Document:

Exhibit 10.1

Exhibit 10.1

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED

WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND

EXCHANGE COMMISSION.

Execution Version

PRODUCT LICENSE AND DISTRIBUTION AGREEMENT

This PRODUCT LICENSE AND DISTRIBUTION AGREEMENT (this “Agreement”) is entered into as of July
19, 2011 (the “Effective Date”), by and between PuriCore, Inc., a Delaware corporation
(“PuriCore”), and MISONIX, INC., a New York corporation (“Misonix”). PuriCore and Misonix may be
referred to as a “Party” and together as the “Parties”.

RECITALS

PuriCore has ownership of certain patents, know-how and other intellectual property related to
its Vashe irrigating solution products.

Misonix develops and sells proprietary therapeutic ultrasound products.

PuriCore International Limited and PuriCore plc, each Affiliates of PuriCore, and Misonix
entered into a Share Purchase Agreement and related agreements to acquire the issued shares of
Labcaire Systems Limited, which was a subsidiary of Misonix. Litigation has arisen related to
claims of breach of warranty and other allegations in connection with this acquisition. Misonix
has denied the claims and allegations in such litigation. Misonix, PuriCore and its Affiliates
have negotiated a settlement to this litigation which includes the license and distribution by
Misonix of PuriCore’s Vashe system under the terms and conditions set forth in this Agreement.

THEREFORE, in consideration of the mutual covenants and agreements contained herein, and
intending to be legally bound hereby, the Parties agree as follows:

	1.	 	DEFINITIONS

Whenever used in this Agreement, the following terms shall have the following meanings:

	 	1.1	 	“510(k)” shall mean a Premarket Notification submission filed with the FDA in
compliance with Section 510(k) of the Food, Drug and Cosmetic Act of 1938, as amended,
per the requirements defined in 21 CFR Part 807 at least 90 days before the commercial
distribution is to begin.

	 	1.2	 	“Affiliate” shall mean any corporation or other legal entity which controls, is
controlled by, or is under common control with, a Party; “control” means the right to
elect or appoint a majority of the directors or similar governing body or the holding,
directly or indirectly, of 50% (or if less, the maximum amount permitted by law) or
more of the capital, income interests or voting rights in the corporation or other
entity.

 

 

 

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED

WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND

EXCHANGE COMMISSION.

	 	1.3	 	“Applicable Law” shall mean, with respect to the Licensed Products in the
Territory, all federal and state laws, statutes, codes and regulations, governing the
activities contemplated by this Agreement, including cGMP.

	 	1.4	 	“Business Day” shall mean any day, from Monday through Friday, except for days
on which commercial banks in New York, New York are authorized or required by law to
close.

	 	1.5	 	“cGMP” shall mean “Good Manufacturing Practices” for the medical device
industry, as in effect from time to time in the Territory, as set forth in the Quality
System Regulations at 21 CFR part 820.

	 	1.6	 	“Contract Year” shall mean the twelve-month period beginning on the date that
is forty-five (45) days after the Effective Date; unless there is a delay to delivery
of Licensed Product by PuriCore that is caused by PuriCore, in which case the beginning
date shall be the earlier of the date that PuriCore makes the first delivery of
Licensed Product to Misonix or ninety (90) days after the Effective Date; and ending on
the one year anniversary of such date and each twelve-month period thereafter.

1.7 “Extension Period” shall have the meaning set forth in Section 14.1.

	 	1.8	 	“FDA” shall mean the United States Food and Drug Administration or any
successor agency.

	 	1.9	 	“Field,” prior to the market availability of sterile Licensed Product, shall
mean the use of the Licensed Product as an irrigating solution specifically for the
treatment of human wound care with emphasis on use in conjunction with therapeutic
ultrasonic procedures. After market release of sterile Licensed Product, “Field” shall
mean the use of the Licensed Product, both sterile and non-sterile, as an irrigating
solution specifically for the treatment of human wound care principally in conjunction
with therapeutic ultrasonic procedures.

	 	1.10	 	“Gross Profit” shall mean the amounts indicated as “gross profit” on
Exhibit C, as Exhibit C may be updated hereunder, and shall not mean
gross profit as it may be understood under generally accepted accounting principles in
the United States or any other accounting principles.

1.11 “Initial Term” shall have the meaning set forth in Section 14.1.

	 	1.12	 	“Licensed Products” shall mean only those PuriCore proprietary Vashe solution
products that are described on Exhibit A.

 

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED

WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND

EXCHANGE COMMISSION.

	 	1.13	 	“Licensed Technology” shall mean the PuriCore Patents and related know-how and
other proprietary technology that cover and are incorporated in the Licensed Products.

	 	1.14	 	“Minimum Gross Profit” shall mean the cumulative amount of Gross Profit to
PuriCore on the paid purchase price from sales of Licensed Products to Misonix under
this Agreement until such cumulative Gross Profit aggregates a total amount of two
million dollars ($2,000,000); provided that the two million dollars ($2,000,000)
requirement may be reduced pursuant to Section 6.6.

	 	1.15	 	“Net Sales” shall mean Misonix’s and its Affiliates’ (including all sales made
by any Sales Representative on behalf of Misonix or any of its Affiliates) gross
receipts from sales of Licensed Products less the sum of (a) discounts actually allowed
in amounts customary in the trade; (b) sales, tariff duties and/or use taxes directly
imposed and with reference to particular sales; (c) outbound transportation prepaid or
actually allowed; and (d) amounts actually allowed or credited on returns. No
deductions shall be made for commissions paid to any Sales Representative, or for cost
of collections.

1.16 “Notes” shall mean those Loan Notes as defined in the SPA.

	 	1.17	 	“Product Labeling” shall mean the labeling as required, permitted and agreed by
and with the FDA under the 510(k) clearance for the Licensed Product and any other
Applicable Law.

1.18 “PuriCore Patents” shall mean those patents set forth on Exhibit B.

	 	1.19	 	“Quarterly Minimum Gross Profit” shall mean the amount of Minimum Gross Profit
that is allocated to be earned from sales of Licensed Product to Misonix in any
specific quarter during the Initial Term, which may be reduced on a pro rata basis in
the event that the Minimum Gross Profit is reduced pursuant to Section 6.6, so
that [* * *].

	 	1.20	 	“Regulatory Approval” shall mean, with respect to any country, all governmental
and regulatory registration and approvals (including but not limited to all approvals
for labeling and all pricing approvals) required for the manufacture, marketing, use,
sale and distribution of Licensed Products in such country.

1.21 “Royalty” shall have the meaning set forth in Section 4.10.

	 	1.22	 	“Sales Representatives” shall mean sales employees of Misonix and professional
persons or companies that regularly act as sales representatives on behalf of third
party companies in the medical device and surgical industry, whether acting in an
independent or direct capacity, and shall not include any person or company that
derives more than 50% of its annual revenues from selling products of its own
manufacture.

 

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED

WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND

EXCHANGE COMMISSION.

	 	1.23	 	“SPA” shall mean that certain Share Purchase Agreement dated as of 4 August
2009 between Misonix, Inc and PuriCore International Limited and PuriCore plc regarding
the acquisition of Labcaire Systems Limited, as varied.

	 	1.24	 	“Specifications” shall mean the specifications set forth on Exhibit A
or as otherwise provided in writing to Misonix by PuriCore and reasonably acceptable to
Misonix.

1.25 “Take or Pay Payments” shall have the meaning set forth in Section 6.5.

	 	1.26	 	“Territory” shall mean the United States and its territories. The Territory
may be expanded upon mutual written agreement of the Parties as Regulatory Approvals in
other countries or territories may be obtained.

	 	1.27	 	“Third Party” shall mean any person or entity that is not a Party or an
Affiliate of a Party.

	 	1.28	 	“Trigger Date” shall mean any of the three Trigger Dates defined in
Sections 2.2, 4.9(c) and 7.5.

	2.	 	GRANT OF LICENSE

	 	2.1	 	License. Subject to the terms of this Agreement, including without
limitation the exclusivity provisions of Section 2.2 and the authority
limitations of Section 3, PuriCore hereby grants to Misonix a license under the
Licensed Technology to use and sell the Licensed Products in the Field in the
Territory. The license granted in this Section 2.1 does not include any rights
of Misonix to grant sublicenses to any Third Party or to have Licensed Products sold by
any Third Party on behalf of Misonix, except that Misonix may utilize Sales
Representatives. A list of Misonix’s current Sales Representatives is attached as
Schedule 2.1. Misonix shall update Schedule 2.1 not less than ten (10)
days prior to the commencement of each Contract Year if there are any changes or
updates to Schedule 2.1. PuriCore acknowledges that Misonix has no control
over the purpose for which its customers use the Licensed Product once sold; and,
therefore, Misonix cannot be held to be in breach of this Agreement if it has sold the
Licensed Product in the Field in good faith even if the customer does not use the
Licensed Product for or in conjunction with ultrasonic procedures.

	 	2.2	 	Exclusivity Covenant. PuriCore covenants that it will not license the
Licensed Technology or sell Licensed Products to any therapeutic ultrasound company for
distribution in the Field in the Territory. In the event that PuriCore chooses (in its
sole discretion and despite the exclusivity covenant) to license the Licensed
Technology or sell Licensed Products to any therapeutic ultrasound company in the
Field in the Territory (the date of which shall be a “Trigger Date”), then
(a) Misonix will not have any exclusivity under this Section 2.2 or this
Agreement, and (b) the Minimum Gross Profit shall be reduced and certain payment
obligations will be eliminated as set forth in Section 6.6.

 

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED

WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND

EXCHANGE COMMISSION.

	 	2.3	 	Trademark/Branding/Labeling. All Licensed Products supplied to Misonix
under this Agreement will be labeled with Misonix branding. Misonix will develop its
own branding and trade dress under which it will sell the Licensed Products. Misonix
is granted no rights to the Vashe trademark, or any other PuriCore trademark, any Vashe
or PuriCore branding or trade dress, including any color, packaging, art or style used
by PuriCore. Notwithstanding anything to the contrary in the foregoing, Misonix shall
have the right to identify PuriCore on the labeling of the Licensed Products if
required to do so by Applicable Law.

	3.	 	DISTRIBUTION APPOINTMENT, AUTHORITY AND OBLIGATIONS

	 	3.1	 	Appointment. Subject to the terms of this Agreement, including without
limitation the exclusivity provisions of Section 2.2 and the authority
limitations of Section 3, PuriCore hereby appoints Misonix as a distributor of
the Licensed Products in the Field in the Territory, and Misonix hereby agrees to act
in that capacity during the term of this Agreement.

	 	3.2	 	Authority; Distribution Channels. Misonix and its Affiliates may sell
Licensed Products through all distribution channels, except it may not sell through
“over the counter” channels, hospital pharmacies (except that it may sell to a hospital
pharmacy if it is acting as the purchasing agent for other or all departments in its
hospital), and home healthcare. Misonix shall not, directly or indirectly, hold itself
out as an agent or representative of PuriCore or as otherwise having the authority to
bind PuriCore. Without the prior written consent of PuriCore, Misonix shall not use
PuriCore’s name for any reason.
	 
	 	3.3	 	Covenants.

	 	(a)	 	Marketing and Promotion. Misonix shall actively
market, promote, distribute and sell the Licensed Products within the Territory
in the Field, and shall use commercially reasonable efforts to do so, which
efforts shall be at least to the same extent that it markets and promotes its
other products.
	 
	 	(b)	 	Reports.

	 	(i)	 	Upon termination of this Agreement, Misonix
shall provide a detailed written report to PuriCore, in a mutually
agreeable format, describing the Licensed Product customers and
customer locations
and any other related information reasonably requested by PuriCore,
broken down by type of Licensed Product.

 

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED

WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND

EXCHANGE COMMISSION.

	 	(ii)	 	In the event that Misonix is manufacturing the
Licensed Products and paying PuriCore the Royalty in accordance with
Section 4.10, on a quarterly basis, Misonix shall provide a
detailed written report to PuriCore, in a mutually agreeable format,
describing the Licensed Product sold, the information underlying the
Net Sales calculation (including gross receipts and all deductions),
the calculation of Royalties and any other related information (not
including customer names or locations) reasonably requested by
PuriCore, broken down by type of Licensed Product.

	 	(iii)	 	PuriCore shall treat all information provided
and subject to review under this Section 3.3 in accordance with
the confidentiality provisions of Section 9.

	 	(c)	 	Records. Misonix shall keep full, complete and proper
records and accounts of sales of Licensed Products in sufficient detail to
confirm information provided or that may need to be provided in reports to
PuriCore in accordance with Section 3.3.
	 
	 	(d)	 	Audits.

	 	(i)	 	Compliance with Agreement Terms. Upon the
written request of PuriCore, and not more than once in each calendar
year, Misonix shall permit an independent consultant selected by
PuriCore, at PuriCore’s expense, to have access during normal business
hours, and upon prior written notice, to such of the records of Misonix
as may be reasonably necessary to verify Misonix’s compliance with this
Agreement, including the Field, Territory and distribution channel
authorization, for any calendar year ending not more than thirty-six
(36) months prior to the date of such request. Such consultant shall
enter into a reasonably acceptable confidentiality agreement with
Misonix obligating such consultant to retain all such information in
confidence pursuant to such confidentiality agreement, including
PuriCore; provided that such consultant can provide a report to
PuriCore with regard to its findings.

	 	(ii)	 	Royalty Calculations. Upon the written request
of PuriCore, and not more than once in each calendar year when the
reports are provided pursuant to Section 3.3(b)(ii), Misonix
shall permit an independent certified public accounting firm selected
by PuriCore (the “Auditor”), at PuriCore’s expense, to have
access during normal business hours, and upon prior written notice, to
such of
the records of Misonix as may be reasonably necessary to verify the
accuracy of the reports hereunder and compliance with this Agreement
for any calendar year ending not more than thirty-six (36) months
prior to the date of such request. Upon the written request of
Misonix, PuriCore shall cause the Auditor to enter into a reasonably
acceptable confidentiality agreement with Misonix obligating such
firm to retain all such information in confidence pursuant to such
confidentiality agreement.

 

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED

WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND

EXCHANGE COMMISSION.

	 	(e)	 	No Sales Outside the Field or Territory. Subject to
Section 2.1, Misonix shall not directly or indirectly sell, have sold,
or seek, market, promote or otherwise induce the sale of, Licensed Products
outside of the Territory or outside the Field, or where one should reasonably
be aware that the ultimate destination for a Licensed Product is outside the
Territory or the ultimate use of the Licensed Product is outside the Field.

	 	(f)	 	Other Solutions. Misonix shall not sell or distribute
in the Territory in the Field any irrigating solution that has anti-microbial
properties other than the Licensed Products. This Section 3.3 (e)
shall cease to be in effect in the event Misonix no longer has exclusivity
under Section 2.2.

	 	(g)	 	No Alterations. Misonix shall not make any alterations
or knowingly permit any alterations to be made to any Licensed Product without
PuriCore’s express prior written consent, which consent may be granted or
withheld in PuriCore’s sole discretion.

	4.	 	SUPPLY AND PURCHASE

	 	4.1	 	Supply of Licensed Products. Subject to the terms of this Agreement,
Misonix shall purchase from PuriCore all of its requirements for Licensed Products, and
PuriCore shall supply such requirements to Misonix.

	 	4.2	 	Compliance with Applicable Law. PuriCore shall manufacture or cause to
be manufactured and supply the Licensed Products being provided hereunder to Misonix in
accordance with all Applicable Law, including, without limitation, those enforced by
the FDA (including compliance with cGMP), in all material respects.

	 	4.3	 	Development of Sterile Licensed Products. PuriCore shall use
commercially reasonable efforts to develop a sterile Vashe solution product in an
IV-hangable, pre-filled container that has 510(k) clearance within the first Contract
Year. Should such a sterile Licensed Product not be available by the end of the first
Contract Year, PuriCore will solicit the technical support of Misonix to cooperate with
PuriCore in pursuing the development and validation of such a sterile Licensed Product.

 

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED

WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND

EXCHANGE COMMISSION.

	 	4.4	 	Samples. PuriCore will furnish Misonix with samples of Licensed
Products at no charge (except that Misonix will pay all delivery costs and charges
related to delivery of samples) up the following maximum amounts of samples per
Contract Year:

	 	 	 
	Contract Year

	 	Maximum Quantity of Samples
	One

	 	[* * *]% of Licensed Product units purchased
	Two

	 	[* * *]% of Licensed Product units purchased
	Three

	 	[* * *]% of Licensed Product units purchased
	All Extension Periods

	 	[* * *]% of Licensed Product units purchased

	 	4.5	 	Forecasting. At least thirty (30) days prior to the start of each
quarter of each Contract Year, Misonix will provide PuriCore with its good faith
written rolling forecast of its supply requirements for Licensed Products for the next
four (4) quarters, the first quarter of which shall be binding and the succeeding three
(3) quarters of which shall be non-binding (the “Supply Forecast”).

	 	4.6	 	Purchase Orders. Misonix shall obtain Licensed Products pursuant to
individual purchase orders that are issued by Misonix or its Affiliates to PuriCore
(each, a “Purchase Order”). PuriCore shall accept any Purchase Order that is
consistent with the Supply Forecast. Such Purchase Order shall specify quantities
ordered of each Licensed Product by category, delivery dates, and delivery and shipping
instructions.

	 	4.7	 	Conflict. In the event of any conflict or inconsistency between the
terms and conditions of any Purchase Order, an Order Acknowledgement and this
Agreement, the terms and conditions of this Agreement shall govern.

	 	4.8	 	Invoice and Payment Terms. Invoices will be issued on the shipment
date for all Licensed Product. Unless Misonix has notified PuriCore, in accordance
with Section 5.2, of non-conformity of Licensed Products delivered to Misonix,
all payments for Licensed Product shall be made within forty-five (45) days of invoice
either (a) by payment by Misonix to PuriCore of the invoice amount by wire transfer or
(b) by a written account notice from Misonix applying a credit note balance on a credit
note previously issued by PuriCore to Misonix pursuant to Clause 3.1 of the terms of
the Notes as varied (as described in Section 6.3 of this Agreement) against the
invoice amount. PuriCore agrees to promptly issue credit notes to Misonix after
request therefor by the Issuer (as defined in Clause 3.1 of the Notes as amended by
Deed). Such credit notes will be applied only at Misonix’s written direction and can
be applied in whole or in part and during one or more quarters. Payments on
outstanding balances not received within such time period shall bear interest at the
lesser of (x) the maximum rate permitted by law, and (y) the Prime Rate as published in
the Wall Street Journal. Any claims arising from alleged failures in shipment or
delivery shall be waived and released by Misonix unless made in writing to PuriCore
within forty-five (45) days from
the date of shipment of such Licensed Product. PuriCore may refuse all further
Purchase Orders and refuse to supply any Licensed Product until Misonix’s account is
in compliance with the payment terms of this Agreement.

 

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED

WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND

EXCHANGE COMMISSION.

	 	4.9	 	Failure to Supply.

	 	(a)	 	In the event that (a) PuriCore fails to provide the Licensed
Products as required by this Agreement for a period of ninety (90) consecutive
days; or (b) PuriCore provides less than seventy percent (70%) of Licensed
Products required under this Agreement in any twelve (12)-month period, then
Misonix will be granted a license to manufacture the Licensed Products during
the term of this Agreement (including any Extension Periods) using a
manufacturing vendor of its choice. If Misonix gains the right to have the
Licensed Products manufactured under this Section 4.9 and the aggregate
Minimum Gross Profit has not yet been earned by PuriCore, then the Take or Pay
Payments will be made regardless of who is manufacturing and supplying the
Licensed Product, but such Take or Pay Payments will be suspended until Misonix
(or its designee) has been manufacturing the Licensed Products for ninety (90)
days. All such suspended Take or Pay Payments will be paid by Misonix before
the end of the Initial Term plus a period of time equal to the time that such
Take or Pay Payments have been suspended.

	 	(b)	 	In the event that PuriCore provides less than ninety percent
(90%) but more than seventy percent (70%) of Licensed Products required under
this Agreement in any twelve (12)-month period, the Take or Pay Payments will
be adjusted to reflect the difference between the ninety percent (90%)
requirement and the percentage of Licensed Products actually delivered. The
amount of the foregoing adjustment shall be added to amounts due, if any, under
the Take or Pay Payments at the end of the Initial Term. By way of example,
assume that (i) PuriCore supplies eighty percent (80%) of the Licensed Products
required under this Agreement during the applicable period and (ii) the
applicable Take or Pay Payment is $10,000. Because the shortfall is ten percent
(10%), $1,000 of the Take or Pay Payment due shall be suspended and shall
instead be added on to any Take or Pay Payment due at the end of the Initial
Term (assuming the Minimum Gross Profit amount had not yet been otherwise
achieved).

 

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED

WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND

EXCHANGE COMMISSION.

	 	(c)	 	In the event Misonix’s right to manufacture Licensed Products
has been triggered under this Section 4.9, and, despite its
commercially reasonable efforts, Misonix is unable to manufacture Licensed
Products or to have Licensed Products manufactured by manufacturing vendors
(the date of written notice to PuriCore of such failure, which shall include
reasonable detail of the efforts taken, shall be a “Trigger Date”),
then the Minimum
Gross Profit shall be reduced and certain payment obligations will be
eliminated as set forth in Section 6.6.

	 	4.10	 	Royalty. In the event that Misonix is manufacturing Licensed Products
pursuant to Section 4.9(a), and after Misonix has satisfied the required Take
or Pay Payments under this Agreement (as required by Section 4.9(a)), Misonix
shall pay PuriCore a royalty (the “Royalty”) of [* * *] percent ([* * *]%) of Net Sales
of Licensed Products.

	 	4.11	 	Audit. Upon the written request of Misonix, and not more than once in
each calendar year and upon at least thirty (30) days notice, PuriCore shall permit an
independent consultant selected by Misonix and approved by PuriCore, at Misonix’s
expense, to have access during normal business hours to PuriCore’s manufacturing
facilities (including any contract manufacturer of PuriCore), as may be reasonably
necessary to verify PuriCore’s compliance with cGMP. Such consultant shall enter into
a reasonably acceptable confidentiality agreement with PuriCore, obligating such
consultant to retain all such information in confidence pursuant to such
confidentiality agreement, including Misonix, provided that such consultant can provide
a report to Misonix with regard to its findings.

	5.	 	DELIVERY

	 	5.1	 	Delivery. Licensed Product shall be delivered to Misonix, or to a
location designated by Misonix in the Purchase Order, FOB (Incoterms, 2000) PuriCore’s
facility loading dock, by a common carrier designated by Misonix in the Purchase Order.

	 	5.2	 	Inspection. No later than twenty (20) days after Misonix’s receipt of
delivered Licensed Product, Misonix will inspect the Licensed Product and will notify
PuriCore of any claim that any such Licensed Product does not conform with the
Specifications. Such notice shall be in writing and shall indicate the non-conforming
characteristics of the Licensed Product. If Misonix does not notify PuriCore of
non-conformity within such twenty (20)-day period, such Licensed Product shall be
deemed accepted and PuriCore shall be released from any claim of non-conformity. If
Misonix does notify PuriCore of non-conformity within such twenty (20)-day period, the
appropriate personnel at the Parties shall in good faith investigate and attempt to
resolve such non-conformity for a period of thirty (30) days. In the event that
Misonix claims that the Licensed Product does not conform to the Specifications and
PuriCore does not agree after such thirty (30)-day period, the Parties will mutually
agree (such agreement not to be unreasonably withheld or delayed) upon a qualified
Third Party to review records, test data and other relevant information and ascertain
conformity or non-conformity. Such Third Party shall execute an appropriate
confidentiality agreement reasonably approved in form and substance by both Parties.
The Third
Party’s findings will be binding on both Parties, and the costs of such third-Party
testing and review will be borne by the Party found to be wrong.

 

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED

WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND

EXCHANGE COMMISSION.

	 	5.3	 	Returns and Sole Remedy. Misonix may only return Licensed Product that
the Parties have agreed do not conform to Specifications or that are found to be
non-conforming pursuant to the process described in Section 5.2. As the sole
remedy to Misonix for such non-conformity, PuriCore, at is option, shall either replace
the non-conforming product or refund the payment for such non-conforming product.

	6.	 	CONSIDERATION

	 	6.1	 	Payment by Misonix. On the Effective Date, Misonix will pay to
PuriCore $650,000 in immediately available funds by wire transfer pursuant to the
instructions set forth on Schedule 6.1.

	 	6.2	 	Forgiveness of Commissions Under SPA. As of the Effective Date,
Misonix hereby forgives in full PuriCore International Limited’s and PuriCore plc’s
obligation under the SPA to pay $1,000,000 of Commissions (as defined in the SPA prior
to amendment).

	 	6.3	 	Modification to the Notes. The Parties acknowledge that, as additional
consideration hereunder, the Notes will be amended by Deed to modify the payment terms.
Specifically,

	 	(a)	 	Clause 3.1 shall be amended by adding at the end “such
repayment to be either by payment by the Issuer to the Noteholders as provided
for in paragraph 3.1 of the Schedule 3 Conditions or by the Issuer procuring
that PuriCore, Inc. forthwith issues a credit note to Misonix, Inc. to the
value of such repayment to fund purchases by Misonix, Inc. from PuriCore, Inc.
under the Product License and Distribution Agreement, dated July 18, 2011, by
and between PuriCore, Inc. and Misonix, Inc. (the “PLDA”);

	 	(b)	 	Paragraph 1.1 of Schedule 3 Conditions shall be amended by
adding after the words Loan Note Instrument the words “under the payment or
credit note mechanism provided for in Clause 3.1 of this Instrument”.

	 	6.4	 	Purchase Price for Licensed Product; Minimum Gross Profit; Volume
Targets.

	 	(a)	 	Purchase Price. The purchase price for all Licensed
Product purchased by Misonix under this Agreement shall be at a discount to
PuriCore’s list price for each such Licensed Product. The discount rate shall
be [* * *] percent ([* * *]%) of list price in Contract Year one; [* * *]
percent ([* * *]%) of list price in Contract Year two; and [* * *] percent ([*
* *]%) of list price in Contract Year three and all Extension Periods.
Exhibit C sets forth PuriCore’s list price and cost of goods sold for
each Licensed
Product. Exhibit C will be updated in writing by the Parties for
all Licensed Products as different Licensed Products become available for
purchase by Misonix, and each such update shall become a part of this
Agreement as if it were contained in this Agreement on the Effective Date.

 

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED

WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND

EXCHANGE COMMISSION.

	 	(b)	 	Minimum Gross Profit. During the Initial Term only,
and on a quarterly basis, Misonix will endeavor to purchase enough Licensed
Product so that payment of the purchase price for such Licensed Products will
provide to PuriCore enough Gross Profit in the applicable quarter to equal the
applicable Quarterly Minimum Gross Profit and the aggregate Minimum Gross
Profit during the Initial Term, as may be extended in accordance with
Section 4.9(a). Except as otherwise provided in Section 6.6,
to the extent that purchases of Licensed Products will not achieve the volume
levels needed to provide the applicable Quarterly Minimum Gross Profit or the
aggregate Minimum Gross Profit, then Misonix will make the Take or Pay
Payments.

	 	(c)	 	Minimum Volume Targets. Within the ninety (90) days
before the end of the Initial Term and before the end of each Extension Period
thereafter, the Parties shall mutually agree in writing to sales volume targets
for the upcoming Extension Period, provided that such volume targets shall not
increase by more than ten percent (10%) year over year unless mutually agreed
in writing by the Parties. Misonix will not be obligated to purchase certain
minimums, to provide additional minimum Gross Profit or to make Take or Pay
Payments (unless mutually agreed in writing otherwise); however, if Misonix
fails to purchase the agreed upon volume targets in the applicable agreed-upon
time periods during any Extension Period, then PuriCore may, at is option,
terminate this Agreement, which Misonix could, at its option, avoid by making a
payment to PuriCore to provide the Gross Profit that would have been provided
to PuriCore if Misonix had purchased amounts of Licensed Products to reach the
applicable volume target.

	 	6.5	 	Take or Pay. During the Initial Term of this Agreement, and on a
quarterly basis, Misonix is obligated to pay to PuriCore a purchase price for
quantities of Licensed Products that will provide the Quarterly Minimum Gross Profit
whether or not it actually purchases enough Licensed Products from PuriCore to provide
each applicable Quarterly Minimum Gross Profit. Therefore, it is the intention of the
Parties that, to the extent that Misonix does not purchase sufficient quantities of
Licensed Product under this Agreement to provide the applicable Quarterly Minimum Gross
Profit, Misonix, unless as otherwise provided in Section 4.9 or Section
6.6, is subject to a take-or-pay arrangement for the Initial Term. Any payments
necessary under the take-or-pay arrangement to reach the applicable Quarterly Minimum
Gross Profit shall be referred to as

 

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED

WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND

EXCHANGE COMMISSION.

	 	 	 	 “Take or Pay Payments”. Misonix agrees that it will make Take or Pay Payments no matter what (unless such
payments are relieved under Section 6.6 or suspended or relieved under
Section 4.9). If this Agreement terminates for any reason before any
Quarterly Minimum Gross Profit or the aggregate Minimum Gross Profit is earned by
PuriCore from payments by Misonix for Licensed Product, then Misonix shall continue
to be obligated to make the Take or Pay Payments if, as and when due pursuant to the
terms of this Agreement unless relieved under Section 6.6. Misonix hereby
waives its right of offset, recoupment, protest, suspension and presentment with
regard to any claim, counterclaim or defense that arises under any agreement among
PuriCore, or any Affiliate of PuriCore, and Misonix, or any Affiliate of Misonix, in
existence now or in the future against any Take or Pay Payments, the Quarterly Gross
Profit amounts and the aggregate Minimum Gross Profit. Misonix hereby waives its
right to assert against PuriCore or its Affiliates any damage claim for or to offset
against Take or Pay Payments, the Quarterly Gross Profit amounts and the aggregate
Minimum Gross Profit. Nothing in the foregoing Section 6.5 is intended to
negate credit notes to be issued by PuriCore to Misonix pursuant to Clause 3.1 of
the Notes (as described in Section 6.3 of this Agreement) or Misonix’s right
to apply such credit notes against any payments owed to PuriCore as provided in
Section 4.8.

	 	6.6	 	Reduction in Minimum Gross Profit; Elimination of Take or Pay Payments.
Upon any Trigger Date (as defined in Sections 2.2, 4.9(c) or 7.5), (a) the
aggregate Minimum Gross Profit amount shall be reduced to the sum of all Quarterly
Minimum Gross Profit amounts due in each full contract quarter prior to the Trigger
Date plus that amount of Gross Profit that would have been generated by all sales of
Licensed Product delivered in the then current contract quarter, and subject to
delivery under open purchase orders, as of the Trigger Date, (b) all remaining
Quarterly Gross Profit amounts will be eliminated, and (c) once the reduced amount
described in Section 6.6(a) is paid, Misonix will no longer be subject to any
Take or Pay Payment obligations or Quarterly Minimum Gross Profit or aggregate Minimum
Gross Profit requirements.

	 	6.7	 	Currency. Any and all payments shall be made in United States Dollars
and shall be remitted to PuriCore in immediately available funds by wire transfer
pursuant to the instructions set forth on Schedule 6.1.

	 	6.8	 	Settlement and Dismissal of Action. The parties acknowledge that the
representations, warranties, covenants, obligations, benefits, and consideration
provided for in this Agreement are also given in consideration of the settlement of the
dispute between Misonix and certain Affiliates of PuriCore relating to the SPA and as
soon as reasonably practicable on or after the Effective Date the claims and
counterclaims in the action shall by consent be dismissed with no order as to costs.

 

13

 

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED

WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND

EXCHANGE COMMISSION.

	 	6.9	 	Royalties. If Royalties are due under Section 4.10, Royalties
shall be paid to PuriCore on a quarterly basis, within forty-five (45) days after the
end of each calendar quarter, based upon the Net Sales during such calendar quarter.
Royalties shall be calculated in accordance with United States generally accepted
accounting principles, consistently applied.

	7.	 	REGULATORY MATTERS

	 	7.1	 	Compliance with Law. In carrying out this Agreement, each Party shall
comply with all applicable local, state, federal and foreign laws and regulations.

	 	7.2	 	Regulatory Approval. PuriCore shall be solely responsible for
obtaining, and shall hold in its or its designee’s name, Regulatory Approvals for the
manufacture, production, distribution, use and sale of Licensed Products in the Field
in the Territory. PuriCore shall have sole responsibility for any warning labels,
packaging, instructions as to use, quality control and compliance with applicable law
as to any Licensed Product distributed, used or sold by Misonix.

	 	7.3	 	Adverse Event Reporting. Misonix will monitor and report to PuriCore
any adverse events related to the use of Licensed Product as is required by Applicable
Law.
	 
	 	7.4	 	Recalls.

	 	(a)	 	The ultimate determination as to whether a recall, withdrawal
or corrective action (collectively, the “Recall”) of any Licensed
Product is required shall be made in PuriCore’s sole discretion; provided,
however, if Misonix believes a Recall is required or appropriate, Misonix will
promptly notify PuriCore and if PuriCore subsequently determines such Recall is
appropriate or required, the Parties will jointly develop a plan for
implementing such Recall.

	 	(b)	 	If there shall be a Recall, the expense of such Recall shall be
borne as follows:

	 	(i)	 	If (i) it is established that the Licensed
Product was nonconforming pursuant to Section 5.2 upon delivery
by PuriCore to Misonix, or (ii) such Recall arises from any breach by
PuriCore of the provisions of this Agreement or Applicable Law, then
PuriCore shall hold Misonix harmless and shall bear all expenses
related to the Recall, including the replacement of the recalled or
withdrawn Licensed Product, which shall be replaced as soon as
reasonably practicable.

 

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED

WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND

EXCHANGE COMMISSION.

	 	(ii)	 	If such Recall arises as a result of actions or
omissions on the part of Misonix, or from any breach by Misonix of the
provisions of this Agreement, then Misonix shall hold PuriCore harmless
and shall bear all costs and expenses in connection with such Recall.

	 	(c)	 	The Parties shall reasonably cooperate in good faith to effect
a Recall. Misonix shall have sufficient quality control policies and
procedures in place that it can track its shipments of Licensed Product so that
Licensed Product sold by Misonix can be Recalled or customers notified of the
Recall.

	 	(d)	 	In the event that a Recall is triggered because of
nonconforming Licensed Product (as determined under Section 5.2), the
provisions of Section 4.9, if triggered, will control.

	 	7.5	 	FDA Prohibition of Licensed Product. In the event that the FDA
prohibits the sale of Licensed Product for use in the Field, and such FDA prohibition
is final, permanent and no longer subject to appeal (the date of such shall be a
“Trigger Date”), then (a) this Agreement shall terminate and (b) the Minimum
Gross Profit shall be reduced and certain payment obligations will be eliminated as set
forth in Section 6.6. During any such appeal period, Misonix’s obligations to
make any Take or Pay Payments or meet Quarterly Minimum Gross Profit or aggregate
Minimum Gross Profit requirements shall be suspended if Misonix is prohibited from
selling the Licensed Products. If Misonix is (if ever) again permitted to sell
Licensed Products, its obligations to make Take or Pay Payments and meet Quarterly
Minimum Gross Profit and aggregate Minimum Gross Profit requirements will resume and
all such suspended Take or Pay Payments will be paid by Misonix before the end of the
Initial Term plus a period of time equal to the time that such Take or Pay Payment have
been suspended.

	8.	 	PATENT, TRADEMARK AND OTHER INTELLECTUAL PROPERTY

	 	8.1	 	Intellectual Property Prosecution and Maintenance. PuriCore shall have
the sole right to act in its sole discretion with respect to filing, prosecution and
maintenance of all of its intellectual property, including the Licensed Technology,
including but not limited to any and all patent applications, patents, trademarks,
know-how, and other proprietary rights related to the Vashe products.
	 
	 	8.2	 	[reserved]

 

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED

WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND

EXCHANGE COMMISSION.

	 	8.3	 	No Warranty On Intellectual Property. Except as may be expressly set
forth in Section 11.2, nothing herein contained shall be deemed to be a
representation or warranty regarding the Licensed Technology or the PuriCore Patents,
including the validity, enforceability and non-infringement of the Licensed Technology
and PuriCore Patents. AS TO ANY ELEMENT OF THE LICENSED
TECHNOLOGY, PURICORE PATENTS OR ANY LICENSED PRODUCT, EXCEPT AS EXPRESSLY SET FORTH
IN SECTION 11.2, PURICORE MAKES NO EXPRESS OR IMPLIED WARRANTY, INCLUDING,
BUT NOT LIMITED TO, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE OR ANY WARRANTY THAT THE USE OF THE LICENSED TECHNOLOGY, PURICORE PATENTS OR
ANY LICENSED PRODUCTS WILL NOT INFRINGE OR VIOLATE ANY PATENT OR OTHER PROPRIETARY
RIGHTS OF ANY THIRD PARTY.

	 	8.4	 	Ownership. Subject to the express rights granted to Misonix under this
Agreement, it is understood and agreed that all right and interest in and to the
PuriCore Patents and Licensed Technology vest solely in PuriCore.
	 
	 	8.5	 	Infringement.

	 	(a)	 	Notification. In the event that Misonix receives information
that a Third Party may be infringing one or more of the PuriCore Patents or any
other Licensed Technology, it shall promptly notify PuriCore of such
infringement.

	 	(b)	 	Right to Sue. PuriCore shall have the sole right, but
not the obligation to bring, at its own expense, an infringement action against
a Third Party infringing one or more of the PuriCore Patents or any of the
Licensed Technology and PuriCore shall have full control over the conduct of
such litigation and Misonix shall be kept reasonably informed of any such
proceedings taken by PuriCore. If PuriCore requests, Misonix shall join with
PuriCore as a party to a lawsuit or other proceeding at PuriCore’s expense if
necessary or desirable to prosecute such lawsuit or proceeding effectively;
however, PuriCore shall retain full control of the prosecution of such lawsuit
or proceeding, as the case may be. Any amounts recovered pursuant to any such
lawsuit or other proceeding shall be the sole property of PuriCore. Misonix
shall cooperate with PuriCore in its efforts to protect the Licensed
Technology.

	9.	 	CONFIDENTIALITY

9.1 Obligations of Confidentiality.

	 	(a)	 	Misonix shall maintain any and all of the Licensed Technology
and other PuriCore proprietary information, any promotion, product, strategy or
business results that may be disclosed to Misonix, including the terms, rights
and obligations of this Agreement (“PuriCore Confidential Information”) in
confidence and shall not (i) release or disclose any tangible or intangible
component thereof to any Third Party without first receiving the prior written
consent of PuriCore to said release or
disclosure or (ii) use the PuriCore Confidential Information for any purpose
other than the performance of this Agreement. This obligation of
confidentiality shall survive termination or expiry of this

 

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED

WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND

EXCHANGE COMMISSION.

	 	 	 	 Agreement for a one (1) year period but shall cease to apply to any component of the
PuriCore Confidential Information which Misonix can prove: (i) is part of
the public domain prior to the Effective Date; (ii) becomes a part of the
public domain not due to some unauthorized act by or omission of Misonix or
its Affiliates after the Effective Date; (iii) is disclosed to Misonix or
its Affiliate without an obligation of confidentiality by a Third Party who
has the right to make such disclosure; (iv) is required by law to be
disclosed provided that Misonix has given prior written notice to PuriCore
and has reasonably cooperated with PuriCore to resist or limit such
disclosure, or (v) can be shown by documentary evidence to have been
independently discovered or developed by the other Party without reference
to or use of the furnishing Party’s Confidential Information.

	 	(b)	 	PuriCore shall maintain any and all of the Misonix proprietary
information disclosed to PuriCore, including the terms, rights and obligations
of this Agreement, the reports and other information supplied by Misonix
pursuant to the terms of this Agreement, and any promotion, product, strategy
or business results that may be disclosed by Misonix to PuriCore (“Misonix
Confidential Information”) in confidence and shall not (i) release or
disclose any tangible or intangible component thereof to any third party
without first receiving the prior written consent of Misonix to said release or
disclosure or (ii) use the Misonix Confidential Information for any purpose
other than the performance of this Agreement. This obligation of
confidentiality shall survive termination or expiry of this Agreement for a one
(1) year period but shall cease to apply to any component of the Misonix
Confidential Information which PuriCore can prove: (i) is part of the public
domain prior to the Effective Date; (ii) becomes a part of the public domain
not due to some unauthorized act by or omission of PuriCore or its Affiliates
after the Effective Date; (iii) is disclosed to PuriCore without an obligation
of confidentiality by a Third Party who has the right to make such disclosure;
(iv) is required by law to be disclosed provided that PuriCore has given prior
written notice to Misonix and has reasonably cooperated with Misonix to resist
or limit such disclosure or (v) can be shown by documentary evidence to have
been independently discovered or developed by the other Party without reference
to or use of the furnishing Party’s Confidential Information.

 

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED

WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND

EXCHANGE COMMISSION.

	10.	 	LIABILITY AND INDEMNIFICATION

	 	10.1	 	Misonix Indemnification. Misonix shall, at all times during the term
of this Agreement and thereafter, defend, indemnify and hold harmless PuriCore and its
Affiliates and the respective directors, officers and employees of PuriCore and its
Affiliates (each a “PuriCore Indemnittee”) from and against any and all
liability, loss, damages, claims, causes of actions, judgments, costs and expenses
(including reasonable fees and costs of attorneys and investigations)
(“Losses”) they may suffer arising out of the breach of this Agreement or
any Applicable Law by Misonix, distribution, use, sale or other disposition by
Misonix or its Affiliates or Sales Representatives of any Licensed Product or any of
Misonix’s ultrasound products or equipment, any negligence or willful misconduct of
Misonix, or its Affiliates or Sales Representatives, or out of any representation or
warranty made by Misonix pursuant to this Agreement failing to be materially true,
provided that Misonix shall not be obligated to defend, indemnify, or hold harmless
any PuriCore Indemnitee to the extent such Losses were caused by such PuriCore
Indemnitee’s negligence in connection with the design, development, manufacture,
packaging, testing, warehousing, handling or use of the Licensed Products, willful
misconduct, material breach of this Agreement or any Applicable Law by PuriCore or
any representation or warranty made by PuriCore pursuant to this Agreement failing
to be materially true.

	 	10.2	 	PuriCore Indemnification. PuriCore shall, at all times during the term
of this Agreement and thereafter, defend, indemnify and hold harmless Misonix and its
Affiliates and the respective directors, officers and employees of Misonix and its
Affiliates (each a “Misonix Indemnittee”) from and against any and all Losses they may
suffer arising out of any negligence in connection with the design, development,
manufacture, packaging, testing, warehousing, handling or use of the Licensed Products,
or willful misconduct of PuriCore or its Affiliates or out of breach of this Agreement
or any Applicable Law by PuriCore, any representation or warranty made by PuriCore
pursuant to this Agreement failing to be materially true, provided that PuriCore shall
not be obligated to defend, indemnify, or hold harmless any Misonix Indemnitee to the
extent such Losses were caused by Misonix’s ultrasound products or equipment, such
Misonix Indemnitee’s negligence, willful misconduct or material breach of this
Agreement or any Applicable Law by Misonix or any representation or warranty made by
Misonix pursuant to this Agreement failing to be materially true.

	 	10.3	 	Notification of Claims. Each Party agrees to notify the other Party as
soon as the Party becomes aware of a claim or action, or a threat of claim or action,
by a Third Party for which indemnification may be sought pursuant hereto. In the event
that a Party seeks indemnification under this Section 10, it shall permit the
indemnifying Party to assume direction and exclusive control of the defense of the
claim, unless otherwise governed by another Section of this Agreement, and shall
cooperate as requested at the expense of the indemnifying Party with respect to
documented and reasonable out-of-pocket expenses of the other Party in the defense of
the claim. A Party shall not settle any claim or action as to which it
seeks indemnification under this Section 10 without the prior written
consent of the indemnifying Party, such consent not to be unreasonably withheld or
delayed.

 

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED

WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND

EXCHANGE COMMISSION.

	 	10.4	 	Limitation of Liability. NEITHER PARTY SHALL BE LIABLE TO THE OTHER
FOR INDIRECT, INCIDENTAL, PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES INCLUDING, BUT NOT
LIMITED TO, LOST PROFITS AND LOSS OF GOODWILL, ARISING FROM OR RELATING TO ANY BREACH
OF THIS AGREEMENT (OR ANY DUTY OF COMMON LAW, AND WHETHER OR NOT OCCASIONED BY THE
NEGLIGENCE OF A PARTY OR ITS AFFILIATES), REGARDLESS OF ANY NOTICE OF THE POSSIBILITY
OF SUCH DAMAGES; PROVIDED THAT NOTHING IN THIS SECTION 10.4 IS INTENDED TO, OR
DOES, LIMIT THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF EITHER PARTY UNDER THIS
SECTION 10; PROVIDED FURTHER THAT, FOR THE AVOIDANCE OF DOUBT, NOTHING IN THIS
SECTION 10 IS INTENDED TO, OR DOES, LIMIT MISONIX’S OBLIGATION UNDER THIS
AGREEMENT TO MAKE TAKE OR PAY PAYMENTS, IF, AS AND WHEN DUE, AND PAY TO PURICORE THE
QUARTERLY MINIMUM GROSS PROFIT OR THE AGGREGATE MINIMUM GROSS PROFIT AS PROVIDED IN
SECTION 6.5 UNLESS MODIFIED UNDER SECTION 6.6. NOTHING CONTAINED IN
THIS SECTION 10.4, SHALL, OR IS INTENDED TO, LIMIT EITHER PARTY’S RIGHT TO
CLAIM DIRECT DAMAGES FROM THE OTHER PARTY.
	 
	 	10.5	 	Insurance Obligations.

	 	(a)	 	Misonix is required to carry the following insurance coverage:

	 	(i)	 	Workers Compensation and Employers Liability
coverage in the states in which the work is to be performed and
elsewhere as may be required by applicable law;

	 	(ii)	 	Commercial General Liability coverage including
Premises-Operations, Products-Completed Operations, and Contractual
Liability with minimum limits of $1,000,000 per Occurrence / $2,000,000
General Aggregate / $2,000,000 Products — Completed Operations
Aggregate;

	 	(iii)	 	Auto Liability with minimum limits of
$1,000,000; and

 

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED

WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND

EXCHANGE COMMISSION.

	 	(iv)	 	Umbrella Liability with minimum limits of
$5,000,000 excess of underlying General Liability, Auto Liability, and
Employers Liability

Misonix shall provide PuriCore with Certificates of Insurance evidencing the
coverages noted above with insurance carriers having an A.M. Best Rating of at least
A- Class VIII. Insurance policies should provide a minimum of 30 days notice of
cancellation. The carrying of insurance described shall in no way be interpreted as
relieving Misonix of any responsibility or liability under this Agreement.

	 	(b)	 	PuriCore is required to carry the following insurance coverage:

	 	(i)	 	Workers Compensation and Employers Liability
coverage in the states in which the work is to be performed and
elsewhere as may be required by applicable law;

	 	(ii)	 	Commercial General Liability coverage including
Premises-Operations, Products-Completed Operations, and Contractual
Liability with minimum limits of $1,000,000 per Occurrence / $2,000,000
General Aggregate / $2,000,000 Products — Completed Operations
Aggregate;

	 	(iii)	 	Auto Liability with minimum limits of
$1,000,000; and

	 	(iv)	 	Umbrella Liability with minimum limits of
$5,000,000 excess of underlying General Liability, Auto Liability, and
Employers Liability.

PuriCore shall provide Misonix with Certificates of Insurance evidencing the
coverages noted above with insurance carriers having an A.M. Best Rating of at least
A- Class VIII. Insurance policies should provide a minimum of 30 days notice of
cancellation. The carrying of insurance described shall in no way be interpreted as
relieving PuriCore of any responsibility or liability under this Agreement.

	11.	 	REPRESENTATIONS AND WARRANTIES

	 	11.1	 	Misonix. Misonix hereby represents, warrants to and covenants with PuriCore as
follows:

	 	(a)	 	Misonix is a company duly organized, validly existing and in
good standing under the laws of the State of New York. Misonix has all
requisite power and authority to carry on its business, to own and operate its
properties and assets and to execute, deliver and perform its obligations under
this Agreement.

 

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED

WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND

EXCHANGE COMMISSION.

	 	(b)	 	There is no pending or threatened litigation involving Misonix
which would have any effect on this Agreement or on the ability of Misonix to
perform its obligations hereunder.

	 	(c)	 	No further corporate action is required on Misonix’s part to
authorize the execution and delivery of this Agreement.

	 	(d)	 	This Agreement is a valid and binding obligation of Misonix
enforceable in accordance with its terms, subject to laws of general
application relating to bankruptcy, insolvency and the relief of debtors.

	 	(e)	 	There is no consent required, or indenture, contract, or
agreement to which Misonix is a party or by which Misonix is bound, which
prohibits or would prohibit the execution and delivery by Misonix of this
Agreement or prohibit or limit the performance or observance by Misonix of any
term or condition of this Agreement.

	 	11.2	 	PuriCore. PuriCore hereby represents, warrants to and covenants with Misonix
that:

	 	(a)	 	PuriCore is duly organized, validly existing and in good
standing under the laws of the State of Delaware. PuriCore has all requisite
power and authority to carry on its business, to own and operate its properties
and assets and to execute, deliver and perform its obligations under this
Agreement.

	 	(b)	 	No further corporate action is required on PuriCore’s part to
authorize the execution and delivery of this Agreement.

	 	(c)	 	This Agreement is a valid and binding obligation of PuriCore
enforceable in accordance with its terms, subject to laws of general
application relating to bankruptcy, insolvency and the relief of debtors.

	 	(d)	 	There is no consent required, or indenture, contract, or
agreement to which PuriCore is a party or by which PuriCore is bound, which
prohibits or would prohibit the execution and delivery by PuriCore of this
Agreement or prohibit or limit the performance or observance by PuriCore of any
term or condition of this Agreement.

	 	(e)	 	PuriCore has the right to grant the license granted to Misonix
in Section 2.1.

 

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED

WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND

EXCHANGE COMMISSION.

	 	(f)	 	As of the Effective Date, (i) to PuriCore’s knowledge, the
Licensed Products to be used in the Field and in the Territory do not infringe
the rights of any Third Party and (ii) the Licensed Products to be used in the
Field and in the Territory are not the subject of any written notice or
claim received by PuriCore regarding any infringement of any Third Party
rights.

	 	(g)	 	As of the Effective Date, Exhibit B sets forth a true,
correct and complete list of all relevant patents and patent applications owned
or licensed by PuriCore related to the use and sale of the Licensed Products.

	 	(h)	 	PuriCore has received 510(k) clearance for the Licensed
Products, which 510(k) clearance is in full force and effect. As of the
Effective Date, the Licensed Products to be used in the Field and in the
Territory are not the subject of any written notice received by PuriCore of any
default or violation of any term, condition or provision of such 510(k)
clearance.

	 	(i)	 	The Licensed Products will be manufactured in accordance with
Applicable Laws and, upon delivery, shall conform to the Specifications and
Product Labeling.

	12.	 	FORCE MAJEURE

	 	12.1	 	Any delay in the performance of any of the duties or obligations (except for
the payment of money) of either Party hereto shall not be considered a breach of this
Agreement, and the time required for performance shall be extended for a period equal
to the period of such delay, provided that such delay has been caused by or is the
result of any acts of God, acts of the public enemy, insurrections, riots, embargoes,
labor disputes, including strikes, lockouts, job actions, or boycotts, fires,
explosions, floods, shortages of material or energy, or acts of judicial, military, or
governmental authorities, or any other unforeseeable causes, provided any such delay or
cause is beyond the reasonable control and without fault or negligence of the Party so
affected. The Party so affected shall give prompt written notice to the other Party of
such cause, and shall take reasonable steps to relieve the effect of such cause as
rapidly as practicable.

	13.	 	PUBLIC ANNOUNCEMENTS

	 	13.1	 	Any news release or other public announcement relating to this Agreement,
including any of its terms, or to the performance hereunder, must be approved in
advance in writing by both Parties, which approval shall not be unreasonably withheld
or delayed. Any disclosure which is required by law may be made without the prior
consent of the other party, provided that the other party shall be given prompt written
notice of any such legally required disclosure and an opportunity to comment on the
proposed disclosure reasonably in advance to the extent feasible, and the disclosing
party shall make reasonable efforts to limit the nature and scope of any disclosure to
the extent reasonably possible.

 

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED

WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND

EXCHANGE COMMISSION.

	14.	 	TERM AND TERMINATION

	 	14.1	 	Initial Term; Extensions. The “Initial Term” of this Agreement
shall begin on the Effective Date, shall endure until completion of three Contract
Years, and shall end at midnight on the final day of the third Contract Year (the
“Expiration Date”), unless earlier terminated under the express provisions of
this Section 14. If Misonix is in material compliance with the terms and
conditions of this Agreement at the Expiration Date or the end of any Extension Period,
then the Agreement shall automatically renew for successive two-year periods (each an
“Extension Period”); provided that the Parties have mutually agreed in writing
to sales volume targets for each Extension Period as provided under Section
6.4(c), and each year within such Extension Period, within the ninety (90) days
prior to the end of the Initial Term or then current Extension Period (as set forth in
Section 6.4(c)) and provided that the cost terms shall be no less favorable
than the twelve (12) months leading up to the start of the then current Extension
Period. If, after using good faith efforts, the Parties do not reach any such mutual
agreement as to sales volume targets, or the Parties mutually agree to terminate this
Agreement, this Agreement shall terminate. This Agreement shall terminate under the
circumstances and provisions of Section 7.5. Any Extension Period can be
terminated early under the express provisions of this Section 14. In no event
shall this Agreement survive beyond the expiration or invalidation of all of the
PuriCore Patents.

	 	14.2	 	Termination for Cause. At any time prior to termination pursuant to
Sections 14.1 or 14.3, a non-breaching Party may terminate this Agreement for
“Cause”. Cause for termination of this Agreement shall be deemed to exist when
a Party has materially breached any term of this Agreement and (a) for a breach related
to the payment of money, the breaching Party has failed to cure such breach within five
(5) Business Days after receipt of written notice from the non-breaching Party
describing such breach, (b) for all other breaches, the breaching Party has failed to
cure such breach within ninety (90) days after receipt of written notice from the
non-breaching Party describing such breach, or (c) the Parties have not entered into a
written agreement for the cure of said breach or other resolution thereof,
conditionally waiving or temporarily staying termination for cause. Such termination
rights shall be in addition to and not in substitution for any other remedies that may
be available to the non-breaching Party at law or at equity. Termination pursuant to
this Section 14.2 shall not relieve the Party in default from liability and
damages to the other Party for breach. In the event this Agreement is terminated by
PuriCore due to Misonix’s Cause, Misonix’s payment obligations under this Agreement
shall be an amount equal to (i) amounts outstanding for Licensed Products previously
delivered to Misonix, plus (ii) such amount, if any, needed to reach the two million
dollars ($2,000,000) cumulative Gross Profit provided for by this Agreement, unless
said two million

 

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EXCHANGE COMMISSION.

	 	 	 	 dollars ($2,000,000) requirement has been reduced in accordance with
the terms of this Agreement, plus (iii) any Royalties that may be due, minus (iv) any unapplied
credits issued by PuriCore pursuant to Clause 3.1 of the Notes (as described in
Section 6.3 of this Agreement) that may remain outstanding, and minus (v)
any amounts due and owing under the Notes for which no credit was issued; provided
that nothing in this sentence shall be a waiver or serve to limit any damages or any
other obligation that Misonix might owe to PuriCore under this Agreement or as a
consequence of such breach. Termination shall not impair the obligations of the
maker under the Notes. Notwithstanding the foregoing, any breach by PuriCore of the
exclusivity covenant in Section 2.2, due to non-conformity to Specifications
as provided in Section 5, or any failure to supply Licensed Product shall
not be considered “Cause” under this provision, shall not give rise to a termination
right, and shall give rise to Misonix of the sole remedies and consequences
expressly provided in Sections 2.2, 4.9 and 5.3, as applicable.

	 	14.3	 	Additional Termination Rights.

	 	(a)	 	PuriCore may terminate this Agreement pursuant to Section
6.4(c), which Misonix could avoid pursuant to Section 6.4(c).

	 	(b)	 	After the Initial Term, PuriCore may terminate this Agreement
for any or no reason upon twelve (12) months written notice with no financial
obligations imposed upon Misonix related to the purchased Licensed Product
hereunder other than to pay (i) amounts outstanding for Licensed Products
previously delivered to Misonix and (ii) any Royalties that may be due.

	 	(c)	 	PuriCore may terminate this Agreement effective immediately
upon written notice by PuriCore to Misonix in the event that there is a “change
in control” of Misonix in which a competitor of PuriCore (a
“Competitor”) has gained direct or indirect control of Misonix. For
purposes of this Section 14.3, a “change in control” shall mean any of
the following: (i) the sale or disposition of all or substantially all of the
assets of Misonix to a Competitor, (ii) the acquisition by a Competitor or any
group of persons or entities who are Competitors acting in concert, other than
an employee benefit plan (or related trust) sponsored or maintained by Misonix
or any of its Affiliates, of more than 50% of Misonix’s outstanding shares of
voting capital stock (e.g., capital stock entitled to vote generally for the
election of directors), (iii) the appointment or election to the board of
directors of Misonix of members constituting a majority of such board who were
not appointed, approved or recommended for election by the board of directors
as constituted immediately prior to the appointment or election of such
majority and who were nominated, appointed, approved or recommended by or on
behalf of a Competitor, or (iv) the merger or consolidation of Misonix or an
Affiliate of

 

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED

WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND

EXCHANGE COMMISSION.

	 	 	 	 Misonix with or into another corporation or entity that is, is an
Affiliate of or is controlled by a Competitor, other than, in the case of (ii) or (iv), an acquisition or a
merger or consolidation of Misonix or an Affiliate of Misonix in which
holders of shares of Misonix’s voting capital stock immediately prior to the
acquisition, merger or consolidation have at least 50% of the ownership of
voting capital stock of the acquiring Competitor or the surviving entity in
such merger or consolidation, as the case may be, immediately after the
merger or consolidation. Notwithstanding the foregoing, a “change of
control” will not be deemed to occur on account of the acquisition of
securities of Misonix by an institutional investor that acquires Misonix’s
securities in a transaction or series of related transactions as a passive
investment which does not affect the management of Misonix, or a sale of
assets, merger or other transaction effected exclusively for the purpose of
changing the corporate domicile of Misonix. For purposes of this
Section 14.3(c), the term “Competitor” shall also include any
Affiliate of such Competitor.

	 	(d)	 	Misonix may terminate this Agreement upon ninety (90) days
written notice if it no longer has exclusivity under Section 2.2.

	 	14.4	 	Effect of Expiration or Termination on Agreement.

	 	(a)	 	No Relief from Accrued Obligations. Termination of
this Agreement shall not relieve the parties of any obligation occurring or
incurred prior to such termination, nor shall it relieve Misonix from making
all Take or Pay Payments and paying to PuriCore the Quarterly Minimum Gross
Profit or the aggregate Minimum Gross Profit pursuant to Section 6.5,
unless expressly provided otherwise under Section 6.6.

	 	(b)	 	Reversion of License. Upon termination of this
Agreement pursuant to this Section 14, all license rights granted by
PuriCore in and to Licensed Technology under this Agreement shall terminate and
revert to PuriCore. Consequently, neither Misonix nor its Affiliates shall
have any license rights to use or sell Licensed Products in the Field or in the
Territory.

	 	(c)	 	Right to Sell Off. Notwithstanding the foregoing, if
Misonix is not in breach of any payment obligations under this Agreement at the
time of termination, Misonix shall be permitted to continue selling the
Licensed Products until the earlier of (i) Misonix’s inventory is exhausted,
(ii) PuriCore has repurchased all Licensed Products in Misonix’s possession
pursuant to clause (d) below, or (iii) twelve (12) months from termination has
elapsed.

 

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED

WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND

EXCHANGE COMMISSION.

	 	(d)	 	Right to Repurchase. Upon expiration or termination of
this Agreement for any reason, PuriCore shall have the right but not the
obligation to purchase Misonix’s unsold inventory of the Licensed Products in
merchantable condition or having a remaining shelf life acceptable to
PuriCore at the actual purchase price paid by Misonix.

	 	(e)	 	Return of Materials. Upon expiration or termination of
this Agreement for any reason, each Party shall upon request promptly return to
the requesting Party all of the requesting Party’s relevant records, materials
and Confidential Information in the possession or control of the other Party.

	15.	 	GENERAL PROVISIONS

	 	15.1	 	Severability. If any one or more of the provisions of this Agreement is held
to be invalid or unenforceable in a proceeding from which no appeal can be or is taken,
the provisions shall be considered severed from this Agreement and shall not serve to
invalidate the remaining provisions thereof, so long as the essential benefits of this
Agreement will still be realized by both Parties. The Parties shall make a good faith
effort to replace the invalid or unenforceable provision with a valid one which in its
economic effect is most consistent with the invalid or unenforceable provision.

	 	15.2	 	Choice of Law. This Agreement shall be governed and interpreted in all
respects under the laws of the Commonwealth of Pennsylvania, without regard to its
conflicts of laws principles. Any suit or action arising out of or relating to this
Agreement shall be brought in the United States District Court for the Eastern District
of Pennsylvania. The Parties consent to the respective exclusive personal jurisdiction
and venue of the United States District Court for the Eastern District of Pennsylvania,
and further consent that any process, notice of motion or other application to the
court or a judge thereof may be served outside the Commonwealth of Pennsylvania, by
registered or certified mail or by personal service, provided that a reasonable time
for appearance is allowed.

	 	15.3	 	Notices. All notices required or permitted to be given under this Agreement
shall be given in writing and shall be sent by (i) hand delivery, (ii) registered mail,
return receipt requested, (iii) overnight delivery by a nationally recognized courier
service, (iv) facsimile transmission, with confirmation received, or (v) when permitted
under this Agreement, by email, and shall be sent or delivered as follows:

	 	 	 
	If to PuriCore:

	 	PuriCore, Inc.
	 

	 	508 Lapp Road
	 

	 	Malvern, PA 19355
	 

	 	Fax: (610) 321-2725
	 

	 	Email: gbosch@puricore.com

	 

	 	Attention: Chief Executive Officer

 

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED

WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND

EXCHANGE COMMISSION.

	 	 	 
	With a copy to General Counsel, PuriCore, Inc.
	 
	 	 
	 

	 	Email: generalcounsel@puricore.com
	 

	 	Fax: (610) 321-2725
	 
	 	 
	If to Misonix:

	 	MISONIX, INC.
	 

	 	1938 New Highway
	 

	 	Farmingdale, NY 11735
	 

	 	Fax: (631) 694-3285
	 

	 	Email: mmcmanus@misonix.com

	 

	 	Attention: Chief Executive Officer
	with a copy to (which shall not constitute notice):
	 
	 	 
	 

	 	Wilk Auslander LLP
	 

	 	675 Third Avenue
	 

	 	New York, NY 10017
	 

	 	Attention: Joel I. Frank, Esq.
	 

	 	Fax: (212) 752-6380
	 

	 	Email: jfrank@wilkauslander.com

or such other addresses or facsimile numbers as either Party may hereafter specify
by written notice to the other as provided above. Such notices and communications
shall be deemed to have been delivered upon receipt.

	 	15.4	 	Affiliate Performance; Assignment of Rights and Duties. Without the
prior written consent of PuriCore, Misonix shall have no right to assign or delegate
any rights or duties under this Agreement. Notwithstanding the foregoing, Misonix
shall be entitled to assign this Agreement to an Affiliate, provided that Misonix shall
be liable for the performance of this Agreement by its Affiliates.

	 	15.5	 	Entire Agreement. This Agreement (the annexed Exhibits hereto, as they
may be amended or updated from time to time and the settlement documents with PuriCore
International Limited and PuriCore plc) constitutes the entire agreement between the
Parties and supersedes any and all prior agreements or understandings, whether oral or
written, between Misonix and PuriCore with respect to the subject matter hereof. No
variation, modification or waiver of any of the terms or conditions hereof shall be
deemed valid unless made in writing and signed by authorized representatives of both
Parties.

	 	15.6	 	No Waiver. No waiver by either Party of any nonperformance or
violation by the other Party of any of the covenants, obligations or agreements of such
other Party hereunder shall be deemed to be a waiver of any subsequent violation or
non-performance of the same or any other covenant, agreement or obligation, nor shall
forbearance by either Party be deemed to be a waiver by such Party of its rights or
remedies with respect to such violation or nonperformance.

 

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED

WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND

EXCHANGE COMMISSION.

	 	15.7	 	Headings. The descriptive headings contained in this Agreement are included
for convenience of reference only and shall not be held to expand, modify or aid in the
interpretation, construction or meaning of this Agreement.

	 	15.8	 	Relationship of the Parties. It is not the intent of the Parties to
create a partnership or joint venture or to assume partnership responsibility or
liability. The obligations of the Parties shall be limited to those set out herein and
such obligations shall be several and not joint. Neither Party shall be authorized to
bind or obligate the other.

	 	15.9	 	Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed to be an original, but all of which together shall constitute one and
the same instrument. Legal delivery of this Agreement may be made by telecopy or by
electronic mail (pdf format).

	 	15.10	 	Waiver of Jury Trial. NO PARTY TO THIS AGREEMENT OR ANY ASSIGNEE,
SUCCESSOR, HEIR OR PERSONAL REPRESENTATIVE OF A PARTY SHALL SEEK A JURY TRIAL IN ANY
LAWSUIT, PROCEEDING, COUNTERCLAIM OR ANY OTHER LITIGATION PROCEDURE BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER AGREEMENTS OR THE DEALINGS OR THE
RELATIONSHIP BETWEEN THE PARTIES. NO PARTY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION,
IN WHICH A JURY TRIAL HAS BEEN WAIVED, WITH ANY OTHER ACTION IN WHICH A JURY TRIAL
CANNOT OR HAS NOT BEEN WAIVED. THE PROVISIONS OF THIS SECTION HAVE BEEN FULLY
DISCUSSED BY THE PARTIES HERETO, AND THESE PROVISIONS SHALL BE SUBJECT TO NO
EXCEPTIONS. NO PARTY HERETO HAS IN ANY WAY AGREED WITH OR REPRESENTED TO ANY OTHER
PARTY HERETO THAT THE PROVISIONS OF THIS SECTION WILL NOT BE FULLY ENFORCED IN ALL
INSTANCES.

[SIGNATURE PAGE FOLLOWS]

 

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WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND

EXCHANGE COMMISSION.

IN WITNESS WHEREOF, the Parties have caused their respective authorized representatives to
execute this Product License and Distribution Agreement as of the Effective Date.

	 	 	 	 	 
	 	PURICORE, INC.

 	 
	 	By:  	/s/ Gregory T. Bosch 	 
	 	 	Name:  	Gregory T. Bosch 	 
	 	 	Title:  	President and Chief Executive Officer 	 
	 
	 	MISONIX, INC.

 	 
	 	By:  	/s/ Michael A. McManus, Jr. 	 
	 	 	Name:  	Michael A. McManus, Jr. 	 
	 	 	Title:  	President and Chief Executive Officer 	 

 

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CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED

WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND

EXCHANGE COMMISSION.

EXHIBIT A

DESCRIPTION OF PURICORE’S VASHE PRODUCTS

[* * *]

SPECIFICATIONS OF LICENSED PRODUCTS

I. Introduction.

[* * *]

II. Licensed Product Detailed Specifications

[* * *]

III. Product Drawings

[* * *]

 

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CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED

WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND

EXCHANGE COMMISSION.

EXHIBIT B

[* * *]

 

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WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND

EXCHANGE COMMISSION.

EXHIBIT C

[* * *]

 

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EXCHANGE COMMISSION.

Schedule 2.1

[* * *]

 

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WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND

EXCHANGE COMMISSION.

Schedule 6.1

[* * *]

 

34exv10w1

Exhibit 10.1

Express-1 Expedited Solutions, Inc.

3399 South Lakeshore Drive, Suite 225

Saint Joseph, Michigan 49085

July 18, 2011

Mike Welch

3399 South Lakeshore Drive, Suite 225

Saint Joseph, Michigan 49085

Re: Amendment of Employment Agreement

Dear Mr. Welch,

     As you know, Jacobs Private Equity LLC, a Delaware limited liability company (the
“Investor Representative”), certain other investors (such investors, together with the Investor
Representative, the “Investors”), and Express-1 Expedited Solutions, Inc., a Delaware corporation
(“Parent”), have entered into an investment agreement, dated June 13, 2011 (the “Signing Date”), as
amended, modified or supplemented from time to time (the “Investment Agreement”), that will,
subject to the satisfaction of the terms and conditions of the Investment Agreement, result in the
Investors making an investment in Parent as contemplated by the Investment Agreement (the
“Investment”).

     In connection with the Investment, the Investors have requested that Parent amend the
Executive Employment Agreement, dated July 1, 2005, as amended, between you and Parent (the
“Employment Agreement”). Therefore, you and Parent hereby agree to amend the Employment Agreement
as set forth in this letter amendment. You acknowledge and agree that a material aspect of the
Investors’ decision to enter into the Investment Agreement is your agreement to abide by the
restrictive covenants set forth in this letter amendment and in the Employment Agreement and that
such covenants represent a material element of the Investors’ valuation of Parent, including its
goodwill.

     This letter amendment will become effective immediately upon its execution by all parties
hereto; provided, however, that this letter amendment will be null and void ab
initio and of no further force or effect if the Investment Agreement is terminated prior to the
closing of the Investment (the “Closing”) (it being understood that, except to the extent provided
with respect to the New Options (as defined below), neither Parent nor any of its subsidiaries will
have any liabilities hereunder unless and until the Closing occurs). All capitalized terms used in
this letter amendment but not otherwise defined herein will have the same meaning as defined in the
Employment Agreement.

     In consideration for entering into this letter amendment, Parent has agreed (i) that all of
your stock options granted by Parent to you prior to the Signing Date (the “Legacy Options”) that
are outstanding and unvested immediately prior to the Closing, shall

 

 

become fully vested and exercisable upon the Closing and (ii) to grant to you options
(the “New Options”) to purchase 200,000 shares of Parent’s common stock, par value $0.001 per share
(“Shares”), on July 22, 2011 (the “Grant Date”), with an exercise price equal to the closing price
per Share as reported by the NYSE Amex LLC on the Grant Date; provided, however,
that the New Options shall be forfeited and you shall have no further rights with respect thereto
if the Investment Agreement is terminated prior to Closing. The New Options will be granted under,
and generally subject to the terms and conditions of, Parent’s Amended and Restated 2001 Stock
Option Plan (the “2001 Plan”); provided, however, that, notwithstanding anything to
the contrary in the 2001 Plan or any other agreement between you and Parent or any of its
subsidiaries, the New Options will not vest as a result of the Investment, the Closing or any of
the transactions contemplated by the Investment Agreement. The New Options will vest, subject to
your continued employment with Parent or its subsidiaries, in three equal installments on each of
the first three anniversaries of the date of the Closing (the “Closing Date”). Notwithstanding
Section 6(f) of the Employment Agreement or any other agreement between you and Parent or any of
its subsidiaries to the contrary, in the event that your employment with Parent and its
subsidiaries terminates for any reason prior to the date that any New Options have become vested,
any New Options that are unvested as of the date of termination of your employment shall be
immediately forfeited. In addition, the New Options will be subject to the terms and conditions of
an award agreement, substantially in the form attached hereto as Exhibit A, evidencing the grant
thereof.

     Notwithstanding anything to the contrary set forth in the Employment Agreement or any other
plan, policy, arrangement or agreement of or with Parent, any of its subsidiaries or any of their
respective affiliates:

	1.	 	Duties and Responsibilities. You hereby agree that Section 3(a) of the Employment
Agreement is hereby deleted in its entirety and replaced with the following:

     “a. Duties and Responsibilities. During the term of this Agreement, the Executive
shall focus a majority of his business time and attention on potential acquisitions and shall
retain certain general management authority of the business operations of the Company, in each
case, as may be assigned to the Executive by the Company’s Chief Executive Officer from time to
time.”

	2.	 	Term. You hereby agree that Section 4 of the Employment Agreement is hereby deleted
in its entirety and replaced with the following:

     “4. Term. The Term of employment hereunder will commence on the Effective Date and
will terminate on the third anniversary of the date of the closing of the Investment (as
hereinafter defined) (the “Closing Date”), unless earlier terminated pursuant to the terms of this
Agreement (the “Term”).”

	3.	 	Salary. You hereby agree that Section 5(a) of the Employment Agreement is hereby
deleted in its entirety and replaced with the following:

2

 

     “a. Salary. The Executive shall be paid a base salary at an annual rate of $240,000.
The Base Salary shall be reviewed annually throughout the Term by the Company’s Compensation
Committee and may be raised in its sole discretion (such base salary as it may be increased from
time to time, the “Base Salary”).”

	4.	 	Treatment of Options upon Change in Control. You hereby agree that the following
Section 6(f)(8)(C) shall be added as the last subsection to Section 6(f)(8) of the Employment
Agreement:

     “(C) Notwithstanding anything to the contrary set forth in this Agreement or any other plan,
policy, arrangement or agreement between the Company and the Executive, in the event of a Change in
Control, the Board of Directors of the Company (or a committee thereof) (the “Administrator”), is
hereby authorized, if deemed appropriate or desirable by the Administrator, in its sole and plenary
discretion, to make adjustments in the terms and conditions of, and the criteria included in, any
Options granted prior to the Signing Date, (i) by providing for a cash payment to the Executive in
consideration for the cancelation of such Option in an amount equal to the excess, if any, of the
fair market value (as of a date specified by the Administrator) of a share of Common Stock subject
to such Option over the aggregate exercise price of such Option and (ii) by canceling and
terminating any such Option having a per share exercise price equal to, or in excess of, the fair
market value of a share of Common Stock subject to such Option without any payment or consideration
therefor; provided that, such adjustments will only be made to the same extent as adjustments made
to any Options granted prior to the Signing Date held by other employees of the Company.”

	5.	 	Good Reason Rights. You hereby agree that the definition of “Good Reason” contained
in Section 6(d) of the Employment Agreement is hereby deleted in its entirety. You hereby
agree that the following language is hereby added as the final sentence of Section 6(f)(10)(C)
of the Employment Agreement.

     “Notwithstanding the foregoing, a termination shall not be considered to be for Good Reason
unless the Executive notifies the Company of the existence of the condition constituting Good
Reason within 45 days following the initial existence thereof, the Company fails to remedy the
condition within 30 days following receipt of such notice, and the Executive terminates employment
within the earlier of 90 days following the initial existence of such condition and 15 days
following notice from the Company that it will not remedy such
condition.”

	6.	 	Definitions. You hereby agree that the following Sections 6(f)(10)(E) and (F) are
hereby added immediately following Section 6(f)(10)(D) of the Employment Agreement:

     “(E) “Investment” shall mean the investment in the Company as contemplated by the
Investment Agreement.

3

 

     (F) “Investment Agreement” shall mean the investment agreement, dated June 13, 2011
(the “Signing Date”), among Jacobs Private Equity LLC, certain other investors and the Company, as
amended, modified or supplemented from time to time.”

	7.	 	Covenant Not to Compete, Not to Solicit and Not to Disparage. You hereby agree that
Section 7(a) of the Employment Agreement is hereby deleted in its entirety and replaced with
the following:

     “a. Covenant Not to Compete, Not to Solicit and Not to Disparage. The Executive
acknowledges and recognizes the highly competitive nature of the Company’s business and that the
goodwill, continued patronage, business reputation and specifically the names and addresses of the
Company’s Clients (as hereinafter defined) constitute a substantial asset of the Company having
been acquired through considerable time, money and effort. Accordingly, in consideration of the
execution of this Agreement, the acceleration of your outstanding unvested Options granted by the
Company prior to the Signing Date, the grant of 200,000 Options, extension of the Term until the
third anniversary of the Closing Date and the commitment with respect to a 2011 Bonus, the
Executive agrees to the following:

The Executive will not, individually or in conjunction with others, directly or indirectly, as an
owner, partner, joint venturer, stockholder, officer, director, employee, independent contractor,
agent, licensee or franchisee, for any person, firm, partnership, corporation or other entity:

     (1) during the Restricted Period (as hereinafter defined) and within the Restricted Area (as
hereinafter defined), engage in any Business Activities (as hereinafter defined); provided that
Executive’s acquisition or holding of less than 1% of the outstanding capital stock of a publicly
traded corporation will not be a violation of this Section 7(a)(1);

     (2) during the Restricted Period, solicit, encourage, advise or influence any of the
Company’s Clients that have a business relationship with the Company during the Restricted Period
to discontinue or reduce the extent of such relationship with the Company or to obtain or seek
products or services the same as or similar to the Company’s from any other source not affiliated
with the Company;

     (3) during the Nonsolicit Period, solicit, recruit, hire or employ any employee, agent or
independent contractor of the Company or persons who, during the 12-month period preceding such
solicitation, recruitment, hiring or employment, have worked for, or provided services to, the
Company or solicit or cause any person or entity to solicit or encourage, either directly or
indirectly, any employee, agent or independent contractor of the Company to terminate his
relationship with the Company or intentionally interfere with the relationship of the Company with
any such employee, agent or independent contractor;

4

 

     (4) during the Restricted Period, persuade or encourage another person or entity to modify,
terminate, cancel, reduce the extent of or revoke any business agreement or relationship with the
Company; or

     (5) during the Nonsolicit Period and thereafter, defame or disparage the Company or any of
its current or former affiliates, directors, officers, employees, members, partners, agents or
representatives (collectively, the “Protected Parties”), or make (or cause to be made) any comment
or statement, whether in writing or orally, including without limitation in the media or to the
press or to any individual or entity, that could reasonably be expected to adversely affect the
reputation of any of the Protected Parties or the conduct of their respective businesses.”

	8.	 	Non-Disclosure of Information. You hereby agree that the following sentence is
hereby added as the last sentence of Section 7(b) of the Employment Agreement:

     “For the avoidance of doubt, the parties hereby agree that all information, observations and
data concerning potential acquisitions by the Company shall be deemed to be Proprietary
Information.”

	9.	 	Restricted Period. You hereby agree that the Section 7(d) of the Employment
Agreement is hereby deleted in its entirety and replaced with the following:

     “d. Restricted Period and Nonsolicit Period.

          (1) The “Restricted Period” shall be deemed to commence on the date of this Agreement and end
on the third anniversary of termination of the Executive’s employment with the Company for any
reason; provided that, the Restricted Period shall be extended by any periods of time during which
the Executive is in violation of any covenant set forth in Section 7(a)(1), (2) or (4).”;

          (2) The “Nonsolicit Period” shall be deemed to commence on the date of this Agreement and end
on the fifth anniversary of termination of the Executive’s employment with the Company for any
reason; provided that, the Nonsolicit Period shall be extended by any periods of time during which
the Executive is in violation of any covenant set forth in Section 7(a)(3) or (5).”

	10.	 	Competitive Business Activities. You hereby agree that Section 7(e) of the
Employment Agreement is hereby deleted in its entirety and replaced with the following:

     “e. Competitive Business Activities. The term “Business Activities” as used herein
shall be deemed to mean (1) selling, distributing, marketing, providing or otherwise disseminating
products or services substantially similar to the type sold, distributed, marketed, provided or
otherwise disseminated by the Company, or which the Company is actively considering selling,
distributing, marketing, providing or otherwise disseminating, in each case, at any time during the
period of the Executive’s employment with the Company or (2) engaging in any acquisition
activities, including researching, analyzing and evaluating companies that, at any time during the
period of the Executive’s

5

 

employment with the Company, the Company has previously evaluated for possible investment in or
acquisition by or on behalf of the Company, with the intent to acquire, make an investment in
and/or dispose of such companies or assets thereof, in each case, other than as directed by the
Company.”

	11.	 	Restricted Area. You hereby agree that Section 7(f) of the Employment Agreement is
hereby deleted in its entirety and replaced with the following:

     “f. Restricted Area. The term “Restricted Area” shall be deemed to mean Canada,
Mexico, any State of the United States and any other country in which the Company does business or
where any of the Company’s Clients are located during the period of the Executive’s employment with
the Company.”

	12.	 	Forfeiture of Unexercised Options. You hereby agree that the following Section 7(k)
is hereby added as the last subsection in Section 7 of the Employment Agreement:

     “k. Forfeiture of Unexercised Options. Notwithstanding anything to the contrary set
forth in this Agreement or any award agreement or notice evidencing any Options, in the event of
(1) a breach of any of the provisions of Section 7, (2) the termination of Executive’s employment
by the Company for Cause or (3) any financial restatements or material loss to the Company to which
the Executive has materially contributed due to the Executive’s fraud or willful misconduct, any
unexercised Options (whether vested or unvested) that were granted on or after the Signing Date and
that Executive holds at the time of such breach, termination or misconduct, as applicable, shall be
forfeited immediately and the Executive shall have no further rights with respect thereto.”

	13.	 	Bonus Opportunity. For the 2011 fiscal year, you shall be eligible to receive,
subject to achievement of the performance goals set forth on Exhibit B attached hereto, an
annual bonus with a targeted amount of $120,000 (the “Bonus Opportunity”). The
Company shall attempt to pay the earned portion of such bonus opportunity to you by March 15,
2012. An amount ranging from 50% to 200% of such targeted amount may be earned by you solely
based on satisfaction of goals that are determined based 50% on Parent’s 2011 Operating Income
and 50% on Parent’s 2011 Revenue (each, as defined below), provided that, except as
specifically set forth in the final sentence of Section 6(d) of the Employment Agreement, you
are employed by the Company on the date such bonus is paid. Your entitlement to payment with
respect to the 2011 fiscal year bonus shall be determined based on achievement of the
performance targets set forth on Exhibit B attached hereto. For purposes of this section, (a)
“Parent’s 2011 Operating Income” means Parent’s operating income from continuing operations
for fiscal year 2011 as reported in Parent’s consolidated financial statements for such fiscal
year less all amounts accrued with respect to bonuses of executives of Parent and its
subsidiaries with respect to such fiscal year and (b) “Parent’s 2011 Revenue” means Parent’s
revenue for fiscal year 2011 as reported in Parent’s consolidated financial statements for
such fiscal year.

6

 

	 	 	The Compensation Committee is hereby authorized, in its sole and plenary discretion, to
adjust or modify the performance targets relating to Parent’s 2011 Operating Income and
Parent’s 2011 Revenue, each as set forth on Exhibit B with respect to the Bonus Opportunity
(i) in the event of, or in anticipation of, any unusual or extraordinary corporate item,
transaction, event or development affecting Parent or any of its subsidiaries, divisions or
operating units (to the extent applicable to such performance targets) or (ii) in
recognition of, or anticipation of, any other unusual or nonrecurring events affecting
Parent or any of its subsidiaries, divisions or operating units (to the extent applicable
to such performance targets), or the financial statements of Parent or any of its
subsidiaries, divisions or operating units (to the extent applicable to such performance
targets) or of changes in applicable rules, rulings, regulations or other requirements of
any governmental body or securities exchange, accounting principles or law.

	14.	 	You hereby agree that you will not, without the prior written consent of the Investor
Representative, during the period ending on the third anniversary of the Closing Date, (a)
offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase, or otherwise
transfer or dispose of, directly or indirectly, any Shares issued or issuable upon exercise of
any Legacy Options (“Locked-up Shares”), or any securities convertible into or exercisable or
exchangeable for any Locked-up Shares, or publicly disclose the intention to make any such
offer, sale, pledge or disposition, (b) enter into any swap or other agreement that transfers,
in whole or in part, any of the economic consequences of ownership of any Locked-up Shares or
such other securities, whether any such transaction described in clause (a) or (b) above is to
be settled by delivery of Shares or such other securities, in cash or otherwise, or (c) make
any demand for or exercise any right with respect to the registration of any Locked-up Shares
or any security convertible into or exercisable or exchangeable for any Locked-up Shares, in
each case, other than (i) transfers of any Locked-up Shares as a result of testate or
intestate succession and (ii) sales, exchanges, swaps or other transfers or dispositions of
any Locked-up Shares to the Company in an amount necessary to cover the exercise price in
connection with the exercise of Legacy Options or to satisfy the applicable tax withholding in
connection with the exercise thereof; provided, however, that, (x) the number
of Shares subject to clauses (a), (b) or (c) above shall not exceed 60,000 (the “Locked-up
Amount”) and (y) notwithstanding the exception in clause (ii), the number of Shares subject to
clauses (a), (b) or (c) above shall not be reduced to less than the Locked-up Amount as a
result of the payment of the aggregate exercises prices and the satisfaction of the applicable
tax withholding in connection with the exercise of the Legacy Options. For the avoidance of
doubt, the restrictions described in clauses (a), (b) and (c) above shall not apply to Shares
that are not Locked-up Shares or Shares in excess of the Locked-up Amount.

	15.	 	You hereby agree that the following Section 24 shall be added as the last subsection of the
Employment Agreement:

7

 

     “24. Section 409A.

     a. It is intended that the provisions of this Agreement comply with Section 409A of
the Code and the Treasury Regulations thereunder as in effect from time to time (“Section
409A”), and all provisions of this Agreement shall be construed and interpreted in a manner
consistent with the requirements for avoiding taxes or penalties under Section 409A.

     b. If and to the extent required to comply with Section 409A, a Change in Control for
purposes of this Agreement shall qualify as a change in the ownership or effective control
of the Company, or in the ownership of a substantial portion of the assets of the Company,
in each case, within the meaning of Section 409A.

     c. Neither the Executive nor any of his creditors or beneficiaries shall have the
right to subject any deferred compensation (within the meaning of Section 409A) payable
under this Agreement or under any other plan, policy, arrangement or agreement of or with
the Company or any of its affiliates (this Agreement and such other plans, policies,
arrangements and agreements, the “Company Plans”) to any anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, attachment or garnishment. Except as permitted
under Section 409A, any deferred compensation (within the meaning of Section 409A) payable
to the Executive or for the Executive’s benefit under any Company Plan may not be reduced
by, or offset against, any amount owing by the Executive to the Company or any of it
affiliates.

     d. If, at the time of the Executive’s separation from service (within the meaning of
Section 409A), (i) the Executive shall be a specified employee (within the meaning of
Section 409A and using the identification methodology selected by the Company from time to
time) and (ii) the Company shall make a good faith determination that an amount payable
under a Company Plan constitutes deferred compensation (within the meaning of Section 409A)
the payment of which is required to be delayed pursuant to the six-month delay rule set
forth in Section 409A in order to avoid taxes or penalties under Section 409A, then the
Company (or its affiliate, as applicable) shall not pay such amount on the otherwise
scheduled payment date but shall instead accumulate such amount and pay it on the first
business day after such six-month period.

     e. Notwithstanding any provision of this Agreement or any Company Plan to the
contrary, in light of the uncertainty with respect to the proper application of Section
409A, the Company reserves the right to make amendments to any Company Plan as the Company
deems necessary or desirable to avoid the imposition of taxes or penalties under Section
409A, provided, however, that no such amendment shall materially and adversely impair any
of the Executive’s vested rights or benefits without the Executive’s prior consent. In any
case, the Executive is solely responsible and liable for the satisfaction of all taxes and
penalties that may be imposed on the Executive in connection with any Company Plan
(including any taxes and penalties under Section 409A), and neither the

8

 

Company nor any affiliate shall have any obligation to indemnify or otherwise hold the
Executive harmless from any or all of such taxes or penalties.

     f. For purposes of Section 409A, each payment hereunder will be deemed to be a
separate payment as permitted under Treasury Regulation Section 1.409A-2(b)(2)(iii).

     g. Except as specifically permitted by Section 409A, any benefits and reimbursements
provided to the Executive under this Agreement during any calendar year shall not affect
any benefits and reimbursements to be provided to the Executive under this Agreement in any
other calendar year, and the right to such benefits and reimbursements cannot be liquidated
or exchanged for any other benefit. Furthermore, reimbursement payments shall be made to
the Executive as soon as practicable following the date that the applicable expense is
incurred, but in no event later than the last day of the calendar year following the
calendar year in the underlying expense is incurred.”

	16.	 	Headings. You hereby agree that Section 7 of the Employment Agreement is hereby
renamed “Restrictive Covenants”. The headings of the sections of this letter
amendment and the Employment Agreement are for convenience only and shall not control or
affect the meaning or construction or limit the scope or intent of any of the provision of
this letter amendment or the Employment Agreement.

	17.	 	Full Force and Effect. Except as specifically set forth herein, this letter
amendment shall not, by implication or otherwise, alter, amend or modify in any way any terms
of the Employment Agreement, all of which shall continue in full force and effect. Without
limiting the generality of the foregoing, you hereby expressly acknowledge and agree that all
provisions set forth in Sections 7(g), 7(h), 7(i), and 7(j) are applicable to the terms of
this letter amendment.

	18.	 	Governing Law/Venue. The parties agree that this letter amendment shall be deemed
made and entered into in the State of Michigan and shall be governed by and construed under
and in accordance with the laws of the State of Michigan. The parties further acknowledge and
agree that Berrien County, Michigan, shall be the venue and exclusive proper forum in which to
adjudicate any case or controversy arising either, directly or indirectly, under or in
connection with this letter amendment and the parties further agree that, in the event of
litigation arising out of or in connection with this letter amendment in these courts, they
will not contest or challenge the jurisdiction or venue of these courts.

	19.	 	Entire Agreement. This letter amendment, together with the Employment Agreement,
contains the entire agreement between you and Parent and its subsidiaries concerning the
subject matter hereof and supersedes all prior agreements, understandings, discussions,
negotiations and undertakings, whether written or oral, between you and any Investor, Parent
or its subsidiaries with respect hereto.

9

 

     Please acknowledge your agreement with and acceptance to these terms by signing a copy of this
letter amendment and returning it to us as soon as possible.

	 	 	 	 	 
	July 18, 2011 	EXPRESS-1 EXPEDITED SOLUTIONS, INC.

 	 
	 	by  	/s/ Calvin “Pete” Whitehead
 	 
	 	 	Name:  	CALVIN “PETE” WHITEHEAD 	 
	 	 	Title:  	BOARD MEMBER AND COMPENSATION COMMITTEE CHAIRMAN 	 
	 
	 	 	 
	July 18,  2011 	/s/ Mike Welch
 	 
	 	MIKE WELCH 	 
	 	 	 
	 

10

 

EXHIBIT A

Express-1 Expedited Solutions, Inc.

3399 South Lakeshore Drive, Suite 225

Saint Joseph, Michigan 49085

July 22, 2011

[NAME]

[ADDRESS]

Re: Grant of Stock Option under the 2001 Stock Option Plan

Dear Mr. [l],

     As you know, Jacobs Private Equity LLC, a Delaware limited liability company (the
“Investor Representative”), certain other investors (such investors, together with the
Investor Representative, the “Investors”), and Express-1 Expedited Solutions, Inc. (the
“Company”), have entered into an investment agreement, dated June 13, 2011, as amended,
modified or supplemented from time to time (the “Investment Agreement”), that will, subject
to the satisfaction of the terms and conditions of the Investment Agreement, result in the
Investors making an investment in the Company as contemplated by the Investment Agreement (the
“Investment”). In connection with the Investment, the Company and you have agreed to amend
your employment agreement with [l], dated [l] (the “Employment Agreement”),
which amendment contemplates, among other things, the grant of certain options to purchase shares
of the Company’s common stock, $0.01 par value per share (the “Stock”). Accordingly, the
Board of Directors of the Company is pleased to award you an option (the “Option”) pursuant
to the provisions of the Company’s 2001 Stock Option Plan (the “Plan”). The Option was
approved and granted on the date of this letter as set forth above (the “Grant Date”);
provided, however, that the Option shall be forfeited and you shall have no further
rights with respect thereto if the Investment Agreement is terminated prior to the closing of the
Investment (the “Closing”). This letter will describe the Option granted to you. Attached
to this letter is a copy of the Plan. The terms of the Plan also set forth provisions governing
the Option granted to you. Therefore, in addition to reading this letter, you should also read the
Plan. Your signature on this letter is an acknowledgment to us that you have read and understand
the Plan and that you agree to abide by its terms. All terms not defined in this letter shall have
the same meaning set forth in the Plan. To the extent the terms in this letter differ from the
terms of the Plan or any other agreement between you and us, the terms in this letter shall govern.

     1. Type of Option. You are granted a nonqualified stock option.

     2. Rights and Privileges. Subject to the conditions hereinafter set forth, we grant
you the right to purchase [l] shares of Stock at an exercise price of $ [l] per share
(the “Exercise Price”), the closing market price of a share of Stock on the Grant Date.

 

 

     3. Vesting Schedule. The Option vests, subject to your continued employment with us
or any of our Subsidiaries, in three equal installments on each first three anniversaries of the
date of the Closing. Any portion of the Option that has vested may be exercised, from time to
time, until this Option terminates pursuant to Section 5 of this letter. Notwithstanding any
provision of this letter or any other agreement between you and us, the Option shall automatically
terminate on the tenth anniversary of the Grant Date.

     4. Method of Exercise. The Option shall be exercised by written notice to the
Company, complying with the applicable procedures established by the Committee or the Company. The
notice shall set forth the shares of Stock to be acquired and shall contain full payment, in
accordance with Section 6.6 of the Plan, of the aggregate Exercise Price for the shares of Stock to
be acquired.

     5. Termination of Option. To the extent not exercised, and notwithstanding any other
provision in this letter, unless the Committee determines otherwise, all vested Options shall
automatically terminate upon the first to occur of the following events:

         (a) termination of your employment for Cause (as such term is defined in the Employment
Agreement); or

         (b) the expiration of three (3) months following the date of termination of your employment with
the Company and its Subsidiaries for any reason other than Cause; or

         (c) breach of any restrictive covenant (which, for the avoidance of doubt, includes any
non-compete, non-solicit, non-disparagement or confidentiality provision) to which you are subject;
or

         (d) your engaging in fraud or willful misconduct that contributes materially to any financial
restatement or material loss to the Company or any of its Subsidiaries.

     Notwithstanding Section 6(f) of the Employment Agreement or any other agreement between you
and the Company or any of its Subsidiaries, any part of an Option that has not vested as of the
date of termination for any reason shall be voided and therefore unexercisable as of said date of
termination. For purposes of this Section 5, “termination of employment” shall include the
termination of an employee’s employment with the Company and its Subsidiaries, the termination of a
director’s service on the Company’s Board of Directors, and the termination of services being
provided to the Company or its Subsidiaries by a consultant, as applicable.

     6. Binding Effect. The rights and obligations described in this letter shall inure to
the benefit of and be binding upon both of us, and our respective heirs, personal representatives,
successors and assigns.

     7. Change of Control.

A-2

 

          (a) Notwithstanding any provision in the Plan or your Employment Agreement to the contrary, upon
the occurrence of a Change of Control (as defined in your Employment Agreement, if applicable),
unless provision is made in connection with the Change of Control for (i) assumption of any
outstanding portion of the Option granted pursuant to this letter or (ii) substitution for such
Option of new awards covering stock of a successor corporation or its “parent corporation” (as
defined in Section 424(e) of the Code) or “subsidiary corporation” (as defined in Section 424(f) of
the Code), with appropriate adjustments as to the number and kinds of shares and the exercise
prices, such Option shall automatically vest and be deemed exercisable as of immediately prior to
such Change of Control. For the avoidance of doubt, notwithstanding any provision in the Plan or
your Employment Agreement to the contrary, none of the Investment, the Closing or any of the
transactions contemplated by the Investment Agreement shall constitute a Change of Control or
otherwise accelerate the vesting of any portion of the Option.

          (b) Notwithstanding any provision in the Plan or your Employment Agreement to the contrary, upon
the occurrence of a Change of Control (as defined in your Employment Agreement, if applicable), the
Committee, is hereby authorized, if deemed appropriate or desirable by the Committee, in its sole
and plenary discretion, to make adjustments in the terms and conditions of, and the criteria
included in, the Options, (i) by providing for a cash payment to you in consideration for the
cancelation of such Option in an amount equal to the excess, if any, of the Fair Market Value (as
of a date specified by the Committee) of a share of Stock subject to such Option over the aggregate
exercise price of such Option and (ii) by canceling and terminating any Option having a per share
exercise price equal to, or in excess of, the Fair Market Value of a share of Stock subject to such
Option without any payment or consideration therefor.

     8. Tax Withholding. The issuance of shares of Stock upon exercise and full payment of
the Exercise Price for the shares of Stock to be acquired is conditioned on satisfaction of any
applicable withholding taxes in accordance with Article 10 of the Plan. You may satisfy, in whole
in part, any withholding tax liability that may arise in connection with the exercise of the Option
by having us withhold from the shares of Stock you would be entitled to receive upon exercise of
the Option a number of shares of Stock having a Fair Market Value equal to such withholding tax
liability.

A-3

 

EXCEPT AS SPECIFICALLY STATED IN THIS LETTER, THIS LETTER AMENDS AND RESTATES ANY LETTER OR OTHER
AGREEMENT OR DOCUMENT PREVIOUSLY ISSUED TO YOU BY EXPRESS-1 EXPEDITED SOLUTIONS, INC. WITH RESPECT
TO THE STOCK OPTION GRANT DESCRIBED HEREIN, AND, AS SUCH, THIS LETTER, TOGETHER WITH THE ATTACHED
PLAN, EMBODY THE ENTIRE AGREEMENT AND UNDERSTANDING OF THE PARTIES WITH RESPECT TO THIS GRANT, AND
SUPERSEDE ALL OTHER PRIOR COMMITMENTS, ARRANGEMENTS, OR UNDERSTANDINGS, BOTH ORAL AND WRITTEN,
BETWEEN THE PARTIES WITH RESPECT THERETO.

	 	 	 	 	 
	 	Very truly yours,

EXPRESS-1 EXPEDITED SOLUTIONS, INC.,

 	 
	 	by  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

AGREED AND ACCEPTED

	 	 	 

	 

[NAME]

	 	 

A-4

 

EXHIBIT B

Fiscal Year 2011 Bonus Formula

Bonus Thresholds

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Base Line	 	 	Budget	 	 	Maximum	 
	Parent’s 2011 Operating Income
	 	$	11,623,000	 	 	$	12,914,000	 	 	$	19,371,000	 
	Parent’s 2011 Revenue
	 	$	168,443,000	 	 	$	187,159,000	 	 	$	280,739,000	 

No amount will be paid for a component if fiscal year 2011 performance for such component
falls below the Base Line. For each component, the bonus will be payable at (1) 50% of the
targeted amount based on achievement of Base Line, (2) 100% of the targeted amount based on
achievement of Budget and (3) 200% of the targeted amount based on achievement of Maximum. In the
event that a component is achieved at a level that falls between Base Line, Budget or Maximum, the
percentage of the targeted amount payable with respect to such component will be determined using
linear interpolation up to the next bonus threshold.

B-1

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