Exhibit 10.2


 


EMPLOYEE AGREEMENT


 


This
Employee Agreement (this “Agreement”) is
made and entered into as of September 3, 2010 by and between Microfluidics
International Corporation, a Delaware corporation (the “Company”),
and William J. Conroy (“Conroy”).


 


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


 


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


 


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


 


1.             Definitions. 
The following terms used in this Agreement shall have the following
meanings:


 


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


 


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


 


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


 


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


 


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


 

















 


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


 


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


 


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


 


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


 


(f)            “Severance Period” shall be the period
commencing on the date of Qualified Termination (as defined below) and
continuing until the twelve (12) month anniversary of the date of the Qualified
Termination.


 


2.             Benefits Upon a Change of Control.


 


(a)           In the event (x) the
Company terminates Conroy’s employment with the Company without Cause at or
immediately prior to the closing of a Change of Control transaction or within
twelve (12) months following a Change of Control, or (y) Conroy terminates
Conroy’s employment with the Company for Good Reason within twelve (12) months
following a Change of Control (each, a “Qualified
Termination”), then:


 


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(i)            the Company shall pay to Conroy an
amount equal to twelve (12) months of Conroy’s Base Monthly Salary as in effect
immediately prior to the date of the Qualified Termination (the “Severance Amount”) as set forth in the
following sentence. Subject to any deferral or reduction in payment of the
Severance Amount pursuant to Section 2(e), the Severance Amount shall be
paid by the Company to Conroy in twelve (12) equal monthly payments commencing
on the thirtieth (30th) day following the date of the
Qualified Termination, provided the Release (as defined below) is effective and
irrevocable prior to such date; and


 


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


 


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


 


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


 


(ii)           Conroy shall also be eligible to
be paid at the time of the closing of the Change of Control transaction his pro
rata share (based on the number of days in the period from the commencement of
the current fiscal year to the date of closing of the Change of Control
transaction) of his maximum bonus opportunity for the current fiscal year, to
the extent the Board determines that (x) the Company is on track through
such closing date in achieving the 


 


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current fiscal year’s Company-wide performance metrics for payment of
such bonus, (y) Conroy has satisfactorily achieved his KRA’s through such
date and (z) the payment of such bonus would be consistent with the
financial performance of the Company and the economics of the Change of Control
transaction (the “Accelerated Bonus”);
provided, however, that the amount of the Accelerated Bonus shall be reduced by
the amount of the Retention Bonus;


 


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


 


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


 


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


 


(e)           (i)            The Severance Amount
provided for in Section 2(a) constitutes an “involuntary separation
pay plan” with respect to termination without Cause or resignation with Good
Reason pursuant to Treas. Reg. §1.409A-1(b)(9)(iii) and thus not “nonqualified
deferred compensation” subject to Section 409A of the U.S. Tax Code (the “Code”).  The Retention Bonus, Accelerated Bonus and
Earned Bonus constitute a “short-term deferral” within the meaning of Treas.
Reg. §1.409A-1(b)(4)(i) and thus not “nonqualified deferred compensation”
subject to Section 409A of the Code. 
If the Severance Amount is deemed to provide benefits that constitute “nonqualified
deferred compensation” with respect to a termination without Cause, resignation
for Good Reason, or any other termination of employment, then the following
interpretations apply to this Agreement:  
(i) Any termination of Conroy’s employment triggering payment of
the Severance Amount must constitute a “separation from service” under Section 409A(a)(2)(A)(i) of
the Code and Treas. Reg. §1.409A-1(h) before distribution of such benefits
can commence.  To the extent that the
termination of Conroy’s employment does not constitute a separation of service
under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h) (as
the result of further services that are reasonably anticipated to be provided
by Conroy to the Company at the time his employment terminates hereunder), any
payment hereunder that constitutes non-qualified deferred compensation subject
to Section 409A of the Code shall be delayed until after the date of a
subsequent event constituting a separation of service under Section 409A(a)(2)(A)(i) of
the Code and Treas. Reg. §1.409A-1(h). 
For purposes of clarification, this section shall not cause any
forfeiture of benefits on Conroy’s part, but shall only act as a delay until
such time as a “separation from service” occurs; (ii) If Conroy is a “specified
employee” (as that term is used in Section 409A of the Code and
regulations and other guidance issued thereunder) on the date his separation
from service becomes effective, any benefits payable hereunder that constitute
non-qualified deferred compensation under Section 409A of the Code shall
be delayed until the earlier of (A) the business day following the
six-month anniversary of the date his separation from service becomes
effective, and (B) the date of his death, but only to the extent necessary
to avoid such penalties under Section 409A of the 


 


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Code. 
On the earlier of (A) the business day following the six-month
anniversary of the date his separation from service becomes effective, and (B) his
death, the Company shall pay Conroy in a lump sum the aggregate value of the
non-qualified deferred compensation that the Company otherwise would have paid
him prior to that date pursuant to this Agreement; (iii) It is intended
that the Severance Amount and each separate payment and installment thereof
shall be treated as a separate “payment” for purposes of Section 409A of
the Code; and (iv) Neither the Company nor Conroy shall have the right to
accelerate or defer the delivery of any such payments or benefits except to the
extent specifically permitted or required by Section 409A of the Code.


 


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


 


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


 


3.             Confidential Information. 
Conroy acknowledges that the information, observations and data obtained
by Conroy while employed by the Company concerning the business or affairs of
the Company or any of its affiliates (“Confidential Information”) are the
property of the Company. Therefore, Conroy agrees that during Conroy’s
employment with the Company and following the termination of Conroy’s
employment with the Company, Conroy shall hold in a fiduciary capacity for the benefit
of the Company the Confidential Information and Conroy shall not disclose to
any unauthorized person or use for Conroy’s own account any Confidential
Information without the prior written consent the Company, unless and to the
extent required by law, rule or regulation or pursuant to any
administrative or court order. The term “Confidential Information” shall not
include: (i) information which is generally available to the public or
those in the Company’s industry as of the date of execution of this Agreement
or which later becomes generally available to the public or those in the
Company’s industry other than as a result of Conroy’s prohibited disclosure; (ii) information
which comes to Conroy from a bona fide third party source so long as such source
was not, to Conroy’s knowledge, prohibited from providing such information to
Conroy by any contractual, legal, fiduciary or other obligation; and (iii) information
which was known to Conroy before such information was obtained from the
Company, except to the extent that such information becomes or is incorporated
into the Company’s Confidential Information, including but not limited to, its
Inventions, as defined under the Invention Assignment and Proprietary
Information Agreement referenced in Section 6 of this Agreement, and any
other trade secrets or proprietary information. The foregoing 


 


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provision shall not be deemed to supersede or limit any other agreement
between Conroy and the Company relating to confidential information of the
Company, but shall be deemed to be in addition to the provisions thereof. To
the extent there arises any irreconcilable conflict between this Agreement and
any such other agreement, the provisions of this Agreement shall control.


 


4.             Non-Compete; Non-Solicitation.


 


(a)           Conroy acknowledges that
in the course of Conroy’s employment with the Company, Conroy will become
familiar with the Company’s trade secrets and with other Confidential
Information concerning the Company and that Conroy’s services will be of
special, unique and extraordinary value to the Company.  Therefore, Conroy agrees that during Conroy’s
employment with the Company and during the Severance Period (the “Noncompete Period”), Conroy shall not,
directly or indirectly, in any state, country or other jurisdiction in which
the Company is engaged or, to the knowledge of Conroy, has reasonably firm
plans to engage in business: (i) engage in any Competitive Business (as
defined below); (ii) render any services to any Competitive Business; or (iii) acquire
a financial interest in any Competitive Business. For purposes of this
Agreement, the phrase “engage in” shall include any direct or indirect
ownership or profit participation interest in such enterprise, whether as an
owner, stockholder, member, partner, joint venturer of or otherwise, and shall
include any direct or indirect participation in such enterprise as an employee,
consultant, director, officer, licensor of technology or otherwise. “Competitive Business” means a business that
is engaged, itself or through an affiliate, in the production, sale, provision
or distribution of products or services, or research or development intended to
create products or services, competitive with the Company’s business including,
but not limited to:


 


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


 


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


 


(iii)          future products, equipment or
services developed;


 


as
such products, equipment or services exist or are contemplated during Conroy’s
employment with the Company.


 


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


 


(b)           During the Noncompete
Period, Conroy shall not directly or indirectly through another entity:  (i) induce or attempt to induce any
employee of the Company to leave the employ of the Company, or in any way
interfere with the relationship between the Company, on the one hand, and any
employee thereof, on the other hand; (ii) hire any person who is or at 


 


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any time was an employee of the Company
earlier than six (6) months after such individual’s employment
relationship with the Company has ended; or (iii) induce or attempt to
induce any customer, supplier, licensee or other business relation of the
Company to cease doing business with the Company, or in any way interfere with
the relationship between any such customer, supplier, licensee or business
relation, on the one hand, and the Company, on the other hand. Clauses (i) and
(iii) of the preceding sentence shall not apply to any general advertising
or solicitation.


 


(c)           If, at the time of
enforcement of this Section 4, a court shall hold that the duration, scope
or area restrictions stated herein are unreasonable under circumstances then
existing, the parties agree that the maximum duration, scope or area reasonable
under such circumstances shall be substituted for the stated duration, scope or
area and that the court shall be allowed to revise the restrictions contained
herein to cover the maximum period, scope and area permitted by law.


 


(d)           In the event of the
breach or a threatened breach by Conroy of any of the provisions of this Section 4,
the Company, in addition and supplementary to other rights and remedies
existing in its favor, may apply to any court of law or equity of competent
jurisdiction solely in any of the forums set forth in Section 18 hereof
for specific performance and/or injunctive or other relief in order to enforce
or prevent any violations of the provisions thereof (without posting a bond or
other security).


 


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


 


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


 


7.             Continued Employment. 
This Agreement shall not give Conroy any right of continued employment
or any right to compensation or benefits from the Company or any subsidiary
except the rights specifically stated herein to certain severance, bonus and
other benefits, and shall not limit the Company’s right to change the terms of
or to terminate Conroy’s employment, with or without Cause, at any time, except
as may be otherwise provided in a written employment agreement, if any, between
the Company and Conroy.  The Company’s
obligations pursuant to Section 2 of this Agreement shall automatically
terminate upon the termination of Conroy’s employment with the Company for any
reason, whether voluntary or 


 


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involuntary, at any time other than at or immediately prior to the
closing of a Change of Control transaction or during the one-year period
following a Change of Control transaction and during the Retention Period, with
respect to the payment of the Retention Bonus as set forth in Section 2(c)(i).


 


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


 


Notices
to Conroy:


 


As
set forth on the signature page to this Agreement.


 


Notices
to the Company:


 


Microfluidics
International Corporation


30
Ossipee Road


Newton,
MA  02464


Attention:  Chief Executive Officer


 


With
a copy to:


 


Posternak
Blankstein & Lund LLP


The
Prudential Tower, 33rd Floor


800
Boylston Street


Boston, MA 
02199


Attention: 
Donald H. Siegel, P.C.


 


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


 


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


 


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limitation, any existing severance agreement and/or severance arrangement
between the Company and Conroy.


 


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


 


12.          Successors and Assigns. 
This Agreement is intended to bind and inure to the benefit of and be
enforceable by Conroy, the Company and each of their respective heirs,
successors and assigns, except that Conroy may not assign Conroy’s rights or
delegate Conroy’s obligations hereunder without the prior written consent of
the Company.  The Company will require
any successor (whether direct or indirect, by purchase, merger, consolidation
or otherwise) of all or substantially all of the business and/or assets of the
Company, to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform if
no such succession had taken place.


 


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


 


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


 


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


 


16.          Attorneys’ Fees and Costs. 
If any action seeking equitable remedies is instituted by either party,
the prevailing party shall be entitled to reasonable attorneys’ fees, costs and
disbursements in addition to any other relief to which that party may be
entitled.


 


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


 


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


 


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


 


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


 


	
   

  	
  Company:

  
	
   

  	
   

  
	
   

  	
  MICROFLUIDICS
  INTERNATIONAL CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Michael C. Ferrara

  
	
   

  	
   

  	
  Name:
  Michael C. Ferrara

  
	
   

  	
   

  	
  Title: President
  and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/
  William J. Conroy

  
	
   

  	
   

  	
  William
  J. Conroy

  
	
   

  	
   

  	
  Address:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  



 


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Exhibit A


 


FORM OF RELEASE AGREEMENT


 


1.             Release.  William J. Conroy (“Conroy”), on his
own behalf, on behalf of any entities he controls and on behalf of his
descendants, dependents, heirs, executors, administrators, assigns and
successors, and each of them, hereby acknowledges full and complete
satisfaction of and releases and discharges and covenants not to sue
Microfluidics International Corporation (the “Company”), its divisions,
subsidiaries, parents, majority unit holders or affiliated companies, past and
present, and each of them, as well as its and their assignees and successors,
any of its directors, officers, shareholders, partners, representatives,
attorneys, agents or employees, past or present (individually and collectively,
the “Releasees”), from and with respect to any and all claims,
agreements, obligations, demands and causes of action, known or unknown,
suspected or unsuspected, arising out of or in any way connected with Conroy’s
employment, the termination thereof, or any other relationship with or interest
in the Company, including without limiting the generality of the foregoing, any
claim for severance pay, profit sharing, bonus or similar benefit, pension,
retirement, life insurance, health or medical insurance or any other fringe benefit,
or disability, or any other claims, agreements, obligations, demands and causes
of action, known or unknown, suspected or unsuspected, resulting from or
arising out of any act or omission by or on the part of the Releasees committed
or omitted prior to the date of this Agreement, including, without limiting the
generality of the foregoing, any claim under Title VII of the Civil Rights Act
of 1964, the Americans with Disabilities Act, the Family and Medical Leave Act,
The Massachusetts Fair Employment Practices Act, M.G.L 151B or any other
federal, state or local law, regulation or ordinance; provided,
however, that the foregoing release does
not apply to (i) Conroy’s right to enforce any obligation of the Company
to Conroy pursuant to Section 2 of the Employee Agreement dated as of September 3,
2010 by and between the Company and Conroy (the “Employee Agreement”); (ii) any
stock options that survive the termination of Conroy’s employment by the terms
of the applicable agreement; (iii) any vested benefits under any Company
sponsored employee benefit plan or perquisite of employment, including accrued
but unused vacation time pursuant to the Company’s vacation policy then in
effect; (iv) any rights to indemnification under the Company’s error and
omissions policy and/or Bylaws; (v) the enforcement of this Agreement and
the surviving provisions of the Employment Agreement; or (vi) the right to
file a charge of discrimination with the U.S. Equal Opportunity Commission (“EEOC”)
or with any state or local anti-discrimination agency or to participate in an
investigation conducted by the EEOC or any such agency.  Conroy has agreed to waive his right to any
damages or other recovery resulting from any administrative, arbitration, or
court proceeding, including any action brought by the EEOC or any other state
or local agency on his behalf or on behalf of a class of which he may be
considered a member, with respect to Conroy’s employment with and/or
termination of employment from the Company and if Conroy is awarded any money
damages, Conroy hereby assigns to the Company Conroy’s right and interest to
such money damages.  Notwithstanding the
foregoing, this paragraph does not limit Conroy’s right to challenge the
validity of the Release Agreement in a legal proceeding under the Older Workers’
Benefit Protection Act, 29 U.S.C. § 626(f) with respect to claims 


 


11

















 


under
the Age Discrimination in Employment Act. 
This paragraph also is not intended to and shall not limit the right of
a court to determine, in its discretion, that the Company is entitled to
restitution, recoupment, or setoff of any payments made to Conroy and/or Conroy’s
counsel by the Company should the Release Agreement be found to be invalid as
to the release of claims under the Age Discrimination in Employment Act.


 


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


 


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


 


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


 


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


 


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


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


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


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


 


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


 


12

















 


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


 


EXECUTED
this                             
day of
                                      
20    .


 


 


	
   

  	
   

  
	
   

  	
  William
  J. Conroy

  



 


13

















 


Exhibit B


 


INVENTION ASSIGNMENT AND PROPRIETARY 

INFORMATION AGREEMENT


 


For
good and valuable consideration, which includes continued employment by
Microfluidics International Corporation and/or its subsidiary, Microfluidics
Corporation (collectively the “Company”), and the compensation received
therefore, I agree that:


 


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


 


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


 


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


 


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


 


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


 


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


 

















 


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


 


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


 


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


 


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


 


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


 


Signed
as a sealed instrument this
                              
day of                         ,
20    .


 


	
   

  	
  EMPLOYEE

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Printed Name

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Witness

  	
   

  



 


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