On November 14, 2008 (the "Effective Date"), Microfluidics International Corporation, a Delaware corporation (the "Company"), entered into a Debenture and Warrant Purchase Agreement (the "Agreement") with Global Strategic Partners, LLC (the "Investor").

Under the Agreement, the Company issued and sold to the Investor a convertible debenture dated the Effective Date in the principal amount of $5,000,000 (the "Debenture"). The $5,000,000 purchase price was paid to the Company on the Effective Date. The outstanding principal amount of the Debenture will accrue interest at a per annum rate equal to nine percent (9.0%) or, if less, at the highest rate permitted by applicable law. In the event of an Event of Default (as defined below), interest on the outstanding principal amount of the Debenture and unpaid interest will increase by two percent (2.0%) per annum or, if less, at the highest rate permitted by applicable law, until such Event of Default is cured or waived. Interest is due and payable on the first business day of each calendar quarter (each, an "Interest Payment Date"). The outstanding principal amount of the Debenture, together with accrued and unpaid interest, is due and payable on the earlier of (i) November 14, 2015 or (ii) the acceleration of the maturity of the Debenture upon the occurrence of an Event of Default (such earlier date, the "Maturity Date"). The Company may, at its option and upon thirty days' notice to the Investor, prepay on an Interest Payment Date all of the principal balance of the Debenture, without penalty or premium, together with accrued and unpaid interest through the date of prepayment.

On the Maturity Date, any Interest Payment Date prior thereto, or the date on which a Change of Control Event (as defined below) occurs, the Investor may, at its option and upon three (3) business days' notice to the Company, convert all or any portion of the outstanding principal amount of the Debenture (the "Converted Principal") into that number of shares of the Company's common stock, par value $0.01 per share (the "Common Stock"), equal to the quotient of:
(i) the outstanding principal amount of the Debenture, divided by (ii) $1.25, rounded to the nearest share (the "Conversion"). Upon the Conversion, all or any portion of the accrued and unpaid interest on the Converted Principal will become immediately due and payable, which amount may be payable in shares of Common Stock in accordance with the formula set forth in the preceding sentence.

The Company also issued a Common Stock Purchase Warrant dated the Effective Date to the Investor (the "Warrant"), representing the right to purchase up to a number of shares of Common Stock equal to fifty percent (50%) of the outstanding Common Stock on a fully diluted basis, less the number of shares of Common Stock into which the Debenture is convertible. The Warrant has a term of the earlier to occur of: (i) the seventh (7th) anniversary of the Effective Date, (ii) the third (3rd) anniversary of the Effective Date (the "Third Anniversary") in the event that the Company has retired the Debenture on or before the Third Anniversary or (iii) such time as the Investor has acquired fifty percent (50%) of the total number of shares of the Common Stock then outstanding on a fully diluted basis (such earlier date, the "Warrant Termination Date").

The Warrant can be exercised by the Investor in two (2) tranches at any time prior to the Warrant Termination Date. The first tranche is exercisable in whole or in part at $2.00 per share. The aggregate number of shares of Common Stock (the "Tranche One Maximum") that may be purchased pursuant to one or more tranche one exercises of the Warrant (the "Tranche One Exercises") is forty percent (40%) of the Common Stock then outstanding on a fully diluted basis, minus that number of shares of Common Stock that the Investor is or was entitled to acquire (or has theretofore acquired) upon exercise of the conversion feature of the Debenture. Notwithstanding the preceding sentence, if all or any portion of the principal amount of the Debenture has been prepaid by the Company prior to the Third Anniversary, then the Tranche One Maximum will also include a number of shares of Common Stock equal to the quotient of: (i) the

amount of the Debenture's principal amount that was so repaid by the Third Anniversary, divided by (ii) $1.25 (the "Prepayment Shares").

The Warrant's second tranche is exercisable in whole or in part at $3.00 per share. The aggregate number of shares of Common Stock that may be purchased pursuant to one or more tranche two exercises of the Warrant (the "Tranche Two Exercises") is equal to (a) fifty percent (50%) of the Common Stock then outstanding on a fully diluted basis, minus (b) that number of shares of Common Stock that the Investor is or was entitled to acquire (or has theretofore acquired) upon (i) exercise of the conversion feature of the Debenture, and
(ii) the Tranche One Exercise, plus (c) the Prepayment Shares. A Tranche Two Exercise may only be made after the full number of shares exercisable pursuant to Tranche One Exercises have been purchased.

The aggregate purchase price for shares of Common Stock purchased under the Warrant (the "Warrant Shares") may be paid either (i) by cash or wire transfer of immediately available funds, (ii) by surrender of a number of Warrant Shares . . .

On the Effective Date, the Company repaid the entire amount of $1,048,264.58 (the "Payoff Amount") due under its (i) Amended and Restated Loan and Security Agreement, dated as of October 20, 2008, with Silicon Valley Bank (the "LSA") and (ii) Amended and Restated Export-Import Bank Loan and Security Agreement, dated as of October 20, 2008, with Silicon Valley Bank (the "EXIM LSA" and together with the LSA, the "SVB Loan Agreement"). The Payoff Amount was comprised of $1,027,674.58 in principal, interest and fees, a termination fee of $20,000, a statement fee of $15.00 and a legal fee of $575. The Company used a portion of the proceeds that the Investor paid to the Company under the Agreement described in Item 1.01 above to satisfy the Payoff Amount.

The terms of the SVB Loan Agreement were reported by the Company in its Current Report on Form 8-K filed with the SEC on October 24, 2008, and are incorporated herein by reference.

The information disclosed in Item 1.01 above is incorporated herein by reference.

(d) The following exhibits are hereby filed as part of this Current Report on Form 8-K:

Number                                   Exhibit

10.1     Amended and Restated Loan and Security Agreement, dated as of
         October 20, 2008, among Silicon Valley Bank, Microfluidics International
         Corporation and Microfluidics Corporation (Filed as Exhibit 10.1 to the
         Company's Current Report on Form 8-K filed with the Securities and
         Exchange Commission on October 24, 2008, and incorporated herein by
         reference).

10.2     Amended and Restated Export-Import Bank Loan and Security Agreement,
         dated as of October 20, 2008, among Silicon Valley Bank, Microfluidics
         International Corporation and Microfluidics Corporation (Filed as
         Exhibit 10.2 to the Company's Current Report on Form 8-K filed with the
         Securities and Exchange Commission on October 24, 2008, and incorporated
         herein by reference).