exv10w8






Exhibit 10.8









EXECUTIVE EMPLOYMENT AGREEMENT




     This EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is made, entered into and effective as
of the 1st day of November, 2006, by and between XStream Systems, Inc., a Delaware corporation
(“XStream”), and Paul J. Micciche (“Executive”).



RECITAL:




     The Board of Directors of XStream (the “Board”) believes it is in XStream’s best interest to
employ Executive as XStream’s Vice President of Engineering, and Executive accepts such employment,
pursuant to the terms and conditions of this Agreement.



     NOW, THEREFORE, in consideration of the foregoing recital and the covenants, agreements,
representations, warranties, terms and conditions set forth in this Agreement, and other good and
valuable consideration, the receipt and adequacy of which are hereby acknowledged, XStream and
Executive, intending to be legally bound, hereby agree as follows:



     1. Employment. XStream hereby employs Executive as Vice President of Engineering of
XStream, and Executive hereby accepts such employment, all upon the terms and conditions contained
in this Agreement.



          A. Executive’s Representation. Executive represents, warrants and covenants to
XStream that Executive is not bound, nor will Executive become bound, by any covenant, contract,
agreement or other obligation that may or does prevent Executive in any manner from (i) performing
Executive’s duties as Vice President of Engineering of XStream, and/or (ii) fulfilling Executive’s
obligations pursuant to this Agreement.



     2. Employment Period. Unless sooner terminated pursuant to the terms and conditions
of this Agreement, the term of this Agreement shall commence on the date first above written, and
shall automatically renew on an annual basis.



     3. Compensation.



          A. Base Salary. Executive shall be entitled to receive a base salary during the term
of this Agreement of at least One Hundred Twenty Thousand Six Hundred Forty Dollars ($120,640) per
year (the “Base Salary”), payable in accordance with the normal payroll policies of XStream. The
Base Salary shall be subject to all appropriate withholding taxes. The Base Salary shall be subject
to all appropriate withholding taxes. Compensation will begin effective November 6, 2006.




               (i) Increases to Base Salary. The Board shall review the Base Salary on not less than
an annual basis. The Board, in its sole and absolute discretion, may elect to increase the Base
Salary at any time, but shall not ever decrease the Base Salary below its then-current amount. Any
increase in the Base Salary shall constitute an amendment to this Agreement solely as to the amount
of the Base Salary, without waiver or modification of any other terms or conditions of this
Agreement.



 









 





          B. Annual Bonus. Executive shall be entitled to receive an annual bonus (“Annual
Bonus”) in accordance with the Xstream Systems Annual Bonus Program.




     4. Benefits. During the term of this Agreement, Executive shall be entitled to
receive the following benefits from XStream (collectively, “Benefits”):



          A. Health Insurance. XStream shall obtain on behalf of Executive, and maintain,
health insurance coverage as the same is available to XStream’s other executive level employees;




          B. Disability Insurance. ONCE THE COMPANY IS PROFITABLE AND PUTS THIS PROGRAM INTO
PLACE, XStream shall obtain on behalf of Executive, pay all premium amounts related to, and
maintain, disability insurance in an amount equal to one hundred percent (100%) of the Base Salary,
which the premium amounts for such disability insurance shall not exceed Five Thousand Dollars
($5,000.00) per year;




          C. Life Insurance. XStream shall obtain on behalf of Executive, pay all premium
amounts related to, and maintain, (portable term) life insurance on the life of Executive, with
such beneficiary(ies) as Executive may select in Executive’s sole discretion, in an amount equal to
$25,000. ONCE THE COMPANY IS PROFITABLE AND THIS BENEFIT IS IMPLEMENTED, this amount will increase
to at least one times (1X) Base Salary, which the premium amounts for such life insurance shall not
exceed ten percent (10%) of Base Salary;




          D. Vehicle Allowance. Executive shall not be entitled to a vehicle allowance;




          E. Retirement Plan. ONCE THE COMPANY IS PROFITABLE AND PUTS THIS PROGRAM INTO PLACE,
Executive may participate in XStream’s 401(k) or similar retirement plan as the same is available
to XStream’s other executive level employees;




          F. Time-Off. Executive shall be entitled to such reasonable periods of paid time-off
as are available to XStream’s other executive level employees and as may be mutually agreed upon by
the Board and Executive from time to time. In no event, however, shall such periods of paid
time-off be less than four (4) weeks per year. Executive shall be entitled to an additional unpaid
week off per year, providing that the executive notifies Human Resources in writing at least one
month in advance;




          G. Employment Location. Executive shall be employed at XStream’s Vero Beach, Florida
location; and




          H. Other Benefits. Executive shall be entitled to any
benefit that is available to other XStream employees




     5. Business Expenses and Reimbursements. Executive shall be entitled to reimbursement
by XStream for ordinary and necessary business expenses incurred by Executive in the performance of
Executive’s duties (collectively, “Business Expenses”), which such Business Expenses shall be
approved by XStream in its sole and absolute discretion, and further provided that:



          A. Each such Business Expense is of a nature qualifying it as a deductible expense on the
Federal income tax return of XStream as a business expense, and not as deductible compensation to
Executive; and




          B. Executive furnishes XStream with adequate records and other documentary evidence required
by applicable statutes, regulations and XStream’s policies for



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the substantiation of such Business
Expenses as a deductible business expense of XStream, and not as deductible compensation to
Executive.




     6. “Key Employee” Insurance. XStream shall have the right to obtain on the life of
Executive, pay all premium amounts related to, and maintain, “key employee” insurance naming
XStream as beneficiary. Selection of such insurance policy shall be in the sole and absolute
discretion of the Board. Executive shall cooperate fully with XStream, the Board, and the insurer
in applying for, obtaining and maintaining such life insurance, by executing and delivering such
further and other documents as XStream, the Board and/or the insurer may request from time to time,
and doing all matters and things which may be convenient or necessary to obtain such insurance,
including, without limitation, submitting to any physical examinations and providing any medical
information required by the insurer.



     7. Duties. Executive shall utilize Executive’s best efforts to do all of the
following:



          A. Performance Requirements. Executive shall perform all duties in connection with
Executive’s position as Vice President of Engineering of XStream, or as otherwise designated by the
Board, including, without limitation, participation in the general overall management of XStream,
and other such duties that as from time to time may be delegated or assigned to Executive by the
Board;




          B. Direction and Control of the Board. Executive shall at all times report to, and
Executive’s activities shall at all times be subject to the direction and control of, the Board;




          C. Adherence to Policies and Rules. Executive shall abide by all by-laws, policies,
rules and regulations as may be established from time to time by XStream, the shareholders of
XStream and/or the Board; and




          D. Devotion of Professional Efforts. Executive shall devote all of Executive’s
business and professional time, efforts, energy and skills to the performance of Executive’s duties
pursuant to this Agreement.




               (i) Exceptions. Notwithstanding Section 7(D), Executive may: (a) invest Executive’s
personal assets in businesses in which Executive’s participation is solely that of a passive
investor, provided, however, the form or manner of such investment shall not require services on
the part of Executive that conflict with Executive’s duties pursuant to this Agreement; and (b)
Executive shall be permitted to serve other public and private organizations, including without
limitation, on the board of directors of such organizations, so long as such service does not
compromise Executive’s devotion of time and efforts to XStream, and does not present a conflict of
interest with regard to XStream.



     8. Termination of Executive’s Employment with XStream.



          A. Termination by Executive Without “Good Reason”. Executive, upon at least sixty
(60) days’ prior written notice to XStream, shall have the right to terminate Executive’s
employment with XStream at any time, for any reason or for no reason. Upon such termination by
Executive, XStream shall pay Executive all Base Salary, Annual Bonus (if already awarded), Stock
Options, Business Expenses and Benefits which are due and accrued through the effective date of
termination. All such amounts shall be payable to Executive within thirty (30) days of the
effective date of termination of Executive’s employment with XStream.




          B. Termination by Executive for “Good Reason”. Executive, effective immediately upon
written notice to XStream, shall have the right to terminate Executive’s



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employment with XStream at
any time, for any one of the following reasons (collectively, “Good Reason”):




               (i) XStream’s violation or breach of any material provision of this Agreement, including,
without limitation, Executive being required to report to, or otherwise
being subject to the direction and control of any other officer(s) and/or authority(ies) other
than the Board;



               (ii) material changes to Executive’s title, working conditions or duties such that Executive’s
power, duties or working conditions are diminished, reduced or otherwise changed to include powers,
duties or working conditions which are inconsistent with Executive’s title and duties as set forth
in this Agreement;



               (iii) any action by XStream which does or would significantly diminish the opportunity for
Executive to earn an annual bonus;



               (iv) any action by XStream which does or would significantly diminish the aggregate value of
the benefits;



               (v) relocation of Executive’s employment location outside of the State of Florida;



               (vi) XStream’s failure to obtain in writing assumption of its rights and obligations pursuant
to this Agreement within fifteen (15) days of a Change in Control (as defined in Section 8(G)
below); and/or



               (vii) the deterioration of Executive’s relationship with the Board and/or XStream’s officers,
as determined by Executive in Executive’s sole discretion, so as to make the performance of
Executive’s duties as set forth in this Agreement impossible or impracticable,


following written notification by Executive setting forth the specific nature of such Good Reason
and XStream’s failure to cure to the satisfaction of Executive within fifteen (15) days (or longer
in the event that such request cannot be reasonably responded to within a shorter period of time
and further provided that XStream has exercised good faith and due diligence in curing) of such
notification.



Upon such termination by Executive for Good Reason, XStream shall pay Executive all Base Salary,
Annual Bonus (if already awarded), Stock Options, Business Expenses and Benefits which are due,
have accrued, or will otherwise become due or accrue through the end of the term of this Agreement,
or six (6) months, whichever is the greater amount of time (as if Executive’s employment with
XStream was not prematurely terminated). All such amounts shall be payable to Executive within ten
(10) days of the effective date of termination of Executive’s employment with XStream.




          C. Termination Upon Executive’s Death. In the event of the death of Executive during
the term of this Agreement, Executive’s employment with XStream shall terminate effective as of the
date of Executive’s death. XStream shall pay Executive’s estate all Base Salary, Annual Bonus (if
already awarded), Stock Options, Business Expenses and Benefits which are due and accrued through
the date of Executive’s death. All such amounts shall be payable to Executive’s estate within ten
(10) days of Executive’s death.




          D. Termination by XStream Without “Cause”. XStream, upon at least sixty (60)days’
prior written notice to Executive, shall have the right to terminate Executive’s employment with
XStream at any time, for any reason or for no reason. Upon such termination



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by XStream, XStream
shall pay Executive all Base Salary, Annual Bonus (if already awarded), Stock Options, Business
Expenses and Benefits which are due, have accrued, or will otherwise become due or accrue through
the end of the term of this Agreement, or six (6) months, whichever is the greater amount of time
(as if Executive’s employment with XStream was not prematurely terminated). All such amounts shall
be payable to Executive within ten (10) days of the effective date of termination of Executive’s
employment with XStream.




          E. Termination by XStream for Cause. XStream, effective immediately upon written
notice to Executive, shall have the right to terminate Executive’s employment with XStream at any
time, for Cause (as defined below). Upon such termination by XStream, XStream shall pay Executive
all Base Salary, Annual Bonus (if already awarded), Stock Options, Business Expenses and Benefits
which are due and accrued through the effective date of termination of Executive’s employment with
XStream. All such amounts shall be payable to Executive within ten (10) days of the effective date
of termination of Executive’s employment with XStream.




               (i) Cause. For purposes of this Agreement, “Cause” shall mean Executive’s (a)
conviction of a felony or of any crime involving moral turpitude, and/or (b) being found guilty or
otherwise pleading guilty to willful gross neglect or willful gross misconduct in performing
Executive’s duties pursuant to this Agreement.



          F. Termination Upon Change of Control. In the event of Executive’s termination of
employment with XStream upon, due to, or as a direct or indirect result of a Change of Control (as
defined below), provided that Executive complies with Sections 8(H) 9, 10 and 12, Executive shall
receive the following:




               (i) Severance. Executive shall receive all Base Salary, Annual Bonus (if already
awarded), Stock Options, Business Expenses and Benefits which are due, have accrued, or will
otherwise become due or accrue for a period of six months (as if Executive’s employment with
XStream was not prematurely terminated). All such amounts shall be payable to Executive within
thirty (30) days of the effective date of termination of Executive’s employment with XStream; and



               (ii) Acceleration of Stock Options. Immediately prior to the effective date of the
Change of Control, twenty five percent (25%) (i.e., one year acceleration) of all outstanding Stock
Options granted by XStream to Executive together with any options issued in a tender offer in
exchange for such outstanding Stock Options shall fully vest and shall be exercisable by Executive
for a period of one (1) year following the effective date of the termination of Executive’s
employment with XStream.



          G. Definition of “Change of Control”. For purposes of this Agreement, “Change of
Control” means when:




               (i) any “person” (as defined by the Securities Exchange Act of 1934), other than a trustee or
other fiduciary holding securities of XStream under an employee benefit plan of XStream, becomes
the “beneficial owner” (as defined by Rule 13(d)(3) promulgated under the Securities Exchange Act
of 1934), directly or indirectly, of securities of XStream representing fifty percent (50%) or more
of (a) the outstanding shares of common stock of XStream or (b) the combined voting power of
XStream’s then-outstanding securities;



               (ii) XStream is party to a merger or consolidation, or series of related transactions, which
results in the then-outstanding voting securities immediately prior thereto to fail to continue to
represent at least fifty percent (50%) of the combined voting power of XStream’s voting securities
or such surviving or other entity outstanding immediately after such merger or consolidation;



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               (iii) there is a sale or disposition of all or substantially all of XStream’s assets, or
consummation of any transaction or series of transactions having a similar effect, unless at least
fifty percent (50%) of the combined voting power of the voting securities of the acquiring entity
is held by persons who held the option securities of XStream immediately prior to such transaction
or series of transactions;



               (iv) there is a dissolution or liquidation of XStream, unless after such liquidation or
dissolution all or substantially all of the assets of XStream are held in an entity at least fifty
percent (50%) of the combined voting power of the voting securities of which is held by persons who
held the voting securities of XStream immediately prior to such liquidation or dissolution; and/or



               (v) any transaction or series of related transactions that has the substantial effect of any
one or more of the foregoing occurrences.



          H. Release. XStream may condition the payments required pursuant to Section 8(F) upon
delivery by Executive of a signed mutual release of known and unknown claims related to Executive’s
employment with XStream.




     9. Nonsolicitation and Noncompetition.



          A. Nonsolicitation. Executive shall not, at any time during the term of this
Agreement, and for twelve (12) months after the effective date of the expiration or termination of
the term of this Agreement, directly or indirectly, contact or proposition, or otherwise attempt to
induce, nor accept the initiative of a third party in such regard, alone or by combining or
conspiring with a third party, any employees, agents, consultants, representatives, contractors,
vendors, suppliers, distributors, manufacturers, clients, customers or other business contacts of
XStream to terminate or modify their relationship with, or compete against, XStream.




          B. Noncompetition. Executive shall not, at any time during the term of this
Agreement, and for twelve (12) months after the effective date of the expiration or termination of
the term of this Agreement, directly or indirectly, personally or as an owner, officer, director,
partner, employee, member, agent, consultant, representative, independent contractor, or in any
other capacity whatsoever of any corporation or other entity, own, manage, operate, control or
conduct any business or enterprise , or any other business in direct or indirect competition with
XStream or its affiliates and subsidiaries (“Competitive Business”). Any Competitive Business
conducted through Internet, wireless or other similar telecommunication media that is viewable or
usable anywhere within the world is prohibited pursuant to this Agreement.




     10. Confidentiality.



          A. The Confidential Information. During the term of this Agreement, Executive may
have access to, be trusted or become acquainted with, and/or may acquire, knowledge and/or
possession or control of various confidential, trade secret and/or proprietary information of
XStream and/or its clients and customers, including, without limitation, trade secrets, know-how,
inventions (whether or not patentable), computer programs, techniques, processes, ideas,
schematics, testing procedures, internal documentation, design and function specifications, product
requirements, problem reports, analysis and performance information, client and customer lists,
lead sheets and other technical, business, product, marketing and financial information, plans and
data (collectively, the “Confidential Information”).




          B. Exclusions from the Confidential Information. The Confidential Information shall
not include information that: (i) becomes public without breach of this Agreement by Executive;
(ii) was received by Executive from a third party not under any obligation of confidentiality to
XStream; or (iii) is required to be disclosed by Executive by law or



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a final order of a court or
other governmental agency or authority of competent jurisdiction; provided, however, reasonable
notice prior to any such disclosure shall be given to XStream to allow sufficient time to obtain
injunctive relief, protective order or similar remedy.




          C. Non-disclosure of the Confidential Information. At all times from the date of this
Agreement, Executive shall: (i) not use or disclose (except as expressly authorized by this
Agreement) the Confidential Information without the prior written consent of XStream; (ii)
take all reasonable measures to maintain the Confidential Information in confidence; (iii)
disclose the Confidential Information only to those who (a) have a confidentiality obligation in
writing with XStream and (b) are necessary for Executive to perform Executive’s duties pursuant to
this Agreement; and (iv) promptly report to XStream any violation of the foregoing.




          D. Executive’s Acknowledgements. Executive acknowledges and agrees that the
Confidential Information, and all copies and manifestations of the same, are, and shall remain at
all times, the exclusive property of XStream and/or its clients and customers. Executive
acknowledges and agrees that the Confidential Information is a special and unique asset of XStream
and/or its clients and customers, created and/or obtained by XStream and/or its clients or
customers at considerable time and/or expense, from which XStream and/or its clients and customers
may or does derive independent economic value from the Confidential Information not being generally
known to the public or third parties.




          E. Return of XStream Property. Executive shall, immediately upon XStream’s request,
or the effective date of the termination of Executive’s employment with XStream: (i) all copies and
manifestations of the Confidential Information that Executive may have or has access to; (ii) all
documents, other materials and equipment provided by XStream and/or its clients and customers; and
(iii) all documents and materials that Executive prepared during Executive’s employment with
XStream (collectively, the “XStream Property”). Executive acknowledges and agrees that the XStream
Property is, and shall remain at all times, the exclusive property of XStream.




     11, Works-Made-for-Hire.



          A. Results Deemed Works-Made-for-Hire. The results of Executive’s employment pursuant
to this Agreement, including, without limitation, any works of authorship resulting from the
performance of Executive’s duties during Executive’s employment with XStream and any works in
progress (collectively, “Results”), shall be deemed works-made-for-hire for the benefit of XStream.
XStream shall be deemed the sole owner throughout the universe of any and all such Results,
whether or not now or hereafter known, existing, contemplated, recognized or developed, with the
right to use the same in perpetuity in any manner XStream, in its sole and absolute discretion,
determines, without any further payment to Executive whatsoever.




          B. Assignment and Waiver. If, for any reason, any of such Results shall not be
legally deemed a work-made-for-hire, and/or there are any rights which do not accrue to XStream
pursuant to this Section, then Executive hereby irrevocably assigns and agrees to assign to XStream
any and all of Executive’s right, title and interest thereto, including, without limitation, any
and all copyrights, patents, trade secrets, trademarks and/or other rights of whatsoever nature
therein, whether or not now or hereafter known, existing, contemplated, recognized or developed,
and XStream shall have the right to use the same in perpetuity throughout the universe in any
manner it determines, in its sole discretion, without any further payment to Executive whatsoever.
To the extent Executive has any rights in the Results that cannot be assigned in the manner
described above, Executive hereby unconditionally and irrevocably waives the enforcement of such
rights. This Section is subject to, and shall not be deemed to limit, restrict, or constitute any
waiver by XStream of, any rights of ownership to which XStream may be entitled by operation of law.




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          C. Further Assurances. Executive shall, from time to time, as may be requested by
XStream, do any and all things which XStream may deem useful, necessary or desirable to establish
or document XStream’s exclusive ownership of any and all rights in any Results, including, without
limitation, the execution of appropriate invention, copyright, trademark, and/or patent
applications or assignments.




     12. Non-Disparagement. Executive shall not, in any communications in any media,
criticize, ridicule or make any statement which disparages or is derogatory of XStream, XStream’s
products or services, or any of XStream’s present, former or future shareholders, officers,
directors, employees, affiliates and/or subsidiaries.



     13. Equitable Relief. XStream has entered into this Agreement in order to obtain the
benefit of Executive’s unique skills, talent, and experience. The parties enter into this
Agreement with the understanding that the provisions of Sections 1(A), 9, 10, 11 and 12 are
material terms of this Agreement, and that the Base Salary to be paid to Executive pursuant to this
Agreement has been based in part on the value to XStream of those Sections. Executive acknowledges
and agrees that any breach or threatened breach of Section 1(A), 9, 10, 11 or 12 will result in
irreparable damage to XStream and, accordingly, XStream may obtain injunctive relief, a decree of
specific performance and/or any other equitable relief for any breach or threatened breach of
Sections 1(A), 9, 10, 11 or 12, in addition to any other remedies available to XStream, without
being required to show any actual damage, or to post an injunction bond.



     14. Reasonableness of Restrictions. The parties agree that the restrictions and
remedies contained in Section 9, 10, 11, 12 and 13 are reasonable, recognizing the competitive
nature of the business of XStream, the nationwide and worldwide scope of similar businesses, the
specialized expertise and knowledge Executive possesses, the unique and extraordinary nature of
Executive’s services, and the importance to XStream of the Confidential Information to which
Executive may be exposed during Executive’s employment with XStream. In addition, Executive hereby
acknowledges and agrees that the faithful observance by Executive of the covenants contained in
this Agreement will not cause Executive any undo hardship, financial or otherwise, and that the
enforcement of each of the covenants contained in Sections 1(A), 9, 10, 11 and 12 will not impair
Executive’s ability to obtain employment. Therefore, it is Executive’s intention and the intention
of XStream that the restrictions and remedies contained in Sections 1(A), 9, 10, 11, 12 and 13
shall be enforceable to the fullest extent permissible by law. If it shall be found by a court of
competent jurisdiction that any such restriction or remedy is unenforceable but would be
enforceable if some part thereof were deleted or the period or geographical area of application
reduced, then such restriction or remedy shall apply with such modification as shall be necessary
to make it enforceable. The period of time during which Executive is prohibited from engaging in
certain activities pursuant to this Agreement shall be extended by the length of time during which
Executive is in breach of the terms of any provision of this Agreement.



     15. Indemnification.



          A. Indemnification of Executive. XStream agrees that if Executive is made a party, or
is threatened to be made a party, to any action, suit or proceeding, whether civil, criminal,
administrative or investigative (a “Proceeding”), by reason of the fact that Executive is or was a
director, officer or employee of XStream or is or was serving at the request of XStream as a
director, officer, member, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, including service with respect to employee benefit plans, whether or not
the basis of such Proceeding is Executive’s alleged action in an official capacity while serving as
a director, officer, member, employee or agent, Executive shall be indemnified and held harmless by
XStream to the fullest extent legally permitted or authorized by XStream’s Articles of
Incorporation, Bylaws or resolutions of the Board or, if



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greater, by the laws of the State of
Florida, against all cost, expense, liability and loss (including, without limitation, attorney’s
fees, judgments, fines, ERISA excise taxes or other liabilities or penalties and amounts paid or to
be paid in settlement) reasonably incurred or suffered by Executive in connection therewith, and
such indemnification shall continue as to Executive even if Executive has ceased to be a director,
member, employee or agent of XStream or other entity and shall inure to the benefit of Executive’s
heirs, executors and administrators.




          B. Advancement of Costs. XStream shall advance to the Executive all reasonable costs
and expenses incurred by Executive in connection with a Proceeding within twenty (20) days after
receipt by XStream of a written request for such advance. Such request shall include an
undertaking by Executive to repay the amount of such advance if it shall ultimately be determined
that Executive is not entitled to be indemnified against such costs and expenses; provided that the
amount of such entitled to be indemnified against such costs and expenses; provided that the amount
of such obligation to repay shall be limited to the after-tax amount of any such advance except to
the extent Executive is able to offset such taxes incurred on the advance by the tax benefit, if
any, attributable to a deduction for the repayment.




          C. No Presumption of Standard of Conduct. Neither the failure of XStream (including
the Board, independent legal counsel or stockholders) to have made a determination prior to the
commencement of any Proceeding concerning payment of amounts claimed by Executive under Section
15(B) above that indemnification of Executive is proper because he has met the applicable standard
of conduct, nor a determination by XStream (including the Board, independent legal counsel or
stockholders) that Executive has not met such applicable standard of conduct, shall create a
presumption in any judicial proceeding that Executive has not met the applicable standard of
conduct.




          D. D & O Insurance. XStream shall maintain a directors’ and officers’ liability
insurance policy covering Executive in an amount of no less than One Million ($1,000,000) Dollars.




     16. Survival. Executive’s obligations under Sections 1(A), 9, 10, 11, 12, 15 and 17
shall remain in full force and effect for the entire period provided in such Sections,
notwithstanding the expiration or termination of Executive’s employment with XStream.



     17. Miscellaneous.



          A. Amendments. The provisions of this Agreement may not be amended, supplemented,
waived or changed orally, but only by a writing signed by both XStream and Executive and making
specific reference to this Agreement.




          B. Assignability; Binding Nature. This Agreement shall be binding upon and inure to
the benefit of XStream and Executive and their respective successors, heirs (in the case of
Executive) and assigns. Rights or obligations of XStream pursuant to this Agreement may be
assigned or transferred by XStream pursuant to a merger or consolidation in which XStream is not
the continuing entity, or the sale or liquidation of all or substantially all of the assets of
XStream, provided that the assignee or transferee is the successor to all or substantially all of
the assets of XStream and such assignee or transferee assumes the liabilities, obligations and
duties of XStream, as contained in this Agreement, either contractually or as a matter of law.
XStream further agrees that, in the event of a sale of assets or liquidation as described in the
preceding sentence, it shall take whatever action it reasonably can in order to cause such assignee
or transferee to expressly assume the liabilities, obligations and duties of XStream hereunder. No
rights or obligations of Executive under this Agreement may be assigned or transferred by Executive
other than his rights to compensation and Benefits, which may be transferred only by will or
operation of law.





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          C. Binding Effect. All of the terms and provisions of this Agreement, whether so
expressed or not, shall be binding upon, inure to the benefit of, and be enforceable by the parties
and their respective administrators, executors, legal representatives, heirs, successors and
permitted assigns.




          D. Severability. If any part of this Agreement or any other Agreement entered into
pursuant to this Agreement is contrary to, prohibited by, or deemed invalid under, applicable law
or regulation, such provision shall be inapplicable and deemed omitted to the
extent so contrary, prohibited or invalid, but the remainder of this Agreement shall not be
invalidated thereby and shall be given full force and effect so far as possible.




          E. Waivers. The failure or delay of any party at any time to require performance by
the other party of any provision of this Agreement shall not affect the right of such party to
require performance of that provision or to exercise any right, power or remedy hereunder, and any
waiver by any party of any breach of any provision of this Agreement shall not be construed as a
waiver of any continuing or succeeding breach of such provision, a waiver of the provision itself
or a waiver of any right, power or remedy under this Agreement. No notice to or demand on any
party in any case shall, of itself, entitle such party to any other or further notice or demand in
similar or other circumstances.




          F. Notices. All notices, requests, consents and other communications required or
permitted under this Agreement shall be in writing (including electronic transmission) and shall be
(as elected by the party giving such notice) hand delivered by messenger or courier service,
electronically transmitted, or mailed (airmail if international) by registered or certified mail
(postage prepaid), return receipt requested, addressed to:




If to Executive:




Paul J. Micciche

147 Filbert Street

Sebastian, FL 32958

Telefax: (     )     -          




	 	 	 
	If to XStream:

	 	With a copy to:
	 
	 	 
	XStream Systems, Inc.

	 	Gunster, Yoakley & Stewart, P.A.
	3873 39th Square

	 	777 South Flagler Drive, Suite 500 East
	Vero Beach, FL 32960

	 	West Palm Beach, Florida 33401
	Telefax: (772) 257-0179

	 	Telefax: (561) 655-5677
	Attention: Brian Mayo, CEO

	 	Attention: David G. Bates, Esq.





or to such other address as any party may designate by notice complying with the terms of this
Section. Each such communication shall be deemed delivered (i) on the date delivered if hand
delivered; (ii) on the date of transmission with confirmed answer back if by electronic
transmission; and (iii) on the date upon which the return receipt is signed or delivery is refused
or the notice is designated by the postal authorities as not deliverable, as the case may be, if
mailed.




          G. Governing Law. This Agreement and all transactions contemplated by this Agreement
shall be governed by, and construed and enforced in accordance with, the internal laws of the State
of Florida, without regard to principles of conflicts of laws.





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          H. Jurisdiction and Venue. The parties acknowledge that a substantial portion of the
negotiations, anticipated performance and execution of this Agreement occurred or shall occur in
Indian River County, Florida. Any civil action or legal proceeding arising out of or relating
pursuant to this Agreement shall be brought in the courts of record of the State of Florida in
Indian River County or the United States District Court, Southern District of Florida. Each party
consents to the jurisdiction of such court in any such civil action or legal proceeding and waives
any objection to the laying of venue of any such civil action or legal proceeding in such court.
Service of any court paper may be effected on such party by mail or in such other manner as may be
provided under applicable laws, rules of procedure or local rules.




          I. Enforcement Costs. If any legal action or other proceeding is brought for the
enforcement of this Agreement, or because of an alleged dispute, breach, default or
misrepresentation in connection with any provisions of this Agreement, the successful or prevailing
party or parties shall be entitled to recover reasonable attorney’s fees, court costs and all
reasonable expenses even if not taxable as court costs (including, without limitation, all such
fees, costs and expenses incident to appeals), incurred in that action or proceeding, in addition
to any other relief to which such party or parties may be entitled.




          J. Headings for Reference Only. The headings contained in this Agreement are for
convenience of reference only and shall not limit or otherwise affect in any way the meaning or
interpretation of this Agreement.




          K. Advice of Counsel. EACH PARTY ACKNOWLEDGES THAT IT HAS BEEN ADVISED BY ITS OWN
COUNSEL, OR HAS HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL, WITH RESPECT TO THIS AGREEMENT.




          L. Construction. This Agreement is a negotiated document and shall not be construed
more strongly against any party regardless of who is responsible for its preparation.




          M. Agreement May Be Signed in Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which taken together shall
constitute one and the same instrument. Confirmation of execution by electronic transmission of a
facsimile signature page shall be binding on a party so confirming.




          N. Entire Agreement. This Agreement represents the entire understanding and agreement
between the parties with respect to its subject matter, and supersedes all other negotiations,
understandings and representations (if any) made by and between the parties.




     XStream and Executive have each executed this Agreement as of the day and year first above
written.



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	 	XStream Systems, Inc.:

 	 
	 	/s/ Brian T. Mayo
 	 
	 	(Signature) 	 
	 	 	 
	 	
 	 
	 	Print Name: 	Brian T. Mayo 	 
	 	Title:  	President & CEO	 
	 	Date:	11/18/06 	 
	 
	 	Executive:

 	 
	 	/s/ Paul J. Micciche
 	 
	 	(Signature) 	 
	 	 	 
	 	 Print Name:	Paul J. Micciche 	 
	 	Date:	11/20/2006 	 
	 




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