Document:

exhibit4-1.htm

EXHIBIT 4.1

 

NEITHER THIS PROMISSORY NOTE NOR ANY OF THE SECURITIES ISSUABLE HEREUNDER HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES, OR DELIVERY TO THE COMPANY OF AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY THAT SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE WITH THE ACT OR UNLESS SOLD IN FULL COMPLIANCE WITH RULE 144 UNDER THE ACT.

 

UNITED AMERICAN HEALTHCARE CORPORATION

 

 

PROMISSORY NOTE

 

	
$300,000

	
December 9, 2011

United American Healthcare Corporation, a Michigan corporation (the “Company”), for value received, hereby promises to pay to St. George Investments, LLC, an Illinois limited liability company, or its assignee (the “Holder”), the principal amount of Three-Hundred Thousand Dollars Exactly ($300,000.00) (such amount is referred to herein as the “Principal Amount”), together with simple interest on the unpaid amount thereof at ten percent (10.0%) per annum, computed on the basis of a
365-day year for the actual number of days elapsed from the date hereof until paid or converted in accordance with the terms hereof.

 

1. Promissory Note (this “Note”)

 

1.1 Payment.  The Principal Amount plus all accrued but unpaid interest thereon shall become due and payable on the date (the “Due Date”) that is the earlier of (a) December 31, 2014, or (b) the date of (i) the sale of all or substantially all of the assets of the Company or Pulse Systems, LLC, (ii) the merger of the Company or Pulse Systems, LLC, or (iii) the sale of all or substantially all of the equity of the Company or Pulse Systems, LLC (collectively, a
“Company Sale”).  Provided that no Event of Default (as defined in Section 4) has occurred, the Company shall not be required to make any payments on this Note prior to the Due Date.  For purposes of this Note, a “business day” shall mean any day which is not a Saturday, Sunday, or a day on which commercial banks in Chicago, Illinois are required or permitted by law to be closed.

 

1.2 Payment Mode.  Payment of this Note shall be made by the Company to the Holder in U.S. Dollars in immediately available funds at the address of the Holder as set forth in the Company’s records or as otherwise directed by the Holder, unless this Note is converted upon an Event of Default into shares of the Company’s common stock (“Common Stock”) pursuant to Section 5 at the sole election of the Holder.

 

1.3 Application of Payments.  Payments on this Note shall be applied first to accrued interest, and thereafter to the outstanding principal balance hereof.  Any and all payments by the Company to the Holder hereunder shall be made free and clear of, and without deducting or withholding for, any taxes, levies, assessments, imposes, duties, fees or similar charges, except where the Company is required by law to make such deduction or withholding.

 

1.4 Waiver of Presentment.  The Company waives presentment for payment, demand, protest and notice of protest for nonpayment of this Note, and consents to any extension or postponement of the time of payment or any other indulgence.

 

2. Authorized Shares.  As collateral security for this Note, the Company shall maintain in reserve a sufficient number of authorized but unissued shares of Common Stock for the Company to issue to the Holder all of the shares of Common Stock that would be issuable upon conversion of all of the Principal Amount and the accrued but unpaid interest thereon upon an Event of Default pursuant to Section 5 (such number, a “Sufficient Number of Authorized
Shares”).  The Company shall take all necessary and desirable action to further amend its Amended and Restated Articles of Incorporation to increase the number of authorized but unissued shares of Common Stock, as may be necessary from time to time, in order to maintain a Sufficient Number of Authorized Shares.  If such amendment is not made within four (4) full calendar months after the time at which the Company first does not have a Sufficient Number of Authorized Shares, then the Principal Amount shall increase, by two percent (2%) of the sum of (a) the Principal Amount and (b) the amount of unpaid monthly interest thereon, each full month until such amendment is made and the Company again has a Sufficient Number of Authorized Shares.

 

3. Right of First Offer; Right of First Refusal.  The Company shall not solicit any equity investment, loan, or other financing without first requesting in writing that the Holder propose such financing (“First Offer”).  The Company shall send a written notice to the Holder requesting a First Offer, and then the Holder shall have thirty (30) days to respond.  If the Holder responds with a written financing offer, the Board of Directors of the
Company shall negotiate in good faith with the Holder for a period of an additional thirty (30) days in order to reach an agreement on terms. If the parties are able to reach an agreement, the financing shall be consummated within thirty (30) days after the agreement is reached. If the parties are unable to reach agreement, or if the Holder declines to offer financing or does not respond in a timely manner, then the Company shall be free to solicit financing proposals from third parties. However, if a third party presents a “credible financing proposal” (as defined in the next sentence) to the Company (the “Third-Party Proposal”), the Board shall inform the Holder in writing within five (5) days after the Company’s receipt of the proposal, and the Holder shall then have thirty (30) days
thereafter to consummate a financing on the same terms and conditions as in the Third-Party Proposal. A “credible financing proposal” is one in which the financing source has provided the Company with written assurances of its ability and willingness to consummate the proposed financing within thirty (30) days. If the Holder declines to provide financing on the same terms and conditions as in the Third-Party Proposal, and if the financing source fails to consummate the financing within thirty (30) days of the date of its proposal, then the Company shall consummate the financing proposed by the Holder, if any was proposed, within thirty (30) days after the financing contemplated by the Third-Party Proposal was scheduled to occur, and the Company shall pay to the Holder a fee of $100,000 to compensate for the delay and expense.

 

4. Events of Default.  The Holder may declare all or a portion of the Principal Amount and accrued but unpaid interest thereon immediately due and payable, effective upon written notice to the Company, if any of the following events occurs (each, an “Event of Default”):

 

(a) The Company defaults in the payment of this Note, whether the Principal Amount or the interest thereon, when due;

 

(b) The Company:

 

(i) Commences any proceeding or any other action relating to it in bankruptcy or seek reorganization, arrangement, readjustment of its debts, dissolution, liquidation, winding-up, composition or any other relief under the United States Bankruptcy Act, as amended, or under any other insolvency, reorganization, liquidation, dissolution, arrangement, composition, readjustment of debt or any other similar act or law, of any jurisdiction, domestic or foreign, now or hereafter existing;

 

(ii) Admits its inability to pay its debts as they mature in any petition or pleading in connection with any such proceeding;

 

(iii) Applies for, or consents to or acquiesces in, an appointment of a receiver, conservator, trustee or similar officer for it or for all or substantially all of its assets and properties;

 

(iv) Makes a general assignment for the benefit of creditors; or

 

(v) Admits in writing its inability to pay its debts as they mature;

 

(c) Any proceeding is commenced or any other action is taken against the Company in bankruptcy or seeking reorganization, arrangement, readjustment of its debts, dissolution, liquidation, winding-up, composition or any other relief under the United States Bankruptcy Act, as amended, or under any other insolvency, reorganization, liquidation, dissolution, arrangement, composition, readjustment of debt or any other similar act or law, of any jurisdiction, domestic or foreign, now or hereafter existing; or a receiver, conservator, trustee or similar officer for the Company or for all or substantially all of its
assets and properties is appointed; and in each such case, such event continues for ninety (90) days undismissed, unbonded and non-discharged;

 

(d) The Company (or any wholly owned subsidiary of the Company) materially breaches (or fails to cure any continuing breach for a period of more than 30 days) any obligation set forth in (i) this Note, (ii) any agreement between the Company (or any wholly owned subsidiary of the Company) and the Holder, or (iii) any material agreement, including but not limited to any loan agreement, between the Company (or any wholly owned subsidiary of the Company) and any other party;

 

(e) A “change in ownership” (as defined in Section 382 of the Internal Revenue Code) occurs; or

 

(f) The Company fails, within four (4) full calendar months after the time at which the Company does not have a Sufficient Number of Authorized Shares, to further amend its Amended and Restated Articles of Incorporation to increase the number of authorized but unissued shares of Common Stock in an amount necessary to maintain a Sufficient Number of Authorized Shares, as provided in Section 2.

 

Upon the occurrence and continuation of an Event of Default, regardless of whether the Holder declares the Principal Amount and accrued but unpaid interest thereon to be immediately due and payable, interest on this Note will increase to an annual rate of eighteen percent (18%) from the date the Event of Default first occurred until the earlier of the dates on which (i) the Event of Default is cured to the sole reasonable satisfaction of the Holder, (ii) all outstanding principal and interest on this Note is paid in full, or (iii) this Note is converted upon an Event of Default pursuant to Section 5 at the sole election of the Holder.

 

5. Conversion Upon the Occurrence of an Event of Default.  Upon the occurrence and continuation of an Event of Default, at any time and from time to time until the repayment in full of the Principal Amount and all accrued but unpaid interest thereon to the Holder, the Holder may, in its sole discretion and as a remedy, convert all or part of the Principal Amount and the accrued but unpaid interest thereon into newly issued shares of Common Stock.  Subject to adjustment pursuant to the next paragraph, the conversion price is
$0.0226 per share of the Common Stock, which conversion price is based on one hundred ten percent (110%) of the average of the closing bid prices for the Common Stock on the five (5) trading days ending December 9, 2011, which is the day following the date on which the Company’s Board of Directors adopted resolutions approving the terms of this Note and the transactions contemplated hereby.  The Holder may exercise this conversion remedy by providing the Company with written notice of the Holder’s intent to convert and  of the amount of the Principal Amount and accrued interest thereon subject to conversion.  The conversion shall then occur on the next business day following the date of the notice.  The Company agrees that the Common Stock reserved for issuance upon conversion is
a pledge and a security interest in collateral for the benefit of the Holder.

 

If, at any time and from time to time while any amount is owed by the Company on this Note, the Company issues equity (or debt or other instruments convertible into equity) at a price per share of Common Stock or Common Stock equivalent (or with a conversion price per share of Common Stock or Common Stock equivalent) lower than the conversion price set forth in the previous paragraph, then the conversion price set forth in the previous paragraph shall be reduced to such lower price, regardless of whether the Company subsequently issues equity (or debt or other instruments convertible into equity) at a price per share of Common Stock or Common Stock equivalent (or with a conversion price per share of Common Stock
or Common Stock equivalent) higher than the conversion price set forth in the previous paragraph.

 

Notwithstanding anything to the contrary in this Note, no conversion of all or part of the Principal Amount and the accrued but unpaid interest thereon into Common Stock shall be permitted if such conversion would cause an “ownership change” as defined in Section 382 of the Internal Revenue Code; provided, however, that the foregoing shall not apply if such an “ownership change” has occurred at any time prior to such conversion.

 

6. Miscellaneous.

 

6.1 Transfer of Note, Etc.  This Note is transferable and assignable by the Holder, subject to the requirement that any such assignment or transfer be, in the reasonable opinion of the counsel of the Holder, in full compliance with applicable state and federal securities laws; provided that no such opinion of counsel shall be necessary for a transfer by the Holder to an affiliated entity or to a stockholder, member or partner of the Holder, or transfers by gift, will or intestate succession to any spouse or lineal descendants or
ancestors, if all transferees agree in writing to be subject to the terms hereof to the same extent as if they were the original Holder hereof.  All covenants, agreements and undertakings in this Note by or on behalf of any of the parties shall bind and inure to the benefit of the respective successors and assigns of the parties whether so expressed or not.  This Note may not be assigned by the Company without the written consent of the Holder.

 

6.2 Attorneys’ Fees. In the event of any dispute between the parties hereto in connection with this Note, the prevailing party shall be entitled to recover from the losing party all of its costs and expenses, including, without limitation, court costs and reasonable attorneys’ fees.

 

6.3 Amendments and Waivers.  The right to the payment of the Principal Amount and all accrued but unpaid interest thereon, and any provision of this Note, may be amended or waived only with the written consent of the Holder, which consent may be withheld for any reason.  Any amendment effected in accordance with this Section 6.3 shall be binding upon any Holder of this Note (and of any securities into which this Note is convertible), each future holder of all such securities, and the Company, even if such Holder of this Note or
such future holder has not executed such amendment.  This Note may not be prepaid in full or in part prior to the Due Date.

 

6.4 Severability.  If one or more provisions of this Note are held to be unenforceable under applicable law, such provision shall be excluded from this Note and the balance of the Note shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.

 

6.5 Governing Law.  This Note shall be governed by and construed and enforced in accordance with the laws of the State of Illinois, without giving effect to its conflicts of laws principles.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

  

  

  

Date:  December 9, 2011

 

	
UNITED AMERICAN HEALTHCARE CORPORATION

	
By:      /s/ Robert T. Sullivan

	
Name: Robert T. Sullivan

	
Title:   Chief Financial Officer

 

ACKNOWLEDGED AND AGREED:

	
ST. GEORGE INVESTMENTS, LLC

	
An Illinois limited liability company

	
By: /s/ Fife Trading, Inc.,

	
       an Illinois corporation,

	
       its Manager

	
By:      /s/ John M. Fife

	
Name: John M. Fife

	
Title:   President

 

 

 

 

 

 

 

	  

[SIGNATURE PAGE TO PROMISSORY NOTE]Exhibit 10.1 CEO/CFO Agmt

Exhibit 10.1

FORM OF INDEMNIFICATION AGREEMENT 
 
THIS AGREEMENT is entered into, effective as of [EFFECTIVE DATE], between Radisys Corporation, an Oregon corporation (the “Company”) and [INDEMNITEE] (“Indemnitee”). 
 
WHEREAS, it is essential to the Company to retain and attract as directors, officers and employees the most capable persons available; 
 
WHEREAS, Indemnitee is a director, and/or officer, and/or employee of the Company; 
 
WHEREAS, both the Company and Indemnitee recognize the increased risk of litigation and other claims currently being asserted against directors, officers and employees of corporations; and 
 
WHEREAS, in recognition of Indemnitee's need for substantial protection against personal liability in order to enhance Indemnitee's continued and effective service to the Company, and in order to induce Indemnitee to provide services to the Company as a director, officer or employee, the Company wishes to provide in this Agreement for the indemnification of and the advancing of expenses to Indemnitee to the fullest extent (whether partial or complete) permitted by law and as set forth in this Agreement, and for the coverage of Indemnitee under the Company's directors' and officers' liability insurance policies. 
 
NOW, THEREFORE, in consideration of the above premises and of Indemnitee's continuing to serve the Company directly or, at its request, with another enterprise, and intending to be legally bound hereby, the parties agree as follows: 
 
1.    Certain Definitions: 
 
(a)    Board:    the Board of Directors of the Company.

(b)    Change in Control:   (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company or a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company, is or becomes the “Beneficial Owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 50% or more of the total voting power represented by the Company's then outstanding Voting Securities, or (ii) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board and any new director whose election by the Board or nomination for election by the Company's stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof, or (iii) the stockholders of the Company approve a merger or consolidation of the Company with any other corporation, other than a merger or consolidation that would result in the Voting Securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into Voting Securities of the surviving or parent entity) at least 50% of the total voting power represented by the Voting Securities of the Company or such surviving or parent entity outstanding immediately after such merger or consolidation, or the stockholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company (in one transaction or a series of transactions) of all or substantially all of the Company's assets.

 (c)    Disinterested Director.    a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee. 
 

(d)    Enterprise.    Any foreign or domestic corporation, company, partnership, joint venture, employee benefit plan, trust, or other enterprise for which Indemnitee is serving at the request of the Company as a director, officer, employee, administrator, trustee, agent, limited partner, member or fiduciary.

(e)    Expenses:    any expense, including without limitation, attorneys' fees, retainers, court costs, transcript costs, fees and expenses of experts, including accountants and other advisors, travel expenses, duplicating costs, postage, delivery service fees, filing fees, and all other disbursements or expenses of the types typically paid or incurred in connection with investigating, defending, being or preparing to be a witness in, or participating in (including on appeal), or preparing for any of the foregoing in, any Proceeding relating to any Indemnifiable Event, and any expenses of establishing a right to indemnification or Expense Advance under Sections 2, 4 and 5 of this Agreement or in connection with any recovery under any directors' and officers' liability insurance policy maintained by the Company or an other Enterprise.  For the avoidance of doubt, Expenses shall include Expenses incurred in connection with an appeal resulting from any Proceeding, including the premium, security for, and other costs relating to any cost bond, supersedeas bond or other appeal bond or its equivalent. 
 
(f)    Indemnifiable Event:    any event or occurrence that takes place either prior to or after the execution of this Agreement, related to the fact that Indemnitee is or was a director, officer or employee of the Company, or while a director, officer or employee, is or was serving at the request of the Company as a director, officer, employee, administrator, trustee, agent, limited partner, manager member or fiduciary of an other Enterprise, or was a director, officer, employee, or agent of a foreign or domestic corporation that was a predecessor corporation of the Company or of an other Enterprise at the request of such predecessor corporation, or related to anything done or not done by Indemnitee in any such capacity, whether or not the basis of the Proceeding is alleged action in an official capacity as a director, officer, employee, or agent or in any other capacity while serving as a director, officer, employee, or agent of the Company, as described above. 
 
(g)    Independent Counsel:    the person or body appointed in connection with Section 3. 
 
(h)    Potential Change in Control:    shall be deemed to have occurred if (i) the Company enters into an agreement or arrangement, the consummation of which would result in the occurrence of a Change in Control; (ii) any person (including the Company) publicly announces an intention to take or to consider taking actions that, if consummated, would constitute a Change in Control; (iii) any person (other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company acting in such capacity or a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company), who is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing 20% or more of the combined voting power of the Company's then outstanding Voting Securities, increases his beneficial ownership of such securities by 5% or more over the percentage so owned by such person on the date hereof, or (iv) the Board adopts a resolution to the effect that, for purposes of this Agreement, a Potential Change in Control has occurred. 
 
(i)    Proceeding:    any threatened, pending, or completed action, suit, arbitration, alternative dispute mechanism, inquiry, administrative or legislative hearing, investigation or any other actual, threatened or completed proceeding, including any and all appeals, whether conducted by the Company or any other party, whether civil, criminal, administrative, investigative, or other, and in each case whether or not commenced prior to the date of this Agreement, that relates to an Indemnifiable Event. 
 
(j)    Reviewing Party:    the person or body appointed in accordance with Section 3. 
 
(k)    Voting Securities:    any securities of the Company that vote generally in the election of directors. 
 
2.    Agreement to Indemnify. 
 

(a)    General Agreement.    In the event Indemnitee was, is, or becomes a party to or witness or other participant in, or is threatened to be made a party to or witness or other participant in, a Proceeding by reason of (or arising in part out of) an Indemnifiable Event, the Company shall indemnify Indemnitee from and against any and all Expenses, liability or loss, judgments, fines, ERISA excise taxes and penalties, amounts paid or to be paid in settlement, any interest, assessments, or other charges imposed thereon, and any federal, state, local, or foreign taxes imposed as a result of the actual or deemed receipt of any payments under this Agreement, to the fullest extent permitted by applicable law, including the nonexclusivity provision of Oregon Revised Statutes (“ORS”) 60.414(1) or any successor provision, as the same exists or may hereafter be amended or interpreted (but in the case of any such amendment or interpretation, only to the extent that such amendment or interpretation permits the Company to provide broader indemnification rights than were permitted prior thereto). The parties hereto intend that this Agreement shall provide for indemnification in excess of that expressly permitted by statute. 
 
(b)    Initiation of Proceeding.    Notwithstanding anything in this Agreement to the contrary, Indemnitee shall not be entitled to indemnification or advancement pursuant to this Agreement in connection with any Proceeding initiated by Indemnitee against the Company or any director or officer of the Company unless (i) the Company has joined in or the Board has consented to the initiation of such Proceeding; (ii) the Proceeding is one to enforce Indemnitee's rights under this Agreement; or (iii) the Proceeding is instituted after a Change in Control. 

(c)    Expense Advances.    If so requested by Indemnitee, the Company shall advance any and all Expenses to Indemnitee (an “Expense Advance”) within thirty (30) calendar days after the receipt by the Company of a statement or statements from Indemnitee requesting such advance or advances, whether prior to or after final disposition of any Proceeding. Advances shall be made without regard to Indemnitee's ability to repay the Expenses and without regard to Indemnitee's ultimate entitlement to indemnification under the provisions of this Agreement. The Indemnitee shall qualify for advances solely upon the execution and delivery to the Company of an undertaking in form and substance reasonably satisfactory to the Company that meets the requirements of ORS 60.397 or any successor provision providing that the Indemnitee undertakes to repay the advance if and to the extent that it is ultimately determined that Indemnitee is not entitled to be indemnified by the Company. Advances shall include any and all reasonable Expenses incurred pursuing an action to enforce this right of advancement. If Indemnitee has commenced legal proceedings in a court of competent jurisdiction in the State of Oregon to secure a determination that Indemnitee should be indemnified under applicable law, as provided in Section 4, any determination made by the Reviewing Party that Indemnitee would not be permitted to be indemnified under applicable law shall not be binding and Indemnitee shall not be required to reimburse the Company for any Expense Advance until a final judicial determination is made with respect thereto (as to which all rights of appeal therefrom have been exhausted or have lapsed). Indemnitee's obligation to reimburse the Company for Expense Advances shall be unsecured and no interest shall be charged thereon. 
 
(d)    Mandatory Indemnification.    Notwithstanding any other provision of this Agreement, to the extent that Indemnitee has been successful on the merits in defense of any Proceeding relating in whole or in part to an Indemnifiable Event or in defense of any issue or matter therein, Indemnitee shall be indemnified against all Expenses incurred in connection therewith. 
 
(e)    Partial Indemnification.    If Indemnitee is entitled under any provision of this Agreement to indemnification or Expense Advance by the Company for some or a portion of Expenses or other amounts, but not, however, for the total amount thereof, the Company shall nevertheless indemnify, or make an Expense Advance to, Indemnitee for the portion thereof to which Indemnitee is entitled. 
 
3.    Reviewing Party. 
 
(a)    Prior to any Change in Control, the person, persons or entity (“the Reviewing Party”) who shall determine whether Indemnitee is entitled to indemnification in the first instance shall be (a) the Board of Directors of the Company acting by a majority vote of Disinterested Directors, whether or not such majority constitutes a quorum of the Board of Directors; (b) a committee of Disinterested Directors designated by a 

majority vote of such directors, whether or not such majority constitutes a quorum; or (c) if there are no Disinterested Directors, or if the Disinterested Directors so direct, by Independent Counsel (as described below in Section 3(b)) in a written determination to the Board of Directors, a copy of which shall be delivered to Indemnitee. 
 
(b)    After a Change in Control, the Reviewing Party shall be the Independent Counsel referred to below. With respect to all matters arising from a Change in Control (other than a Change in Control approved by a majority of the directors on the Board who were directors immediately prior to such Change in Control) concerning the rights of Indemnitee to indemnity payments and Expense Advances under this Agreement or any other agreement or under applicable law or the Company's articles of incorporation or by-laws now or hereafter in effect relating to indemnification for Indemnifiable Events, the Company shall seek legal advice only from Independent Counsel selected by Indemnitee and approved by the Company (which approval shall not be unreasonably withheld), and who has not otherwise performed services for the Company or the Indemnitee (other than in connection with indemnification matters) within the last five years. The Independent Counsel shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee's rights under this Agreement. Such counsel, among other things, shall render its written opinion to the Company and Indemnitee as to whether and to what extent the Indemnitee should be permitted to be indemnified under applicable law. The Company agrees to pay the reasonable fees of the Independent Counsel and to indemnify fully such counsel against any and all expenses (including attorneys' fees), claims, liabilities, loss, and damages arising out of or relating to this Agreement or the engagement of Independent Counsel pursuant hereto. 
 
4.    Indemnification Process and Appeal. 
 
(a)    Indemnification Payment.    Indemnitee shall be entitled to indemnification, and shall receive payment thereof, from the Company in accordance with this Agreement within thirty (30) calendar days after Indemnitee has made written demand on the Company for indemnification (which written demand shall include such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification), unless the Reviewing Party has provided a written determination to the Company that Indemnitee is not entitled to indemnification under applicable law. The Reviewing Party making the determination with respect to Indemnitee's entitlement to indemnification shall notify Indemnitee of such written determination no later than two (2) business days thereafter. 
 
(b)     Suit to Enforce Rights.    If (i) no determination of entitlement to indemnification shall have been made within thirty (30) calendar days after Indemnitee has made a demand in accordance with Section 4(a), (ii) payment of indemnification pursuant to Section 4(a) is not made within thirty (30) calendar days after a determination has been made that Indemnitee is entitled to indemnification, (iii) the Reviewing Party determines pursuant to Section 4(a) that Indemnitee is not entitled to indemnification under this Agreement, or (iv) Indemnitee has not received advancement of Expenses within thirty (30) calendar days after making such a request in accordance with Section 2(c), then Indemnitee shall have the right to enforce its indemnification and Expense Advance rights under this Agreement by commencing litigation in any court of competent jurisdiction in the State of Oregon seeking an initial determination by the court or challenging any determination by the Reviewing Party or any aspect thereof. The Company hereby consents to service of process and to appear in any such proceeding. Any determination by the Reviewing Party not challenged by the Indemnitee on or before the first anniversary of the date of the Reviewing Party's determination shall be binding on the Company and Indemnitee. The remedy provided for in this Section 4 shall be in addition to any other remedies available to Indemnitee in law or equity. 
 
(c)    Defense to Indemnification, Burden of Proof, and Presumptions. 
 
(i)    To the maximum extent permitted by applicable law in making a determination with respect to entitlement to indemnification (or Expense Advances) hereunder, the Reviewing Party shall presume that an Indemnitee is entitled to indemnification (or Expense Advances) under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 4(a) of this Agreement or a request for Expense 

Advances in accordance with Section 2(c), and the Company shall have the burden of proof by clear and convincing evidence to overcome that presumption in connection with the making by the Reviewing Party of any determination contrary to that presumption. 
 
(ii)    It shall be a defense to any action brought by Indemnitee against the Company to enforce this Agreement (other than an action brought to enforce a claim for Expenses incurred in defending a Proceeding in advance of its final disposition where the required undertaking has been tendered to the Company) that it is not permissible under applicable law for the Company to indemnify Indemnitee for the amount claimed. 
 
(iii)    In connection with any action brought pursuant to Section 4(c)(ii) as to whether Indemnitee is entitled to be indemnified hereunder, the burden of proving Indemnitee is not entitled to indemnification under this Agreement shall be on the Company by clear and convincing evidence. 
 
(iv)    Neither the failure of the Reviewing Party or the Company (including its Board, Independent Counsel or its stockholders) to have made a determination prior to the commencement of such action by Indemnitee that indemnification of the claimant is proper under the circumstances because Indemnitee has met the standard of conduct set forth in applicable law, nor an actual determination by the Reviewing Party or Company (including its Board, Independent Counsel or its stockholders) that the Indemnitee had not met such applicable standard of conduct, shall be admissible as evidence in any such action for any purpose. 
 
(v)    For purposes of this Agreement, the termination of any claim, action, suit, or proceeding, by judgment, order, settlement (whether with or without court approval), conviction, or upon a plea of nolo contendere, or its equivalent, shall not create a presumption that Indemnitee did not meet any particular standard of conduct or have any particular belief or that a court has determined that indemnification is not permitted by applicable law. 
 
5.     Indemnification for Expenses Incurred in Enforcing Rights.    The Company shall indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall advance such Expenses to Indemnitee that are incurred by Indemnitee in connection with any claim asserted against or action brought by Indemnitee for 
 
(i)    enforcement of this Agreement, 
 
(ii)    indemnification or Expense Advances by the Company under this Agreement or any other agreement or under applicable law or the Company's articles of incorporation or by-laws now or hereafter in effect relating to indemnification for Indemnifiable Events, and/or 
 
(iii)    recovery under directors' and officers' liability insurance policies maintained by the Company. 
 
6.    Notification and Defense of Proceeding. 
 
(a)    Notice.    Promptly after receipt by Indemnitee of notice of the commencement of any Proceeding, Indemnitee will, if a claim in respect thereof is to be made against the Company under this Agreement, notify the Company of the commencement thereof; but the omission so to notify the Company will not relieve it from any liability that it may have to Indemnitee, except as provided in Section 13(c). 
 
(b)    Defense.    With respect to any Proceeding as to which Indemnitee notifies the Company of the commencement thereof, the Company will be entitled to participate in the Proceeding at its own expense and except as otherwise provided below, to the extent the Company so wishes, it may assume the defense thereof with counsel reasonably satisfactory to Indemnitee. After notice from the Company to Indemnitee of its election to assume the defense of any Proceeding, the Company will not be liable to Indemnitee under this Agreement or otherwise for any Expenses subsequently incurred by Indemnitee in connection with the defense of 

such Proceeding other than reasonable costs of investigation, appearing as a witness or as otherwise provided below. Indemnitee shall have the right to employ his or her own counsel in such Proceeding, but all Expenses related thereto (other than reasonable costs of investigation or appearing as a witness) incurred after notice from the Company of its assumption of the defense shall be at Indemnitee's expense unless: (i) the employment of counsel by Indemnitee has been authorized by the Company, (ii) Indemnitee has reasonably determined that there may be a conflict of interest between Indemnitee and the Company in the defense of the Proceeding, (iii) after a Change in Control, the employment of counsel by Indemnitee has been approved by the Independent Counsel, or (iv) the Company shall not within sixty (60) calendar days in fact have employed counsel to assume the defense of such Proceeding, in each of which case all Expenses of the Proceeding shall be borne by the Company; and (v) if the Company has selected counsel to represent Indemnitee and other current and former directors, officers and employees of the Company in the defense of a Proceeding, and a majority of such persons, including Indemnitee, reasonably object to such counsel selected by the Company pursuant to this Section 6(b), then such persons, including Indemnitee, shall be permitted to employ one (1) additional counsel of their choice and the reasonable fees and expenses of such counsel shall be at the expense of the Company; provided, however, that such counsel shall be chosen from amongst the list of counsel, if any, approved by any company with which the Company obtains or maintains insurance. In the event separate counsel is retained by an Indemnitee pursuant to this Section 6(b), the Company shall cooperate with Indemnitee with respect to the defense of the Proceeding, including making documents, witnesses and other reasonable information related to the defense available to the Indemnitee and such separate counsel pursuant to joint-defense agreements or confidentiality agreements, as appropriate. The Company shall not be entitled to assume the defense of any Proceeding brought by or on behalf of the Company or as to which Indemnitee shall have made the determination provided for in (ii) above. 
 
(c)    Settlement of Claims.    The Company shall not be liable to indemnify Indemnitee under this Agreement or otherwise for any amounts paid in settlement of any Proceeding effected without the Company's written consent, provided, however, that if a Change in Control has occurred, the Company shall be liable for indemnification of Indemnitee for amounts paid in settlement if the Independent Counsel has approved the settlement. The Company shall not settle any Proceeding in any manner that would impose any penalty or limitation on Indemnitee without Indemnitee's written consent. Neither the Company nor the Indemnitee will unreasonably withhold their consent to any proposed settlement. The Company shall not be liable to indemnify the Indemnitee under this Agreement with regard to any judicial award if the Company was not given a reasonable and timely opportunity, at its expense, to participate in the defense of such action; the Company's liability hereunder shall not be excused if participation in the Proceeding by the Company was barred by this Agreement. 
 
7.    Establishment of Trust.    In the event of a Change in Control or a Potential Change in Control, the Company shall, upon written request by Indemnitee, create a Trust for the benefit of the Indemnitee and from time to time upon written request of Indemnitee shall fund the Trust in an amount sufficient to satisfy any and all Expenses reasonably anticipated at the time of each such request to be incurred in connection with investigating, preparing for, participating in, and/or defending any Proceeding relating to an Indemnifiable Event. The amount or amounts to be deposited in the Trust pursuant to the foregoing funding obligation shall be determined by the Reviewing Party. The terms of the Trust shall provide that upon a Change in Control, (i) the Trust shall not be revoked or the principal thereof invaded, without the written consent of the Indemnitee, (ii) the Trustee shall advance, within ten business days of a request by the Indemnitee, any and all Expenses to the Indemnitee (and the Indemnitee hereby agrees to reimburse the Trust under the same circumstances for which the Indemnitee would be required to reimburse the Company under Section 2(c) of this Agreement), (iii) the Trust shall continue to be funded by the Company in accordance with the funding obligation set forth above, (iv) the Trustee shall promptly pay to the Indemnitee all amounts for which the Indemnitee shall be entitled to indemnification pursuant to this Agreement or otherwise, and (v) all unexpended funds in the Trust shall revert to the Company upon a final determination by the Reviewing Party or a court of competent jurisdiction, as the case may be, that the Indemnitee has been fully indemnified under the terms of this Agreement. The Trustee shall be chosen by the Indemnitee. Nothing in this Section 7 shall relieve the Company of any of its obligations under this Agreement. All income earned on the assets held in the Trust shall be reported as income by the Company for federal, state, local, and foreign tax purposes. The Company shall pay all costs of establishing and maintaining the Trust and shall indemnify the Trustee against any and all expenses (including attorneys' fees), claims, liabilities, loss, and damages arising out 

of or relating to this Agreement or the establishment and maintenance of the Trust. 
 
8.    Non-Exclusivity.    The rights of Indemnitee hereunder shall be in addition to any other rights Indemnitee may have under the laws of the State of Oregon, the Company's articles of incorporation, by-laws, applicable law, or otherwise. To the extent that a change in applicable law (whether by statute or judicial decision) permits greater indemnification by agreement than would be afforded currently under the Company's articles of incorporation, by-laws, applicable law, or this Agreement, it is the intent of the parties that Indemnitee enjoy by this Agreement the greater benefits so afforded by such change. 
 
9.     Liability Insurance.    For the duration of Indemnitee's service as a director, officer or employee of the Company or as a director, officer, employee, administrator, trustee, agent, partner, manager, member or fiduciary of an other Enterprise, and thereafter for so long as Indemnitee shall be subject to any pending or possible claim, the Company shall use commercially reasonable efforts (taking into account the scope and amount of coverage available relative to the cost thereof) to cause to be maintained in effect policies of directors' and officers' liability insurance providing coverage for directors and/or officers of the Company or other Enterprise that is at least substantially comparable in scope and amount to that provided by the Company's current policies of directors' and officers' liability insurance. The minimum AM Best rating for the insurance carriers of such insurance carrier shall be not less than A- VI. The Company shall provide Indemnitee with a copy of all directors' and officers' liability insurance applications, binders, policies, declarations, endorsements and other related materials, and shall provide Indemnitee with a reasonable opportunity to review and comment on the same. Without limiting the generality or effect of the requirement to use commercially reasonable efforts to obtain insurance and give directors the chance to review the proposal, the Company shall not discontinue or significantly reduce the scope or amount of coverage from one policy period to the next without the prior approval thereof by a majority vote of the directors, even if less than a quorum. 
 
10.     Period of Limitations.    No legal action shall be brought and no cause of action shall be asserted by or on behalf of the Company or any affiliate of the Company against Indemnitee, Indemnitee's spouse, heirs, executors, or personal or legal representatives after the expiration of two years from the date of accrual of such cause of action, or such longer period as may be required or permitted by federal or state law under the circumstances. Any claim or cause of action of the Company or its affiliate shall be extinguished and deemed released unless asserted by the timely filing of a legal action within such period; provided, however, that if any shorter period of limitations is otherwise applicable to any such cause of action the shorter period shall govern. 
 
11.    Amendment of this Agreement.    No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall operate as a waiver of any other provisions hereof (whether or not similar), nor shall such waiver constitute a continuing waiver. Except as specifically provided herein, no failure to exercise or any delay in exercising any right or remedy hereunder shall constitute a waiver thereof. 

12.     Subrogation.    In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and shall do everything that may be necessary to secure such rights, including the execution of such documents necessary to enable the Company effectively to bring suit to enforce such rights. 
 
13.    No Duplication of Payments.    The Company shall not be liable under this Agreement to make any payment in connection with any claim made against Indemnitee to the extent Indemnitee has otherwise actually received payment (under any insurance policy, by law, or otherwise) of the amounts otherwise indemnifiable hereunder. 
 
14.    Binding Effect.    This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors, assigns, including any direct or indirect successor by purchase, merger, consolidation, or otherwise to all or substantially all of the business and/or assets of the Company, spouses, heirs, and personal and legal representatives. The Company shall require and cause any 

successor (whether direct or indirect by purchase, merger, consolidation, or otherwise) to all, substantially all, or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. This Agreement shall continue in effect regardless of whether Indemnitee continues to serve as a director, officer or employee of the Company or of any other enterprise at the Company's request. 
 
15.    Severability.    If any provision (or portion thereof) of this Agreement shall be held by a court of competent jurisdiction to be invalid, void, or otherwise unenforceable, the remaining provisions shall remain enforceable to the fullest extent permitted by law. Furthermore, to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of this Agreement containing any provision held to be invalid, void, or otherwise unenforceable, that is not itself invalid, void, or unenforceable) shall be deemed reformed and construed to conform to applicable law so as to give maximum effect to the intent manifested by the provision held invalid, void, or unenforceable. 
 
16.    Governing Law.    This Agreement, and all disputes and controversies arising therefrom or related thereto, shall be governed by and construed and enforced in accordance with the laws of the State of Oregon applicable to contracts made and to be performed in such state without giving effect to the principles of conflicts of laws that would apply any other law. 
 
17.    Notices.    All notices, demands, and other communications required or permitted hereunder shall be made in writing and shall be deemed to have been duly given if delivered by hand, against receipt, or mailed, postage prepaid, certified or registered mail, return receipt requested, and addressed to the Company at: 
 
Radisys Corporation 
5445 NE Dawson Creek Drive
Hillsboro, OR  97124
Attn: CEO & CFO

and to Indemnitee at the address indicated on the signature page to this Agreement. 
 
Notice of change of address shall be effective only when done in accordance with this Section. All notices complying with this Section shall be deemed to have been received on the date of delivery or on the third business day after mailing. 

[signatures on next page]

IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Agreement as of the day specified above. 
 

Company:                 Radisys Corporation, an Oregon corporation

By:                      
Name:    
Title:    

Indemnitee:                                     
Name:    [INDEMNITEE]
Address:

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