Document:

exv10w1

Exhibit 10.1

CHANGE OF CONTROL/SEVERANCE AGREEMENT

      This CHANGE OF CONTROL/SEVERANCE AGREEMENT, dated as of November 5, 2009 by and
between PAREXEL International Corporation (together with all subsidiaries or affiliates hereinafter
referred to as the “Company”) and Ulf Schneider, PhD (the “Executive”).

     WHEREAS, the Executive has been hired as a senior executive of the Company and is expected to
make major contributions to the Company;

     WHEREAS, the Company desires continuity of management; and

     WHEREAS, the Executive is willing to render services to the Company subject to the conditions
set forth in this Agreement.

     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the Company and the Executive agree as follows:

	 	1.	 	Termination without Cause.

     In the event the Company terminates the Executive’s employment with the Company without Cause
(as such term is defined in Section 5(c) below), the Company shall pay to the Executive lump sum
amounts (net of any required withholding) equal to: (i) twelve (12) months of monthly base salary
(at the highest monthly base salary rate in effect for the Executive in the twelve month period
prior to the termination of his employment) (“Base Salary”) (which shall be paid within ten
business days following the Executive’s last date of employment), plus (ii) the pro rata share of
the bonus that would otherwise have been payable to the Executive pursuant to the Company’s
Performance Bonus Plan (the “PBP”) during the year in which the termination occurs had his
employment not been terminated by the Company, based on bonus arrangements in effect at any time
during the twelve (12) month period immediately prior to the termination of his employment, such
pro rata share to be calculated from the beginning of the fiscal year in which the termination
occurs through the date of termination (which shall be paid within ten (10) business days after the
payment of bonuses, if any, to the Company’s executive officers pursuant to the PBP for the year in
which the termination occurred); provided, however, that such pro rata bonus shall only be payable
to the extent of, and in accordance with, (i) the Company’s determination that the Company’s and
the Executive’s PBP performance goals have been satisfied, and (ii) the Company’s determination to
pay bonuses to its executive officers, for the year in which the termination occurs.

	 	2.	 	Termination Prior to a Change of Control.

     (a) Notwithstanding the provisions of Section 1 above, if, within nine (9) months prior to a
Change of Control (as such term is defined in Section 5(b) below) and subsequent to the
commencement of substantive discussions that ultimately result in the Change of Control, the
Company terminates the Executive’s employment with the Company without Cause (as such term is
defined in Section 5(c) below), the Company shall:

	 	(1)	 	Pay to the Executive, within ten (10) business days following
the Change of Control, a lump sum amount (net of any required withholding)
equal to: (i) twelve (12) months of Base Salary, plus (ii) the target bonus
that could have been payable to the Executive (assuming continued employment)
during the year in which the termination of employment occurs based on bonus
arrangements in effect at any time during the twelve (12) month period
immediately prior to the termination of his employment; and
	 
	 	(2)	 	Provide the Executive and his dependents with life, accident,
health and dental insurance substantially similar to that which the Executive
was receiving immediately prior to the termination of his employment until the
earlier of: (i) the date which is twelve (12) months following the Change of
Control; or (ii) the date the Executive commences subsequent employment; and
	 
	 	(3)	 	On the Change of Control, cause any unexercisable installments
of any stock options of the Company or any subsidiary or affiliate of the
Company held by the Executive on the Executive’s last date of employment with
the Company that have not expired to become exercisable on the Change of
Control; provided, however, that: (i) such acceleration of
exercisability shall not occur as to any option if the Change of Control does
not occur within the period within which the Executive may exercise such option
after a termination of employment in accordance with the provisions of the
relevant option agreement and option plan; and (ii) any such acceleration of
exercisability shall not extend the period after a termination of employment
within which any option may be exercised by the Executive in accordance with
the provisions of the relevant option agreement and option plan; and
	 
	 	(4)	 	On the Change of Control, cause any unvested portion of any
qualified or nonqualified capital accumulation benefits, and any unvested
portion of any qualified or nonqualified awards made pursuant to any stock
incentive plans, including, but not limited to, restricted stock units,
restricted stock, stock appreciation rights and all other equity based awards
(but excluding stock options), to become immediately vested (subject to
applicable law);

- 2 -

 

provided, however, that any amounts and benefits set forth in this Section 2 shall
be reduced by any and all other severance or other amounts or benefits paid or payable to the
Executive as a result of the termination of his or her employment.

	 	3.	 	Termination Following a Change of Control.

     (a) Notwithstanding the provisions of Section 1 above, if, at any time during a period
commencing with a Change of Control and ending eighteen (18) months after such Change of Control
the Company terminates the Executive’s employment without Cause (as such term is defined in Section
5(c) below) or the Executive terminates his employment with the Company for Good Reason (as such
term is defined in Section 3(b) below) ( provided, however, that a termination for
Good Reason by the Executive can only occur if (i) the Executive has given the Company a Notice of
Termination indicating the existence of a condition giving rise to Good Reason and the Company has
not cured the condition giving rise to Good Reason within thirty (30) days after receipt of such
Notice of Termination, and (ii) such Notice of Termination is given within ninety (90) days after
the initial occurrence of the condition giving rise to Good Reason and further provided that a
termination for Good Reason shall occur no later than two (2) years after the initial existence of
the condition constituting “Good Reason”), the Company shall:

	 	(1)	 	Pay to the Executive, within ten (10) business days following
the Executive’s last date of employment, a lump sum amount (net of any required
withholding) equal to: (i) twelve (12) months of Base Salary, plus (ii) the
target bonus that could have been payable to such Executive (assuming continued
employment) during the year in which the termination of employment occurs based
on bonus arrangements in effect immediately prior to the termination of his or
her employment (all payments under Sections 1, 2 and this Section 3(a) being
referred to collectively, as the “Severance Payments”); and
	 
	 	(2)	 	Provide the Executive and his dependents with life, accident,
health and dental insurance substantially similar to that which the Executive
was receiving immediately prior to the termination of his employment until the
earlier of: (i) the date which is twelve (12) months following the Executive’s
last day of employment; or (ii) the date the Executive commences subsequent
employment; and
	 
	 	(3)	 	Cause any unexercisable installments of any stock options of
the Company or any subsidiary or affiliate of the Company held by the Executive
on the Executive’s last date of employment with the Company that have not
expired to become exercisable on such last date of employment;
provided, however, that: (i) such acceleration of
exercisability shall not occur as to any option if the Change of Control does
not occur within the period within which the Executive may exercise such option
after a termination of employment in accordance with the provisions of the
relevant option agreement and option plan; and (ii) any

- 3 -

 

	 	 	 	such acceleration of exercisability shall not extend the period after a
termination of employment within which any option may be exercised by the
Executive in accordance with the provisions of the relevant option agreement
and option plan; and
	 
	 	(4)	 	Cause any unvested portion of any qualified or nonqualified
capital accumulation benefits, and any portion of any qualified or
nonqualified awards made pursuant to any stock incentive plans, including, but
not limited to, restricted stock units, restricted stock, stock appreciation
rights and all other equity based awards (but excluding stock options), to
become immediately vested (subject to applicable law);

provided, however, that any amounts and benefits set forth in this Section 3 shall
be reduced by any and all other severance or other amounts or benefits paid or payable to the
Executive as a result of the termination of his or her employment.

     (b) For purposes of Section 3 above, “Good Reason” shall mean the occurrence of one or more of
the following events following a Change of Control, as the case may be: (i) the assignment to the
Executive of any duties inconsistent in any adverse, material respect with his position, authority,
duties or responsibilities immediately prior to the Change of Control or any other action by the
Company which results in a material diminution in such position, authority, duties or
responsibilities; (ii) a material reduction in the aggregate of the Executive’s base compensation
or the termination of the Executive’s rights to any employee benefits immediately prior to the
Change of Control, except to the extent any such benefit is replaced with a comparable benefit, or
a reduction in scope or value thereof; or (iii) a change by the Company in the location at which
the Executive performs the Executive’s principal duties for the Company to a new location that is
both (X) outside a radius of 40 miles from the Executive’s principal residence immediately prior to
the Change of Control and (Y) more than 30 miles from the location at which the Executive performed
the Executive’s principal duties for the Company immediately prior to the Change of Control; or a
requirement by the Company that the Executive travel on Company business to a substantially greater
extent than required immediately prior to the Change of Control; (iv) a failure by the Company to
obtain the agreement referenced in Section 5(f).

	 	4.	 	Distributions.

The following rules shall apply with respect to distribution of the payments and benefits, if any,
to be provided to the Executive under this Agreement:

(i) It is intended that each installment of the payments and benefits provided under
this Agreement shall be treated as a separate “payment” for purposes of Section 409A
of the U.S. Internal Revenue Code of 1986, as amended, and the guidance issued
thereunder (“Section 409A”). Neither the Company nor the Executive shall have the
right to accelerate or defer the delivery of any such

- 4 -

 

payments or benefits except to the extent specifically permitted or required by
Section 409A;

(ii) If, as of the date of the “separation from service” of the Executive from the
Company, the Executive is not a “specified employee” (each within the meaning of
Section 409A), then each installment of the payments and benefits shall be made on
the dates and terms set forth in this Agreement; and

(iii) If, as of the date of the “separation from service” of the Executive from the
Company, the Executive is a “specified employee” (each, for purposes of this
Agreement, within the meaning of Section 409A), then:

(A) Each installment of the payments and benefits that, in accordance with
the dates and terms set forth herein, will in all circumstances, regardless
of when the separation from service occurs, be paid within the Short-Term
Deferral Period (as hereinafter defined) shall be treated as a short-term
deferral within the meaning of Treasury Regulation § 1.409A-1(b)(4) to the
maximum extent permissible under Section 409A. For purposes of this
Agreement, the “Short-Term Deferral Period” means the period ending on the
later of the 15th day of the third month following the end of the
Executive’s tax year in which the Executive’s separation from service occurs
and the 15th day of the third month following the end of the Company’s tax
year in which the Executive’s separation from service occurs; and

(B) Each installment of the payments and benefits that is not paid within
the Short-Term Deferral Period and that would, absent this subsection, be
paid within the six-month period following the “separation from service” of
the Executive of the Company shall not be paid until the date that is six
months and one day after such separation from service (or, if earlier, the
death of the Executive), with any such installments that are required to be
delayed being accumulated during the six-month period and paid in a lump sum
on the date that is six months and one day following the Executive’s
separation from service and any subsequent installments, if any, being paid
in accordance with the dates and terms set forth herein; provided, however,
that the preceding provisions of this sentence shall not apply to any
installment of payments and benefits if and to the maximum extent that that
such installment is deemed to be paid under a separation pay plan that does
not provide for a deferral of compensation by reason of the application of
Treasury Regulation § 1.409A-1(b)(9)(iii) (relating to separation pay upon
an involuntary separation from service) or Treasury Regulation §
1.409A-1(b)(9)(iv) (relating to reimbursements and certain other separation
payments). Such payments shall bear interest at an annual rate equal to the
prime rate as set forth in the Eastern edition of the Wall Street Journal on
the Date of Termination, from the Date of Termination to the date of
payment. Any installments that qualify for the

- 5 -

 

exception under Treasury Regulation § 1.409A-1(b)(9)(iii) must be paid no
later than the last day of the second taxable year of the Executive
following the taxable year of the Executive in which the separation from
service occurs.

	 	5.	 	General.

     (a) In the event the Executive’s employment with the Company is terminated (i) by the Company
at any time for Cause (as such term is defined in Section 5(c) below), or (ii) the Executive
terminates his employment with the Company other than during the specific time periods set forth in
Section 3 or for any reason other than Good Reason (as such term is defined in Section 3(b) above),
the Executive shall not be entitled to the severance benefits or other considerations described
herein by virtue of this Agreement. Notwithstanding the provisions above, the Executive
understands and acknowledges that the automatic termination of the Executive’s employment pursuant
to Section 3(7) of the Executive’s Contract of Employment shall not, for purposes of this
Agreement, constitute termination without Cause and shall not entitle the Executive to any
severance benefits under this Agreement.

     (b) For purposes of this Agreement, “Change of Control” shall mean the closing of: (i) a
merger, consolidation, liquidation or reorganization of the Company into or with another Company or
other legal person, after which merger, consolidation, liquidation or reorganization the capital
stock of the Company outstanding prior to consummation of the transaction is not converted into or
exchanged for or does not represent more than 50% of the aggregate voting power of the surviving or
resulting entity; (ii) the direct or indirect acquisition by any person (as the term “person” is
used in Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended) of more
than 50% of the voting capital stock of the Company, in a single or series of related transactions;
or (iii) the sale, exchange, or transfer of all or substantially all of the Company’s assets (other
than a sale, exchange or transfer to one or more entities where the stockholders of the Company
immediately before such sale, exchange or transfer retain, directly or indirectly, at least a
majority of the beneficial interest in the voting stock of the entities to which the assets were
transferred).

     (c) For purposes of this Agreement, “Cause” shall mean: (i) the commission by the Executive of
a felony, either in connection with the performance of his obligations to the Company or which
adversely affects the Executive’s ability to perform such obligations; (ii) gross negligence,
breach of fiduciary duty or breach of any confidentiality, non-competition or developments
agreement in favor of the Company; or (iii) the commission by the Executive of an act of fraud or
embezzlement or other acts in intentional disregard of the Company which result in loss, damage or
injury to the Company, whether directly or indirectly.

     (d) Notwithstanding anything to the contrary in this Agreement, if any portion of any payments
received by the Executive from the Company (whether payable pursuant to the terms of this Agreement
or any other plan, agreement or arrangement with the Company, its successors or any person whose
actions result in a change of control of the Company) shall be subject to tax imposed by Section
4999 of the Internal Revenue Code of 1986, as amended or any successor statutory provision, the
Company shall pay to the Executive such additional amounts as are

- 6 -

 

necessary so that, after taking into account any tax imposed by Section 4999 (or any successor
statutory provision), and any federal and state income taxes payable on any such tax, the Executive
is in the same after-tax position that he or she would have been if such Section 4999 (or any
successor statutory provision) did not apply and no payments were made pursuant to this Section
5(d). The Executive and the Company shall each reasonably cooperate with the other in connection
with any administrative or judicial proceedings concerning the existence or amount of liability for
Excise Tax with respect to the Payments. All determinations required to be made under this Section
5(d), including whether a Gross-Up Payment is required and the amount of such Gross-Up Payment,
shall be made by the Company, after consultation with its tax and accounting advisors.

     (e) The parties hereto expressly agree that the payments by the Company to the Executive in
accordance with the terms of this Agreement will be liquidated damages, and that the Executive
shall not be required to mitigate the amount of any payment provided for in this Agreement by
seeking other employment or otherwise, nor shall any profits, income, earnings or other benefits
from any source whatsoever create any mitigation, offset, reduction or any other obligation on the
part of the Executive.

     (f) Except as otherwise provided herein, this Agreement shall be binding upon and inure to the
benefit of the Company and any successor (whether direct or indirect, by purchase, merger,
consolidation, reorganization or otherwise) of the Company; provided, however, that
as a condition of closing any transaction which results in a Change of Control, the Company shall
obtain the written agreement of any successor (whether direct or indirect, by purchase, merger,
consolidation, reorganization or otherwise) of the Company to be bound by the provisions of this
Agreement as if such successor were the Company and for purposes of this Agreement, any such
successor of the Company shall be deemed to be the “Company” for all purposes.

     (g) Nothing in this Agreement shall create any obligation on the part of the Company or any
other person to continue the employment of the Executive. If the Executive elects to receive the
severance and benefits set forth in Sections 1, 2 or 3, the Executive shall not be entitled to any
other salary continuation or severance benefits in the event of his cessation of employment with
the Company.

     (h) Nothing herein shall affect the Executive’s obligations under any key employee,
non-competition, confidentiality, option or similar agreement between the Company and the Executive
currently in effect or which may be entered into in the future.

     (i) The Executive agrees that it will execute and deliver to the Company a copy of the
Agreement/Waiver in the form attached hereto as Exhibit A in consideration of, and prior to
the Company’s payment of, any amounts payable hereunder.

     (j) This Agreement shall be governed by and construed in accordance with the laws of the
Commonwealth of Massachusetts. This Agreement constitutes the entire Agreement between the
Executive and the Company concerning the subject matter hereof and supersedes any prior
negotiations, understandings or agreements concerning the subject matter hereof, whether oral or
written, including without limitation, Sections 3(5) and 3(6) of the Executive’s Contract of
Employment, as amended. This Agreement may be amended or rescinded only upon

- 7 -

 

the written consent of the Company and the Executive. The invalidity or unenforceability of
any provision of this Agreement shall not affect the other provisions of this Agreement and this
Agreement shall be construed and reformed to the fullest extent possible. The Executive may not
assign any of his rights or obligations under this Agreement; the rights and obligations of the
Company under this Agreement shall inure to the benefit of, and shall be binding upon, the
successors and assigns of the Company. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same instrument.

     (k) This Agreement is intended to comply with the provisions of Section 409A and shall, to the
extent practicable, be construed in accordance therewith. Terms defined in the Agreement shall
have the meanings given such terms under Section 409A if and to the extent required in order to
comply with Section 409A. Notwithstanding the foregoing, to the extent that the Agreement or any
payment or benefit hereunder shall be deemed not to comply with Section 409A, then neither the
Company, the Board of Directors nor its or their designees or agents shall be liable to the
Executive or any other person for any actions, decisions or determinations made in good faith.

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

	 	 	 	 	 
	 	The Company:

PAREXEL INTERNATIONAL CORPORATION

 	 
	 	By:  	                                              /s/ Josef H. von Rickenbach
 	 
	 	 	Name:  	Josef H. von Rickenbach 	 
	 	 	Title:  	Chairman and Chief Executive Officer
 	 
	 	 	Date:  	November 5, 2009	 
	 

	 	 	 	 	 
	 	The Executive:

 	 
	 	Signature:  	                                              /s/ Ulf Schneider
 	 
	 	 	Printed Name:  	Ulf Schneider, PhD 	 
	 	 	Date: November 5, 2009	 
	 

- 8 -

 

Exhibit A

AGREEMENT/WAIVER

     It is hereby agreed by and between Ulf Schneider PhD (the “Executive”) and PAREXEL
International Corporation (together with all subsidiaries and affiliates hereinafter referred to as
the “Company”), for good and sufficient consideration more fully described below, that:

     1. Consideration. The Company will provide the Executive with the amounts and
benefits described in Sections 1, 2 and 3 of the Change of Control/Severance Agreement entered into
by the Company and the Executive, dated                                , 200  , (the “Agreement”), subject to the
terms and conditions of such Agreement. The Executive understands that payment of and all such
amounts and benefits are conditioned upon the Executive signing this agreement.

     2. Settlement of Amounts Due the Executive. The Executive agrees that the amounts set
forth above in Section 1, together with any amounts previously provided to the Executive by the
Company, shall be complete and unconditional payment, settlement, satisfaction and accord with
respect to all obligations and liabilities of the Company and any of its affiliated companies
(including their respective successors, assigns, shareholders, officers, directors, employees
and/or agents) to the Executive, and all claims, causes of action and damages by the Executive
against the Company and/or any such other parties regarding the Executive’s employment with and
termination from employment with the Company, including, without limitation, all claims for back
wages, salary, draws, commissions, bonuses, vacation pay, equity compensation, expenses,
compensation, severance pay, attorney’s fees, compensatory damages, exemplary damages, or other
costs or sums.

     3. Release.

     (a) In exchange for the amounts and benefits described in Section 1 above and other good and
valuable consideration, receipt of which is hereby acknowledged, the Executive and his
representatives, agents, estate, successors and assigns, absolutely and unconditionally hereby
release and forever discharge the Company, its affiliated companies and/or their successors,
assigns, directors, shareholders, officers, employees and/or agents, both individually and in their
official capacities, (the “Releasees”), from any and all actions or causes of action, suits,
claims, complaints, contracts, liabilities, agreements, promises, debts and damages, controversies,
judgments, rights and demands, whether existing or contingent, known or unknown, which arise under
the Agreement. This release is intended by the Executive to be all encompassing and to act as a
full and total release of any claims that the Executive may have or has had against the Releasees
under the Agreement, including, but not limited to, any federal, state or local law or regulation
dealing with either employment or employment discrimination such as those laws or regulations
concerning discrimination on the basis of age, race, color, religion, creed, sex, sexual-
orientation, national origin, ancestry, marital status, physical or mental disability, any veteran
status or any military service or application for any military service; any contract, whether oral
or written, express or implied; or common law.

 

 

     (b) The Executive agrees not only to release and discharge the Releasees from any and all
claims as stated above that the Executive could make on his/her own behalf or on behalf of others,
but also those claims which might be made by any other person or organization on behalf of the
Executive, and the Executive specifically waives any right to become, and promises not to become, a
member of any class in a case in which a claim or claims against the Releasees are made involving
any matters which arise out of, or in connection with, the Agreement. Nothing in this agreement is
to be construed as an admission by the Releasees of any liability or unlawful conduct whatsoever.

     4. Waiver of Rights and Claims Under the Age Discrimination and Employment Act of
1967.

     (a) The Executive has been informed that since he is 40 years of age or older, he has or might
have specific rights and/or claims under the Age Discrimination and Employment Act of 1967. In
consideration for the amounts described in Section 1 hereof, the Executive specifically waives such
rights and/or claims to the extent that such rights and/or claims arose prior to the date this
Agreement was executed.

     (b) The Executive was advised by the Company of his right to consult with an attorney prior to
executing this Agreement.

     (c) The Executive was further advised when he was presented by the Company with the original
draft of this Agreement on                     , 200  , that he had at least 21 days within which to consider its
terms and to consult with or seek advice from an attorney or any other person of his/her choosing,
until the close of business on                     , 200  .

     5. Confidentiality. The Executive agrees he shall not divulge or publish, directly or
indirectly, any information whatsoever regarding the substance, terms or existence of the Agreement
or this agreement and/or any discussions or negotiations relating to the Agreement or this
agreement to any person or organization, except to his immediate family members, counsel or
accountant, and unless required under law or court order.

     6. Representations and Governing Law.

     (a) This agreement represents the complete and sole understanding between the parties
regarding the subject matter hereto. This agreement may not be modified, altered or rescinded
except upon written consent of the Company and Executive. The invalidity or unenforceability of
any provision of this agreement shall not affect the other provisions of this agreement, but this
agreement shall be revised, construed and reformed to the fullest extent possible to effectuate the
purposes of this agreement. This agreement shall be binding upon and inure to the benefit of the
Company and the Executive and their respective heirs, successors and assigns. The parties agree
that the Company will not have an adequate remedy if the Executive fails to comply with Sections 3,
4, and 5 hereof and that damages will not be readily ascertainable, and that in the event of such
failure, the Executive shall not oppose any application by the Company requiring a decree of
specific performance or an injunction enjoining a breach of this agreement. If the

A - 2

 

Executive breaches any of his/her obligations hereunder, he shall forfeit all right to payments
pursuant to Section 1.

     (b) This agreement shall be governed by and construed in accordance with the laws of the
Commonwealth of Massachusetts, without giving effect to the principles of conflicts of law thereof.

     (c) The Executive represents that he has read this agreement, fully understands the terms and
conditions of such agreement, and is voluntarily executing the same. In entering into this
agreement, the Executive does not rely on any representation, promise or inducement made by the
Releasees, with the exception of the consideration described in this document.

     7. Effective Date. The Executive may revoke this agreement during the period of seven
(7) days following its execution by the Executive, and this agreement shall not become effective or
enforceable until this revocation period has expired.

	 	 	 	 	 
	 	The Company:

PAREXEL INTERNATIONAL CORPORATION

 	 
	 	By:  	
 	 
	 	 	Name:  		 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	The Executive:

 	 
	 	Signature:  	
 	 
	 	 	Printed Name:  		 
	 	 	Date: 	 
	 

A - 3exv4w1

Exhibit 4.1

XStream Systems, Inc.

Unsecured Subordinated Debenture

 

This Debenture has not been registered under the U.S. Securities Act of 1933, as amended (the
“Securities Act”) in reliance upon the exemption contained in Section 4(2) of the Securities Act
and Regulation D thereunder, and has not been registered under the securities laws of any state.
This Debenture must be acquired for investment purposes and may not be offered for sale, sold,
transferred, hypothecated or otherwise disposed of in the United States or to a United States
citizen unless a registration statement with respect to this Debenture is effective under the
Securities Act, and any applicable state securities laws, or unless the Company has received an
opinion of counsel acceptable to the Company that such registration is not required.

 

			
	 	 	 
	U.S. $                    
	 	                             ,            

     FOR VALUE RECEIVED, the undersigned, XSTREAM SYSTEMS, INC., a Delaware corporation (the
“Company”), promises to pay to the order of                                          (“Holder”) on December 31,
2007 (“Maturity Date”) in immediately available funds in lawful money of the United States, the
principal sum of                                          Dollars (U.S. $                    ), together with all accrued and
unpaid interest on the outstanding principal balance.

     1. Payment of Principal and Interest.

          (a) The Company agrees to repay, by the Maturity Date, the principal amount of this Debenture
first written above.

          (b) The Company agrees to pay interest on the principal balance outstanding on this Debenture
at the rate of four percent (4.0%) per annum accruing from the date first written above.

          (c) The Company shall pay interest that accrues between the date first written above and
December 31, 2005 on or before December 31, 2005. After December 31, 2005, the Company shall pay
accrued interest quarterly in arrears on the last day of each calendar quarter until the Maturity
Date. All interest accruing from the date first written above shall accrue and be Interest shall
be computed on the basis of a 365-day year.

     2. Place of Payments. Principal and interest payments due under this Debenture shall
be paid by mailing a check to Holder at the address of Holder set forth in Section 12, or such
other address as may be designated by Holder from time to time in accordance with Section 12.

     3. Events of Default; Acceleration. Each of the following shall constitute an Event
of Default under this Debenture (an “Event of Default”):

Page 1 of 6

 

          (a) the failure of the Company to pay any installment of principal and interest due hereunder
when due and the continuation of such failure for ten (10) days following written notice to the
Company of such failure;

          (b) the filing of a petition by the Company pursuant to which the Company seeks to avail
itself of the protection of any federal or state bankruptcy, insolvency or similar law;

          (c) the initiation of any federal or state bankruptcy or insolvency proceeding against the
Company which is not dismissed within ninety (90) days following the date filed; or

          (d) the making of a general assignment by the Company for the benefit of the Company’s
creditors.

Upon the occurrence of any such Event of Default, Holder may, in Holder’s sole discretion,
accelerate this Debenture by declaring in a written notice to the Company that the then outstanding
principal and accrued and unpaid interest under this Debenture is immediately due and payable.

     4. Subordination.

          (a) This Debenture is an unsecured direct obligation of the Company. The indebtedness
evidenced by this Debenture and the payment of the principal of, and interest hereon, shall be at
all times and in all respects wholly subordinate, junior and subject in right of payment to all
Senior Indebtedness (as hereinafter defined) now outstanding or hereinafter incurred. Without
limiting the effect of the foregoing, “subordinate,” as used herein, shall be deemed to mean that,
in the event of any default in the payment of Senior Indebtedness (after giving effect to “cure”
provisions, if any), if there shall have occurred an event of default with respect to any Senior
Indebtedness permitting the holders thereof to accelerate the maturity thereof, or if any judicial
proceeding shall be pending with respect to any such default, or in the event of any liquidation,
insolvency, bankruptcy, reorganization, or similar proceedings relating to the Company or to its
subsidiaries, all sums payable on Senior Indebtedness shall first be paid in full, with interest,
if any, before payment is made upon the indebtedness evidenced by this Debenture, and, in such
event, any subsequent payment or distribution of any character which shall be made with respect to
this Debenture shall be paid over to the holders of Senior Indebtedness for application pro rata to
the payment thereof, unless and until such Senior Indebtedness shall have been paid and satisfied
in full. “Senior Indebtedness” shall mean the principal of, and premium, if any, and interest on,
all indebtedness of the Company, including each of its subsidiaries and affiliates (and of any of
the Company’s wholly owned subsidiaries which the Company has guaranteed), to banks, trust
companies, insurance companies, and similar institutional lenders and any deferrals, renewals,
extensions, or guarantees thereof, and to all other indebtedness of the Company (including trade
payables) whether now existing or hereinafter incurred; provided, however that Senior Indebtedness
shall not include indebtedness of the Company or its subsidiaries to any affiliate of the Company.
This Debenture shall not be deemed to prohibit the Company from incurring additional Senior
Indebtedness following the date hereof.

          (b) No right of any present or future holder of any Senior Indebtedness to enforce
subordination as herein provided shall at any time in any way be prejudiced or impaired by any act
or failure to act on the part of the Company or by any non-compliance by the Company with the
terms, provisions and covenants of this Debenture, regardless of any knowledge thereof which any
such owner or holder may have or be otherwise charged with.

     5. Prepayment. This Debenture may be prepaid in whole or in part at any time without
penalty or premium.

Page 2 of 6

 

     6. Application of Payments. Any payments or prepayments made under this Debenture
shall be applied first to the discharge of accrued interest, and the balance, if any, shall be
applied to the reduction of principal, except as otherwise required by the provisions of Section
10.

     7. No Rights as Shareholder or Owner. Holder shall not be entitled to any rights of a
shareholder or other similar equity interest in the Company, including the right to vote or to
receive dividends or other distributions and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided in the Warrant.

     8. Limited Recourse. No recourse shall be had for the payment of the principal or
interest of this Debenture against any incorporator or any past, present or future stockholder,
officer, director or agent of the Company or of any successor, affiliate, subsidiary or parent
corporation, either directly or through the Company or any successor, affiliate, subsidiary or
parent corporation, under any statute or by the enforcement of any assessment or otherwise, all
such liability of the incorporators, stockholders, officers, directors and agents being waived,
released and surrendered by the Holder by the acceptance of this Debenture.

     9. Taxes Due. Any documentary stamp taxes or intangible taxes due in connection with
this Debenture shall be paid by the Company.

     10. Intent Not to Commit Usury. Nothing contained in this Debenture shall be
construed or so operate as to require the Company to pay interest at a greater rate than is now
lawful in such case to contract for, or to make any payment, or to do any act contrary to law.
Should any interest or other charges paid by the Company in connection with this Debenture result
in the computation or earning of interest in excess of the maximum legal rate of interest which is
legally permitted under applicable law, then any and all such excess shall be and the same is
hereby waived by Holder, and any and all such excess shall be automatically credited against and in
reduction of the balance due under this Debenture, and the portion of said excess which exceeds the
balance due under this Debenture shall be paid by Holder to the Company.

     11. Assignments. The Company shall not assign its obligations or rights under this
Debenture without the prior written consent of Holder, which may be withheld in Holder’s sole
discretion.

     12. Notices. All notices, requests, consents and other communications required or
permitted under this Debenture shall be in writing and shall be (as elected by the person giving
such notice) hand delivered by messenger or courier service, transmitted by fax, or mailed by
registered or certified mail (postage prepaid), return receipt requested, addressed to:

Page 3 of 6

 

	 	 	 
	If to the Company:

	 	With a copy to:
	 
	 	 
	XStream Systems, Inc.

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

	 	777 South Flagler Drive
	Vero Beach, FL 32960

	 	Suite 500 East Tower
	Attention: Darren Sylvia

	 	West Palm Beach, Florida 33401
	Phone: 772-257-0165, extension 208

	 	Attention: David G. Bates, Esq.
	Fax: 772-257-0179

	 	Phone: 561-650-0793
	 

	 	Fax: 561-655-5677
	 
	 	 
	If to Holder:

	 	With a copy to:
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	Attention:

	 	Attention:
	 
	 	 

	Phone:

	 	Phone:
	 

	 	 

	Fax:

	 	Fax:
	 

	 	 

or to such other address as any party may designate by notice complying with the terms of this
Section. Each such notice shall be deemed delivered (a) on the date delivered, if by messenger or
courier service; (b) on the date of the confirmation of receipt, if by fax; and (c) either upon the
date of receipt or refusal of delivery, if mailed.

     13. Binding Effect. All of the terms and provisions of this Debenture shall be
binding upon, inure to the benefit of, and be enforceable by the Company and Holder and their
respective administrators, personal representatives, legal representatives, heirs, successors and
permitted assigns, whether so expressed or not.

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

     15. Severability. If any provision of this Debenture or any other agreement entered
into pursuant to this Debenture is contrary to, prohibited by or deemed invalid under applicable
law or regulation, such provision shall be inapplicable and deemed omitted to the extent so
contrary, prohibited or invalid, but the remainder of this Debenture shall not be invalidated
thereby and shall be given full force and effect so far as possible. If any provision of this
Debenture may be construed in two or more ways, one of which would render the provision invalid or
otherwise voidable or unenforceable and another of which would render the provision valid and
enforceable, such provision shall have the meaning which renders it valid and enforceable.

     16. Waivers. The Company hereby waives demand, presentment, notice of nonpayment,
notice of dishonor, protest and notice of protest of this Debenture. No delay or omission on the
part of Holder in exercising any right under this Debenture or under any other instrument
evidencing this Debenture shall operate as a waiver of such right or of any other right of Holder,
nor shall any delay, omission, or waiver on any one occasion be deemed a bar to or waiver of the
same or any other right on any future occasion.

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

Page 4 of 6

 

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

     19. Amendments. The provisions of this Debenture may not be amended, supplemented,
waived or changed orally, but only by a writing signed by the Company and Holder and making
specific reference to this Debenture.

     20. Advice of Counsel. EACH OF THE COMPANY AND HOLDER ACKNOWLEDGES THAT IT HAS BEEN
ADVISED BY ITS OWN COUNSEL WITH RESPECT TO THIS DEBENTURE, AND SPECIFICALLY WITH RESPECT TO THE
TERMS OF SECTION 21 WHICH CONCERNS THE WAIVER OF THE COMPANY’S AND HOLDER’S RIGHT TO TRIAL BY JURY.

     21. Jury Waiver. IN ANY CIVIL ACTION, COUNTERCLAIM, OR PROCEEDING, WHETHER AT LAW OR
IN EQUITY, WHICH ARISES OUT OF, CONCERNS, OR RELATES TO THIS DEBENTURE, ANY AND ALL TRANSACTIONS
CONTEMPLATED BY THIS DEBENTURE, THE PERFORMANCE OF THIS DEBENTURE, OR THE RELATIONSHIP CREATED BY
THIS DEBENTURE, WHETHER SOUNDING IN CONTRACT, TORT, STRICT LIABILITY, OR OTHERWISE, TRIAL SHALL BE
TO A COURT OF COMPETENT JURISDICTION AND NOT TO A JURY. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY. ANY PARTY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
DEBENTURE WITH ANY COURT, AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES TO THIS DEBENTURE OF
THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. NEITHER PARTY HAS MADE OR RELIED UPON ANY ORAL
REPRESENTATIONS TO OR BY ANY OTHER PARTY REGARDING THE ENFORCEABILITY OF THIS PROVISION. EACH
PARTY HAS READ AND UNDERSTANDS THE EFFECT OF THIS JURY WAIVER PROVISION.

Page 5 of 6

 

     The Company has caused this Debenture to be executed and delivered by its duly authorized
representative on the date shown above.

	 	 	 	 	 
	 	XStream Systems, Inc.

 	 
	 	By:  	 	 
	 	 	Darren Sylvia, Chief Financial Officer 	 
	 	 	 	 
	 

	 	 	 
	AGREED
	 	 
	 
	 	 
	 
	 	 
	 
	 	 
	 
	 	 
	Print Name of Holder:
	 	 
	 
	 	 
	Date:
	 	 
	 
	 	 

Page 6 of 6

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00165-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00165-of-00352.parquet"}]]