Document:

Exhibit 10.1  

THIRD
AMENDMENT TO CREDIT AGREEMENT AND FIRST AMENDMENT TO 

AMENDED AND RESTATED REVOLVING NOTE

                    This
Third Amendment to Credit Agreement and First Amendment to Amended and Restated
Revolving Note (this “Amendment”), dated as of October 31, 2014, is
entered into by and between COMMUNICATIONS SYSTEMS, INC., a Minnesota
corporation (“Communications Systems”), JDL TECHNOLOGIES, INCORPORATED, a
Minnesota corporation (“JDL”), TRANSITION NETWORKS, INC., a
Minnesota corporation (“Transition Networks”, together with
Communications Systems and JDL, “Borrowers” and each a “Borrower”), and WELLS FARGO
BANK, NATIONAL ASSOCIATION (“Lender”).

RECITALS

                    Borrowers
and Lender are parties to a Credit Agreement dated as of October 28, 2011, as
amended by a First Amendment to Credit Agreement and Waiver of Event of Default
dated as of November 28, 2012 and a Second Amendment to Credit Agreement and
Waiver of Event of Default dated as of November 14, 2013 (as so amended, and as
the same may be further amended, restated, supplemented or otherwise modified
from time to time, the “Credit Agreement”). Capitalized terms used
in these recitals have the meanings given to them in the Credit Agreement
unless otherwise specified.

                    Borrowers’
obligations to Lender are evidenced by, among other things, that certain
Amended and Restated Revolving Note dated November 28, 2012, issued by
Borrowers in favor of Lender in the original principal amount of $10,000,000
(as amended, restated, supplemented, extended, renewed, replaced or otherwise
modified from time to time, the “Revolving Note”)

                    Borrowers
have requested that Lender agree to certain amendments to the Credit Agreement
and the Revolving Note, and the Lender has agreed to make such amendments on
the terms and conditions set forth herein.

                    NOW,
THEREFORE, in consideration of the premises and of the mutual covenants and
agreements herein contained, it is agreed as follows:

                    1.        Definitions.
Capitalized terms used in this Amendment (including in the Recitals) have the
meanings given to them in the Credit Agreement unless otherwise expressly
defined in this Amendment.

                    2.        Amendment to
Revolving Note. The dated “November 1, 2014” contained in the first
paragraph of the Revolving Note is hereby replaced in its entirety to read
“November 1, 2016”.

                    3.        Amendments
to Credit Agreement. 

	
  

 	
  

 
	
  

 	
           (a)      The
 date “November 1, 2014” contained in the first sentence of Section 1.1(a) is
 hereby amended in its entirety to read as follows: “November 1, 2016”.

 
	
  

 	
  

 
	
  

 	
           (b)      The
 phrase “Ten Million Dollars ($10,000,000)” contained in the first sentence of
 Section 1.1(b) is hereby amended in its entirety to read as follows: “One
 Million Dollars ($1,000,000)”.

 

	
  

 	
  

 
	
  

 	
           (c)      Section
 4.9 of the Credit Agreement is hereby amended and restated in its entirety to
 read as follows: 

 

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
           Section
 4.9 Financial
 Condition. Using GAAP (except to the extent modified by the
 definitions herein):

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (a)     Maintain
 Borrowers’ financial condition as follows, with compliance determined as of
 each fiscal quarter end, determined on a rolling four-quarter basis, commencing
 with financial statements for the quarter ending December 31, 2011:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
           (i)      a
 minimum Current Ratio not less than 1.75 to 1.0;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
           (ii)     a
 minimum Net Profit of $3,000,000; and 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
           (iii)    a
 minimum Tangible Net Worth of not less than $60,000,000.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (b)     Commencing
 June 30, 2015 and as of June 30 of each year thereafter, Borrowers will
 achieve Net Profit of not less than $500,000, with compliance determined as
 of each such June 30 on a fiscal year-to-date basis.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Notwithstanding the
 foregoing or anything to the contrary contained in the definitions below, for
 purposes of determining Borrowers’ compliance with subsections (a)(ii) and
 (b) of this Section 4.9, up to $5,850,000 of goodwill impairment charges
 recognized by Borrowers on or about September 30, 2013 in connection with
 Borrower’s Transition Networks business unit shall be excluded. As used in
 this Section 4.9:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
           (v)     “Current
 Ratio” means, with respect to the applicable computation period,
 the ratio of (i) current assets owned by such entity to (ii) current
 liabilities of such entity, plus the sum of all outstanding working
 capital borrowings under the Line of Credit and Letters of Credit issued
 under this Agreement; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
           (x)     “Net
 Profit” means net profit of an entity before tax; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
           (y)     “Tangible
 Net Worth” means the sum of (i) an entity’s total net worth less
 (ii) any intangible assets owned by such entity, plus the sum of all
 Subordinated Debt; and

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
           (z)     “Subordinated
 Debt” means debt of a person or entity that is subordinated to the
 payment of all debts, liabilities and obligations of Borrowers arising under
 or in connection with this Agreement and any other Loan Documents and all
 rights and remedies granted to Bank under or in connection with this
 Agreement and any other Loan Documents pursuant to a subordination agreement
 in form and substance acceptable to Bank in its sole discretion, executed and
 delivered by each holder of such subordinated debt in favor of Bank. 

 
	
  

 	
  

 	
  

 
	
                     4.       No Other
 Changes. Except as explicitly amended by this Amendment, all of
 the terms and conditions of the Credit Agreement, the Revolving Note and the
 other Loan Documents remain in full force and effect.

 

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                     5.      Conditions
 Precedent. This Amendment shall be effective when Lender shall
 have received an executed original of this Amendment, together with each of
 the following, each in form and substance acceptable to Lender:

 
	
  

 
	
  

 	
           (a)     a
 certificate of the secretary of each Borrower: (a) attaching resolutions
 of the Board of Directors of such Borrower authorizing the execution,
 delivery and performance by such Borrower of the Loan Documents, including
 this Amendment and the Amended Note, (b) certifying that the articles of
 incorporation of such Borrower delivered by such Borrower to Lender on
 October 28, 2011 have not been amended or changed in any respect (or if there
 has been any amendment or change, certifying that attached to such
 certificate is a current copy of such articles of incorporation (certified by
 the Secretary of State of formation)), (c) certifying that the bylaws of
 such Borrower delivered by such Borrower to Lender on October 28, 2011 have
 not been amended or changed in any respect (or if there has been any
 amendment or change, certifying that attached to such certificate is a
 current copy of such bylaws of such Borrower), and (d) containing the
 names of the officer or officers of such Borrower authorized to sign the Loan
 Documents, including this Amendment and the Amended Note, together with a
 sample of the true signature of each such officer, or affirming that the
 officer or officers certified to Lender on October 28, 2011 remain so
 authorized; together with current good standing certificate for such
 Borrower; and

 
	
  

 	
  

 
	
  

 	
           (b)     such
 other matters as Lender may reasonably require. 

 
	
  

 	
  

 
	
                     6.       Representations
 and Warranties. Borrowers hereby represent and warrant to Lender
 as follows:

 
	
  

 	
  

 
	
  

 	
           (a)     Each
 Borrower has all requisite power and authority to execute this Amendment, the
 Amended Note and any other agreements or instruments required hereunder
 and to perform all of its obligations hereunder, and the Credit Agreement, as
 amended by this Amendment, and the other Loan Documents to which
 such Borrower is a party have been duly executed and delivered by such
 Borrower and constitute the legal, valid and binding obligations of such
 Borrower, enforceable in accordance with their respective terms, except as
 enforcement may be limited by equitable principles or by bankruptcy,
 insolvency, reorganization, moratorium or similar laws relating to or
 limiting creditors’ rights generally.

 
	
  

 	
  

 
	
  

 	
           (b)     The
 execution, delivery and performance by such Borrower of Credit Agreement, as
 amended by this Amendment, and the other Loan Documents to which such
 Borrower is a party have been duly authorized by all necessary corporate
 action and do not (i) violate any material provision of federal, state, or
 local law or regulation applicable to such Borrower, the governing documents
 of such Borrower, or any order, judgment, or decree of any court or other
 governmental authority binding on such Borrower, (ii) conflict with,
 result in a breach of, or constitute (with due notice or lapse of time or
 both) a default under any contract, obligation, indenture or other instrument
 to which any Borrower is a party or by which any Borrower may be bound, (iii) result
 in or require the creation or imposition of any Lien of any nature whatsoever
 upon any assets of any Borrower, or (iv) require any approval of such
 Borrower’s shareholders or any approval or consent of any other person or
 entity.

 
	
  

 	
  

 
	
  

 	
           (c)     All
 of the representations and warranties contained in Article II of the Credit
 Agreement are correct on and as of the date hereof as though made on and as
 of the date hereof, except to the extent that such representations and
 warranties relate solely to an earlier date.

 

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                    7.       References.
All references in the Credit Agreement to “this Agreement” shall be deemed to
refer to the Credit Agreement as amended by this Amendment; and any and all
references in the other Loan Documents to the Credit Agreement shall be deemed
to refer to the Credit Agreement as amended by this Amendment. All references
in the Credit Agreement and each other Loan Document to “the Revolving Note”
shall be deemed to refer to the Amended Note.

                    8.       No Other
Waiver. Except as expressly set forth therein, the execution of this
Amendment and the acceptance of all other agreements and instruments
related hereto shall not be deemed to be a waiver of any default or Event of
Default under the Credit Agreement or a waiver of any breach, default or event
of default under any other Loan Document, whether or not known to Lender and
whether or not existing on the date of this Amendment.

                    9.       Release.
Each Borrower hereby absolutely and unconditionally releases and forever
discharges Lender, and any and all participants, parent corporations,
subsidiary corporations, affiliated corporations, insurers, indemnitors,
successors and assigns thereof, together with all of the present and former
directors, officers, agents and employees of any of the foregoing, from any and
all claims, demands or causes of action of any kind, nature or description
arising under, in connection with or related to any of the debts, liabilities
or obligations of Borrowers and/or any Borrower under any of the Loan Documents
or any of the Loan Documents, whether arising in law or equity or upon contract
or tort or under any state or federal law or otherwise, which Borrowers and/or
any Borrower has had, now has or has made claim to have against any such person
or entity for or by reason of any act, omission, matter, cause or thing
whatsoever arising from the beginning of time to and including the date of this
Amendment, whether such claims, demands and causes of action are matured or
unmatured or known or unknown.

                    10.     Costs and
Expenses. Borrowers hereby reaffirm their agreement under Section
7.3 of the Credit Agreement to pay or reimburse Lender with respect to its
costs, expenses and fees, including, without limitation, all reasonable fees
and disbursements of legal counsel incurred by the Lender in connection with
this Amendment.

                    11.     Miscellaneous.
This Amendment may be executed in any number of counterparts, each of which
when so executed and delivered shall be deemed an original and all of which
counterparts, taken together, shall constitute one and the same instrument.
Delivery of an executed signature page of this Amendment by facsimile
transmission or in a pdf or similar electronic file shall be effective as
delivery of a manually executed counterpart thereof.

Signature page follows

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                    IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed as of the date first above written.

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 BORROWERS:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 COMMUNICATIONS
 SYSTEMS, INC.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By: 

 	
  

 	
  

 	
  

 
	
  

 	
 Name:

 	
  

 	
  

 
	
  

 	
 Title:

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 JDL
 TECHNOLOGIES, INCORPORATED

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By: 

 	
  

 	
  

 	
  

 
	
  

 	
 Name:

 	
  

 	
  

 
	
  

 	
 Title:

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 TRANSITION
 NETWORKS, INC.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By: 

 	
  

 	
  

 	
  

 
	
  

 	
 Name:

 	
  

 	
  

 
	
  

 	
 Title:

 	
  

 	
  

 

Signature Page to Third Amendment to
Credit Agreement and First Amendment to Amended and Restated Revolving Note

	
  

 	
  

 	
  

 
	
  

 	
 LENDER:

 
	
  

 	
  

 	
  

 
	
  

 	
 WELLS
 FARGO BANK, NATIONAL ASSOCIATION

 
	
  

 	
  

 	
  

 
	
  

 	
 By: 

 	
  

 
	
  

 	
 Name: Michael M. Lebens

 
	
  

 	
 Title: Vice President

 

Signature Page to Third Amendment to
Credit Agreement and First Amendment to Amended and Restated Revolving NoteEX-10.1

 Exhibit 10.1 

GENERAL RELEASE AND POST-SEPARATION CONSULTING AGREEMENT 

This General Release and Post-Separation Consulting Agreement (the “Agreement”) is made and entered into by and between Klara
A. Dickinson-Eason (the “Executive”) and Hyperion Therapeutics, Inc. (the “Company”) (each a “Party,” and together, the “Parties”). 

WHEREAS, Executive and the Company wish to resolve, except as specifically set forth herein, all claims between them arising from or relating
to any act or omission predating the effective date of the General Release contained in this Agreement; 
 WHEREAS, Executive and the
Company have decided to terminate their employer-employee relationship; 
 WHEREAS, Executive and the Company are parties to a Change of
Control and Severance Agreement, dated April 11, 2012 (the “Severance Agreement”), and the Company wishes to provide the Executive the termination benefits described in Section 3 of the Severance Agreement (the
“Termination Benefits”) in connection with the termination of their employer-employee relationship; 
 WHEREAS, the Company
wishes to retain Executive as a consultant following the termination of her employment relationship so that Executive may advise the Company’s executives on regulatory and compliance matters within Executive’s expertise; 

NOW THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth in this
Agreement, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, the Parties agree as follows: 

1. Confirmation of Termination Benefits under this Agreement. The Company shall pay or provide to Executive all of the Termination
Benefits described in Exhibit A to this Agreement, as, when and on the terms and conditions specified in the Severance Agreement, but as modified by Exhibit A. 

2. Termination of Employment; Consulting Services. 

(a) Executive’s employment with the Company terminated effective as of July 8, 2014 (the “Separation Date”).
Following the Separation Date, and at the request of the Company, Executive will consult with the Company’s executive officers and other employees regarding certain of the Company’s business, regulatory and compliance activities, as
assigned by the Company to Executive from time to time, through December 31, 2014. Executive acknowledges that the consultation is to be performed from Executive’s home and the Company’s office in California, but that the consultation
also may require Executive to travel from time to time. Executive shall agree to be available to provide consulting services on reasonable notice for reasonable hours, up to eight hours per day, 40 hours per week, upon request by the Company.
Executive and the Company agree that in exchange for being available during the consulting period, the Company will pay Executive the Consulting Fee (as defined in Section 2(d) below), whether or not the Company requests any services from
Executive, so long as Executive is willing, able and available to provide the consulting services. The Company will honor this Agreement following a Control of Control, as defined in the Separation Agreement. 

 (b) Executive shall be an independent contractor of the Company, and this Agreement shall not be
construed to create any association, partnership, joint venture, employee or agency relationship between Executive and the Company for any purpose. Notwithstanding the previous sentence, Executive’s service as a consultant under the terms of
this Agreement shall be included within the definition of “Corporate Status” under the April 9, 2012 Indemnification Agreement (“Indemnification Agreement”) between Executive and the Company such that Executive shall
be entitled to indemnity through the Indemnification Agreement for her services as a consultant. After the Separation Date, Executive shall have no authority to bind the Company or its affiliates, and Executive shall not attempt to obligate or bind
the Company or any of its affiliates in any way without the Company’s prior approval. All documents, including but not limited to contracts, agreements, letters of intent, employment agreements and leases, that purport to bind or obligate the
Company or any of its affiliates in any respect must be signed by the appropriate representative(s) of the Company. 
 (c) The Company will
provide Executive with support services in its California office for the consulting period following the Separation Date to the extent determined necessary and reasonable by the Company. During the consulting period, Executive may be engaged or
employed in any other business, trade, profession or other activity which does not place Executive in a conflict of interest with the Company; provided, that, during the consulting period, Executive shall not be engaged in any business activities
that do or may compete with the business of the Company, without the Company’s prior written consent to be given or withheld in its sole discretion. 

(d) If Executive executes, does not revoke, and abides by the terms of this Agreement and the bring-down release specified in Section 3(b)
below, the Company shall pay to Executive as full compensation for the consulting services a monthly consulting fee in the gross amount of Thirty One Thousand Dollars ($31,000.00) (the “Consulting Fee”) for each full month Executive
is available to provide consulting services in accordance with Section 2(a). Executive acknowledges and agrees that the Consulting Fee does not constitute compensation for Executive’s time worked and services rendered through the
Separation Date, but rather constitutes consideration for Executive’s agreement to provide consulting services to the Company on an “as needed” basis and as an independent consultant through December 31, 2014, following the
Separation Date, and that such consideration is above and beyond any wages, salary or other sums to which Executive is entitled from the Company under the terms of her employment with the Company or under any other contract or law. Executive shall
be responsible for any travel or other costs or expenses incurred by Executive in connection with the performance of the consulting services, and in no event shall the Company reimburse Executive for any such costs or expenses unless authorized in
writing by the Chief Executive Officer of the Company. 
 (e) With the exception of the Consulting Fee specified Section 2(d) above, the
Company shall withhold the appropriate federal, state and local taxes, as reasonably determined by the Company, from the Termination Benefits paid under this Agreement. Executive acknowledges and agrees that the Consulting Fee shall be subject to
Internal Revenue Service reporting through a Form 1099 issued to Executive. Executive will invoice the Company, and the Company will pay each such invoice no later than thirty (30) days after its receipt. Payment of the Consulting Fee will be
made without any withholdings or deductions by the Company. Executive agrees that she will be exclusively liable for the payment of any taxes which may be assessed against the Consulting Fee, as well as any additional payments of interest,
penalties, or assessment of attorneys’ fees required 

 
by a governmental authority, taxing authority, or court in connection with the payment of the Consulting Fee. Executive further agrees to indemnify and hold the Company harmless from any
liability (including attorneys’ fees), penalties or interest that may be assessed by any taxing authority or governmental authority with respect to the payment of the Consulting Fee. Executive further acknowledges that the Company makes no
representations or warranties with respect to the tax treatment by any local, state or federal taxing authority of the Consulting Fee or other payments made under this Agreement. 

(f) The Company is and shall be, the sole and exclusive owner of all right, title and interest throughout the world in and to all the results
and proceeds of the consulting services performed under this Agreement (the “Deliverables”), including all patents, copyrights, trademarks, trade secrets and other intellectual property rights (collectively “Intellectual
Property Rights”). Executive agrees that the Deliverables are hereby deemed a “work made for hire” as defined in 17 U.S.C. § 101 for the Company. If, for any reason, any of the Deliverables do not constitute a “work made
for hire,” Executive hereby irrevocably assigns to the Company, in each case without additional consideration, all right, title and interest throughout the world in and to the Deliverables, including all Intellectual Property Rights. 

(g) Executive shall be required, at the Company’s request, to provide up to forty (40) hours per week of consulting services to the
Company during the consulting period. If Executive elects to provide additional consulting services beyond the forty (40) hour per week amount, Executive shall not be entitled to any additional consideration or compensation beyond the
Consulting Fee for such additional consulting services. The Company may terminate the consulting services provided under this Agreement upon written notice to Executive if the Company determines that Executive is not willing, available or able to
provide the required consulting services after reasonable attempts by the Company to obtain such consulting services from Executive. In the event of termination pursuant to this Section 2(g), the Company shall pay to Executive on a proportional
basis any Consulting Fees then due and payable for any consulting services completed up to and including the date of such termination. The Company may terminate this Agreement, effective upon written notice to Executive, in the event that Executive
materially breaches this Agreement, and such breach is incapable of cure, or with respect to a material breach capable of cure, Executive does not cure such breach within ten (10) days after receipt of written notice of such breach. In the
event of a Change of Control (as defined in the Severance Agreement) during the consulting period, Executive shall be entitled to payment of the unpaid portion of the Consulting Fee for the period from the date of the Change of Control through
December 31, 2014. 
 3. General Release. 

(a) Scope of Release. Executive, for herself, and for her heirs, assigns, executors and administrators, hereby releases, remises and
forever discharges the Company, its parents, subsidiaries, affiliates, divisions, predecessors, successors, assigns, directors, officers, partners, attorneys, shareholders, administrators, employees, agents, representatives, employment benefit
plans, plan administrators, fiduciaries, trustees, insurers and re-insurers, and all of their predecessors, successors and assigns, (collectively, the “Releasees”), of and from all claims, causes of action, covenants, contracts,
agreements, promises, damages, disputes, demands, and all other manner of actions whatsoever, in law or in equity, that Executive ever had, may have had, now has or that his heirs, assigns, executors or administrators hereinafter can, shall or may
have, whether known or unknown, asserted or unasserted, suspected or unsuspected, as a result of Executive’s employment, the termination of that employment, or any act or omission which has occurred at any time up to and including the date of
the execution of this Agreement (the “Released Claims”). 

 (b) Released Claims. The Released Claims released include, but are not limited to, any
claims for monetary damages; any claims to severance or similar benefits; any claims to expenses, attorneys’ fees or other indemnities; any claims based on actions or failure to act on or before the date of this Agreement; any claims for other
personal remedies or damages sought in any legal proceeding or charge filed with any court or federal, state or local agency either by one or by a person claiming to act on my behalf or in Executive’s interest. Executive understands that the
Released Claims might have arisen under many different local, state and federal statutes, regulations, case law and/or common law doctrines. Executive hereby specifically, but without limitation, agrees to release all of the Releasees from any and
all claims under the following: 
 (i) Antidiscrimination laws, such as Title VII of the Civil Rights Act of 1964, as amended, and
Executive Order 11246 (which prohibit discrimination based on race, color, national origin, religion, or sex); Section 1981 of the Civil Rights Act of 1866 (which prohibits discrimination based on race or color); the Age Discrimination in
Employment Act (“ADEA”), including but not limited to the Older Worker Benefit Protection Act (“OWBPA”), except as it relates to the validity of this Agreement under ADEA, as amended by the OWBPA, and Executive
Order 11141 (which prohibit discrimination based upon age); the Americans with Disabilities Act and Sections 503 and 504 of the Rehabilitation Act of 1973 (which prohibit discrimination based upon disability); the Equal Pay Act (which prohibits
paying men and women unequal pay for equal work); the California Fair Employment and Housing Act, California Government Code Section 12900 et seq. (which prohibits discrimination based on protected characteristics including race, color,
religion, sex, gender, sexual orientation, marital status, national origin, language restrictions, ancestry, physical or mental disability, medical condition, age, and denial of leave); the California Equal Pay Law (which prohibits paying men and
women unequal pay for equal work), California Labor Code Section 1197.5; the Unruh Civil Rights Act, California Civil Code Section 51 et seq. (which prohibits discrimination based on age, sex, race, color, religion, ancestry,
national origin, disability, medical condition, marital status, or sexual orientation); or any other local, state or federal statute, regulation, common law or decision concerning discrimination, harassment, or retaliation on these or any other
grounds or otherwise governing the employment relationship. 
 (ii) Other employment laws, such as the federal Worker Adjustment and
Retraining Notification Act of 1988 and the California Worker Adjustment and Retraining Notification Act, California Labor Code Sections 1400 et seq. (known as WARN laws, which require that advance notice be given of certain workforce reductions);
Executive Retirement Income Security Act of 1974 (which, among other things, protects employee benefits); Fair Labor Standards Act of 1938 (which regulates wage and hour matters); the Family and Medical Leave Act of 1993 (which requires employers to
provide leaves of absence under certain circumstances); the California Labor Code (which regulates employment and wage and hour matters); the California Family Rights Act of 1993 , California Government Code Section 12945.1 et seq.
(which requires employers to provide leaves of absence under certain circumstances); and any other federal, state, or local statute, regulation, common law or decision relating to employment, such as veterans’ reemployment rights laws or any
other aspect of employment. 

 (iii) Other laws, such as any federal, state, or local law enforcing express or implied
employment or other contracts or covenants; any other federal, state or local laws providing relief for alleged wrongful discharge, physical or personal injury, breach of contract, emotional distress, fraud, negligent misrepresentation, defamation,
invasion of privacy, violation of public policy and similar or related claims; common law claims under any tort, contract or other theory now or hereafter recognized, and any other federal, state, or local statute, regulation, common law or decision
otherwise regulating employment 
 (c) Participation in Agency Proceedings. Nothing in this Agreement shall prevent Executive from
filing a charge (including a challenge to the validity of this Agreement) with the Equal Employment Opportunity Commission (the “EEOC”), the National Labor Relations Board (the “NLRB”), the California Department of
Fair Employment and Housing (the “DFEH”), or other similar federal, state or local agencies, or from participating in any investigation or proceeding conducted by the EEOC, the NLRB, the DFEH or similar federal, state or local
agencies. However, by entering into this Agreement, Executive understands and agrees that she is waiving any and all rights to recover any monetary relief or other personal relief as a result of any such EEOC, NLRB, DFEH or similar federal, state or
local agency proceedings, including any subsequent legal action. 
 (d) Claims Not Released. The Released Claims do not include
claims by Executive for: (i) unemployment insurance; (ii) workers’ compensation benefits; (iii) state disability compensation; (iv) previously vested benefits under any the Company-sponsored benefits plan; (v) indemnity
under the Indemnification Agreement or any other written indemnity agreement between the Company and Executive; and (vi) any other rights that cannot by law be released by private agreement. 

(e) EXCEPT AS OUTLINED ABOVE, BY SIGNING THIS AGREEMENT, EXECUTIVE WAIVES ANY RIGHT THAT SHE MAY HAVE HAD TO PURSUE OR BRING A LAWSUIT OR MAKE
ANY LEGAL CLAIM AGAINST THE COMPANY OR THE RELEASEES INCLUDING, BUT NOT LIMITED TO, CLAIMS THAT IN ANY WAY ARISE FROM OR RELATE TO HER EMPLOYMENT OR THE TERMINATION OF THAT EMPLOYMENT, UP TO AND INCLUDING THE DATE OF THE EXECUTION OF THIS AGREEMENT.
EXECUTIVE AGREES NOT TO PURSUE OR BRING ANY SUCH LAWSUIT OR LEGAL CLAIM SEEKING MONETARY OR OTHER RELIEF. 
 (f) Waiver of Rights under
California Civil Code Section 1542. Executive acknowledges that she has read Section 1542 of the Civil Code of the State of California, which provides as follows: 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR. 
 Executive understands that
for purposes of this Section 3(f), she is considered the “creditor” and the Company is considered the “debtor.” Executive understands that Section 1542 gives her the right not to release existing claims of which she is
not now aware, unless she voluntarily chooses to waive this right. Even though Executive is aware of this right, Executive nevertheless hereby voluntarily waives the right described in Section 1542 with respect to the Released Claims, and
elects to assume all risks for claims that now exist in her favor, known or unknown, arising from the subject matter of the Release. 

 Executive acknowledges that different or additional facts may be discovered in addition to what she now knows or
believes to be true with respect to the matters herein released, and Executive agrees that this Agreement shall be and remain in effect in all respects as a complete and final release of the matters released, notwithstanding any such different or
additional facts. Executive represents and warrants that she has not previously filed or joined in any claims that are released herein and that she has not given or sold any portion of any claims released herein to anyone else. 

(g) Acknowledgments/Time Frames. 

(i) Executive agrees and acknowledges that (A) she understands the language used in this Agreement and its legal effect, and (B) she
will receive compensation and/or benefits under the Severance Agreement to which Executive would not have been entitled without signing this Agreement. Executive further agrees and acknowledges that, with respect to the General Release in this
Section 3, Executive is specifically releasing all claims and rights under the Age Discrimination in Employment Act, as amended, 29 U.S.C. Section 621 et seq. Executive acknowledges that she has read and understands the foregoing
Agreement and executes it voluntarily and without coercion. 
 (ii) Executive further acknowledges that she is hereby being advised in
writing to consult with an attorney prior to executing this Agreement and that she is being given a period of twenty one (21) days within which to consider and execute this Agreement. Executive understands that she may voluntarily choose to
execute this Agreement before the end of the twenty-one day period, at her sole option, by executing the “Election to Execute Release Prior to Expiration of 21-Day Consideration Period” attached hereto. 

(iii) Executive further understands that she has seven days following his execution of this Agreement to revoke it in writing, and that this
Agreement is not effective or enforceable until after this seven day period has expired without revocation (the “Effective Date”). For such revocation to be effective, written notice must be either personally delivered to the
Company in the care of Donald J. Santel or sent via certified mail, return receipt requested, or overnight delivery service to the same address and to the attention of Donald J. Santel, and received by the addressee by no later than 9:00 a.m. on the
eighth calendar day after the date by which Executive has signed this Agreement (“Revocation Deadline”). If Executive revokes this Agreement on the seventh day of the revocation period or before 9:00 a.m. the following day, then she
agrees that she will fax the revocation notice to (650) 871-7029 on that day and will then follow up by sending the original revocation via certified mail or overnight delivery. Executive expressly agrees that, in the event she revokes this
Agreement, the Agreement shall be null and void and have no legal or binding effect whatsoever and Executive shall not be eligible for the Termination Benefits or the Consulting Fee. 

(h) Executive agrees to execute a second bring-down release, in the same form provided in this Section 3, on the last day of the
consulting period (the “Consulting End Date”) which release shall cover the period from the Effective Date through the Consulting End Date. 

4. The Parties agree that their respective rights and obligations under the Severance Agreement shall survive the execution of this Agreement.

 5. Executive acknowledges that she has received all compensation to which she is entitled for her
work up to her last day of employment with the Company, and that she is not entitled to any further pay or benefit of any kind, for services rendered or any other reason, other than the Termination Benefits she will receive if she signs this
Agreement. 
 6. Executive agrees that from and after the date of the receipt of this Agreement, Executive will not, directly or indirectly,
provide to any person or entity any information concerning or relating to the negotiation of this Agreement or its terms and conditions, except: (i) to the extent specifically required by law or legal process or as authorized in writing by the
Company; (ii) to Executive’s tax advisors as may be necessary for the preparation of tax returns or other reports required by law; (iii) to Executive’s attorneys as may be necessary to secure advice concerning this Agreement; or
(iv) to members of Executive’s immediate family. Executive agrees that prior to disclosing such information under parts (ii), (iii), or (iv), Executive will inform the recipients that they are bound by the limitations of this section.
Subsequent disclosure by any such recipients will be deemed to be a disclosure by Executive in breach of this Agreement. 
 7. Executive
agrees that any sensitive, proprietary, or confidential information or data relating to the Company or any of its affiliates or other Releasees as defined in Section 3 above, including, without limitation, trade secrets, processes, practices,
pricing information, billing histories, customer requirements, customer lists, customer contacts, employee lists, salary information, personnel matters, financial data, operating results, plans, contractual relationships, projections for new
business opportunities, new or developing business for the Company, technological innovations in any stage of development, the Company’s financial data, long range or short range plans, any confidential or proprietary information of others
licensed to the Company, and all other data and information of a competition-sensitive nature (collectively, “Confidential Information”), and all notes, records, software, drawings, handbooks, manuals, policies, contracts,
memoranda, sales files, or any other documents generated or compiled by any employee of the Company reflecting such Confidential Information, that Executive acquired while an employee of the Company will not be disclosed or used for Executive’s
own purposes or in a manner detrimental to the Company’s interests. In addition, Executive hereby reaffirms Executive’s existing obligations, to the fullest extent permitted by law, under the Executive Confidential Information and
Invention Assignment Agreement that Executive signed with the Company (the “Confidential Information Agreement”). 
 8. At
the Company’s request, Executive will return to the Company all property and equipment belonging to the Company and the Releasees, including without limitation all computers, hard drives, and access cards, the originals and all copies
(regardless of medium) of all information, files, materials, documents or other property relating to the business of the Company, the Releasees, or their affiliates, and Executive represents that all such information and items have been returned to
the Company. If Executive fails to return any such property, the Company shall be entitled to deduct from the Severance an amount equal to the value of non-returned property. 

9. Executive agrees that she will not make to any person or entity any false, disparaging, or derogatory comments about the Company, its
business affairs, its employees, clients, contractors, agents, or any of the other Releasees. Executive will refer all reference requests regarding Executive’s employment with the Company to the Company’s Human Resources department, who
will disclose only Executive’s dates of employment with the Company, last position held, and upon Executive’s written request, final salary, in response to such reference requests. 

 10. This Agreement, the Severance Agreement, and the Confidential Information Agreement represent
the entire understanding of the Parties with respect to the subject matter hereof and supersede all prior arrangements and understandings regarding same including, without limitation, any severance provisions of the offer letter agreement between
Executive and the Company. For the avoidance of doubt, Executive’s Continuous Service, as defined in the applicable Company stock option plans, shall terminate on the Separation Date, and Executive shall not vest in any stock options or
restricted stock awards after the Separation Date other than as provided for in this Agreement. No provision of this Agreement shall be modified, waived or discharged unless the modification, waiver or discharge is agreed to in writing and signed by
Executive and by an authorized officer of the Company (other than Executive). No waiver by either Party of any breach of, or of compliance with, any condition or provision of this Agreement by the other Party shall be considered a waiver of any
other condition or provision or of the same condition or provision at another time. 
 BY SIGNING BELOW, EXECUTIVE REPRESENTS AND WARRANTS THAT SHE HAS FULL
LEGAL CAPACITY TO ENTER INTO THIS AGREEMENT, HAS CAREFULLY READ THIS AGREEMENT, HAS HAD A FULL OPPORTUNITY TO REVIEW THIS AGREEMENT WITH COUNSEL OF EXECUTIVE’S CHOOSING, AND HAS EXECUTED THIS AGREEMENT VOLUNTARILY, WITHOUT DURESS, COERCION OR
UNDUE INFLUENCE. 
  

							
	HYPERION THERAPEUTICS, INC	  		  	EXECUTIVE
				
	By:	 	 /s/ Donald J. Santel
	  		  	 /s/ Klara A. Dickinson-Eason

	 Donald J. Santel
 President and
Chief Executive Officer
	  		  	Klara A. Dickinson-Eason
			
	 Date: 4 August 2014
	  		  	Date: 30 July 2014

 TO EXECUTE RELEASE OF CLAIMS 

PRIOR TO EXPIRATION OF 21-DAY CONSIDERATION PERIOD 

I, Klara A. Dickinson, understand that I have twenty-one (21) days within which to consider and execute the attached General Release
of Claims. However, after having an opportunity to consult counsel, I have freely and voluntarily elected to execute the General Release of Claims before such twenty-one (21) day period has expired. 

 

					
	 30 July 2014

Date
	  		  	 /s/ Klara A. Dickinson-Eason

Executive Signature

 EXHIBIT A 

SUMMARY OF TERMINATION BENEFITS 
 The
Termination Benefits provided for in the Severance Agreement, which are all subject to Executive’s compliance with Section 1 of this Agreement and Section 3 of the Severance Agreement, consist of: 

 

	A.	The gross amount of Three Hundred Seventy-two Thousand, Eight Hundred and Sixty Dollars ($372,860.00), which is an amount equal to 12 months of Executive’s base salary at the rate in effect at the time of the
Separation Date, and payable in substantially equal installments in accordance with the Company’s normal payroll policies, less applicable withholdings, with such installments to commence on the first payroll period following the sixtieth
(60th) day after the date of the Separation (with the first such installment to include any payments that otherwise would have been made if the Agreement were not subject to revocation). 

 

	B.	The gross amount of One Hundred Forty-nine Thousand, One Hundred Forty-four Dollars ($149,144.00), which is an amount equal to 12 months of Executive’s target annual bonus for the current fiscal year, and payable
in a lump sum on the first payroll period following the sixtieth (60th) day after the date of Executive’s Separation Date, less applicable withholdings. 

 

	C.	The automatic vesting of Executive’s stock options and restricted stock awards with respect to the number of shares of Company common stock that would have vested had Executive’s employment with the Company
continued for 12 months following the Separation Date. Such amounts are set forth on Schedule A to this Agreement. 

  

	D.	If Executive elects COBRA continuation coverage, the payment or reimbursement of the healthcare insurance premium for Executive and her covered dependents through the earlier of: (1) 24 months following the
Separation Date; (2) the termination of Executive’s qualification or eligibility for COBRA continuation coverage; or (3) Executive and her dependents becoming eligible for healthcare coverage under another employer’s plan.

  

	E.	Transition support of either Fifteen Thousand Dollars ($15,000.00) or an equivalent amount of outplacement services, at Executive’s election, and payable after the Effective Date, less applicable withholdings.

  

	F.	The right to keep Executive’s Company-issued smartphone or handheld device. 

 SCHEDULE A 

EQUITY AWARD VESTING 

 SCHEDULE A 

EQUITY AWARDS 
  

																													
	 Grant #
	  	Grant Date	  	Plan	  	Price	 	 	Number of
Options
Granted	 	  	Options
Vested at
July 8,
2014	 	  	Acceleration
(12 months)	 	  	New Deadline To
Exercise Equity
Awards	  	Options Exercisable
pursuant to Agreement	 	  	Type of
Equity
Award
	 1176019
	  	04/16/2012	  	2006 Plan	  	$	7.31	  	 	 	36,945	  	  	 	20,782	  	  	 	9,236	  	  	January 8, 2015	  	 	30,018	  	  	NQSO
	 1315522
	  	04/15/2013	  	2012 Plan	  	$	24.46	  	 	 	8,153	  	  	 	272	  	  	 	623	  	  	January 8, 2015	  	 	895	  	  	NQSO
	 1315523
	  	04/15/2013	  	2012 Plan	  	$	24.46	  	 	 	34,847	  	  	 	12,270	  	  	 	10,127	  	  	January 8, 2015	  	 	22,397	  	  	NQSO
	 1315584
	  	03/11/2014	  	2012 Plan	  	$	26.74	  	 	 	712	  	  	 	—  	  	  	 	—  	  	  	January 8, 2015	  	 	—  	  	  	NQSO
	 1315585
	  	03/11/2014	  	2012 Plan	  	$	26.74	  	 	 	11,288	  	  	 	—  	  	  	 	3,000	  	  	January 8, 2015	  	 	3,000	  	  	NQSO
	 1315645
	  	03/11/2014	  	2012 Plan	  	 
 	(RSU, no
price)	  
  	 	 	2,000	  	  	 	—  	  	  	 	500	  	  	January 8, 2015	  	 	500	  	  	RSU
	 361500
	  	11/03/2009	  	2006 Plan	  	$	1.28	  	 	 	80,131	  	  	 	80,131	  	  	 	—  	  	  	January 8, 2015	  	 	80,131	  	  	NQSO
	 488451
	  	04/15/2011	  	2006 Plan	  	$	4.08	  	 	 	22,525	  	  	 	17,832	  	  	 	4,693	  	  	January 8, 2015	  	 	22,525	  	  	NQSO
	 76080
	  	08/31/2007	  	2006 Plan	  	$	327.95	  	 	 	169	  	  	 	169	  	  	 	—  	  	  	January 8, 2015	  	 	169	  	  	NQSO
	 84176
	  	04/22/2008	  	2006 Plan	  	$	327.95	  	 	 	27	  	  	 	27	  	  	 	—  	  	  	January 8, 2015	  	 	27	  	  	NQSO
		  		  		  				 	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  		  	  
	  
	 	  	
	 Total
	  		  		  				 	 	196,797	  	  	 	131,483	  	  	 	28,179	  	  		  	 	159,662

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