(b) To the extent permitted under the applicable plans, programs or policies, if anymaintained by the Company, including any pension, disability and life insurance plans, policies orprograms (collectively the “Plans”), the Company will pay Royston (or direct that payment be madeto Royston) all previously earned, accrued, vested and unpaid benefits from the Plans, whichbenefits, if any, will be payable as provided pursuant to the terms of the applicable Plans and anyapplicable benefit election forms or related documentation. The parties agree and acknowledge thatRoyston is owed $18,000.00, less usual withholdings, under the Company’s Long Term IncentiveCompensation program.(c) The parties acknowledge and agree that the Company owes to Royston as severance$157,500.00, less usual withholdings (the “Severance Payment”). If Royston is a “specifiedemployee,” as defined in section 409A of the Internal Revenue Code of 1986, as amended (the“Code”), except to the extent that any amounts payable to Royston as a Severance Payment are nottreated as deferred compensation under Code section 409A, the Severance Payment will not be madeuntil the earlier of (i) the expiration of the six (6) month period measured from the TerminationDate and (ii) the date of Royston’s death.(d) The parties acknowledge and agree that the Company owes Royston $6,461.53, less usualwithholdings, as payment for the continuation of Royston’s base salary during the payroll periodcontaining the Date of Termination.(e) The parties acknowledge and agree that the Company is entitled to withhold $123,329.54from the amounts due to Royston under this Agreement in satisfaction of Royston’s obligationpursuant to the restricted stock agreements entered into between Royston and the Company on July18, 2008 and November 13, 2009 to remit to the Company the amount necessary for the Company to meetits tax withholding obligations with respect to the fifty thousand (50,000) shares of restrictedstock that vested on January 15, 2010 and the one hundred, fifty thousand (150,000) shares ofrestricted stock that vested as of July 13, 2010.(f) The Parties agree that the severance obligations referenced in this Paragraph 2 are infull and complete satisfaction of any obligations on the part of the Company. The Parties agreethat no additional amounts are due under the Employment Agreement.**3.****Expense Payments****.**The Company will reimburse Royston for any reasonable and customary business expenses incurredby him before the Date of Termination, which will be paid in accordance with Company policy,provided that such expenses are submitted on an expense report within ten (10) days of theEffective Date of this Agreement. Payment for such expenses will be made within fifteen (15)business days after the Company’s receipt of such expense report.
 
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**4. ****Additional Severance Obligation (COBRA Payments)****.**During the twelve-month period after Royston’s employee insurance coverage ends (“SeverancePeriod”), the Company shall pay for the premium costs for Royston and Royston’s enrolleddependants’ at the time of the Date of Termination to continue group health insurance coverage,including medical, dental and vision coverage under the Consolidated Omnibus Budget ReconciliationAct of 1985, as amended (“COBRA”), provided that (i) Royston makes a timely election to continuesuch coverage under COBRA and timely completes all necessary paperwork and (ii) Royston reimbursesthe Company $154.48 per month for the employee-paid portion of Royston’s and his dependents’insurance premiums as of the Date of Termination; such reimbursement will be made in the form of acheck payable to Astrotech Corporation and shall be mailed to the attention of Barbara Cory,Astrotech Corporation, 907 Gemini, Houston, TX 77058 on or before the fifth day of each month (suchpremium payment is referred to as the “Subsidized Continued Coverage”). The Subsidized ContinuedCoverage will be treated as and counted against Royston’s and his dependents’ statutorily mandatedperiod of continuation coverage under COBRA. In the event that Royston secures other employmentproviding health insurance coverage during the Severance Period, the Company’s obligations underthis Section 4 will cease as of the date on which Royston’s new health insurance coverage becomeseffective, and Royston hereby agrees promptly to notify the Company of such coverage. Uponcompletion of the Severance Period, a breach of this Agreement, or Royston’s acquisition of newhealth insurance coverage, whichever occurs first, Royston and/or his dependents may, at his/theiroption, be eligible to elect to continue to receive continuation coverage under COBRA at his/theirsole expense for the remainder of the applicable COBRA continuation coverage period in accordancewith the eligibility requirements of COBRA. The amount of any such premium expenses paid in oneyear will not affect the premium expenses eligible for payment in any subsequent year, andRoyston’s right to such payment will not be subject to liquidation or exchange for any otherbenefit. The payment of premium expenses pursuant to this Section 4 will also satisfy all otherrequirements of the regulations under Code section 409A with respect to any such reimbursements.**5.****Vesting of Restricted Stock****.**Effective as of his Date of Termination, the Company shall grant to Royston 150,000 shares ofrestricted stock in accordance with the terms and conditions set forth in the restricted stockagreements entered into between Royston and the Company on July 18, 2008 and November 13, 2009.**6.****Release****.**Royston settles, releases and waives all claims, counter claims, liens, demands, causes ofaction, obligations, damages and liabilities, expenses, costs, attorneys’ fees, damages,indemnities, obligations and/or liabilities of any nature whatsoever, whether known or unknown,that Royston ever had, now has or may hereafter claim to have against the Company and theirstockholders, investors, officers, agents, directors, employees, affiliates, parents, subsidiaries,divisions, predecessors, successors or assigns thereof, including, but not limited to, all claimsof unlawful discrimination, harassment or retaliation under state, local or federal law (includingbut not limited to, Title I of the Americans With Disabilities Act of 1990, Title VII of the CivilRights Act of 1964, as amended, the Civil Rights Act of 1991, Older Workers’ Benefit ProtectionAct, the Age Discrimination in Employment Act, the Texas Labor Code, or 42 U.S.C. § 1981); anyclaim for stock options, equity awards, stock repurchases, unpaid wages, bonuses, severance,vacation, expenses, relocation expenses or commissions; any claim for breach of the EmploymentAgreement or any employment contract or other agreement; any claims for any violation of any otherfederal, state or local statute, ordinance or regulation, or the Constitution of the United Statesor the State of Texas; any claims of personal injury or other tort; any and every other claimarising under federal or state common law; and all claims for attorneys’ fees.
 
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This release, however, does not waive any rights or claims that may arise after the dateRoyston signs this agreement and this release will not operate to extinguish any rights of Roystonto receive workers’ compensation benefits or benefits under the Company’s employee benefits plans,which shall be due and payable in accordance with the terms and conditions of such plans.**7.****Covenant Not to Sue****.**Royston warrants and covenants that he shall never institute, maintain or prosecute, or induceor assist in the instigation, commencement, maintenance or prosecution of any action, suit,proceeding or administrative charge in any forum that has or could have been asserted as of theEffective Date of this Agreement against the Company or any of its owners, officers, agents,directors, employees, affiliates, parents, subsidiaries, divisions, predecessors, successors orassigns thereof.Royston further agrees and covenants that he will not seek or accept any personal, equitableor monetary relief in any action, suit, proceeding or administrative charge filed by one party onhis behalf by any person, organization or other entity against the Company.**8. Company Property.**Royston agrees to return all property belonging to the Company as of the date Royston signsthis Agreement. Royston acknowledges and agrees that he will perform a complete search ofRoyston’s home(s), office(s), automobile(s), computers, electronic devices, and cellular and otherphones for any property, including trade secrets and confidential information, that may belong tothe Company. Royston acknowledge and agrees that he will search for, amongst other things, hardcopy documents, email, telephone numbers, contact information, equipment, devices and computerfiles, and that Royston will return all such property to the Company, and will no longer retain anysuch property.**9. Confidentiality.**The Parties agree that the existence and terms of this Agreement are strictly confidential.Unless otherwise required by law or as may be required to be reflected in financial statements bygenerally accepted accounting principles, the Parties shall limit disclosure of this Agreement tolegal counsel, immediate family, accountants, financial and tax advisors and officials withresponsibility for determining tax liability or corporate valuation. With the exception noted inSection 10, Royston further agrees that he will keep confidential all aspects of his employment andother involvement with the Company, such that if any third party asks about the Company, Royston’semployment with the Company, or Royston’s departure from the Company, Royston will state that “allmatters have been resolved amicably” and “no further comment is permitted.”
 
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**10. ****Non-disparagement and Non-acquisition****.**Royston agrees that he will not make any statements, written or verbal, or cause, participateor encourage others to make any statements, written or verbal, that defame or disparage thepersonal or business reputation, practices or conduct of the Company, its employees, directors andstockholders. Royston also agrees not to contact, communicate with, cooperate with or assist anyperson or entity (or their counsel) making or threatening to make any legal claim against theCompany; provided however, nothing herein shall prohibit Royston from providing truthful testimonypursuant to any validly issued subpoena or court order. Royston agrees to provide the Company acopy of such subpoena or court order within three business days of receipt of any such subpoena orcourt order. Royston shall not speak with Company employees or any third party about the Companyunless specifically in writing directed by the Company’s Board of Directors; provided however, thatRoyston may communicate with potential employers about duties, responsibilities, and achievementsduring his employment with the Company, subject to this Section 10 and his confidentialityobligations to the Company.The Company, through its directors and executive officers, acting within the scope of theirduties and authority, agrees not to, directly or indirectly, disclose, communicate, or publish anynon-factual information concerning or related to Royston.Royston agrees that he and his affiliates (as defined in Rule 12b-2 under the SecuritiesExchange Act of 1934, as amended (the “Exchange Act”)) will not (and he and they will not assist,provide or arrange financing to or for others or encourage others to), directly or indirectly,acting alone or in concert with others, unless specifically requested in writing in advance by theCompany’s Board of Directors:(a) acquire or agree, offer, seek or propose to acquire (or request permission to do so),ownership (including, but not limited to, beneficial ownership as defined in Rule 13d-3 under theExchange Act) of any of the assets or businesses of the Company or any securities, bank debt ortrade debt issued by the Company, or any rights or options to acquire such ownership (includingfrom a third party), other than the acquisition or holding of an interest in a mutual fundregistered as an open-end management investment company under the Investment Company Act of 1940with assets under management of at least $500 million, that holds not more than 2% of theoutstanding common stock of the Company.(b) seek or propose to influence or control the management or the policies of the Company orto obtain representation on the Company’s Board of Directors, or solicit, or participate in thesolicitation of, any proxies, consents or votes with respect to any securities of the Company orwith respect to any plan of reorganization filed by the Company or any other person in connectionwith a bankruptcy or similar proceeding under state or federal law involving the Company or any ofits subsidiaries,(c) enter into any discussions, negotiations, arrangements or understandings with any thirdparty with respect to any of the foregoing, or(d) seek or request permission to do any of the foregoing or make or seek permission to makeany public announcement with respect to any of the foregoing.If at any time during such period Royston is approached by any third party concerning his ortheir participation in a transaction involving the assets or businesses of the Company orsecurities issued by the Company, Royston will promptly inform the Company of the nature of suchcontact and the parties thereto.
 
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**11. ****Remedies for Violation of Certain Covenants****.**In the event Royston breaches Sections 9 or 10 of this Agreement or Sections 11, 12, 15, 16 or17 of his Employment Agreement (together, the “Covenants”), all payments due pursuant thisAgreement shall cease and no further payments shall be due. In addition, any payments made by theCompany pursuant to this Agreement while Royston was in breach of any of the Covenants shall bereturned to the Company plus interest at the prime rate as quoted from time to time during therelevant period in the Southwest Edition of The Wall Street Journal.The Company will be entitled to bring suit to recover any and all damages, both direct andconsequential, that may be sustained as a result of Royston’s breach or threatened breach of theCovenants. In addition, the Company will be entitled to specific performance and/or a temporary orpermanent injunction prohibiting and enjoining Royston from violating the Covenants. For purposesof obtaining equitable relief, the Company need not prove, and Royston hereby admits, thatirreparable harm or injury will have occurred as a result of any breach of the Covenants. TheCompany retains all its rights under the Employment Agreement to enforce Sections 11, 12, 15, 16 or17 of the Employment Agreement.**12.****Future Cooperation****.**In the event that the Company becomes involved in any civil or criminal litigation,administrative proceeding or governmental investigation, Executive shall, upon request, providereasonable cooperation and assistance to the Company, including without limitation, furnishingrelevant information, attending meetings and providing statements and testimony. The Company willreimburse Executive for all reasonable and necessary expenses Executive incurs in complying withthis Section 12.**13.****Denial of Liability****.**No provision contained herein shall be construed as an admission by Royston or the Company ofimproper conduct, omissions or liability.**14.****Adequacy of Consideration****.**The Parties agree that the consideration given by the other pursuant to this Agreement isadequate and sufficient to make their respective obligations under this Agreement final andbinding.**15.****No Right to Future Employment****.**Royston hereby waives all rights to recall, reinstatement, employment, reemployment, and pastor future wages from the Company or any the Company Affiliate. Royston further agrees not to applyfor employment with the Company or any the Company Affiliate.
 
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**16. ****Miscellaneous****.*****A. Entire Agreement.***With the exceptions of Royston’s surviving obligations in the Employment Agreement, includingSections 11, 12, 15, 16, 17, 18, 19, 22, and 29 the Parties agree that this Agreement sets forththe entire agreement of the Parties on this subject matter and supersedes and extinguishes any andall prior statements, agreements, representations (including any oral representations) orunderstandings by or among the Parties, and may not be modified or amended except in writing,executed by all of the Parties. The Parties also agree and acknowledge that all obligations underthe Employment Agreement have been satisfied.***B. Validity of Remaining Terms.***Should any provision of this Agreement be determined to be illegal, invalid, or otherwiseunenforceable, the validity of the remaining terms and provisions hereof will not be affectedthereby but such will remain valid and enforceable, and the illegal or invalid terms or provisionsshall be deemed not to be a part of this Agreement.***C. Choice of Law/Interpretation.***This Agreement is entered into in the State of Texas, and shall in all respects beinterpreted, enforced, and governed by the laws of the State of Texas, without regard to itsprinciples governing the conflicts of laws. The language of this Agreement shall be construed as awhole, according to its fair meaning, and shall not be construed strictly for or against either ofthe Parties. The headings used herein are used for reference only and shall not affect theconstruction of this Agreement.***D. Advice to Consult Attorney.***Royston represents that he has been advised to consult with an attorney before signing thisAgreement and that he is relying solely on his own judgment and the advice of his own counsel inmaking this Agreement.***E. Revocation Period.***For a period of seven (7) days following Royston’s signing this Agreement, Royston may revokethis Agreement (“Revocation Period”) by ensuring receipt of written notice of revocation by John M.Porter, Senior Vice President & Chief Financial Officer, 401 Congress Ave., Suite 1650, Austin, TX78701 by 5:00 pm, Central Standard Time on the seventh day after Royston signs this Agreement.This Agreement shall not become effective or enforceable until the Revocation Period has expired.Any obligations on the part of the Company are contingent upon Royston not exercising his right torevoke.***F. No Waiver.***One or more waivers of a breach of any covenant, term or provision of this Agreement by anyparty shall not operate or be construed as a waiver of any subsequent breach of the same covenant,term or provision, nor shall it be considered a waiver of any other then existing or subsequentbreach of a different covenant, term or provision.
 
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***G. 21 Days to Review.***Royston warrants and represents that he has had at least twenty-one (21) days to review thisAgreement to decide whether to sign this Agreement and be bound by its terms.**AGREED**:         Date:                 James D. Royston             Astrotech Corporation         Date:                 By:               Title:             
 
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