Exhibit 10.46
EMPLOYMENT AGREEMENT
This employment agreement is made and entered into as of this 26 day of July,
2010, by and between Unilife Corporation (“Unilife”) and Dennis Pyers (“Pyers”).
The term “Unilife” shall include its subsidiaries, affiliates, assigns and
successors in interest under Sections 7, 8, and 13.
WHEREAS, Unilife wishes to employ Pyers as Vice President and Controller, and
Pyers wishes to enter into this agreement to formalize his employment agreement;
and
WHEREAS, Unilife is engaged in the business of designing, developing,
manufacturing and supplying innovative healthcare safety products for medical
device and pharmaceutical industries; and
WHEREAS, Pyers will develop valuable relationships by virtue of his employment
with Unilife, and Pyers will have access to valuable confidential and
proprietary information and trade secrets belonging to Unilife; and
WHEREAS, Unilife and Pyers desire to set forth the terms of their employment
relationship in this agreement;
NOW, THEREFORE, in consideration of the promises and covenants set forth herein,
and intending to be legally bound hereby, the parties agree as follows:
1. Term. This agreement shall be effective upon the counter-execution of this
agreement and is for an initial multi-year term commencing on the effective date
and expiring on June 30, 2012. This agreement will automatically renew for
one-year periods annually thereafter, unless either party gives the other party
thirty (30) days written notice in advance of the relevant expiration date of
its intention not to renew the agreement. Upon expiration or earlier termination
of this employment relationship, the parties will be relieved of their duties
and obligations under this agreement, except that the rights and obligations of
Unilife under Section 6 below shall remain in full force and effect until all
appropriate payments have been made to Pyers and the rights and obligations of
Pyers set forth in Sections 7 and 8 below shall remain in full force and effect
and shall survive the expiration or termination of this agreement, regardless of
the reason(s) for termination.
2. Position and Duties.
     (a) Unilife will employ Pyers as Vice President and Controller, and Pyers
agrees to serve in such capacity for Unilife with responsibility for Unilife’s
accounting department and such other duties as are assigned to him by the Chief
Financial Officer of Unilife, and shall have vested in him the authority and
duties typically held by an employee in such position. Pyers shall report to the
Chief Financial Officer, with respect to the performance of these duties. In the
performance of these duties, Pyers shall devote his knowledge, skill, attention,
energies and all of his business time, and shall

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comply with all of Unilife’s policies, rules, and procedures, as they may be
amended from time to time. Pyers shall not engage in any endeavor that would
conflict with the rendition of his services to Unilife, either directly or
indirectly, without the prior written consent of Unilife; provided, however,
Pyers may participate in civic, charitable, educational, industry and
professional organizations, to the extent that such participation does not
interfere with the performance of his duties hereunder; and Pyers may also serve
on corporate boards and committees, but only with the prior written consent of
Unilife.
     (b) Notwithstanding the responsibilities and duties contained in Section
2(a) above, Pyers acknowledges that all material decisions relating to the
management of Unilife’s business will be made by the Board of Directors of
Unilife. In addition, any decisions which have the capacity to affect
significantly the financial standing of Unilife must be referred to the Board of
Directors of Unilife which will have ultimate control in respect of these
matters.
3. Compensation.
     (a) Base Salary. Pyers shall be paid an annual base salary of One Hundred
Eighty-Five Thousand Dollars ($185,000.00) payable in accordance with Unilife’s
standard payroll practices. Pyers’ base salary will be subject to the customary
withholding and employment taxes, as required by law, with respect to
compensation paid by an employer to an employee. At the discretion of the Board
of Directors of Unilife, Pyers shall be eligible for increases in base salary.
Further, Unilife will not reduce Pyers’ base salary to less than what is agreed
to herein.
     (b) Bonus. Pyers shall be eligible to participate in Unilife’s Incentive
Bonus Plan in amounts and percentages as annually determined by Unilife’s Board
of Directors and Chief Executive Officer. For calendar year 2010, the potential
cash bonus amount will be twenty-five percent (25%) of base salary, prorated
based on the number of days employed in 2010. For calendar years 2011 and 2012,
Pyers’ annual target cash bonus shall be a minimum of twenty-five percent (25%)
of base salary. Bonuses are subject to achievement of such goals and objectives
as the Compensation Committee of the Board of Directors, upon recommendation of
the Chief Executive Officer, determines in a set of Key Performance Indicators.
Any bonus payable for a calendar year shall be paid in a lump-sum payment in the
following calendar year on or before March 15. Pyers’ bonuses will be subject to
the customary withholding and employment taxes, as required by law, with respect
to compensation paid by an employer to an employee.
4. Benefits.
     (a) Benefits Generally Available to Unilife Employees. Pyers shall be
eligible to participate in Unilife’s benefits programs (including any equity
incentive plan of Unilife or its affiliates), as they may change from time to
time. The benefits provided to Pyers will be the same as the benefits provided
to other similarly situated Unilife employees, and may be changed upon
expiration or other termination of the current benefits

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contracts. For further information, Pyers should review any applicable benefit
plan documents, which will govern the terms of the benefits.
     (b) Vacation. Pyers shall also receive four (4) weeks of paid vacation per
calendar year. Any unused vacation days may be carried over or paid in lieu
thereof, to the extent allowed by Unilife’s policy for similarly situated
employees.
     (c) Equity Plans. All incentive compensation and stock-based compensation
that Pyers may receive from Unilife shall be subject to any policy adopted by
Unilife, now or hereafter existing, that imposes on Pyers’ stock ownership
requirements, stock holding requirements, stock liquidation restrictions or
recoupment provisions provided that such requirements, restrictions and
recoupment provisions also apply to similarly situated members of senior
management. Any stock options and other stock-based awards that Pyers may
receive from Unilife shall be governed by the applicable, underlying award
agreement.
     (d) Expenses. Unilife shall reimburse Pyers for all reasonable and
necessary expenses incurred by him in carrying out his duties under this
Agreement in accordance with Unilife’s business expense policies, including
without limitation, requirements with respect to reporting, documentation and
payment of such expenses. All such expenses shall be paid no later than
December 31st of the calendar year following the year in which such expenses
were incurred.
5. Indemnification. Unilife agrees to provide Pyers with indemnification
equivalent to that provided to other members of senior management and pursuant
to Unilife’s Directors and Officers insurance policies, as amended from time to
time.
6. Termination and Pay Upon Termination.
     (a) General Rule. In the event that Unilife terminates this agreement and
Pyers’ employment without Cause as defined herein, including employment
termination due to Unilife’s election not to renew this agreement where Pyers
was willing and able to continue performing services under the terms of this
agreement, Unilife will pay Pyers:
     (i) his base salary, at the rate in effect immediately before the date that
Pyers’ employment terminates, for six (6) months, in accordance with Unilife’s
standard payroll practices then in effect, commencing on the fifteenth (15th)
day after the date that Pyers’ employment terminates and the General Release
provided for in Section 10 of this Agreement becomes irrevocable; and
     (ii) provided that Pyers is eligible for and timely elects to receive COBRA
health care continuation coverage, the cost of Pyers’ COBRA health care
continuation coverage premiums for six (6) months, commencing on the first of
the month immediately after the month which includes the date that Pyers’

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employment terminates and the General Release provided for in Section 10 of this
Agreement becomes irrevocable.
In the event that Pyers terminates this agreement for any reason, including
Pyers’ election not to renew the agreement, Pyers shall not receive any
compensation or benefits from the time that he ceases to devote full time and
attention to Unilife’s business. In addition, Pyers agrees to provide Unilife
with thirty (30) days advance written notice of his intent to terminate his
employment, whether during the initial term or any renewal thereof. Upon
termination of this agreement, the parties will be relieved of their duties and
obligations, except that the rights and obligations of Unilife under this
Section 6(a) shall remain in full force and effect until all appropriate
payments have been made to Pyers and the rights and obligations of Pyers set
forth in Sections 7 and 8 below shall remain in full force and effect and shall
survive the expiration or termination of this agreement, regardless of the
reason(s) for termination. Upon termination of this agreement, Pyers shall not
have any further contact with any customers of Unilife until the expiration of
the conditions of Section 8 of this Agreement.
     (b) Termination Following a Change in Control.
     (i) Termination Pay. Notwithstanding paragraph (a) immediately above, in
the event that Pyers’ employment is terminated coincident with a Change in
Control as defined in subparagraph (iii) immediately below, then Unilife in lieu
of and not in duplication of the severance compensation provided for in
paragraph (a) immediately above, shall pay Pyers:
     (A) his base salary, at the rate in effect immediately before the date that
Pyers’ employment terminates, for eighteen (18) months, in accordance with
Unilife’s standard payroll practices then in effect, commencing on the fifteenth
(15th) day after the date that Pyers’ employment terminates and the General
Release provided for in Section 10 of this Agreement becomes irrevocable,
     (B) provided that Pyers is eligible for and timely elects to receive COBRA
health care continuation coverage, the cost of Pyers’ COBRA health care
continuation coverage premiums for eighteen (18) months, commencing on with the
first of the month immediately after the month which includes the date that
Pyers’ employment terminates and the General Release provided for in Section 10
of this Agreement becomes irrevocable,
     (C) payment of a lump-sum amount, equal to the amount of the bonus, if any,
earned by and paid to Pyers for the last completed fiscal year prior to the year
in which his employment terminates, which will be payable on the fifteenth
(15th) day after the date that Pyers’ employment terminates and the General
Release provided for in Section 10 of this Agreement becomes irrevocable, and

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     (D) notwithstanding anything to the contrary, all of his outstanding and
unvested options and other stock-based awards shall vest immediately upon such
termination of employment following the Change in Control.
     (ii) Definition of “Cause”. “Cause” will mean any one or more of the
following:
     (A) material neglect of assigned duties, willful misconduct in connection
with the performance of duties, or refusal to perform assigned duties (other
than by reason of disability) which continues uncured for thirty (30) days
following receipt of written notice of such deficiency from the Chief Financial
Officer, specifying the scope and nature of the deficiency;
     (B) an act of dishonesty or any act that results in the loss of status as a
Certified Public Accountant;
     (C) engaging in illegal conduct;
     (D) committing a crime relating to an act of dishonesty or fraud;
     (E) engaging in any act of moral turpitude that causes material harm to
Unilife or its reputation;
     (F) breaching, in any material respect, the terms of any agreement with
Unilife; or
     (G) commencement of employment with any other employer while an employee of
Unilife without the prior written consent of the Chief Executive Officer.
Any determination of “Cause” as used herein will be made in good faith by the
Chief Executive Officer.
     (iii) Definition of “Change in Control”. “Change in Control” means a: (i)
Change in Ownership of Unilife Corporation, (ii) Change in Effective Control of
Unilife Corporation, or (iii) Change in the Ownership of Assets of Unilife
Corporation, all as described herein and construed in accordance with section
409A of the Internal Revenue Code of 1986, as amended (the “Code”).
     (A) A Change in Ownership of Unilife Corporation shall occur on the date
that any one Person acquires, or Persons Acting as a Group (or Group) acquire,
ownership of the capital stock of Unilife Corporation that, together with the
stock held by such Person or Group, constitutes more

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than fifty percent (50%) of the total fair market value or total voting power of
the capital stock of Unilife Corporation. However, if any one Person is, or
Persons Acting as a Group are, considered to own more than fifty percent (50%)
of the total fair market value or total voting power of the capital stock of
Unilife Corporation, the acquisition of additional stock by the same Person or
Persons Acting as a Group is not considered to cause a Change in Ownership of
Unilife Corporation or to cause a Change in Effective Control of Unilife
Corporation. An increase in the percentage of capital stock owned by any one
Person, or Persons Acting as a Group, as a result of a transaction in which
Unilife Corporation acquires its stock in exchange for property will be treated
as an acquisition of stock.
     (B) A Change in Effective Control of Unilife Corporation shall occur on the
date a majority of members of the Board of Directors of Unilife Corporation is
replaced during any twelve (12)-month period by directors whose appointment or
election is not endorsed by a majority of the members of the Board of Directors
of Unilife Corporation before the date of the appointment or election.
     (C) A Change in the Ownership of Assets of Unilife Corporation shall occur
on the date that any one Person acquires, or Persons Acting as a Group acquire
(or has or have acquired during the twelve (12)-month period ending on the date
of the most recent acquisition by such Person or Persons), assets (including
tangible/real property and intangible property (such as goodwill)) from Unilife
Corporation the total gross fair market value of which is more than fifty
percent (50%) of the total gross fair market value of all of the assets of
Unilife Corporation immediately before such acquisition or acquisitions. For
this purpose, gross fair market value means the value of the assets of Unilife
Corporation, or the value of the assets being disposed of, determined without
regard to any liabilities associated with such assets.
     (D) The following rules of construction apply in interpreting the
definition of Change in Control:
     (I) A Person means any individual, entity or group within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended,
other than employee benefit plans sponsored or maintained by Unilife Corporation
and by entities controlled by Unilife Corporation or an underwriter of the
capital stock of Unilife Corporation in a registered public offering.
     (II) Persons will be considered to be Persons Acting as a Group if they are
owners of a corporation that enters into a merger, consolidation, purchase or
acquisition of stock, or similar business transaction with the corporation. If a
Person owns stock in both

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corporations that enter into a merger, consolidation, purchase or acquisition of
stock, or similar transaction, such shareholder is considered to be acting as a
Group with other shareholders only with respect to the ownership in that
corporation before the transaction giving rise to the change and not with
respect to the ownership interest in the other corporation. Persons will not be
considered to be acting as a Group solely because they purchase assets of the
same corporation at the same time or purchase or own stock of the same
corporation at the same time, or as a result of the same public offering.
     (III) For purposes of this Section 6(b), fair market value shall be
determined in accordance with Code Section 409A.
     (IV) A Change in Control shall not include a transfer to a related person
as described in Code section 409A or a public offering of capital stock of
Unilife Corporation.
     (E) For purposes of this Section 6(b), Code section 318(a) applies to
determine stock ownership. Stock underlying a vested option is considered owned
by the individual who holds the vested option (and the stock underlying an
unvested option is not considered owned by the individual who holds the unvested
option). For purposes of the preceding sentence, however, if a vested option is
exercisable for stock that is not substantially vested (as defined by Treasury
Regulation §1.83-3(b) and (j), the stock underlying the option is not treated as
owned by the individual who holds the option.
7. Confidential Information.
     (a) Pyers acknowledges that Unilife has a valuable property interest in all
aspects of its business relationships with its customers, clients, vendors and
suppliers. In the course of Pyers’ work with Unilife, Pyers has become aware of
and familiar with secret and confidential information of Unilife relating to its
customers, clients, vendors and suppliers, and its internal business operations.
Secret and confidential information includes, but is not limited to, Unilife’s
business plans, customer lists, customer data, marketing plans, supplier and
vendor lists and cost information, software and computer programs, data
processing systems and information contained therein, financial statements,
financial data, acquisition and divestiture plans, and any other trade secrets
or confidential or proprietary information, documents, reports, plans, or data,
of or about Unilife that is not already available to the public.
     (b) Pyers agrees that he will not, without the written consent of Unilife,
during the term of this agreement or thereafter, disclose or make any use of
secret and confidential information, except as may be required in the
performance of his duties under Section 2 of this agreement. Pyers agrees that,
following the termination of his

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employment with Unilife for any reason, he will never use secret and
confidential information to compete with Unilife in any manner, and he will
never disclose any secret and confidential information to any other business or
individual, unless such secret or confidential information is: (i) publicly
known through no breach of the provisions of this Section 7 by either party,
(ii) lawfully disclosed by a third party, or (iii) disclosed pursuant to legal
requirement or court order. In no event shall any disclosure made to investment
banking firms or private equity firms at the request of Unilife and as part of
Pyers’ duties ever be considered a violation of this Section 7.
     (c) Upon termination of this agreement, Pyers shall surrender to Unilife
all records and all paper and/or electronic copies made of those records that
pertain to any aspect of the business of Unilife, including all secret and
confidential information.
8. Agreement Not To Compete.
     (a) In consideration for continued employment by Unilife and the benefits
of this agreement, Pyers agrees to be bound by the covenant not to compete as
set forth in Section 8 of this agreement below.
     (b) Pyers agrees that during the term of this agreement and for a period of
two (2) years following the termination of this agreement for any reason, he
will not, directly or indirectly:
     (i) render services to, become employed by, be engaged as a consultant by,
own, or have a financial or other interest in (either as an individual, partner,
joint venture, owner, manager, employee, partner, officer, director, independent
contractor, or other similar role) any business that is engaged in any business
activity that is in competition with the activities of Unilife.
     (ii) induce, offer, assist, encourage, or suggest that another business or
enterprise offer employment to or enter into a consulting arrangement with any
individual who is employed by Unilife, or induce, offer, assist, encourage, or
suggest that any Unilife employee terminate her or her employment with Unilife,
or accept employment with any other business or enterprise.
     (c) In the event that Pyers commits any breach of Section 8(b) above, Pyers
acknowledges that Unilife would suffer substantial and irreparable harm and
damages. Accordingly, Pyers hereby agrees that in such event, Unilife shall be
entitled to temporary and/or permanent injunctive relief, without the necessity
of proving damage, to enforce the provisions of this Section, all without
prejudice to any and all other remedies that Unilife may have at law or in
equity and that Unilife may elect or invoke. Pyers agrees that if any of the
provisions of this Section are or become unenforceable, the remainder hereof
shall nevertheless remain binding upon him to the fullest extent possible,
taking into consideration the purposes and spirit of this agreement. Any invalid
or unenforceable provision is to be reformed to the maximum time, geographic

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and/or business limitations permitted by applicable laws, so as to be valid and
enforceable.
     (d) Pyers expressly acknowledges and agrees that the restrictive covenants
set forth in Sections 7 and 8 above are absolutely necessary to protect the
legitimate business interests of Unilife, because he is employed in a position
of trust and confidence and is provided with extensive access to Unilife’s most
confidential and proprietary trade secrets, and has significant involvement in
important business relationships, which constitute the goodwill of Unilife.
Pyers further agrees and acknowledges that these restrictive covenants are
reasonable, will not restrict him from earning a livelihood following the
termination of employment, and are intended by the parties to be enforceable
following termination of employment for any reason.
     (e) In the event that Unilife must bring legal action to enforce or seek a
remedy for any breach of the provisions of Sections 7 or 8 of this agreement and
Pyers is found by a court to have breached any of these provisions, Pyers agrees
to reimburse Unilife for any and all expenses, including attorneys’ fees and
court costs, incurred by it in enforcing the terms of these Sections of the
agreement.
9. Continuing Education and Membership Reimbursement. Unilife agrees to
reimburse Pyers for all the costs associated with maintaining his Certification
as a Certified Public Accountant, including but not limited to licensing fees,
membership fees, the cost of continuing education (and time off with pay to
attend such seminars).
10. General Release. As a condition of receiving the severance compensation and
benefits described in Section 6, Unilife and Pyers will execute a mutual general
release of claims (which is in a form acceptable to Unilife). Such general
release would not include rights to previously vested options or claims for any
compensation earned (including, without limitation, accrued vacation), or
reimbursement of expenses incurred, through the date of termination. Such
release must be agreed to, executed and irrevocable no later than 30 days
following Pyers’ termination date.
11. Dispute Resolution. Any controversy, claim or dispute involving the parties
(or their affiliated persons) directly or indirectly concerning this agreement
shall be finally settled by binding arbitration held in Harrisburg, Pennsylvania
by one arbitrator (who is mutually acceptable to both parties, as well as
licensed to practice law in the Commonwealth of Pennsylvania) in accordance with
the rules of employment arbitration then followed by the American Arbitration
Association or any successor to the functions thereof. The arbitrator shall
apply Pennsylvania law in the resolution of all controversies, claims and
disputes and shall have the right and authority to determine how his or her
decision or determination as to each issue or matter in dispute may be
implemented or enforced. Any decision or award of the arbitrator shall be final
and conclusive for both Pyers and Unilife (and its affiliates), and there shall
be no appeal there from other than causes of appeal allowed by the Federal
Arbitration Act. Unilife shall bear all costs of the arbitrator in any action
brought under this agreement. The arbitrator shall have the power to award
attorney’s fees and arbitration costs to the prevailing party, if the award

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of attorney’s fees and litigation costs would be permitted by a court. The
parties hereto agree that any action to compel arbitration may be brought in the
appropriate Pennsylvania state or federal court, and in connection with such
action to compel, the laws of the Commonwealth of Pennsylvania and the Federal
Arbitration Act shall control. Application may also be made to such court for
confirmation of any decision or award of the arbitrator, for an order of the
enforcement and for any other remedies, which may be necessary to effectuate
such decision or award. The parties hereto hereby consent to the jurisdiction of
the arbitrator and of such court and waive any objection to the jurisdiction of
such arbitrator and court.
12. Non-waiver. A waiver of any provision of this agreement by either party
shall not prevent either party from enforcing that provision or any other
provision hereof.
13. Assignment. This agreement is personal and may not be assigned by Pyers. Any
assignment of this agreement between Unilife (or its successor) and its
affiliates (and their successors) shall not constitute a termination of Pyers’
employment hereunder. This agreement (including the Restrictive Covenants set
forth in Sections 7 and 8) shall inure to the benefit of and be binding upon any
successor to Unilife. The parties specifically understand and agree that the
non-compete provisions of Section 8 will inure to the benefit of a successor and
that Pyers will remain bound by these provisions in the event of a sale or
corporate reorganization of Unilife.
14. Severability. Each provision of this agreement is severable and distinct
from, and independent of, every other provision hereof. If one provision hereof
is declared void, the remaining provisions shall remain in effect. Any provision
of this agreement which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective only to the extent of such
prohibition or unenforceability without invalidating or affecting the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
15. Entire Agreement. This agreement contains the entire agreement of the
parties concerning the employment relationship and supersedes any prior
agreements or understandings between the parties concerning the terms and
conditions of Pyers’ employment, whether oral or written; provided, however,
that Pyers’ equity grants shall be governed by the equity grant documents and
will be in such amounts as stated in Pyers’ offer letter dated July 14, 2010;
provided further, that any stock options or other stock-based awards provided to
Pyers shall be governed by Unilife’s stock incentive plans as they are amended
from time to time, except as provided herein. The parties acknowledge, in
entering into this agreement that they have not relied upon any promise or
inducement not specifically set forth herein. Any changes to this agreement must
be in writing and signed by both parties.
16. Section 409A.

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     (a) This agreement is intended to comply with, or otherwise be exempt from,
Code section 409A and any regulations and Treasury guidance promulgated
thereunder, and Unilife shall be required to interpret the terms of this
agreement as necessary to comply with the requirements of Code section 409A.
     (b) Unilife shall undertake to administer, interpret, and construe this
agreement in a manner that does not result in the imposition on Pyers of any
additional tax, penalty, or interest under Code section 409A.
     (c) Unilife and Pyers agree that they will execute any and all amendments
to this agreement permitted under applicable law as they mutually agree in good
faith may be necessary to ensure compliance with the distribution provisions of
Code section 409A or as otherwise needed to ensure that this agreement complies
with that section.
     (d) The preceding provisions, however, shall not be construed as a
guarantee by Unilife of any particular tax effect to Pyers under this agreement.
Unilife shall not be liable to Pyers for any payment made under this agreement
that is determined to result in an additional tax, penalty, or interest under
Code section 409A, nor for reporting in good faith any payment made under this
agreement as an amount includible in gross income under that section.
     (e) For purposes of Code section 409A, the right to a series of installment
payments under this agreement shall be treated as a right to a series of
separate payments.
     (f) With respect to any reimbursement of future expenses of, or any
provision of in-kind benefits to, Pyers, as specified under this agreement, such
reimbursement of expenses or provision of in-kind benefits shall be subject to
the following conditions: (i) the expenses eligible for reimbursement or the
amount of in-kind benefits provided in one taxable year shall not affect the
expenses eligible for reimbursement or the amount of in-kind benefits provided
in any other taxable year, except for any medical reimbursement arrangement
providing for the reimbursement of expenses referred to in Code section 105(b);
(ii) the reimbursement of an eligible expense shall be made no later than the
end of the year after the year in which such expense was incurred; and (iii) the
right to reimbursement or in-kind benefits shall not be subject to liquidation
or exchange for another benefit. Any tax gross-up payment shall be made by no
later than the end of the calendar year following the year in which Pyers remits
the taxes.
     (g) “Termination of employment,” “resignation,” or words of similar import,
as used in this agreement means, for purposes of any payments under this
agreement that are payments of deferred compensation subject to Code section
409A, Pyers’ “separation from service” as defined in that section.
     (h) If a payment obligation under this agreement arises on account of
Pyers’ separation from service while Pyers is a “specified employee” (as defined
under Code

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section 409A and determined in good faith by the Unilife), any payment of
“deferred compensation” (as defined under Treasury regulation section
1.409A-1(b)(1), after giving effect to the exemptions in Treasury regulation
sections 1.409A-1(b)(3) through (b)(12)) that is scheduled to be paid within six
(6) months after such separation from service shall accrue without interest and
shall be paid within 15 days after the end of the six-month period beginning on
the date of such separation from service or, if earlier, within 15 days after
the appointment of the personal representative or executor of Pyers’ estate
following his death.
17. Excise Tax on Parachute Payments. Pyers shall bear all expense of, and be
solely responsible for, all federal, state, local or foreign taxes due with
respect to any payment received hereunder, including, without limitation, any
excise tax imposed by Code section 4999; provided, however, that any payment or
benefit received or to be received by Pyers in connection with a Change in
Control or the termination of Pyers’ employment (whether payable pursuant to the
terms of this Agreement (“Contract Payments”) or any other plan, arrangements or
agreement with Unilife or any affiliate (collectively with the Contract
Payments, the “Total Payments”) shall be reduced to the extent necessary so that
no portion thereof shall be subject to the excise tax imposed by Code section
4999 but only if, by reason of such reduction, the net after-tax benefit
received by Pyers shall exceed the net after-tax benefit that would be received
by Pyers if no such reduction was made.
     For purposes of this Section 17, “net after-tax benefit” shall mean (i) the
total of all payments and the value of all benefits which Pyers receives or is
then entitled to receive from Unilife that would constitute “excess parachute
payments” within the meaning of Code section 280G, less (ii) the amount of all
federal, state, local and foreign income taxes payable with respect to the
foregoing calculated at the maximum marginal income tax rate for each year in
which the foregoing shall be paid to Pyers (based on the rate in effect for such
year as set forth in the Code or other applicable tax law as in effect at the
time of the first payment of the foregoing), less (iii) the amount of excise
taxes imposed with respect to the payments and benefits described in (i) above
by Code section 4999.
     The foregoing determination shall be made by a nationally recognized
accounting firm (the “Accounting Firm”) selected by Unilife and reasonably
acceptable to Pyers (which may be, but will not be required to be, Unilife’s
independent auditors). The Accounting Firm shall submit its determination and
detailed supporting calculations to both Pyers and Unilife within fifteen (15)
days after receipt of a notice from either Unilife or Pyers that Pyers may
receive payments which may be “parachute payments.” If the Accounting Firm
determines that a reduction is required by this Section 17, the Contract
Payments consisting of cash severance shall be reduced to the extent necessary
so that no portion of the Total Payments shall be subject to the excise tax
imposed by Code section 4999, and Unilife shall pay such reduced amount to Pyers
in accordance with the terms of this agreement. If the Accounting Firm
determines that none of the Total Payments, after taking into account any
reduction required by this Section 17, constitutes a “parachute payment” within
the meaning of Code section 280G, it will, at

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the same time as it makes such determination, furnish Pyers and Unilife an
opinion that Pyers has substantial authority not to report any excise tax under
Code section 4999 on his federal income tax return.
     Pyers and Unilife shall each provide the Accounting Firm access to and
copies of any books, records, and documents in the possession of Pyers or
Unilife, as the case may be, reasonably requested by the Accounting Firm, and
otherwise cooperate with the Accounting Firm in connection with the preparation
and issuance of the determinations and calculations contemplated by this
Section 17. The fees and expenses of the Accounting Firm for its services in
connection with the determinations and calculations contemplated by this
Section 17 shall be borne by Unilife.
18. Counterparts. This agreement may be executed on separate counterparts, each
of which is deemed to be an original and all of which taken together constitute
one and the same agreement.
19. Interpretation. The captions and headings of this agreement are not part of
the provisions hereof and shall have no force or effect.
20. Notices. Any notices, requests, demands and other communications provided
for by this agreement shall be sufficient if in writing and if hand delivered,
sent by overnight courier, or sent by registered or certified mail to Pyers at
the last address he has filed in writing with Unilife or, in the case of
Unilife, to Unilife’s Chief Financial Officer at Unilife’s principal executive
offices.
21. Governing Law. The terms of this agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania
without giving effect to provisions thereof regarding conflict of laws.
22. Representation. Pyers represents and warrants to Unilife that he is not
bound by any restrictive covenants and has no prior or other obligations or
commitments of any kind that would in any way prevent, restrict, hinder or
interfere with Pyers’ acceptance of employment or the performance of all duties
and services hereunder to the fullest extent of Pyers’ ability and knowledge.
     IN WITNESS WHEREOF, and wishing to be legally bound, the parties have
executed this agreement as of the date first above written.

                  UNILIFE CORPORATION:       Dennis Pyers:    
 
               
By:
Name:
  /s/ Alan Shortall
 
Alan Shortall       /s/ Dennis P. Pyers
 
   
Title:
  Chief Executive Officer            

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