Document:

Exhibit 10.2

Exhibit 10.2

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”), made as of the 8 th day of
April 2009 (the “Effective Date”), is entered into by Ocean Power Technologies, Inc., a New Jersey
corporation with a principal place of business at 1590 Reed Road, Pennington, New Jersey 08534 (the
“Company”), and Charles F. Dunleavy, an individual with his primary residence at [address deleted]
(the “Employee”).

WHEREAS, the Company and the Employee entered into an Amended and Restated Employment
Agreement on October 23, 2003 (the “Prior Agreement”); and

WHEREAS, the Company and the Employee desire to amend and restate and supersede the Prior
Agreement in its entirety; and

WHEREAS, the Company desires to continue the employment of the Employee, and the Employee
desires to be employed by the Company pursuant to the terms of this Agreement.

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

1. Term of Employment. The Company hereby agrees to employ the Employee, and the
Employee hereby agrees to accept employment with the Company pursuant to the terms and conditions
of this Agreement, for the period commencing on the Effective Date and expiring on the day before
the first anniversary thereof, unless sooner terminated (the “Initial Term”). On the expiration of
the Initial Term and on each anniversary thereof, the Agreement shall renew automatically for
additional one-year periods (the “Renewal Term”), unless sooner terminated or unless either party notifies the other party in writing of his or its

 

 

 

intentions not to renew
this Agreement not less than sixty (60) days prior to the expiration of the then current term
(“Notice of Nonrenewal”). A Notice of Nonrenewal by the Company of its intent not to renew this
Agreement shall constitute “Good Reason” for termination of this Agreement by the Employee,
pursuant to Section 4(d) hereof. Upon a termination by either party for any reason and at any
time, the payments or other benefits stated in Section 5 hereof shall be the exclusive remedy
available to the Employee under this Agreement.

2. Position and Duties. The Employee shall serve as Senior Vice President and Chief
Financial Officer of the Company. The Employee shall be subject to the supervision of, and shall
have such authority and duties to the Company or its subsidiaries or affiliates, as are reasonably
delegated to him, by the Board of Directors of the Company (the “Board”) and such duties and
responsibilities common to Senior Vice Presidents and Chief Financial Officers of companies of like
size and purpose. The Employee shall devote his full working time, energy and skill (reasonable
absences for vacations and illness excepted) to the business of the Company during the term of this
Agreement as is necessary to perform the Employee’s duties faithfully, competently and diligently.
The Employee agrees to abide by the rules, regulations, instructions, personnel practices and
policies of the Company and any Company affiliate or subsidiary for or with which the Employee
conducts any business, as they may be changed, amended or adopted from time to time. Upon approval
by the Board, which approval shall not be unreasonably withheld, the Employee may devote reasonable
periods of time to serving on the boards of directors of other companies or organizations, so long
as such service does not unreasonably interfere with his duties to the Company and does not
constitute a conflict of the Company’s interests.

 

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3. Compensation. During the term of this Agreement, the Employee shall receive, for
all services rendered to the Company hereunder, the following salary, compensation and benefits
(hereinafter referred to as “Compensation”):

(a) Base Salary. Commencing on the Effective Date, the Employee shall be paid a base
salary at the annualized rate of Three Hundred Thousand Dollars ($300,000). Base salary will be
payable in accordance with the Company’s normal payroll procedures. The Employee’s base salary
shall be reviewed on an annual basis, and positive adjustments may be made by the Compensation
Committee of the Board (the “Compensation Committee”) in its sole discretion. The base salary
shall not be subject to decrease without the written consent of the Employee.

(b) Bonuses. The Employee may be eligible for bonuses pursuant to any bonus program
designed for employees of the Company. Such bonuses, if any, shall be at the sole discretion of
the Compensation Committee.

(c) Incentive Compensation. The Employee may be eligible for incentive compensation,
including stock options and restricted stock grants, pursuant to any incentive compensation program
designed for employees of the Company. Such incentive compensation, if any, shall be determined by
the Compensation Committee in the exercise of its sole discretion.

(d) Benefits. The Employee shall be eligible to participate in all benefits programs,
if any, that the Company establishes and makes available to its employees and executives, in
accordance with and subject to the terms and conditions of such benefits programs. Such programs
may include health and dental insurance plans, long-term disability insurance plans, life insurance
plans, and other benefits made available to the Company’s employees from time to time.

 

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(e) Reimbursement of Expenses. The Company shall reimburse the Employee for all
reasonable and necessary business-related expenses incurred or paid by the Employee in the
performance of the Employee’s duties, responsibilities or services under this Agreement, provided
that the Employee provides documentation, receipts, vouchers, and/or such other supporting
information as the Company may request.

(f) Deductions. The Company shall deduct and withhold from the Employee’s
compensation all necessary or required taxes, including, but not limited to, social security,
withholding and otherwise, and any other applicable amounts required by law or any taxing
authority, as well as such other deductions properly authorized in writing by the Employee.

(g) Absences. The Employee shall be entitled to a minimum of 20 days of paid vacation
time per calendar year, as well as sick leave, and such other absences in accordance with and
subject to the Company’s current policies and procedures regarding such paid absences. Such
policies may be amended, modified, or rescinded in the Company’s sole discretion.

4. Termination. The employment of the Employee by the Company shall terminate upon
the occurrence of any of the following:

(a) The Company may terminate the Employee’s employment hereunder for Cause immediately and
with prompt notice to the Employee, which Cause shall be determined in good faith by the Board.
The Employee shall be provided a reasonable opportunity to be heard by the Board, before his
employment is terminated for Cause hereunder. “Cause” for termination shall include the following
conduct of the Employee:

(i) Material breach of any provision of this Agreement by the Employee causing a
material detrimental effect on the Company;

 

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(ii) Material misconduct as an employee which has a material detrimental effect on
the Company, including: misappropriating any funds or property of the Company, or
attempting to willfully obtain any substantial personal profit from any transaction
in which the Employee has an interest which is adverse to the interests of the
Company;

(iii) Gross negligence or knowing refusal to perform the reasonable duties assigned
to the Employee under or pursuant to this Agreement;

(iv) Conviction of a felony or plea of no lo contendre to a felony;

(v) Acts of dishonesty or moral turpitude by the Employee that are materially
detrimental to the Company; or

(vi) Alcohol or drug use which impairs the Employee’s ability to perform his duties
hereunder.

 

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(b) Immediately upon the death of the Employee;

(c) Thirty days after the Disability of the Employee. As used in this Agreement, the term
“Disability” shall mean the inability of the Employee with reasonable accommodation as may be
required by State or Federal law, due to a physical or mental disability, for a period of ninety
(90) days, whether or not consecutive, during any 360-day period to perform the services
contemplated under this Agreement. A determination of Disability shall be made by a physician
satisfactory to both the Employee and the Company, provided that if the Employee
and the Company do not agree on a physician, the Employee and the Company shall each select a
physician and these two together shall select a third physician, whose determination as to
Disability shall be binding on all parties;

(d) The Employee may terminate his employment hereunder for “Good Reason” if, after written
notice as provided below, the Company fails to cure the following conduct:

(i) Material breach of any provision of this Agreement by the Company;

(ii) Failure to maintain the Employee in a position commensurate with that referred
to in Section 2 of this Agreement; or

(iii) The assignment to the Employee of any duties inconsistent with the Employee’s
position, authority, duties or responsibilities as contemplated by Section 2 of this
Agreement that results in a substantial diminution in the Employee’s duties or
responsibilities;

(iv) Relocation of the Employee’s main office more than 50 miles from Pennington,
New Jersey;

(v) Material reduction in the Employee’s base salary or a material adverse change in
the Employee’s eligibility for incentive compensation; or

(vi) The termination of the Employee’s employment without Cause by the giving by the
Company of a Notice of Nonrenewal, informing the employee of the Company’s intent
not to renew the Initial Term or any Renewal Term.

 

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Notwithstanding the occurrence of any such event or circumstance, such occurrence shall not be
deemed to constitute Good Reason unless (x) the Employee gives the Company written notice of
termination no more than 90 days after the initial existence of such event or circumstance, (y)
such event or circumstance has not been fully corrected within 30 days of the Company’s receipt of
such notice and (z) the Employee’s termination of employment occurs within one year following the
Company’s receipt of such notice.

(e) At the election of the Employee, without Good Reason, upon not less than thirty (30) days
prior written notice of termination to the Company;

(f) At the election of the Company, without Cause, immediately upon thirty (30) days prior
written notice of termination to the Employee.

5. Effect of Termination. Upon termination of this Agreement at any time, the
payments and remedies stated in this Section 5 shall be exclusive and Employee shall not be
eligible for any further payment or other benefits from the Company.

(a) Termination for Cause or at Election of the Employee without Good Reason. In the
event the Employee’s employment is terminated for Cause pursuant to Section 4(a), or at the
election of the Employee pursuant to Section 4(e), the Company shall pay to the Employee the base
salary and benefits due and owing to him under Section 3 through the last day of the Employee’s
actual employment by the Company.

 

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(b) Termination for Death or Disability. If the Employee’s employment is terminated
by death or because of disability pursuant to Section 4(b) or 4(c), the Company shall pay to the
estate of the Employee or to the Employee, as the case may be, the base salary and
benefits that would otherwise be payable to the Employee through the end of the month in which
the termination of employment because of death or disability occurs. In addition, the Company will
make a one-time payment of $10,000.00 to the estate of the Employee or to the Employee, as the case
may be. If the payment is made due to disability, the Employee will be required to sign a release
of claims as in Section 5(c) prior to receiving the payment under this section.

(c) Termination by the Company Without Cause; Termination by the Employee for Good
Reason. If the Employee’s employment is terminated without Cause pursuant to Section 4(f) or
if the Employee terminates his own employment for Good Reason pursuant to Section 4(d), and if, and
only if, the Employee first executes a general release drafted by and satisfactory to counsel for
the Company releasing the Company, along with its directors, officers, employees, agents and
affiliate company’s from any and all liability to the Employee (the “Release Agreement”), the
Company shall pay and provide to the Employee, or to his estate if he were to die after termination
and prior to such payment: (i) the Employee’s then current base salary, as severance pay, for a
period equal to the Severance Period, as defined below, to be paid in a lump sum payment within
thirty (30) days of termination, and (ii) continuation of the Employee’s health, medical and long
term disability insurance during the Severance Period, as defined below, at the Company’s expense,
until such time as the Employee becomes eligible for such coverage through a subsequent employer
and only to the extent permitted pursuant to the Company’s applicable benefit insurance policies
(or, if not so permitted, the Company shall reimburse the Employee for similar coverage under
COBRA). The payments pursuant to Section 5(c)(i) shall be paid regardless of whether the Employee
seeks or obtains any employment subsequent to his employment with the Company. The payments under
Section 5(c)(i) shall commence 30 days following the Employee’s date of termination, provided that
the Employee has executed the Release Agreement and any waiting periods contained in such release

 

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have expired prior to such 30th day following the date of termination. Notwithstanding
the foregoing, if the 30th day following the date of termination occurs in the calendar
year following the year of Employee’s termination of employment, then the payments shall commence
no earlier than January 1 of such subsequent calendar year. In addition, regardless of whether the
Employee signs the Release Agreement, the Company shall pay to the Employee the salary and benefits
due and owing to him under Section 3 through the last day of the Employee’s actual employment by
the Company. The term “Severance Period” as used herein shall mean a period of twelve (12)
months. The payments under clause (i) of this Section 5(c) shall be subject to the terms and
conditions set forth on Exhibit A hereto.

(d) Survival. The provisions of Sections 6, 7 and 8 of this Agreement shall survive
the termination of this Agreement.

6. Restrictive Covenants.

(a) During the term of this Agreement and for a period of one (1) year after the termination
or expiration thereof, the Employee will not directly or indirectly:

(i) as an individual proprietor, partner, stockholder, officer, employee, director,
joint venturer, investor, lender, or in any other capacity whatsoever (other than as
the holder of not more than one percent (1%) of the total outstanding stock of a
publicly held company), engage in the business of developing, producing, marketing
or selling services of the kind or type developed or being developed, produced,
marketed or sold by the Company while the Employee was employed by the Company; or

 

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(ii) hire, engage, recruit, solicit or induce, or attempt to induce, any current or
prospective employee, officer, director, contractor or other business associate of
the Company to terminate their employment with, or otherwise cease their business
relationship with, the Company; or

(iii) solicit, divert or take away, or attempt to divert or to take away, the
business or patronage of any of the clients, customers or accounts, or prospective
clients, customers or accounts, of the Company which were contacted, solicited or
served by the Employee while employed by the Company.

(iv) For the purposes of these restrictions, the word “prospective” shall apply to
any individual or entity with which the Company has had substantive contact within
the twelve month period prior to any potential hiring, solicitation, recruiting,
diversion or otherwise. In addition a “current” employee shall include any employee
who was employed by the Company within the three (3) months preceding any potential
solicitation or hiring.

 

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(b) If any restriction set forth in this Section 6 is found by any court of competent
jurisdiction to be unenforceable because it extends for too long a period of time or over too great
a range of activities or in too broad a geographic area, it shall be interpreted to extend only
over the maximum period of time, range of activities or geographic area as to which it may be
enforceable.

(c) The restrictions contained in Sections 6, 7 and 8 are necessary for the protection of the
business and goodwill of the Company and are considered by the Employee to be reasonable for such
purpose. The Employee agrees that any breach of Sections 6, 7 or 8 will cause the Company
substantial and irrevocable damage and therefore, in the event of any such breach, in addition to
such other remedies which may be available, the Company shall have the right to seek specific
performance and injunctive relief in any court of competent jurisdiction, regardless of any
statement to the contrary herein.

7. Proprietary Information.

(a) The Employee agrees that all information and know-how, whether or not in writing, of a
private, secret or confidential nature concerning the Company’s business or financial affairs
(collectively, “Proprietary Information”) is and shall be the exclusive property of the Company.
By way of illustration, but not limitation, Proprietary Information may include inventions,
products, processes, methods, techniques, formulas, compositions, compounds, projects,
developments, plans, research data, clinical data, financial data, personnel data, computer
programs, and customer and supplier lists. The Employee will not disclose any Proprietary
Information to others outside the Company or use the same for any unauthorized purposes without
written approval by an officer of the Company, either during or after his employment, unless and
until such Proprietary Information has become public knowledge without fault by the Employee.

 

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(b) The Employee agrees that all files, letters, memoranda, reports, records, data, sketches,
drawings, laboratory notebooks, program listings, or other written, photographic, or other tangible
material containing Proprietary Information, whether created by the Employee or others, which shall
come into his custody or possession, shall be and are the exclusive property of the Company to be
used by the Employee only in the performance of his duties for the Company.

(c) The Employee agrees that his obligation not to disclose or use information, know-how and
records of the types set forth in paragraphs (a) and (b) above, also extends to such types of
information, know-how, records and tangible property of customers of the Company or suppliers to
the Company or other third parties who may have disclosed or entrusted the same to the Company or
to the Employee in the course of the Company’s business.

(d) The Employee agrees that, immediately upon the termination of his employment with the
Company for any reason, he shall return all Proprietary Information and other property of the
Company that is in his possession or control.

8. Developments.

(a) The Employee will make full and prompt disclosure to the Company of all inventions,
improvements, discoveries, methods, developments, software, and works of authorship, whether
patentable or not, which are created, made, conceived or reduced to practice by the Employee or
under his direction or jointly with others during his employment by the Company, whether or not
during normal working hours or on the premises of the Company (all of which are collectively
referred to as “Developments”).

 

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(b) The Employee agrees to assign and does hereby assign to the Company (or any person or
entity designated by the Company) all his right, title and interest in and to all Developments and
all related patents, patent applications, copyrights, copyright applications,
design rights (registered or unregistered) and all rights of a similar or equivalent nature in
any jurisdiction. However, this Section 8(b) shall not apply to Developments which do not relate
to the present or planned business or research and development of the Company and which are made
and conceived by the Employee not during normal working hours, not on the Company’s premises and
not using the Company’s tools, devices, equipment or Proprietary Information.

(c) The Employee agrees to cooperate fully with the Company, both during and after his
employment with the Company, with respect to the procurement, maintenance and enforcement of
copyrights and patents (both in the United States and foreign countries) relating to Developments.
The Employee shall sign all papers, including, without limitation, copyright applications, patent
applications, declarations, oaths, formal assignments, assignment of priority rights, and powers of
attorney, which the Company may deem necessary or desirable in order to protect its rights and
interests in any Development. The Employee unconditionally and irrevocably waives all moral rights
he may have in relation to the Developments.

9. Other Agreements. The Employee hereby represents that he is not bound by the terms
of any agreement with any previous employer or other party to refrain from using or disclosing any
trade secret or confidential or proprietary information in the course of his employment with the
Company or to refrain from competing, directly or indirectly, with the business of such previous
employer or any other party. The Employee further represents that his performance of all the terms
of this Agreement and as an employee of the Company does not and will not breach any agreement to
keep in confidence proprietary information, knowledge or data acquired by him in confidence or in
trust prior to his employment with the Company or otherwise violate any agreement or other
obligation that the Employee may have to any other party.

 

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10. Indemnification Agreement and Invention Assignment Confidentiality Agreement.
Nothing in this Agreement is intended to supercede: (i) the Indemnification Agreement signed by the
Employee on March 24, 1995; or (ii) any stock option agreement between the Employee and the
Company. The parties intend to provide the Employee with the greatest level of protection under
each of the agreements. To the extent that the Employee is eligible for severance pay or other
post termination benefits pursuant to more than one agreement, the provisions of this agreement
shall supercede all other agreements (post termination treatment of equity positions shall not be
considered “severance” for the purpose of this Section). Nothing herein is intended to supercede
any tights the Company may have pursuant to any invention assignment, confidentiality,
non-competition or non-solicitation agreement between the Employee and the Company and it is
intended that the Company shall receive the greatest protection provided pursuant to any such
agreement, this agreement or common law.

11. Resolution of Disputes. Any disputes arising under or in connection with this
Agreement or otherwise arising pursuant to the Employee’s employment with the Company shall be
resolved by binding arbitration to be held in the State of New Jersey, in accordance with the
applicable arbitration rules of the American Arbitration Association before a panel of three
arbitrators. Judgment upon the award rendered by the arbitrator(s) may be entered in any court
having jurisdiction thereof. Each party shall bear his or its own costs of the arbitration or, if
applicable, litigation; however, the prevailing party shall be reimbursed for his or its costs and
expenses, including attorneys’ fees to the extent the dispute involves rights arising under a
statute providing costs and fees to a prevailing party or to the extent such prevailing party has
proven a material breach of this Agreement by the other party. Nothing in this Section shall in
any way limit the Company’s right to seek injunctive or other equitable relief in any court of
competent jurisdiction, to enforce the provisions of Sections 6, 7 and 8 hereof. Each party
agrees to waive his or its right to a trial by jury on any claims arising out of their relationship
and agree that the arbitrators shall be empowered to award damages to the same extent a court of
competent jurisdiction would have had.

 

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12. Notices. All notices required or permitted under this Agreement shall be in
writing and shall be deemed effective upon personal delivery or upon deposit in the United States
Post Office, by registered or certified mail, postage prepaid, addressed to the other party at the
address shown above, or at such other address or addresses as either party shall designate to the
other in accordance with this Section 12.

13. Entire Agreement. This Agreement constitutes the entire agreement between the
parties and supersedes all prior agreements and understandings, whether written or oral, relating
to the subject matter of this Agreement, including but not limited to the Original Agreement and
the Change in Control Severance Pay Agreement signed by the Employee on or about January 12, 2000,
except as stated to the contrary in Section 10.

14. Amendment. This Agreement may be amended or modified only by a writing executed
by both the Employee and a representative of the Company acting on express authority from the
Board.

15. Governing Law. This Agreement shall be construed, interpreted and enforced in
accordance with the laws of the State of New Jersey.

16. Successors and Assigns; Binding Agreement.

(a) This Agreement shall be binding upon and inure to the benefit of both parties and their
respective successors and assigns, including any corporation with which or into which the Company
may be merged or which may succeed to its assets or business, provided however, that the
obligations of the Employee are personal and shall not be assigned by him.
The Company specifically reserves the right to assign its rights under this Agreement,
including but limited to, any covenants by the Employee contained in Sections 6, 7 and 8 hereof.

 

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(b) The Employer will require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business or assets of the Employer,
to expressly assume and agree to perform this Agreement in the same manner and to the same extent
that the Employer would be required to perform it if no such succession had taken place, unless
such assumption occurs automatically by operation of law.

17. Acknowledgement. The Employee states and represents that he has had an
opportunity to fully discuss and review the terms of this Agreement with an attorney. The Employee
further states and represents that he has carefully read this Agreement, understands the contents
herein, freely and voluntarily assents to all of the terms and conditions hereof, and signs his
name as his own free act.

18. No Waiver. No delay or omission by the Company in exercising any right under this
Agreement shall operate as a waiver of that or any other right. A waiver or consent given by the
Company on any one occasion shall be effective only in that instance and shall not be construed as
a bar or waiver of any right on any other occasion.

19. Captions. The captions of the Sections of this Agreement are for convenience of
reference only and in no way define, limit or affect the scope or substance of any Section of this
Agreement.

20. Severability. In case any provision of this Agreement shall be invalid, illegal
or otherwise unenforceable, the validity, legality and enforceability of the remaining provisions
shall in no way be affected or impaired thereby.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year set
forth above.

	 	 	 	 	 	 	 	 	 
	 	 	 	 	OCEAN POWER TECHNOLOGIES, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	/s/ CHARLES F. DUNLEAVY
 

Charles F. Dunleavy

	 	 
	 	By:
	 	/s/ GEORGE W. TAYLOR
 

Name: George W. Taylor

Title: Executive Chairman
	 	 

 

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Exhibit A

Compliance with Section 409A

Subject to the provisions in this Exhibit A, any severance payments or benefits under this
Agreement shall begin only upon the date of Employee’s “separation from service” (determined as set
forth below) which occurs on or after the date of termination of Employee’s employment. The
following rules shall apply with respect to distribution of the payments and benefits, if any, to
be provided to Employee under this Agreement:

(a) It is intended that each installment of the severance payments and benefits provided under
this Agreement shall be treated as a separate “payment” for purposes of Section 409A of the Code
and the guidance issued thereunder (“Section 409A”). Neither the Company nor Employee 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.

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

(c) If, as of the date of Employee’s “separation from service” from the Company, Employee is a
“specified employee” (within the meaning of Section 409A), then:

(i) Each installment of the severance payments and benefits due under this Agreement
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 defined in Section 409A) shall be treated as a short-term deferral
within the meaning of Treasury Regulation Section 1.409A-1(b)(4) to the maximum extent
permissible under Section 409A; and

(ii) Each installment of the severance payments and benefits due under this Agreement
that is not described in this Exhibit A, paragraph (c)(i) above and that would, absent this
subparagraph, be paid within the six-month period following Employee’s “separation from
service” from the Company shall not be paid until the date that is six months and one day
after such separation from service (or, if earlier, Employee’s death), 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 Employee’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 severance
payments and benefits if and to the maximum extent 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). Any installments that qualify for the
exception under Treasury Regulation Section 1.409A-1(b)(9)(iii) must be paid no later than the last day of Employee’s second taxable year
following the taxable year in which the separation from service occurs.

 

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(d) The determination of whether and when Employee’s separation from service from the Company
has occurred shall be made in a manner consistent with, and based on the presumptions set forth in,
Treasury Regulation Section 1.409A-1(h). Solely for purposes of this Exhibit A, paragraph (d),
“Company” shall include all persons with whom the Company would be considered a single employer as
determined under Treasury Regulation Section 1.409A-1(h)(3).

(e) All reimbursements and in-kind benefits provided under this Agreement shall be made or
provided in accordance with the requirements of Section 409A to the extent that such reimbursements
or in-kind benefits are subject to Section 409A, including, where applicable, the requirements that
(i) any reimbursement is for expenses incurred during Employee’s lifetime (or during a shorter
period of time specified in this Agreement), (ii) the amount of expenses eligible for reimbursement
during a calendar year may not affect the expenses eligible for reimbursement in any other calendar
year, (iii) the reimbursement of an eligible expense will be made on or before the last day of the
calendar year following the year in which the expense is incurred and (iv) the right to
reimbursement is not subject to set off or liquidation or exchange for any other benefit.

(f) Notwithstanding anything herein to the contrary, the Company shall have no liability to
Employee or to any other person if the payments and benefits provided hereunder that are intended
to be exempt from or compliant with Section 409A are not so exempt or compliant.

 

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Exhibit 4.4

PARTNERSHIP INTEREST PURCHASE AGREEMENT

This PARTNERSHIP INTEREST PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of
this 1st day of September 2008, by and between NBM ENTERPRISES L.L.C, a Texas limited liability
company (“NBM”), JEFFREY M. MATTICH, a resident in the State of Texas ( “Mattich” and, together
with NBM, the, “Purchasers”), FSS HOLDING CORP., a Texas corporation (“FSS”) and HOME SOLUTIONS OF
AMERICA, INC. a Delaware corporation ( and ‘together with FSS the “Sellers”)’

RECITALS:

WHEREAS, Fiber-Seal Systems, L.P., a Texas limited partnership (“Fiber-Seal”), governed
pursuant to the terms of the Agreement of Limited Partnership of Fiber-Seal Systems L.P. dated June
2l, 2002. a true and complete copy of which is attached hereto as Exhibit A (the” Partnership
Agreement”) is currently engaged in the business of distributing the Fiber-Seal fabric, carpet, rug
and furniture protection and cleaning system (the” Business”);

WHEREAS, FSS is the owner and holder of the 0.1% general partnership interest in Fiber-Seal
(the” FSS Interest”) and HSOA is the owner and holder of the 99.9% limited partnership interest in
Fiber-Seal (the” HSOA Interest” and, together with the FSS Interest, the” Fiber-Seal Interests”;

WHEREAS, FSS has agreed to sell the FSS Interest to NBM, and HSOA has agreed to sell the HSOA
Interest to Mattich on the terms as set forth herein;

WHEREAS. the parties desire to make certain representations, warranties and agreements in
connection with the proposed purchase and sale of the Fiber-Seal Interests, as further set forth
herein;

WHEREAS, Fiber-Seal has previously agreed to grant and deliver to NBM $14,235.00 worth of
shares of common stock of HSOA (the “Stock obligation”);

WHEREAS. HSOA is indebted to Mattich in the amount of $76,130.23, representing unreimbursed
expenses and credit for accrued vacation resulting from Mattich’s previous employment with HSOA
(the” Expense Obligation”); and

WHEREAS, NBM made a loan in the original principal amount of $35,000.00 to Fiber-Seal
evidenced by a demand note dated July 3, 2008 (the” Demand Note”).

NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration,
the parties hereto agree as follows:

l. Purchase and Sale; Closing.

	1.1	 	Purchase and Sale.

(a) FSS hereby sells, assigns, transfers and delivers to NBM, and NBM hereby purchases from FSS.
the FSS Interests in exchange for the following:

	 	(i)	 	waiver by NBM of the Stock Obligation of HSOA;

	 
	 	(ii)	 	cancellation by NBM of the Demand Note; and

	 
	 	(iii)	 	$4,285.77 in cash.

(b) HSOA hereby sells, assigns, transfers and delivers to Mattich, and Mattich hereby purchases
from HSOA, the HSOA Interest in exchange for waiver by Mattich of the Expense Obligation of
Fiber-Seal.

Partnership Interest Purchase Agreement —

 

 

1.2 Closing. The closing of the purchase and sale of the Fiber-Seal Interests (the
“Closing”) shall take place simultaneously with the execution of this Agreement on the date hereof
(the “Closing Date”). Upon the Closing, Sellers shall cause Fiber-Seal to register the transfer
of the Fiber-Seal Interests to Purchasers on its books and Records, and NBM shall pay to FSS
+,Z.SS.’liln cash by wire transfer to an account designated by FSS or by check. In addition,( a)
waiver by NBM of the Stock Obligation of Fiber-Seal, (b) cancellation by NBM of the Demand Note,
and (c) waiver by Mattich of the Expense obligation of Fiber-Seal shall each be automatically
deemed to be effective as of the Closing Date.

2. Representations and Warranties of Sellers. Each of the Sellers hereby jointly and
severally represents and warrants to Purchasers as follows:

2.1 Authority; Enforceability. Sellers have the legal power and authority to execute and
deliver this Agreement and all other documents required to be executed and delivered by Sellers
hereunder, to consummate the transactions hereby contemplated, and to take all other actions
required to be taken by Sellers pursuant to the provisions hereof. This Agreement and all other
documents required to be executed and delivered by Sellers have been duly executed and delivered by
Sellers and constitute the legal, valid and binding obligations of sellers, enforceable against
Sellers in accordance with their terms.

2.2 Partnership Agreement. The Partnership Agreement attached hereto as Exhibit A
is a true, complete and correct copy of such document, and there have been no amendments or
modifications thereto except as attached hereto.

2.3 Fiber-Seal Interests. Sellers are the sole and lawful owners of the Fiber-Seal
Interests. Sellers hold and are transferring to purchasers the Fiber-Seal Interests free and clear
of all liens, restrictions, covenants or adverse claims of any kind or character. Sellers have full
record and beneficial ownership of the Fiber-Seal Interests.

2.4 Assets. Fiber-Seal owns all of the assets, properties, rights and authorizations of
any kind or description. Including, but not limited to those certain distributorship agreements by
and between Fiber-Seal and its various distributors, required to operate the Business as presently
conducted. Fiber-Seal owns or has the license or right to use, all intellectual property rights
currently used or necessary to conduct the Business. All inventory of Fiber-Seal consists of a
quality and quantity that are useable and saleable in the ordinary course of business and the
quantities of each type of inventory, whether raw materials, work-in-process or finished goods, are
not excessive in the present circumstances of Fiber-Seal.

2.5 Access to Information. Sellers have been provided an opportunity to conduct their own
due diligence review of all of Fiber-Seal’s tax, accounting, partnership and financial books and
records (collectively, the “Books and Records”), and to obtain any additional information
concerning Fiber-Seal and its assets as Sellers consider necessary to evaluate the merits or risks
of the sale of the Fiber-Seal Interests. The Books and Records are true, correct and complete in
all material respects and have been maintained on a current basis. Fiber-Seal has no liability
(whether known or unknown, whether absolute or contingent, whether liquidated or unliquidated and
whether due or to become due, including without limitation any liability for taxes and interest,
penalties, and other charges payable with respect to any such liability or obligation) other than
as reflected in the Books and Records.

2.6 Solvency. Fiber-Seal is not, and, with the passage of time, does not expect to
become, insolvent or bankrupt.

2.7 Security Interests of Texas Capital Bank. The security interests of Texas Capital
Bank, National Association, as Administrative Agent, as Secured Party, against each of Fiber-Seal,
HSOA and FSS, as Debtor, evidenced by those certain UCC-1 Financing Statements on file with the
Secretary of State of Texas have been released and a UCC-3 termination statements as been filed
corresponding to each such UCC-l.

Partnership Interest Purchase Agreement —

 

Page 2

 

2.8 Good Standing of Fiber-Seal and Sellers.

(a) The 2006 and 2007 Franchise Tax Returns of FSS have been filed with the Office of the
Texas Comptroller of Public Accounts and the charter of FSS has been reinstated by the Texas Secretary of State. FSS
has delivered to Purchasers a certificate of good standing for FSS issued by the Texas Comptroller
of Public Accounts and a certificate of status for FSS issued by the Texas Secretary of State.

(b) The 2007 Franchise Tax Returns o f Fiber-Seal and HSOA have been filed with the Office of the
Texas Comptroller of Public Accounts, Fiber-Seal and HSOA have delivered to Purchasers a
certificate of good standing
for each of Fiber-Seal and HSOA issued by the Texas Comptroller of Public Accounts and a
certificate of status for
each of Fiber-Seal and HSOA issued by the Texas Secretary of State.

2.9 Copier Lease. HSOA has assigned to Fiber-Seal, and Fiber-Seal has assumed that certain
Lease Agreement/Order Agreement dated October 1, 2006 by and between HSOA and Lanier Worldwide,
Inc. (the “Copier Lease”), and the terms and conditions of Section 6 of the Copier Lease
pertaining to restrictions on assignment thereof have been complied with fully.

2.10 Reliance on Representations and Warranties. Sellers and Fiber Seal understand and
agree that Purchasers have relied and will rely upon the representations and warranties of Sellers
contained in this Agreement in connection with the transfer of the Fiber-Seal Interests and
admission of Purchasers as partners in Fiber-Seal.

3. Representations and Warranties of Purchasers. Each of the Purchasers hereby jointly and
severally represents and warrants to Sellers as follows:

3.1 Shares for Account of Investor. The Fiber-Seal Interests are being acquired for the
account of Purchasers for investment purposes only, and are not being purchased with a view to or
for the resale distribution or fractionalization thereof and purchasers have not contract,
undertaking agreement or arrangement with and have no present plan to enter into any contract
undertaking agreement or arrangement with any person to sell, transfer or pledge the Fiber-Seal
Interest or any portion thereof.

3.2 Securities Not Registered Under Securities Laws. Purchasers have been informed and
understand that: (a) THE SECURII’IES I,IAVE NOT BEEN REGISI’ERED UNDER THE SECURITIES ACT OI’
I933, AS AMENDED (“THE SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE AND ARE BEING OFFERED
AND SOLD IN RELIANCEO N EXEMPTIONS FROM THE REGISTRAT’ION REQUIREMENTS OF THE SECURITIES ACT AND
SUCH LAWS. THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES OR OTHER REGULATORY AUTHORITY, NOR HAS ANY OF THE FOREGOING
AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THE OFFERING OF’SUCH SECURITIES OR THE ACCURACY
OR ADEQUACY OF ANY DISCLOSURES RELATED THERETO. ANY REPRESENTATION TO ‘I’HE CONTRARY IS A CRIMINAL
OFFENSE, and (b) the Fiber-Seal Interests have not been, and Purchasers have no right to require
that they be, registered under the Securities Act or any applicable state securities laws, and such
Fiber-Seal Interests are being sold in reliance upon exemptions available under such laws.

3.3 Limitation on Transferability of Securities. Purchasers have been informed and
understand and agree that:

(a) THE FIBER-SEAL INTERESTS ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE UNDER
APPLICABLE LAWS AND PURSUANT TO THE PARTNERSHIP AGREEMENT AND MAY NOT BE TRANSFERRED OR RESOLD
EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND THE APPLICABLE STATE SECURITIES LAWS PURSUANT TO
REGISTRATION OR EXEMPTIONS
THEREFROM.

Partnership Interest Purchase Agreement —

 

Page 3

 

(b) Purchasers are aware that Purchasers must bear the economic risk of the investment in the
Fiber-Seal Interests for an indefinite period of time.

(c) No offer, sale, transferor other disposition of the Fiber-Seal Interests may be made unless
such Fiber-Seal Interests have theretofore been effectively registered under the Securities Act and
applicable state securities laws, or Fiber-Seal has received the written opinion of counsel
satisfactory to Fiber-Seal that the transaction will not violate or require registration under such
laws and obtains warranties similar to those set forth herein from the proposed transferee.

3.4 Financial Ability of Investor. Purchasers (a) have the financial ability to bear the
economic risk of their investment in the Fiber Seal Interests (including the possible loss of the
entire amount thereof, (b) have adequate means for providing for their current and future needs and
personal contingencies notwithstanding (i) Purchasers’ investment in the Fiber-Seal Interests(,i i)
the unavailability of any tax, financial or other benefits from Purchasers’ investment in or
ownership of the Fiber-Seal Interests or (iii) the complete loss of Purchasers’ entire investment
in the Fiber-Seal Interests and ( c) have no need for liquidity with respect to their investment in
the Fiber-Seal nterests.

3.5 Investor Sophistication. Purchasers have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of an investment in the
Fiber-Seal Interests and have obtained sufficient information from Fiber-Seal to enable them to
evaluate the risks of an investment in the Fiber-Seal Interests.

3.6 Access to Information. Purchasers (a) have been provided an opportunity to conduct
their own due diligence and review financial information regarding Fiber-Seal and to obtain any
additional information concerning Fiber-Seal and its assets and (b) have had the opportunity to ask
questions of, and receive answers from, Fiber-Seal or its authorized representatives concerning the
terms and conditions of this Agreement and other matters pertaining to the acquisition of the
Fiber-Seal Interests and to obtain such additional information as Purchasers consider necessary to
evaluate the merits or risks of the acquisition of the Fiber-Seal Interests. Purchasers have not
been furnished any other offering literature or prospectus. Purchasers have received and reviewed
a copy of the Partnership Agreement and acknowledge that upon the transfer of the Fibcr-Seal
Interests to Purchasers, Purchasers will be subject to the terms thereof.

3.7 Authority. The execution, delivery, and performance of this Agreement have been duly
authorized by Purchasers. The execution and delivery of this Agreement and the purchase of the
Fiber-Seal Interests do not conflict with or breach any provision of the organizational documents
of NBM or any law, ruling, regulation, statute or agreement to which it is subject.

3.8 No Brokers or Finders. No agent, broker, investment banker, financial advisor or other
firm or person is or will be entitled to any broker’s or finder’s fee or any other similar
commission or fee in connection with any of the transactions contemplated by this Agreement as a
result of arrangements entered into by Purchasers.

3.9  Reliance on Representations and Warranties. Purchasers understand and agree that
Sellers and Fiber-Seal have relied and will rely upon the representations and warranties of
Purchasers contained in this Agreement in connection with the transfer of the Fiber-Seal Interests
and admission of Purchasers as partners in Fiber-Seal.

Partnership Interest Purchase Agreement —

 

Page 4

 

4. Indemnification: Third-Party Claims.

4.1 Indemnification by Sellers. Sellers, jointly and severally, covenant and agree to
defend, indemnify and hold Purchasers and Purchasers’ officers, directors, stockholders, partners,
successors and assignees (collectively, the “Indemnitees”) harmless from and against any and all
damages, losses, liabilities, fines, penalties, costs and expenses (including, but not limited to,
reasonable counsel fees and costs and expenses incurred in the investigation, defense or settlement
of any claim covered by this indemnity) (collectively, the “Indemnifiable Costs”) with respect
to or arising out of any demand, claim, inquiry, investigation, proceeding, action or cause of
action that the Indemnitees may suffer or incur by reason of:

(a) any breach of, or any inaccuracy in, any representation or warranty of Sellers contained herein
or in any document or instrument executed and delivered pursuant hereto or thereto;

(b) the non-performance of any covenant or obligation to be performed by Sellers contained herein
or in any document or instrument executed and delivered pursuant hereto or thereto;

(c) any liability of Sellers of any nature in connection with or arising out of the ownership,
operation or management of the Business prior to the Closing Date;

(d) any liability of any nature, presently existing or arising out of any pending or threatened
litigation, claims, investigations, inquiries, regulatory audits or assessments, or similar
proceedings against Sellers and/or their heirs and assigns or representatives as, well as any
future litigation, claims, investigations, inquiries, regulatory audits or assessments or, other
similar proceedings against Sellers and/or their heirs and assigns or representatives or;

(e) any taxes of Sellers with respect to the Business for all periods prior to the Closing Date and
any tax liability of the Sellers arising out of the transactions contemplated hereby.

4.2 Procedures. If a claim by a third party is made against an Indemnitee, and if such
Indemnitee intends to seek indemnity with respect thereto under this Section 4, the Indemnitee
shall promptly, and in any event within thirty (30) days after the assertion of any claim or the
discovery of any fact upon which Indemnitee intends to base a claim for indemnification under this
Agreement (“Claim”), notify the party from whom indemnification is sought (“Indemnitor”) of such
Claim; provided, that the failure or delay in giving such notice shall not preclude Indemnitee of
such Claim; provided, that the failure or delay in giving such notice shall not preclude Indemnitee
from making any Claim thereon if the failure or delay in giving such notice did not prejudice
Indemnitor. In the event of any Claim, except a Claim for taxes, Indemnitor shall be entitled to
participate in the defense of such Claim and, to the extent that it wishes ( unless( i) the
Indemnitor is also a party to the proceedings concerning such Claim and the Indemnitee determines
in good faith that joint representation would be a conflict of interest, or (ii) the Indemnitor
fails to provide reasonable assurance to the Indemnitee of its financial capacity to defend such
Claim and provide indemnification with respect to such Claim), to assume the defense of such Claim
with counsel reasonably satisfactory to the Indemnitee and, alter notice from the Indemnitor to the
Indemnitee of its election to assume the defense of such proceeding given within thirty (30) days
of receipt of Indemnitee’s notice of the Claim, the Indemnitor will not, as long as it diligently
conducts such defense be liable to the Indemnitee under this Section 4 for any fees of other
counsel or any other expenses with respect to the defense of such Claim, in each case subsequently
incurred by the Indemnitee in connection with the defense of such Claim. In the event that
Indemnitor elects to undertake the defense of any Claim hereunder, Indemnitee shall cooperate with
Indemnitor to the fullest extent possible in regard to all matters relating to the Claim (including
without limitation, corrective actions required by applicable legal requirements, assertion of
defenses and the determination, mitigation, negotiation and settlement of all amounts, costs,
actions, penalties, damages and the like related thereto) so as to permit Indemnitor’s management
of same with regard to the amount of Indemnifiable Costs payable by the Indemnitor hereunder. No
Indemnitee or Indemnitor shall be entitled to settle any Claim without the prior written consent of
the other, which consent shall not be unreasonably withheld. A claim for indemnification for any
matter not involving a third-party claim may be asserted by notice to the party from whom
indemnification is sought and shall be paid promptly after such notice.

Partnership Interest Purchase Agreement —

 

Page 5

 

5. Additional Covenants.

5.1 Transfer of Interests. Sellers each acknowledge and agree that the signatures of
Sellers to this Agreement shall also be deemed to be, and shall constitute, each Seller’s prior
written consent of the transfer of the Fiber-Seal Interests to Purchasers an d shall satisfy the requirements of Article 6 of the Partnership
Agreement relating to such transfer.

5.2 Acknowledgement of Terms of Partnership Agreement. Upon Purchasers’ acquisition of the
Fiber-Seal Interests, the Purchasers (and their spouses, if any) shall execute a signature page
(and spousal consent, as applicable) acknowledging Purchasers’ (and their spouses’) agreement to be
bound by the terms of the Partnership Agreement.

5.3 Further Assurances. In connection with the transfer of the Fiber-Seal Interests,
Purchasers and Sellers shall cooperate with Fiber-Seal to execute any additional documentation
reasonably requested on behalf of Fiber-Seal to evidence the transfer of the Fiber-Seal Interests
from Sellers to Purchasers. Upon the transfer of the Fiber-Seal Interests to purchasers, Sellers
shall cease to be partners in Fiber-Seal. Pursuant to Section 2.02 of the Texas Revised Limited
Partnership Act, within 30 days after the closing Date, FSS and NBM shall cooperate to file a
Certificate of Amendment to the certificate of Limited Partnership for Fiber-Seal reflecting the
withdrawal of FSS as general partner and the admission of NBM as the new general partner.

6. Miscellaneous.

6.1 Governing Laws. This Agreement shall be governed by and controlled in accordance with
the laws substantive of the State of Texas without regard to conflict of law provisions.

6.2 Headlines. The headings of the sections of this Agreement are for reference only and
shall not limit or otherwise affect the interpretation or effect of any term or provision.

6.3 Binding Agreement. Except as expressly set forth to the contrary, this Agreement
shall be binding upon and inure to the benefit of the heirs, executors, administrators, legal
representatives, successors and permitted assigns of the parties.

6.4  Expenses. The parties hereto shall each bear their own legal, financial and other
expenses incurred in relation to the execution of this Agreement and the related transactions
thereto.

[Signature Page Follows]

Partnership Interest Purchase Agreement —

 

Page 6

 

Executed as of the date first written above.

	 	 	 	 	 
	 	PURCHASERS:

NBM ENTERPRISES LLC,

a Texas limited liability company

 	 
	 	By:  	/s/ Jeffrey M. Mattich
 	 
	 	 	Jeffrey M. Mattich 	 
	 	 	Manager 	 
	 	 	 
	 	/s/ Jeffrey M. Mattich
 	 
	 	JEFFREY M. MATTICH, an individual 	 
	 	 	 
	 	SELLERS:

HOME SOLUTIONS OF AMERICA, INC.,

a Delaware corporation

 	 
	 	By:  	/s/ Frank J. Fradella
 	 
	 	 	Name:  	Frank J. Fradella 	 
	 	 	Title:  	Chief Executive Officer 	 
	 
	 	FSS HOLDING CORP.,

a Texas corporation

 	 
	 	By:  	/s/ Frank J. Fradella
 	 
	 	 	Name:  	Frank J. Fradella 	 
	 	 	Title:  	Authorized Agent 	 

Partnership Interest Purchase Agreement —

 

Page 7

 

	 	 	 	 	 

EXHIBIT A

Partnership Agreement

[Attached]

Partnership Interest Purchase Agreement —

 

Page 8

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