discrimination in
Employment Act (“ADEA”), the Family and Medical Leave Act, or on the basis of
race, color, sex (including sexual harassment), national origin, ancestry,
disability, religion, sexual orientation, marital status, parental status,
veteran status, source of income, entitlement to benefits, union activities, or
any other status protected by local, state or federal laws, constitutions,
regulations, ordinances or executive orders; or

 
*  
violated the Company’s personnel policies or procedures, any covenant of good
faith and fair dealing, or any express or implied contract of any kind; or

 
*  
violated public policy, statutory or common law, including claims for:  personal
injury; invasion of privacy; retaliatory discharge; negligent hiring, retention
or supervision; defamation; intentional or negligent infliction of emotional
distress and/or mental anguish; intentional interference with contract;
negligence; detrimental reliance; loss of consortium to Executive or any member
of his family; and/or promissory estoppel;

 
*  
are in any way obligated for any reason to pay Executive damages, expenses,
litigation costs (including attorneys’ fees), wages and/or penalties, backpay,
frontpay, disability or other benefits, compensatory damages, punitive damages,
and/or interest.

 
4. Exclusions From General Release.  Excluded from the General Release in
paragraph 3 above are any claims against the Released Parties or rights which
cannot be waived or released by law.  Also excluded from the General Release is
Executive’s right to file a charge against the Released Parties with an
administrative agency or participate in any agency investigation of the Released
Parties.  Executive is, however, waiving and releasing his right to recover any
money in connection with such a charge or investigation. Executive is also
waiving and releasing his right to recover money in connection with a charge or
law suit filed by any other individual, group of individuals or by the Equal
Employment Opportunity Commission or any other federal or state agency on your
behalf or on behalf of a group of which his is a
 
 
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member.   In addition, the Company acknowledges Executive’s rights (and
Executive reserves his rights) to indemnification as an indemnitee under the
Company's Articles of Incorporation.
 
5. Covenant Not To Sue.  A “covenant not to sue” is a legal term which means a
promise not to file a lawsuit in court.  It is different from the General
Release of claims contained in paragraph 3 above.  In addition to waiving and
releasing the claims covered by paragraph 3 above, Executive agrees not to sue
the Released Parties based on any claim waived or released by the General
Release provided in paragraph 3 of this Agreement.  This Covenant Not To Sue
does not bar Executive from bringing a claim against the Company to enforce this
Agreement or to challenge the validity of this Agreement under the ADEA.  If
Executive sues the Released Parties in violation of this Agreement, he shall be
liable to them for their reasonable attorneys’ fees and other litigation costs
incurred in defending against such a suit.  (As indicated above, it would not
violate any part of this Agreement to sue the Released Parties to enforce this
Agreement, or to challenge the validity of this Agreement under the ADEA.)
 
6. Executive Acknowledgments.  Executive also acknowledges that he: (i) has been
paid in full for all hours worked; (ii) has no accrued but unused vacation due
to him; (iii) has received any leaves to which he was entitled during his
employment and the Company has not interfered with his ability to request or
take such leaves; (iv) has not been retaliated or discriminated against because
he took a family or medical leave or any reason protected by law; and (v) has
not suffered any on-the-job injury for which he has not already filed a claim.
 
7. Non-Admissions.  The fact and terms of this Agreement are not an admission by
the Released Parties of any liability or wrongdoing under any law.
 
8. Non-Disparagement.   Executive understands and agrees that as a condition of
his receipt of the Severance Benefits, he shall not make any false, disparaging
or derogatory
 
 
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statements to any media outlet, industry group, financial institution or current
or former employee, consultant, client or customer of the Company regarding the
Company or any of its directors, officers, employees, agents or representatives
or about the Company’s business affairs and financial condition.  The Company
agrees that it will not, and will cause its senior executives (Michael Adams,
Andy Reed, Paul Strati and Khristine Carroll) and Directors who are not also
senior executives (William O’Neill, Anthony Armini, Michael Baretti, and Jerry
Dorsey) not to take any action or make any statement which is false, disparages,
criticizes, or is derogatory with respect to, Executive regardless of whether
such statements would be actionable under statutory or common law liability
theories.
 
9. Non-Disclosure of Confidential Information.  Executive acknowledges his
obligation to keep confidential all non-public information concerning the
Company which he acquired during the course of his employment with the Company,
including without limitation, information about clients that is not otherwise
publicly available; information about prospective clients; financial information
unless it is publicly available; information about strategic business plans and
initiatives that is not otherwise publicly available; information concerning any
aspect of staff employment including but not limited to compensation,
performance and disciplinary matters; computer passwords and any other
electronic means that would allow non-public access to the Company; and
information about the Company that is not otherwise within the public domain.
 
10. Confidentiality.  Executive understands and agrees that as a condition for
his receipt of the Severance Benefits herein described, the existence, terms and
contents of this Agreement, and the contents of any negotiations or discussions
resulting in this Agreement, shall be maintained as confidential by Executive
and his attorneys, agents and representatives and
 
 
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shall not be disclosed except to the extent required by federal or state law or
as otherwise agreed to in writing by the Company; provided, however, that it is
agreed that the Company shall issue (and Executive shall be free to provide
copies of) a press release in the form attached as Exhibit 1 to this Agreement.
 
11. Return of Company Property.  As a condition for Executive’s receipt of the
Severance Benefits described herein, he is required to return and represent that
he has returned all Company property including, but not limited to, files and
records, whether in electronic or hard copy (and copies thereof), keys,
passcards, electronic equipment (such as cell phones, beepers, laptop
computers), hardware, software, which was in his possession or
control.  Executive represents that he has left intact all electronic Company
documents or files, including those which he developed or helped develop during
his employment.
 
12. Additional Employee Acknowledgments.  Executive agrees that:
 
*  
He is entering into this Agreement knowingly and voluntarily;

 
*  
He as been advised to consult with an attorney before signing this Agreement;

 
*  
He understands that he may take up to twenty-one days from the date he receives
this Agreement to consider this Agreement before signing it;

 
*  
except for this Agreement he is not entitled to the Separation Benefits
described in paragraph 2 of this Agreement;

 
*  
this Agreement is the entire Agreement between Executive and the Company
regarding his release of claims against the Company.

 
13. Revocation/Payment.  After Executive signs this Agreement, he will have
seven (7) days to revoke it if he changes his mind.  If Executive wants to
revoke the Agreement, he should deliver a written revocation to Michael Adams,
the CEO of the Company,  within 7 days after he signed it.  If Executive revokes
this Agreement by delivery of a written revocation, this Agreement shall be of
no effect and will not bind or obligate either him or the Company.
 
 
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If Executive does not revoke this Agreement, this Agreement becomes effective on
the eighth day after he signed it (the “Effective Date”) and he will receive the
Severance Benefits described in paragraph 2.
 
14. Severability.  If any part of this Agreement is found to be invalid, the
rest of the Agreement will be enforceable.
 
15. Applicable Law. This Agreement shall be interpreted and construed by the
laws of the Commonwealth of Massachusetts, without regard to conflict of laws
provisions.  Executive hereby irrevocably submits to and acknowledges and
recognizes the jurisdiction of the courts of the Commonwealth of Massachusetts,
or if appropriate, a federal court located in Massachusetts (which courts, for
purposes of this agreement, are the only courts of competent jurisdiction), over
any suit, action or other proceeding arising out of, under or in connection with
this letter agreement or the subject matter hereof.
 
ERIC WALTERS
AdvanSource Biomaterials Corporation
/s/ Eric Walters
BY:  /s/ Michael F. Adams
 
TITLE:  President and Chief Executive Officer
DATE  February 27, 2009
DATE  February 28, 2009

 

 
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