Exhibit 10.1


 


EMPLOYMENT AGREEMENT


This
EMPLOYMENT AGREEMENT (“Agreement”) is
made and entered into as of November 14, 2007 by and between MFIC Corporation, a Delaware corporation (the “Company”), and Michael C. Ferrara
(“Executive”).


In
consideration of the mutual covenants contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:


1.             Employment.  The Company shall employ Executive, and Executive
accepts employment with the Company, upon the terms and conditions set forth in
this Agreement for the period beginning on the date hereof and ending as
provided in Section 4 below.  Executive
warrants that he is not subject to any agreement or obligation that would
prohibit or restrict his performance under this Employment Agreement.


2.             Position and Duties.


(a)           During
the Employment Period (as defined in Section 4(a)), Executive shall serve as
the Chief Executive Officer of the Company, reporting to the Company’s Board of
Directors (the “Board”).  Executive shall have the duties and
responsibilities of such position as well as such other duties and
responsibilities as the Board may from time to time reasonably direct.  Subject to the Company’s bylaws, Executive
shall also serve a director of the Company.


(b)           Executive’s
principal place of employment will be the Company’s principal corporate office,
currently located at 30 Ossipee Road in Newton, Massachusetts.  Executive shall travel as necessary for the
proper performance of his duties and responsibilities.  The expense of such business travel shall be
borne by the Company in accordance with Section 3(f) below.


(c)           The
Company and Executive acknowledge and agree that this employment will require
the full time and energies of Executive. 
Notwithstanding the foregoing, nothing in this Agreement shall preclude
Executive from:  (i) serving on the
governing bodies of the companies listed on Exhibit A or other companies
for which he has obtained the prior written approval of the Board,
(ii) engaging in charitable and public service activities, or
(iii) managing Executive’s personal investments, provided that such
activities under clauses (i) and (ii) are disclosed in writing to the
Board in a notice that references this provision and the activities under
clauses (i), (ii) and (iii) do not interfere with Executive’s availability
or ability to perform Executive’s duties or responsibilities hereunder.


3.             Compensation: Salary; Bonuses;
Stock Options and Other Benefits.


(a)           The
Company shall pay Executive a base salary of $230,000 per year (the “Base Salary”), payable in substantially
equal installments in accordance with the Company’s customary payroll
practices.  The Base Salary shall be
subject to annual review by the Board. 
Any increase in the Base Salary shall be determined by the Board in its
sole discretion.


 

















 


(b)           In
connection with compensation for calendar year 2008, Executive shall be
eligible to receive a performance bonus (the “Performance Bonus”) targeted on
the amount in the following schedule, where: 
(i) “EBITDA Percentage” is calculated as the Company’s earnings before
interest, taxes, depreciation and amortization divided by the Company’s gross
revenues, and (ii) all amounts used in said calculation are taken from the
Company’s audited financial statements for 2008.   




	
  EBITDA Percentage

  	
   

  	
  Target Amount

  	
   

  
	
  Less than 10%

  	
   

  	
  $60,000

  	
   

  
	
  At least 10% but less than 11%

  	
   

  	
  40%
  of base salary

  	
   

  
	
  At least 11% but less than 12%

  	
   

  	
  50%
  of base salary

  	
   

  
	
  At least 12% but less than 13%

  	
   

  	
  60%
  of base salary

  	
   

  
	
  At least 13% but less than 14%

  	
   

  	
  70%
  of base salary

  	
   

  
	
  At least 14% but less than 15%

  	
   

  	
  80%
  of base salary

  	
   

  
	
  At least 15% but less than 16%

  	
   

  	
  90%
  of base salary

  	
   

  
	
  16% or more

  	
   

  	
  100%
  of base salary

  	
   

  






 


The
Performance Bonus shall be determined by the Board, and may vary from the “Target
Amount” set forth above, based on Executive’s success at achieving other
performance objectives as may be established by the Board and Executive for the
2008 calendar year.  It is understood
that Executive and the Board will seek to establish such other performance
objectives within the first sixty (60) days of the calendar year.  The determination of whether and to what
extent the agreed performance objectives for 2008 have been achieved and the
actual amount of the Performance Bonus to be paid shall be determined by the
Board in it sole discretion.  The Board
shall consider Executive for a discretionary advance on the 2008 Performance
Bonus, payable in June 2008 of up to $20,000 against his potential Performance
Bonus for 2008.  The 2008 Performance
Bonus shall be paid within thirty (30) days after release of the Company’s
audited financial statements for calendar year 2008.  The payment of any Performance Bonus shall be
conditioned upon Executive remaining in the Company’s employ through the date
on which the Performance Bonus is paid.


(c)           It
is intended that the Compensation Committee of the Board and Executive shall
work together to create and implement performance bonus standards for future
years of Executive’s employment hereunder.


(d)           The Company shall grant Executive an
option (the “Option”) to purchase
300,000 shares of the Company’s common stock. 
The grant shall be effective, and the exercise price of the Option shall
be established as of the close of trading, on the Executive’s first day of
employment hereunder (the “Grant Date”).  If the trading markets for the Company’s
common stock are not in session on the Grant Date, the exercise price shall be
established as of the close of trading on the next trading day thereafter.  The Option shall be granted pursuant to, and
subject to all of the terms and conditions of, the MFIC Corporation 2006 Stock
Plan (the “Plan”).


 


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If
a Change of Control (as defined below) occurs during the Employment Period, the
Option shall immediately become vested as to all 300,000 shares.  Notwithstanding any other provision of this
Agreement, all vesting shall cease immediately upon the end of the Employment
Period.


(e)           Except
as otherwise expressly provided herein, Executive shall be eligible to
participate in the Company’s employee benefits as they may exist from time to
time including its health insurance, life insurance, 401k and stock purchase
plans (the “Employee  Benefits”). 
The Company’s current Employee Benefits are described in Exhibit B
to this Agreement.  Executive’s
participation in the Company’s employee benefit plans shall be subject to the
terms, conditions and eligibility requirements of each plan, provided that the
Company may alter, modify, add to, replace or delete any or all of its employee
benefit plans at any time as the Company in its sole discretion deems
appropriate.


(f)            Executive
shall be eligible to earn and use three (3) weeks of paid vacation per calendar
year, accruing at the rate of 1.25 days per month.  The use, accrual and carry over of vacation
time shall be governed by the Company’s vacation policies in effect from time
to time.


(g)           The
Company shall reimburse Executive for all reasonable expenses he incurs in the
course of performing his duties under this Agreement, to the extent consistent
with the policies established by the Company from time to time with respect to
travel and other business expenses and subject to the Company’s requirements
with respect to reporting and documentation of such expenses.


4.             Term.


(a)           The
term of Executive’s employment pursuant to this Agreement (the “Employment Period”) shall commence on the
Grant Date hereof and continue until such time as is specified by either party
in its written notice to the other given no less than thirty (30) days’ in
advance thereof, or until the Employment Period otherwise terminates as
described in this Section 4.


(b)           The
Employment Period shall terminate upon Executive’s death or upon the expiration
of a continuous period of ninety (90) days during which Executive is unable to
perform his assigned duties due to physical or mental incapacity (“Permanent Disability”).


(c)           In
the event the Employment Period is terminated either by Executive for other
than a Good Reason (as defined below) or by the Company for Cause (as defined
below) or as a result of Executive’s death or Permanent Disability, then the
Company shall have no further obligation to Executive hereunder other than as
set forth in subsection (d) below.


(d)           In the event of a termination of the
Employment Period for any reason, and in addition to any other payments that
may be required pursuant to this Agreement, the Company will pay Executive or
his designated beneficiary, or if no beneficiary has been designated in
writing, to his estate:  (i) any Base
Salary earned but not paid during the final payroll period of his employment
through the date of termination, (ii) pay for any vacation time accrued but not
used through the date of termination, and (iii) reimbursement for any 


 


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unreimbursed
expenses that have been properly incurred or that the Company has become
obligated to pay prior to termination.


(e)           If
the Employment Period is terminated by the Company without Cause, by Executive
for Good Reason or by the Company for any reason within one hundred eighty
(180) days of a Change of Control (as defined below) Executive shall be
entitled to receive as severance:  (i)
six (6) months of his Base Salary (as of the effective date of any such
termination) payable in monthly installments, (ii) six (6) monthly payments of
the amount that the Company would have contributed in continuation of Executive’s
medical coverage if Executive had remained as an employee of the Company, and
(iii) if the termination is effective prior to the end of a calendar year,
Executive shall be entitled to a pro-rated portion of the bonus that would
otherwise have been paid to Executive under this Agreement if Executive had
remained employed until year-end; such pro-rated portion to be calculated by
multiplying the amount determined pursuant to Section 3(b) or 3(c) of this
Agreement, as the case may be, by the fraction obtained by dividing the day of
the year upon which the termination became effective by 365.  The payment of the foregoing severance shall
be contingent in all respects on Executive having theretofore executed (and not
thereafter revoked) the general release of claims in the form attached hereto
as Exhibit C.


(f)            Except
as otherwise set forth above, all of Executive’s rights to employee benefits or
payments from or in respect of the Company after the termination of the
Employment Period shall cease upon such termination.


(g)           For
purposes of this Agreement, “Cause”
shall mean:  (i) the willful failure or
refusal by Executive to perform his duties hereunder (other than any such
failure resulting from Executive’s incapacity due to physical or mental
illness); (ii) Executive’s willful material breach of this Agreement or any
material policy of the Company or its subsidiaries applicable to him that has
been disclosed to him, which, if capable of cure, has not been cured within ten
(10) business days after written notice of such breach delivered to Executive by
the Board; (iii) Executive’s willful engaging in misconduct, or conduct deemed
by the Board to be grossly negligent, with respect to the performance of his
duties that is materially injurious to the Company, its subsidiaries, employees
or customers, monetarily or otherwise, which, if capable of cure, has not been
cured within ten (10) business days following written notice of such violation
delivered to Executive by the Company, or (iv) any violation by Executive of
Section 5 or 6 hereof; (v) Executive’s conviction of, or plea of guilty or nolo contendere, with respect to any
felony or any crime involving dishonesty or fraud; (vi) any act of fraud,
theft, or financial dishonesty with respect to the Company or any of its
subsidiaries; or (vii) alcohol or substance abuse by Executive.


(h)           For purposes of this Agreement, “Good Reason” shall mean the occurrence of
any of the following events:  (i) any
material breach of this Agreement by the Company (or any successor or assignee
of the Company), unless such breach is cured within ten (10) business days
after receiving written notice of the breach from Executive; (ii) relocate its
executive offices more than 50 miles from its current location; or (iii) a
Change of Control (as defined below). 
The foregoing definitions of Good Reason shall not be applicable,
however, if the event constituting Good Reason occurs:  (i) with Executive’s express prior written
consent, 


 


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or
(ii) in connection with termination of Executive’s employment for Cause or due
to his death or Permanent Disability.


(i)            For
purposes of this Agreement, “Change in Control” of the Company shall be deemed
to have occurred if:  (i) any person (as
such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”), other than a trustee or other fiduciary
holding securities of the Company under an employee benefit plan of the
Company, becomes the beneficial owner (as defined in Rule 13d-3 promulgated
under the Exchange Act), directly or indirectly, of securities of the Company
representing fifty percent (50%) or more of: 
(A) the outstanding shares of Common Stock of the Company, or (B) the
combined voting power of the Company’s then-outstanding securities entitled to
vote generally in the election of directors; (ii) the stockholders of the
Company approve a merger or consolidation which would result in the holders of
voting securities of the Company outstanding immediately prior thereto failing
to continue to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) at least fifty percent (50%) of
the combined voting power of the voting securities of the Company or such
surviving entity outstanding immediately after such merger or consolidation; or
(iii) the stockholders of the Company approve a plan of complete liquidation of
the Company or an agreement for the sale or disposition by the Company of all
or substantially all of the Company’s assets or any transaction having a
similar effect.


(j)            In
the event of any dispute regarding the existence of Executive’s Permanent
Disability hereunder, the matter will be resolved by a physician qualified to
practice medicine in the Boston metropolitan area who is on the staff of a
university hospital and has no prior relationship with Executive, which
physician shall be jointly selected by each of Executive (or his nominee) and
the Board of Directors of the Company. 
For this purpose, Executive will submit to all appropriate medical
examinations.


5.             Confidential
Information.  Executive acknowledges that the information,
observations and data obtained by him while employed by the Company concerning
the business or affairs of the Company (“Confidential Information”) are the
property of the Company.  Therefore,
Executive agrees that he shall not disclose to any unauthorized person or use
for his own account any Confidential Information without the prior written
consent of a majority of the Board of the Company, unless and to the extent
required by law, rule or regulation or pursuant to any administrative or court
order.  The term “Confidential
Information” shall not include:  (i)
information which is generally available to the public or those in the Company’s
industry as of the date of execution of this Agreement or which later becomes
generally available to the public or those in the Company’s industry other than
as a result of Executive’s prohibited disclosure; (ii) information which comes
to Executive from a bona fide third party source so long as such source was
not, to Executive’s knowledge, prohibited from providing such information to
Executive by any contractual, legal, fiduciary or other obligation; and (iii)
information which was known to Executive before such information was obtained
from the Company.  The foregoing
provision shall not be deemed to supersede or limit any other agreement between
Executive and the Company relating to confidential information of the Company,
but shall be deemed to be in addition to the provisions thereof.  To the extent there arises any irreconcilable
conflict between this Agreement and any such other agreement, the provisions of
the other agreement shall control.


 


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6.             Non-Compete; Non-Solicitation.


(a)           Executive
acknowledges that in the course of his employment with the Company he will
become familiar with the Company’s trade secrets and with other confidential
information concerning the Company and that his services will be of special, unique
and extraordinary value to the Company. 
Therefore, Executive agrees that: 
(i) during the Employment Period and for a period of twelve (12) months
thereafter (the “Noncompete Period”),
he shall not, directly or indirectly: 
(i) engage in any Competitive Business (as defined below); (ii) render
any services to any Competitive Business; or (iii) acquire a financial interest
in any Competitive Business.  For
purposes of this Agreement, the phrase “engage in” shall include any direct or
indirect ownership or profit participation interest in such enterprise, whether
as an owner, stockholder, member, partner, joint venturer of or otherwise, and
shall include any direct or indirect participation in such enterprise as an
employee, consultant, director, officer, licensor of technology or
otherwise.  “Competitive Business” means a business that is engaged, itself
or through an affiliate, in the production, sale, provision or distribution of
products or services, or research or development intended to create products or
services, competitive with the Company’s:


(i)            high-shear processing equipment used to: (A) produce
sub-micron and nanoscale liquid and solid particles in emulsions and
dispersions for the biotech, pharmaceutical, chemical/coatings, personal
care/cosmetics and food industries, and (B) perform cell disruption (lysis), or
(C) create liposomal encapsulation of a variety of products;


(ii)           chemical reactor equipment for: (A) the continuous
production of nanoscale products through chemical reaction, or (B) crystallization
processes to produce drug and other nanosuspensions for the pharmaceutical and
biotechnology industries; or


(iii)          future products, equipment or services developed;


as
such products, equipment or services exist or are contemplated during Executive’s
employment hereunder.


Without
limiting the generality of the foregoing, and solely for purposes of providing
examples, certain of the companies that the parties agree would constitute
Competitive Businesses are listed in Exhibit D attached hereto.  Nothing herein shall prohibit Executive from
being a passive owner of not more than three percent (3%) of the outstanding
stock of any class of an entity which is publicly traded, so long as Executive
has no active participation in any aspect of the business of such entity.


(b)           During the Noncompete Period,
Executive shall not directly or indirectly through another entity:  (i) induce or attempt to induce any employee
of the Company to leave the employ of the Company, or in any way interfere with
the relationship between the Company, on the one hand, and any employee
thereof, on the other hand; (ii) hire any person who is or at any time was an
employee of the Company earlier than six (6) months after such individual’s
employment relationship with the Company has ended; or (iii) induce or attempt
to induce any customer, supplier, licensee or other business relation of the
Company to cease doing business 


 


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with
the Company, or in any way interfere with the relationship between any such
customer, supplier, licensee or business relation, on the one hand, and the
Company, on the other hand.  Clauses (i)
and (iii) of the preceding sentence shall not apply to any general advertising
or solicitation.


(c)           If,
at the time of enforcement of this Section a court shall hold that the
duration, scope or area restrictions stated herein are unreasonable under
circumstances then existing, the parties agree that the maximum duration, scope
or area reasonable under such circumstances shall be substituted for the stated
duration, scope or area and that the court shall be allowed to revise the
restrictions contained herein to cover the maximum period, scope and area
permitted by law.


(d)           In
the event of the breach or a threatened breach by Executive of any of the
provisions of this Section, the Company, in addition and supplementary to other
rights and remedies existing in its favor, may apply to any court of law or
equity of competent jurisdiction for specific performance and/or injunctive or
other relief in order to enforce or prevent any violations of the provisions
thereof (without posting a bond or other security).


7.             Executive and
Company Representations.  Executive hereby represents and warrants to
the Company that:  (i) the execution,
delivery and performance of this Agreement by Executive does not and will not
conflict with, breach, violate or cause a default under any contract,
agreement, instrument, order, judgment or decree to which Executive is a party
or by which he is bound, and (ii) upon the execution and delivery of this
Agreement by the Company, this Agreement shall be the valid and binding
obligation of Executive, enforceable in accordance with its terms.  The Company hereby represents and warrants to
Executive that:  (i) the execution,
delivery and performance of this Agreement by the Company does not and will not
conflict with, breach, violate or cause a default under any contract,
agreement, instrument, order, judgment or decree to which the Company is a
party or by which it is bound and (ii) upon the execution and delivery of this
Agreement by Executive, this Agreement shall be the valid and binding
obligation of the Company, enforceable in accordance with its terms.


8.             Ownership of Intellectual
Property.  Executive
hereby assigns, and agrees to take any further actions both during and after
the Employment Period as the Company may deem necessary or appropriate to cause
all right, title and interest in, any and all intellectual property developed
by (or with the assistance of) Executive during the Employment Period.  Without limiting the generality of the
foregoing, it is specifically agreed that:


(a)           if Executive contributes to any patentable invention arising out of or in
the course of Executive’s employment hereunder, any such patentable invention
shall be the exclusive property of the Company, which shall have the exclusive
right to file patent applications for the benefit of the Company.  Executive hereby agrees to irrevocably assign to
the Company any rights Executive may have
as an inventor in respect of such invention and
to co-operate with the Company and provide all necessary assistance in the
filing and prosecution of such patent applications;


 


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(b)           all
copyrights and similar rights in all works created by Executive in the
course of his employment hereunder shall be the exclusive property of the Company from the
inception of the creation thereof; and


(c)           Executive shall execute the Company’s Invention Assignment and Proprietary
Information Agreement in the form of Exhibit E to this Agreement.  To
the extent there arises any irreconcilable conflict between this Agreement and
any such other agreement, the provisions of this Agreement shall control.


Executive hereby waives all moral
rights, rights of paternity, or any other rights implicit to the creation of
any and all such intellectual property.


9.             Survival.  Sections 4, 5, 6 and 8 through 17 shall survive and
continue in full force in accordance with their terms notwithstanding any
termination of the Employment Period.


10.          Notices.  All notices, requests, demands and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to be delivered and receive five business days
after having been deposited in the United States mail and enclosed in a
registered or certified post-paid envelope; one business day after having been
sent by reputable overnight courier; when personally delivered or sent by
facsimile communications equipment of the sending party on a business day, or
if not on a business day on the next succeeding business day thereafter; and in
each case addressed to the respective party at the address set forth below or
to such other changed addresses as the party may have fixed by notice as
provided herein:


Notices to Executive:


Michael C. Ferrara


140 Mount Vernon St., #4


Boston, MA  02108


 


Notices
to the Company:


MFIC Corporation


30 Ossipee Road


Newton, MA 02464


Attention:  Chairman of the Board of Directors


 


With a copy to:


 


MFIC Corporation


30 Ossipee Road


Newton, MA 02464


Attention:  General Counsel


 


11.          Severability.  Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision 


 


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of this Agreement is held
to be invalid, illegal or unenforceable in any respect under any applicable law
or rule in any jurisdiction, such invalidity, illegality or unenforceability
will not affect any other provision or any other jurisdiction, but this
Agreement will be reformed, construed and enforced in such jurisdiction as if
such invalid, illegal or unenforceable provision had never been contained
herein.


12.          Complete
Agreement.  This Agreement, those documents expressly
referred to herein and other documents of even date herewith embody the
complete agreement and understanding among the parties and supersede and
preempt any prior understandings, agreements or representations by or among the
parties, written or oral, which may have related to the subject matter hereof
in any way.


13.          Counterparts.  This Agreement may be executed in separate
counterparts, including via facsimile, each of which is deemed to be an
original and all of which taken together constitute one and the same agreement.


14.          Successors and
Assigns.  This Agreement is intended to bind and inure to the
benefit of and be enforceable by Executive, the Company and their respective
heirs, successors and assigns, except that Executive may not assign his rights
or delegate his obligations hereunder without the prior written consent of the
Company.  It is understood that when and
if the Company establishes a subsidiary in the United States the Company shall
be permitted to assign this Agreement to that subsidiary, which subsidiary will
succeed to the terms of this Agreement by novation.  The Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise)
of all or substantially all of the business and/or assets of the Company, to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform if no such
succession had taken place.


15.          Dispute Resolution;
Attorneys’ Fees and Costs.  The Company
and Executive agree that, except for those disputes for which equitable
remedies are appropriate, all disputes arising in connection with the subject
matter of this Agreement shall be submitted solely and exclusively to final and
binding arbitration pursuant to the prevailing National Rules for the
Resolution of Commercial Disputes of the American Arbitration Association (“AAA”),
to be decided by a single, neutral arbitrator appointed in accordance with the
AAA’s rules.  Such arbitration shall
proceed in Boston, Massachusetts, and the Demand for Arbitration shall only be
filed with the AAA after the initiating party provides the other party(s) with
at least thirty (30) days’ advance notice of the contemplated demand.  Judgment upon the award rendered by the
arbitrator may be entered in any court of competent jurisdiction.  The initiating party shall advance the
arbitration filing fee, and all other AAA administrative fees shall be shared
equally by the parties to such a dispute, subject to apportionment by the
arbitrator in the award.  Each party
shall be solely responsible for its own costs and attorneys’ fees, subject to
apportionment by the arbitrator in the award. 
If any action seeking equitable remedies is instituted by either party,
the prevailing party shall be entitled to reasonable attorneys’ fees, costs and
disbursements in addition to any other relief to which that party may be
entitled.


 


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16.          Choice of Law.  This Agreement will be governed by the internal law,
and not the laws of conflicts that would give effect to the laws of another
jurisdiction, of the Commonwealth of Massachusetts.


17.          Amendment and
Waiver.  The provisions of this Agreement may be amended or
waived only with the prior written consent of the Company and Executive, and no
course of conduct or failure or delay in enforcing the provisions of this
Agreement shall affect the validity, binding effect or enforceability of this
Agreement.


IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
first written above.


	
   

  	
  MFIC Corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James N. Little

  
	
   

  	
   

  	
  James N. Little, Acting
  Chairman

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Michael C. Ferrara

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Michael C. Ferrara

  



 


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Exhibit A


 


LIST OF COMPANIES FOR WHICH
EXECUTIVE CURRENT SERVES

ON THE GOVERNING BODY


 


 


Board of Directors of Integration Capital
& Trade, Inc., an investment company based in New York, NY


 


Board of Advisors of PureColor, Inc., a
Delaware corporation, based in Santa Fe, NM


 


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Exhibit B


 


MFIC
BENEFITS SUMMARY(1)


(Microfluidics Division)


 


	
  EMPLOYEE
  BENEFIT

  	
   

  	
  SUMMARY DESCRIPTION

  
	
  (a)  401 K Plan

  	
   

  	
  Currently includes 16
  options from various fund families. No waiting period. Full vesting after 3
  years of service.

  
	
  (b)  Flexible
  Spending Account

  	
   

  	
  Pre-tax premium
  contributions for company medical and dental plans. Pre-tax set aside plan
  for out-of-pocket medical expenses and dependent day care expenses.

  
	
  (c)  Paid
  Holidays

  	
   

  	
  10 paid holidays per year.

  
	
  (d)  Life, ADD,
  & LTD Insurance

  	
   

  	
  Fully paid by the Company.
  Life is 1.5 times salary, capped at $50,000. LTD is 66 2/3% of
  salary after 90 days of continuous disability.

  
	
  (e)  Medical
  Insurance

  	
   

  	
  Blue Cross Blue Shield
  Enhanced Value Plan. 78% of premium cost paid by employer for full-time
  employees. Three tiers available (single, double, and family).

  
	
  (f)  Dental
  Insurance

  	
   

  	
  Guardian Dental coverage.
  78% of premium cost paid by employer for full-time employees. Three tiers
  available (single, double, and family).

  
	
  (g)  Sick Leave
  Benefits

  	
   

  	
  7 days of sick-time per
  calendar year. Pro-rated for part-time employees.

  
	
  (h)  Short-term
  Disability

  	
   

  	
  A self-insured salary
  continuation plan designed to provide a bridge to LTD eligibility. Employees
  with at least six months of service will be paid a minimum of 60% of salary
  for up to 65 days.

  
	
  (i)  Vacation
  Benefits

  	
   

  	
  Employees receive 10 days
  of vacation during first year of service. 15 days of vacation after one year.
  18 days of vacation after 5 years. 24 days of vacation after 10 years.

  
	
  (j)  Tuition
  Reimbursement

  	
   

  	
  100% reimbursement for
  grades of A or B. 50% reimbursement for grade of C. Prior approval required.
  Yearly cap of $5000 will apply

  
	
  (k)  Other
  Benefits

  •  Paid
  Bereavement Leave

  •  Paid Jury
  Duty

  •  Paid
  Maternity Leave

  •  Family/Medical
  Leave

  •  Employee
  Stock Purchase Plan

  •  Incentive
  Stock Option Grants

  •  Credit Union
  Membership

  	
   

  	
  As described in the
  Policies and Procedures Handbook

  











(1)                                  This summary is not
intended to be a definitive statement of all of our policies but a brief
overview. At all times the Policies and Procedures Handbook, together with plan
descriptions available upon request from the Company’s Human Resources
Department, shall be the controlling document.


 


12

















 


Exhibit C


 


FORM OF RELEASE AGREEMENT


                1.             Release. 
Michael C. Ferrara (“Executive”), on his own behalf, on behalf of
any entities he controls and on behalf of his descendants, dependents, heirs,
executors, administrators, assigns and successors, and each of them, hereby
acknowledges full and complete satisfaction of and releases and discharges and
covenants not to sue MFIC Corporation (the “Company”), its divisions,
subsidiaries, parents, majority unit holders or affiliated companies, past and
present, and each of them, as well as its and their assignees and successors
(individually and collectively, “Company Releasees”), from and with
respect to any and all claims, agreements, obligations, demands and causes of
action, known or unknown, suspected or unsuspected, arising out of or in any
way connected with Executive’s employment, the termination thereof, or any
other relationship with or interest in the Company, including without limiting
the generality of the foregoing, any claim for severance pay, profit sharing,
bonus or similar benefit, pension, retirement, life insurance, health or
medical insurance or any other fringe benefit, or disability, or any other
claims, agreements, obligations, demands and causes of action, known or
unknown, suspected or unsuspected, resulting from or arising out of any act or
omission by or on the part of Company Releasees committed or omitted prior to
the date of this Agreement, including, without limiting the generality of the
foregoing, any claim under Title VII of the Civil Rights Act of 1964, the
Americans with Disabilities Act, the Family and Medical Leave Act, The Massachusetts
Fair Employment Practices Act, M.G.L 151B or any other federal, state or local
law, regulation or ordinance; provided, however,
that the foregoing release does not apply to Executive’s right to enforce any
obligation of the Company to Executive pursuant to Section 4 of the Employment
Agreement dated as of November    , 2007 by and between the Company
and Executive or to file a charge of discrimination with the U.S. Equal Opportunity
Commission (“EEOC”) or with any state or local anti-discrimination agency or to
participate in an investigation conducted by the EEOC or any such agency.  However, Executive has agreed to waive his
right to any damages or other recovery resulting from any action brought by the
EEOC or any other state or local agency on his behalf or on behalf of a class
of which he may be considered a member.


                2.             [Deemed included if California law ever becomes
applicable] Waiver of Civil Code Section 1542.  This Agreement is intended to be effective as
a general release of and bar to each and every claim, agreement, obligation,
demand and cause of action hereinabove specified (collectively, the “Claims”).  Accordingly, Executive hereby expressly
waives any rights and benefits conferred by Section 1542 of the California
Civil Code as to the Claims.  Section
1542 of the California Civil Code provides:


“A
GENERAL RELEASE DOES NOT EXTEND TO A CLAIM WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE,
WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER
SETTLEMENT WITH THE DEBTOR.”


 


13

















 


Executive acknowledges that he later may discover claims, demands,
causes of action or facts in addition to or different from those which
Executive now knows or believes to exist with respect to the subject matter of
this Agreement and which, if known or suspected at the time of executing this
Agreement, may have materially affected its terms.  Nevertheless, Executive hereby waives, as to
the Claims, any claims, demands, and causes of action that might arise as a
result of such different or additional claims, demands, causes of action or
facts.


                3.             Additional Release by Executive.  In addition to the release set forth in
Section 1 above and subject to the actions excluded from that Section 1,
Executive, on his own behalf and behalf of his descendants, dependents, heirs,
executors, administrators, assigns and successors, and each of them, hereby
acknowledges full and complete satisfaction of and releases and discharges and
covenants not to sue any director, officer, shareholder, partner, representative,
attorney, agent or employee, past or present, of any Company Releasee
(individually and collectively, “Individual Releasees”), from and with
respect to any and all claims, agreements, obligations, demands and causes of
action (collectively, “Known Claims”), arising out of or in any way connected
with Executive’s employment or any other relationship with or interest in the
Company.  Executive represents and agrees
that he has no knowledge of any facts or circumstances that may reasonably
constitute or lead to any such Known Claim.


                4.             ADEA Waiver. 
Executive expressly acknowledges and agrees that by entering into this
Agreement, he is waiving any and all rights or claims that he may have arising
under the Age Discrimination in Employment Act of 1967, as amended, which have
arisen on or before the date of execution of this Agreement.  Executive further expressly acknowledges and
agrees that:


(a)                                  In return for this Agreement, he will
receive consideration beyond that which he was already entitled to receive
before entering into this Agreement;


(b)                                 He is hereby advised in writing by this
Agreement to consult with an attorney before signing this Agreement;


(c)                                  He was given a copy of this Agreement on
[                  ,
20     ] and informed that he had twenty-one (21) days
within which to consider the Agreement; and


(d)                                 He was informed that he has seven (7)
days following the date of execution of the Agreement in which to revoke the
Agreement.


                5.             No Transferred Claims.  Each party hereto represents and warrants to
the other that he or it, as applicable, has not heretofore assigned or
transferred to any person not a party to this Agreement any released matter or
any part or portion thereof.


The
undersigned have read and understand the consequences of this Agreement and
voluntarily sign it.  The undersigned
declare under penalty of perjury under the laws of the State of Massachusetts
that the foregoing is true and correct.


EXECUTED this                        
day of                              
20    .


 


	
   

  	
  “Executive”

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Michael C. Ferrara

  



 


14

















 


Exhibit D


 


EXAMPLES OF COMPANIES THAT ARE
CURRENTLY CONSIDERED “COMPETITIVE BUSINESSES”


	
  COMPANY

  	
   

  	
  TRADE NAME(S)

  	
   

  	
  TYPE / EQUIPMENT

  	
   

  	
  ADDRESS

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  INVENSYS plc (formerly APV Group plc acquired
  1997)

  	
   

  	
  500 Research Dr., Wilmington, MA 01887

  
	
  APV Gaulin

  	
   

  	
  Manton Gaulin

  	
   

  	
  homogenizer

  	
   

  	
   

  
	
  APV Crepaco

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  APV Rannie

  	
   

  	
   

  	
   

  	
  homogenizer

  	
   

  	
   

  
	
  APV Union Homogenizer

  	
   

  	
   

  	
   

  	
  homogenizer

  	
   

  	
   

  
	
  APV Chemical Machinery, Inc.
  (formerly Baker Perkins)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Applied Science Karasawa Lab & Co

  	
   

  	
  Ultimaizer —See Ultimaizer below

  	
   

  	
  high pressure fluid jet shear/cavitation

  	
   

  	
  3-27, Minami-Nakano,Ohmiyashi, Saitama
  33O JAPAN

  
	
  Avestin, Inc.

  	
   

  	
  EmulsiFlex C5,

  C50, C55, C160,

  EmulsiFlex-C1000 production, LiposoFast

  	
   

  	
  cell disruptors, homogenizers/emulsifiers

  	
   

  	
  76 Frank St, Ottawa, Ontario, K2P OX2 CANADA

  
	
  Bayer AG

  	
   

  	
  High Pressure Homogenizer

  	
   

  	
  Liposomal encapsulator for pharmaceuticals

  	
   

  	
  Germany

  
	
  BEEI (Best Emulsifying Equipment International)

  	
   

  	
  Nano DeBEE,

  Micro DeBEE,
 Mini DeBEE,

  DeBEE 2000 Pilot, DeBEE 2000P

  Production Homogenizers

  	
   

  	
  high pressure fluid jet shear/cavitation

  	
   

  	
  Ramat Gavriel, Migdal Haemek,
  10550 ISRAEL

  
	
  Branson Ultrasonics

  	
   

  	
   

  	
   

  	
  homogenizers/emulsifiers, cell disruptors

  	
   

  	
  Eagle Road, Danbury, CT 06813

  
	
  Bran & Luebbe GmbH (SPX)

  	
   

  	
  Meganizer, Pentax

  	
   

  	
  high-pressure homogenizer, Multi-Frequency Fluid Mixers

  	
   

  	
  Werkstrasse 4 D22844

  Norderstedt, Germany

  
	
  Braun Instrument

  	
   

  	
  Braunsonic

  	
   

  	
  ultrasonic homogenizer/cell disruptor

  	
   

  	
  875 Stanton Road, Burlingame CA 94010

  
	
  Brinkman Instruments

  	
   

  	
  Kinematica Polytron

  	
   

  	
  homogenizer emulsifier, disperser and mixer

  	
   

  	
  One Cantiague Rd, Westbury, NY 11590

  
	
  Chemineer, Inc.

  	
   

  	
  Greerco

  	
   

  	
  portable impeller mixers, homogenizers,colloid mills

  	
   

  	
  P.O. BOX 1123, Dayton, OH 45401

  
	
  Constant Systems Ltd.

  	
   

  	
  Cell Disruptor

  	
   

  	
  high pressure jet impingement

  	
   

  	
  Unit 11, Low March,Daventry Northamptonshire

  NN11 4SD, U.K. - Tel: 44 1327 314146

  
	
  EKATO SYSTEMS GmbH

  	
   

  	
  NANOmix

  	
   

  	
  high pressure pump homogenizer

  	
   

  	
  Käppelemattweg 2, 79650 Schopfheim, Germany

  



 


15

















 


	
  FES International, Inc.

  	
   

  	
  HP-50, HP-300, HP-700, HP-1400

  	
   

  	
  high pressure pump homogenizer

  	
   

  	
  2120 Auto Centre Drive,
  Glendora, CA 91740

  
	
  Fisher

  	
   

  	
  Touch Mixer

  	
   

  	
   

  	
   

  	
   

  
	
  Five Star Technologies

  	
   

  	
  Caviflo, Cavimax & Cavipro

  	
   

  	
  mid-to-ultra high shear mixers/homogenizers

  	
   

  	
  21200 Aerospace Pkwy, Cleveland, OH 44142

  
	
  Glen Creston

  	
   

  	
  Dyno Mill, Ecm, Emulsiflex

  	
   

  	
  jet bead mill (fluidized), high pressure homogenizer

  	
   

  	
  16 Dalston Gardens; Stanmore, Middlesex, HA7 1BU, UK

  
	
  Glen Mills, Inc.

  	
   

  	
  Dyno-Mill, Polytron, Megatron, Sonicator French
  Press, Micromincer,Tissue Tearor

  	
   

  	
  bead & hammer mills, rotor stator homogenizers,
  ultrasonic dispersing/homogenizing

  	
   

  	
  395 Allwood Road, Clifton, NJ 07012

  
	
  Ilshin Autoclave ISA

  	
   

  	
  NanoDisperser

  	
   

  	
  High pressure disperser, emulsifier, liposomal encapsulator
  & cell disruptor

  	
   

  	
  1688-15 Shinii-Dong, Daeduck-Gu, Taejon, Korea
  306-230

  
	
  Kinematica AG

  	
   

  	
  Polytron & Megatron

  	
   

  	
   

  	
   

  	
  Lucerne, Switzerland

  
	
  Koruma (ROMACO)

  	
   

  	
  Disho Inline

  	
   

  	
  homogenizer, rotor stator mixer

  	
   

  	
  Germany

  
	
  Krupp AG

  	
   

  	
  Krupp Industrie Technik

  	
   

  	
  colloid mill

  	
   

  	
  Germany

  
	
  Misonix, Inc.

  	
   

  	
  MICROSON

  	
   

  	
  ultrasonic cell disruptor

  	
   

  	
  1938 New Highway, Farmingdale, NY 11735

  
	
  Nanomizaa, KK

  	
   

  	
  NANOMIZER

  	
   

  	
  Hi-pressure, homogenizer, emulsifier, disperser

  	
   

  	
  (Sayama Trading Co.) JAPAN

  
	
  Niro-Soavi S.P.A. (owner GEA Group

  Group Aktiengesellschaft) www.geagroup.com/en/

  	
   

  	
  Panda, Pony, Panther, Soavi High Pressure
  Homogenizer

  	
   

  	
  Low and high pressure homogenizers

  	
   

  	
  1600 County Rd. Ft., Hudson, WI 54106

  GEA - Bochum, Germany

  
	
  NanoJet - Haskel International

  	
   

  	
  LAB 8H & LAB 30P, LAB 15H & LAB 30H

  	
   

  	
  homogenizer (M* knockoff)

  	
   

  	
  Dortmund, Germany

  
	
  Omni International

  	
   

  	
   

  	
   

  	
  homogenizers & emulsifiers

  	
   

  	
  6530 Commerce Ct, Warrenton, VA 20187

  
	
  Parr Instruments Co.

  	
   

  	
   

  	
   

  	
  decompression bomb-cell disruptor

  	
   

  	
  211 53rd Street, Moline, IL 61265-9984

  
	
  SLM/Aminco

  	
   

  	
   

  	
   

  	
  french press / cell disruptor

  	
   

  	
   

  
	
  Sonic Corp.

  	
   

  	
  SONOLATOR

  	
   

  	
  ultrasonic cell disruptor

  	
   

  	
  One Research Dr., Stratford, CT 06497

  
	
  Sonics & Materials Inc.

  	
   

  	
  VIBRA CELL

  	
   

  	
  ultrasonic cell disruptor

  	
   

  	
  Kenosha Ave, Danbury, CT

  
	
  Stansted Fluid Power Ltd.

  	
   

  	
  nm-GEN, AO, TC,

  	
   

  	
   

  	
   

  	
  70 Bentfield Rd., Stansted, Essex, U.K.

  
	
  Ultimaizer — Sugino Machine Ltd (Itochu Sanki Corporation)
  (formerly Karasawa Labs)

  	
   

  	
  ULTIMAIZER

  	
   

  	
  hi-pressure, homogenizer, emulsifier, disperser

  	
   

  	
  JAPAN & 1380 Hamilton Pkwy Itasca,IL 60143 U.S.A

  



 


16

















 


Exhibit E


 


FORM OF INVENTION ASSIGNMENT AND
PROPRIETARY 

INFORMATION AGREEMENT


 


[ See Attached ]


 


17

















 


INVENTION ASSIGNMENT AND PROPRIETARY


INFORMATION
AGREEMENT


 


In consideration of
employment by MFIC Corporation and/or its subsidiary, Microfluidics Corporation
(collectively the “Company”), and the compensation received therefore, I agree
that:


 


1.             I
hereby assign to the Company my rights and all interests in inventions, improvements
and discoveries, original works of authorship, formulas, processes, computer
programs, and trade secrets (the “Inventions”) made, conceived or first reduced
to practice or created by me, either alone or jointly with others, during my
period of employment by the Company, whether or not in the ordinary course of
my employment. This applies to inventions and discoveries which relate to the
current business of the Company, or business which the Company may reasonably
be expected to enter.


 


2.             I
will promptly disclose in confidence the Inventions to the appropriate Company
designee and will assist the Company in any reasonable manner to protect and
implement these for its benefit.  On
request, I will participate in the patent process or other activities to carry
out the purpose of this Agreement, without further consideration, but at the
expense of the Company. If such actions are required after termination of my employment
I will be entitled to a fair and reasonable per diem fee plus expense reimbursement,
if incurred at the request of the Company.


 


3.             I
agree that all Inventions that: (a) are developed using equipment, supplies, facilities
or trade secrets of the Company, or (b) result from work performed for the Company,
or (c) related to the Company’s business or anticipated research and development,
will be the sole and exclusive property of and are hereby assigned to the Company.


 


4.             Without
prior written consent of the Company, I will not, during my employment by the
Company, engage in any employment or activity for others, in any business in
which the Company is or may reasonably be expected to be active.


 


5.             During
my employment by the Company, or thereafter at any time, I will not disclose to
others or use for my benefit trade secrets or confidential information of the
Company (as defined below) and that of its clients or other business
relationships, except as necessary in the ordinary course of performing my
duties with co-workers or as otherwise permitted by the Company’s Board of
Directors in writing.  For the purposes
of this Agreement the Company’s confidential information shall be deemed to
include but not be limited to:  (i) trade
secrets, know-how, designs, technical information, techniques, processes,
functioning, diagrams, schematics, timing, measurements, tolerances,
quantification of physical forces exerted, materials and methods of
construction relating to or embodied within the Microfluidizer device and, in
particular, within its interaction chambers and auxiliary processing modules,
(ii) the identity of the Company’s customers, suppliers and vendors, non-public
financial information including  price
lists, budgets, financial plans and projections (the “Confidential Information”).


 


6.             I
will not use or disclose in the course of my employment for the Company any
trade secrets or Confidential Information belonging to others.


 


18

















 


7.             Upon
termination or resignation, I shall turn over to the Company all written and
visual materials, and computer data storage diskettes and/or other storage
media pertaining to my work and other pertinent Confidential Information or
other equipment, parts, or information of the Company.


 


8.             I
agree that in the event of my breach of this Agreement the Company’s available
damages and remedies at law would be inadequate and, accordingly, the Company
shall have the right to obtain temporary and/or permanent injunctive relief or
its equivalent under domestic or foreign law against me to prevent the unauthorized
use or disclosure of any Confidential Information as well as all other remedies
that may be available to the Company.  I
further agree that all legal and equitable rights, remedies and damages
available to the Company shall be considered cumulative and the use or choice
of a particular remedy, damage or relief shall not preclude the Company’s
further exercise of other rights, remedies and damages.


 


9.             This
Agreement shall be governed by and construed under the laws of the Commonwealth
of Massachusetts without regard to its internal conflicts of laws
provisions.  I hereby consent to the
jurisdiction of the courts of the Commonwealth of Massachusetts or such other
jurisdiction as the Company may find more convenient or effective for the
prosecution of any action hereunder.


 


10.           This
Agreement represents the entire agreement between the parties relating to the
subject matter hereof and supersedes any previous understanding or agreement.


 


11.           I
agree that the provisions of this Agreement are severable.  If any provision hereof shall be declared to
be invalid or unenforceable for any reason, such unenforceability shall not
effect the enforceability of the remaining provisions of the Agreement, and
such provision shall be reformed and construed to the extent permitted by law
so that the remainder is valid and enforceable.


 


                Signed
as a sealed instrument this           
day of                       ,
200   .


 


 


EMPLOYEE


 


 


 


____________________________________________


 


 


 


____________________________________________


Printed Name


 


 


____________________________________________


Witness


 


 


19