Exhibit 10.1


 


EMPLOYEE AGREEMENT


 


This
Employee Agreement (this “Agreement”) is
made and entered into as of September 1, 2010 by and between Microfluidics
International Corporation, a Delaware corporation (the “Company”),
and Peter F. Byczko (“Byczko”).


 


WHEREAS, Byczko is a senior executive of the Company and a
key member of the Company’s management;


 


WHEREAS, the Company wishes to assure Byczko of fair
severance should Byczko’s employment terminate in specified circumstances
following a change of control, and to assure Byczko of certain other benefits
upon a change of control.


 


NOW, THEREFORE, 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.             Definitions.  The following terms used in this Agreement
shall have the following meanings:


 


(a)           “Base Monthly
Salary” shall mean Byczko’s base monthly salary, exclusive of any
bonus or other benefits Byczko may receive.


 


(b)           “Board”
shall mean the Board of Directors of the Company.


 


(c)           “Cause”
shall mean (i) the willful failure or refusal by Byczko to perform Byczko’s
duties (other than any such failure resulting from Byczko’s incapacity due to
physical or mental illness); (ii) Byczko’s willful material breach of any
employment agreement or offer letter with the Company or any job description or
material policy of the Company or its subsidiaries applicable to Byczko; (iii) Byczko’s
willful engaging in misconduct, or conduct deemed by the Board of Directors of
the Company, in its sole discretion, to be grossly negligent, with respect to
the performance of Byczko’s duties that is materially injurious to the Company,
its subsidiaries, employees or customers, monetarily or otherwise, (iv) any
violation by Byczko of Byczko’s obligations under Sections 3 and 4 of this
Agreement or (v) Byczko’s conviction of, or plea of guilty or nolo contendere, with respect to any felony or any crime
involving theft, dishonesty or fraud, or commission of an act of moral
turpitude which results or is reasonably likely to result in material harm to
the Company, its business or reputation; provided that, in the case of
subsections (i), (ii) and (iii) any such failure, breach or
misconduct which, if capable of cure, has not been cured within five (5) days
after written notice of such breach is delivered to Byczko by the Board of
Directors of the Company.


 


(d)           “Change of
Control” means the occurrence of any of the following events:


 


(i)            Any person (as such term is defined in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) becomes the “beneficial owner” (as defined
in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities
of the Company representing fifty percent (50%) or more of the total voting


 

















 


power
represented by the Company’s then outstanding voting securities; provided
however, that with respect to Global Strategic Partners, LLC, a Delaware
limited liability company, and its Affiliates (as defined in the Exchange Act),
such number shall be sixty percent (60%) on a fully diluted basis; or


 


(ii)           The consummation of the sale or disposition by the
Company of all or substantially all the Company’s assets; or


 


(iii)          The consummation of a merger or consolidation of the
Company with (i) Global Strategic Partners, LLC or its affiliates (as
defined in the Exchange Act); provided, however, that such merger or
consolidation results in the ownership by Global Strategic Partners, LLC of at
least sixty percent (60%) or more of the total voting power represented by the
Company’s then outstanding voting securities, or (ii) any other
corporation or entity, excluding a merger or consolidation which would result
in the voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) at least fifty percent (50%) of
the total voting power represented by the voting securities of the Company or
such surviving entity outstanding immediately after such merger or
consolidation.


 


(e)           “Good Reason”
shall mean the occurrence of any of the following events: (i) any material
diminution in Byczko’s duties, authority, reporting relationships or
responsibilities (whether or not accompanied by a title change); (ii) any
material reduction in Byczko’s Base Monthly Salary, other than as a result of a
Company wide reduction in base salaries; or (iii) the relocation of the
Company’s executive offices more than 50 miles from its current location;
provided however that (A) such Good Reason is not remedied or cured by the
Company within thirty (30) days after the Company receives notice from Byczko
of the occurrence of a Good Reason; (B) such notice of the occurrence of a
Good Reason is sent by Byczko no later than thirty (30) days after the
occurrence of such Good Reason; and (C) Byczko terminates Byczko’s
employment with the Company within ninety (90) days of the occurrence of such
Good Reason. The foregoing definitions of Good Reason shall not be applicable,
however, if the event constituting Good Reason occurs: (i) with Byczko’s
express prior written consent, or (ii) in connection with termination of
Byczko’s employment for Cause or due to Byczko’s death or permanent disability.


 


(f)            “Severance
Period” shall be the period commencing on the date of Qualified
Termination (as defined below) and continuing until the nine (9) month
anniversary of the date of the Qualified Termination, or such later monthly
period not to exceed the twelve (12) month anniversary of the date of the
Qualified Termination to the extent Byczko receives the additional monthly
payments under Section 2(a)(i) beyond the initial nine (9) month
Severance Amount.


 


2.             Benefits
Upon a Change of Control.


 


(a)           In the event (x) the
Company terminates Byczko’s employment with the Company without Cause at or
immediately prior to the closing of a Change of Control transaction or within
twelve (12) months following a Change of Control, or (y) Byczko


 


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terminates
Byczko’s employment with the Company for Good Reason within twelve (12) months
following a Change of Control (each, a “Qualified Termination”),
then:


 


(i)            the Company shall pay to
Byczko an amount equal to nine (9) months of Byczko’s Base Monthly Salary
as in effect immediately prior to the date of the Qualified Termination, which
amount may be increased, at the sole discretion of the Chief Executive Officer,
by up to three (3) months of Byczko’s Base Monthly Salary as in effect
immediately prior to the date of the Qualified Termination (the “Severance Amount”) as set forth in the following sentence.
Subject to any deferral or reduction in payment of the Severance Amount pursuant
to Section 2(f), the Severance Amount shall be paid by the Company to
Byczko in that number of equal monthly payments equal to the number of months
of Base Monthly Salary Byczko receives under the Severance Amount commencing on
the thirtieth (30th) day following
the date of the Qualified Termination, provided the Release (as defined below)
is effective and irrevocable prior to such date, and


 


(ii)           Provided Byzcko elects to
continue coverage under the Company’s present group health and dental plans
pursuant to the federal Consolidated Omnibus Budget Reconciliation Act (“COBRA”), then for the shorter of (a) the Severance
Period, (b) until such time as Byczko becomes ineligible for COBRA
payments, or (c) until such time as Byczko becomes eligible to receive
healthcare coverage from a subsequent employer, the Company and Byczko will
each pay the same percentage contribution toward Byczko’s monthly premium(s) as
were made during Byczko’s employment, and Byczko’s share of such premium will
be deducted from the Severance Amount on a monthly basis if such deduction
would not violate the provisions of Section 2(f). Thereafter, in the event
Byczko remains eligible for COBRA benefits, Byczko will be solely responsible
for payment of Byczko’s monthly COBRA premium costs, in addition to an
administrative fee of up to 2%.


 


(b)           The Company’s obligations in
Section 2(a) shall be contingent in all respects on Byczko having
theretofore executed (and not thereafter revoked) the general release of claims
in the form attached hereto as Exhibit A (the “Release”).
Notwithstanding any of the foregoing, in the event Byczko breaches any of the
provisions contained in Section 3, 4, or 15 of this Agreement or the
Invention Assignment and Proprietary Information Agreement referenced in Section 6
of this Agreement, all payments of the Severance Amount and all provision of
benefits pursuant to Section 2(a) shall immediately cease and become
repayable to the Company to the extent paid to Byczko.


 


(c)           (i)            Provided Byczko remains
employed by the Company during the 60 day period commencing at or immediately
prior to the time of the closing of a Change of Control transaction (the “Retention Period”), Byczko shall be paid on the last day of
the Retention Period a bonus payment in an amount equal to $15,000.00 (the “Guaranteed Bonus”). Notwithstanding the foregoing, Byczko
shall be paid the Guaranteed Bonus even if Byczko undergoes a termination of
employment at or immediately prior to the time of closing of a Change of
Control transaction or during the Retention Period, if such termination of
employment is by the Company without Cause or by Byczko for Good Reason and, in
such event, the payment of the Guaranteed Bonus shall be made promptly
following Byczko’s date of termination, but in no event later than the date
that is 75 days following Byczko’s date of termination;


 


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(ii)           Byczko shall also be
eligible to be paid at the time of the closing of the Change of Control
transaction his pro rata share (based on the number of days in the period from
the commencement of the current fiscal year to the date of closing of the
Change of Control transaction) of his maximum bonus opportunity for the current
fiscal year, to the extent the Board determines that (x) the Company is on
track through such closing date in achieving the current fiscal year’s
Company-wide performance metrics for payment of such bonus, (y) Byczko has
satisfactorily achieved his KRA’s through such date and (z) the payment of
such bonus would be consistent with the financial performance of the Company
and the economics of the Change of Control transaction (the “Accelerated Bonus”); provided, however, that the amount of
the Accelerated Bonus shall be reduced by the amount of the Guaranteed Bonus;


 


(iii)          upon payment of any
Accelerated Bonus pursuant to Section 2(c)(ii), Byczko shall not be
entitled to any further payments under the existing bonus plan for the balance
of the then current fiscal year; and


 


(iv)          if the Company does not pay
any Accelerated Bonus at the closing of a Change of Control transaction, as
provided in Section 2(c)(ii) above, Byczko will remain eligible to
receive his annual bonus, to the extent earned, as and when due and payable
under the terms applicable to such bonus (“Earned Bonus”),
and in such event the amount of the Guaranteed Bonus shall be credited against
and treated as a prepayment of the amount of the Earned Bonus;


 


(d)           If Byczko is employed by the
Company at the time of the closing date of the Change of Control then, at the
sole discretion of the Chief Executive Officer of the Company, the Company will
pay to Byczko a cash bonus in an amount equal to a minimum of three (3) times
his Base Monthly Salary (the “Discretionary Transaction
Bonus”) on the thirtieth (30th) day following the closing date of
the Change of Control.


 


(e)           Byczko’s unvested stock
options will become fully vested and exercisable immediately prior to the
Change of Control.


 


(f)            (i)            The Severance Amount
provided for in Section 2(a) constitutes an “involuntary separation
pay plan” with respect to termination without Cause or resignation with Good
Reason pursuant to Treas. Reg. §1.409A-1(b)(9)(iii) and thus not “nonqualified
deferred compensation” subject to Section 409A of the U.S. Tax Code (the “Code”).  The Guaranteed Bonus, Accelerated Bonus and
Earned Bonus constitute a “short-term deferral” within the meaning of Treas.
Reg. §1.409A-1(b)(4)(i) and thus not “nonqualified deferred compensation”
subject to Section 409A of the Code. 
If the Severance Amount is deemed to provide benefits that constitute “nonqualified
deferred compensation” with respect to a termination without Cause, resignation
for Good Reason, or any other termination of employment, then the following
interpretations apply to this Agreement: 
(i) Any termination of Byczko’s employment triggering payment of
the Severance Amount must constitute a “separation from service” under Section 409A(a)(2)(A)(i) of
the Code and Treas. Reg. §1.409A-1(h) before distribution of such benefits
can commence.  To the extent that the
termination of Byczko’s employment does not constitute a separation of service
under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h) (as
the result of further services that are reasonably anticipated to be provided
by Byczko to the Company at the time his employment terminates hereunder), any
payment hereunder that


 


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constitutes
non-qualified deferred compensation subject to Section 409A of the Code
shall be delayed until after the date of a subsequent event constituting a
separation of service under Section 409A(a)(2)(A)(i) of the Code and
Treas. Reg. §1.409A-1(h).  For purposes
of clarification, this section shall not cause any forfeiture of benefits on
Byczko’s part, but shall only act as a delay until such time as a “separation
from service” occurs; (ii) If Byczko is a “specified employee” (as that
term is used in Section 409A of the Code and regulations and other
guidance issued thereunder) on the date his separation from service becomes
effective, any benefits payable hereunder that constitute non-qualified
deferred compensation under Section 409A of the Code shall be delayed
until the earlier of (A) the business day following the six-month
anniversary of the date his separation from service becomes effective, and (B) the
date of his death, but only to the extent necessary to avoid such penalties
under Section 409A of the Code.  On
the earlier of (A) the business day following the six-month anniversary of
the date his separation from service becomes effective, and (B) his death,
the Company shall pay Byczko in a lump sum the aggregate value of the
non-qualified deferred compensation that the Company otherwise would have paid
him prior to that date pursuant to this Agreement; (iii) It is intended
that the Severance Amount and each separate payment and installment thereof
shall be treated as a separate “payment” for purposes of Section 409A of
the Code; and (iv) Neither the Company nor Byczko shall have the right to
accelerate or defer the delivery of any such payments or benefits except to the
extent specifically permitted or required by Section 409A of the Code.


 


(ii)           Notwithstanding anything to
the contrary set forth in this Section 2, in the event that all or any
portion of the amounts to be paid to Byczko pursuant to Section 2 would be
a “parachute payment,” as defined in section 280G(b)(2) of the Code and
the Treasury Regulations thereunder, the aggregate present value of the total
amounts to be paid to Byczko under Section 2 shall be limited to an amount
that is less than three times Byczko’s “annualized includible compensation for
the base period,” as defined in section 280G(d) of the Code and any
Treasury Regulations thereunder.


 


(iii)          If any dispute between the
Company and Byczko as to any of the amounts to be determined under Section 2(f)(ii) or
the method of calculating such amounts cannot be resolved by the Company and
Byczko, either party, after giving three (3) days written notice to the
other, may refer the dispute to a regional or national accounting firm
designated by the Board of Directors of the Company, in its sole discretion,
which firm shall have not had a material business relationship with the Company
in the preceding three (3) years, whose determination as to the amounts to
be determined under Section 2(f)(ii) and the method of calculating
such amounts shall be final and binding on both the Company and Byczko. The
Company shall bear the costs of any such determination.


 


3.             Confidential Information.  Byczko acknowledges that the information,
observations and data obtained by Byczko while employed by the Company
concerning the business or affairs of the Company or any of its affiliates (“Confidential Information”) are the property of the Company.
Therefore, Byczko agrees that during Byczko’s employment with the Company and
following the termination of Byczko’s employment with the Company, Byczko shall
hold in a fiduciary capacity for the benefit of the Company the Confidential
Information and Byczko shall not disclose to any unauthorized person or use for
Byczko’s own account any Confidential Information without the prior written
consent the Company, unless and to the extent required by law, rule or
regulation or pursuant to any administrative or court order. The term


 


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“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 Byczko’s
prohibited disclosure; (ii) information which comes to Byczko from a bona
fide third party source so long as such source was not, to Byczko’s knowledge,
prohibited from providing such information to Byczko by any contractual, legal,
fiduciary or other obligation; and (iii) information which was known to
Byczko before such information was obtained from the Company, except to the extent
that such information becomes or is incorporated into the Company’s
Confidential Information, including but not limited to, its Inventions, as
defined under the Invention Assignment and Proprietary Information Agreement
referenced in Section 6 of this Agreement, and any other trade secrets or
proprietary information. The foregoing provision shall not be deemed to
supersede or limit any other agreement between Byczko 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 this Agreement shall control.


 


4.             Non-Compete; Non-Solicitation.


 


(a)           Byczko acknowledges that in
the course of Byczko’s employment with the Company, Byczko will become familiar
with the Company’s trade secrets and with other Confidential Information
concerning the Company and that Byczko’s services will be of special, unique
and extraordinary value to the Company. Therefore, Byczko agrees that during
Byczko’s employment with the Company and during the Severance Period (the “Noncompete Period”), Byczko shall not, directly or
indirectly, in any state, country or other jurisdiction in which the Company is
engaged or, to the knowledge of Byczko, has reasonably firm plans to engage in
business: (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 business including, but not limited to:


 


(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


 


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(iii)          future products, equipment or services developed; as
such products, equipment or services exist or are contemplated during Byczko’s
employment with the Company.


 


Nothing
herein shall prohibit Byczko from being a passive owner of not more than three
percent (3%) of any class of securities of a public company, so long as Byczko
has no active participation in any aspect of the business of such entity.


 


(b)           During the Noncompete
Period, Byczko 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 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 4, 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 Byczko of any of the provisions of this Section 4,
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 solely in any of the forums set forth in Section 18 hereof
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).


 


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


 


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6.             Intellectual
Property Agreement.  If Byczko has not previously done so, Byczko
shall, simultaneous with the execution hereof, execute and deliver to the
Company the Invention Assignment and Proprietary Information Agreement in the
form attached hereto as Exhibit B.


 


7.             Continued
Employment.  This Agreement
shall not give Byczko any right of continued employment or any right to
compensation or benefits from the Company or any subsidiary except the rights
specifically stated herein to certain severance, bonus and other benefits, and
shall not limit the Company’s right to change the terms of or to terminate
Byczko’s employment, with or without Cause, at any time, except as may be
otherwise provided in a written employment agreement, if any, between the
Company and Byczko. The Company’s obligations pursuant to Section 2 of
this Agreement shall automatically terminate upon the termination of Byczko’s
employment with the Company for any reason, whether voluntary or involuntary,
at any time other than at or immediately prior to the closing of a Change of
Control transaction or during the one-year period following a Change of Control
transaction and during the Retention Period, with respect to the payment of the
Guaranteed Bonus as set forth in Section 2(c)(i).


 


8.             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 Byczko:


 


As
set forth on the signature page to this Agreement.


 


Notices to the Company:


 


Microfluidics
International Corporation


30
Ossipee Road


Newton,
MA 02464


Attention:
Chief Executive Officer


 


With
a copy to:


 


Posternak
Blankstein & Lund LLP


The
Prudential Tower, 33rd Floor


800
Boylston Street


Boston, MA 02199


Attention: Donald H. Siegel, P.C.


 


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9.             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 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.


 


10.          Complete
Agreement.  This Agreement,
any stock option award agreement between Byczko and the Company, and those
documents expressly referred to herein, embody the complete agreement and
understanding among the parties and supersede and preempt any prior
understandings, agreements or representations by or among the parties, whether
written or oral, which may have related to the subject matter hereof in any
way, including, without limitation, any existing severance agreement and/or
severance arrangement between the Company and Byczko.


 


11.          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.


 


12.          Successors
and Assigns.  This Agreement is intended to bind and inure
to the benefit of and be enforceable by Byczko, the Company and each of their
respective heirs, successors and assigns, except that Byczko may not assign
Byczko’s rights or delegate Byczko’s obligations hereunder without the prior
written consent of the Company. 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.


 


13.          No
Duty to Mitigate Damages.  Byczko’s benefits under Section 2 shall
be considered severance pay in consideration of Byczko’s past service and
Byczko’s continued service from the date of this Agreement, and Byczko’s
entitlement thereto shall not be governed by any duty to mitigate Byczko’s
damages by seeking further employment.


 


14.          Cooperation.  During the Severance Period, Byczko shall
reasonably cooperate with the Company with respect to any questions or
inquiries the Company may have concerning its business, including but not
limited to, its operations, services, customers, vendors, and employees;
provided, however, that such cooperation shall not materially interfere with
Byczko’s employment, if any.


 


15.          No
Disparagement.  Byczko agrees that neither he, nor any person
acting on his behalf, shall directly or indirectly take any action that he
knows or reasonably should know would be detrimental to the Company’s interest,
or make any disparaging remarks concerning the business, operations, services,
management, employees, affiliates, affairs and/or financial condition of the
Company.  The Company agrees that it will
not make any disparaging remarks concerning Byczko or his employment with the
Company.  Nothing herein shall preclude
either Byczko or the Company from making truthful representations required
pursuant to legal process


 


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or
court order, or in response to inquiries from any federal, state or local
governmental entity or regulatory body.


 


16.          Attorneys’
Fees and Costs.  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.


 


17.          Governing
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.


 


18.          Forum.  The parties submit to the exclusive
jurisdiction of the federal and state courts of Boston, Massachusetts in
relation to any dispute arising in connection herewith.


 


19.          Amendment
and Waiver.  The provisions of this Agreement may be
amended or waived only with the prior written consent of the Company and
Byczko, 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.


 


 


	
   

  	
  Company:

  
	
   

  	
   

  
	
   

  	
  MICROFLUIDICS
  INTERNATIONAL CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael C. Ferrara

  
	
   

  	
   

  	
  Name:

  	
  Michael
  C. Ferrara

  
	
   

  	
   

  	
  Title:

  	
  President
  and Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Peter F. Byczko

  
	
   

  	
  Peter
  F. Byczko

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
   

  



 


10
















 


FORM OF RELEASE AGREEMENT


 


1.             Release.  Peter F. Byczko (“Byczko”), 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 Microfluidics International 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, any of its directors, officers,
shareholders, partners, representatives, attorneys, agents or employees, past
or present (individually and collectively, the “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 Byczko’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 the 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 (i) Byczko’s right to enforce
any obligation of the Company to Byczko pursuant to Section 2 of the
Employee Agreement dated as of September 1, 2010 by and between the Company and
Byczko (the “Employee Agreement”); (ii) any stock options that survive the
termination of Byczko’s employment by the terms of the applicable agreement; (iii) any
vested benefits under any Company sponsored employee benefit plan or perquisite
of employment, including accrued but unused vacation time pursuant to the
Company’s vacation policy then in effect; (iv) any rights to
indemnification under the Company’s error and omissions policy and/or Bylaws; (v) the
enforcement of this Agreement and the surviving provisions of the Employment
Agreement; or (vi) the right 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. Byczko has agreed to waive his right to any
damages or other recovery resulting from any administrative, arbitration, or
court proceeding, including 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, with respect to Byczko’s employment with and/or
termination of employment from the Company and if Byczko is awarded any money
damages, Byczko hereby assigns to the Company Byczko’s right and interest to
such money damages. Notwithstanding the foregoing, this paragraph does not
limit Byczko’s right to challenge the validity of the Release Agreement in a
legal proceeding under the Older Workers’ Benefit Protection Act, 29 U.S.C. §
626(f) with respect to claims under the Age Discrimination in Employment
Act. This paragraph also is not intended to and shall not limit the right of a
court to determine, in its discretion, that the Company is entitled to
restitution, recoupment, or setoff of any payments made to Byczko and/or Byczko’s
counsel by the Company should the Release Agreement be found to be invalid as
to the release of claims under the Age Discrimination in Employment Act.


 

















 


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, Byczko
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 FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.”


 


Byczko
acknowledges that he later may discover claims, demands, causes of action or
facts in addition to or different from those which Byczko 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, Byczko 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.             ADEA Waiver.  Byczko 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. Byczko 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.


 


4.             No Disparagement.  Byczko agrees that neither he, nor any person
acting on his behalf, shall directly or indirectly take any action that he
knows or reasonably should know would be detrimental to the Company’s interest,
or make any disparaging remarks concerning the business, operations, services,
management, employees, affiliates, affairs and/or financial condition of the
Company.  The Company agrees that it will
not make any disparaging remarks concerning Byczko or his employment with the
Company.  Nothing herein shall preclude
either Byczko or the Company from making truthful representations required
pursuant to legal process or court order, or in response to inquiries from any
federal, state or local governmental entity or regulatory body.


 


2

















 


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.


 


EXECUTED
this                        day
of                        20   .


 


 


	
   

  	
   

  
	
   

  	
  Peter
  F. Byczko

  



 


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Exhibit B


 


INVENTION ASSIGNMENT AND PROPRIETARY


INFORMATION AGREEMENT


 


For
good and valuable consideration, which includes continued employment by
Microfluidics International 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.


 

















 


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
affect 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                        ,
20   .


 


 


	
   

  	
  EMPLOYEE

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Printed Name

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Witness

  	
   

  



 


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