Document:

Exhibit 10.2 - Muhich A&R Change of Control Agreement

Exhibit 10.2
AMENDED AND RESTATED
EXECUTIVE CHANGE OF CONTROL AGREEMENT

February 1, 2013
	
		
	Allen Muhich
	Executive

	 
	 

	 
	 

	Radisys Corporation, an Oregon Corporation
	 

	5435 NE Dawson Creek Drive
	 

	Hillsboro, OR 97124
	the Company

1.Employment Relationship.  Executive is currently employed by the Company as Chief Financial Officer, Vice President of Finance and Secretary.  Executive and the Company acknowledge that either party may terminate this employment relationship at any time and for any or no reason, provided that each party complies with the terms of this Agreement.
2.    Release of Claims.  In consideration for and as a condition precedent to receiving the severance benefits outlined in this Agreement, Executive agrees to execute a Release of Claims in the form attached as Exhibit A ("Release of Claims").  Executive promises to execute and deliver the Release of Claims to the Company within 21 days (or, if required by applicable law, 45 days) from the last day of Executive's active employment.  Executive shall forfeit the severance benefits outlined in this Agreement in the event that Executive fails to execute and deliver the Release of Claims to the Company in accordance with the timing and other provisions of the preceding sentence or revokes such Release of Claims prior to the "Effective Date" (as such term is defined in the Release of Claims) of the Release of Claims.
3.    Additional Compensation Upon Certain Termination Events.
3.1    Change of Control.  In the event of a Termination of Executive's Employment (as defined in Section 6.1), and provided such Termination of Executive's Employment occurs within twelve (12) months following a Change of Control (as defined in Section 6.3 of this Agreement) or within three (3) months preceding a Change of Control, and contingent upon Executive's execution of the Release of Claims without revocation within the time period described in Section 2 above and compliance with Section 9 and Section 10, Executive shall be entitled to the following benefits:
(a)    As severance pay and in lieu of any other compensation for periods subsequent to the date of termination, the Company shall pay Executive, in a lump sum, an amount equal to twelve (12) months of Executive's annual base pay at the highest annual rate in effect at any time within the 12-month period preceding the date of termination.   Severance pay that is payable under this Agreement shall be paid to Executive within 5 days following the Effective Date of the Release of Claims, and no later than two and one-half months following the last day of the calendar year of the Termination of Executive's Employment. 
(b)    As an additional severance benefit, the Company will provide Executive with up to twelve (12) months of continued coverage (100% paid by the Company) pursuant to COBRA under the Company's group health plan at the level of benefits (whether single or family coverage) previously elected by Executive immediately before the Termination of Executive's Employment and to the extent that Executive elects to continue coverage during such 12-month period.  Each month for which the Company pays COBRA premiums directly reduces the total number of months of Executive’s COBRA continuation entitlement.

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(c)    The Company shall also pay Executive his cash-based incentive compensation plan payout earned but not yet received under each cash-based incentive compensation plan maintained by the Company, if any, for any performance period completed prior to the Termination of Executive's Employment.  In addition, the Company shall pay Executive his cash-based incentive compensation plan payout for any then current performance period under each such cash-based incentive compensation plan, provided that such payout, if any, shall be based on actual performance results for the performance period, shall not exceed the payout at target performance, and shall be pro-rated through the date of the Termination of Executive's Employment.  The amounts described in this Section (c), if any, shall be paid on the date Executive would otherwise have received each such payment if his employment had not been terminated and, in any event, no later than two and one-half months following the last day of the calendar year for which the cash-based incentive compensation plan payout was earned.
(d)    All stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares including those granted under the Company's Long Term Incentive Plan, performance units and other similar awards granted to Executive under the Company's 2007 Stock Plan or any other similar incentive plan shall vest in full; all stock options, stock appreciation rights and other similar purchase rights shall be immediately exercisable in full in accordance with the applicable provisions of the relevant award agreement and plan; and any risk of forfeiture included in any restricted stock, restricted stock unit, performance share, performance unit or other similar award shall immediately lapse.  Stock options that are not incentive stock options under the Code, and stock appreciation rights shall also be amended to permit Executive to exercise such stock options and stock appreciation rights until the earlier of (i) 180 days after the date of the Termination of Executive's Employment, or (ii) the date that each such stock option and stock appreciation right would otherwise expire by its original terms had Executive's employment not terminated.  Such vesting and extension of stock options and stock appreciation rights shall occur notwithstanding any provision in any plan or award agreement to the contrary.  Any restricted stock unit, performance share, or performance unit that vests, becomes immediately exercisable in full, or is no longer subject to a risk of forfeiture pursuant to this clause (d) shall be paid or settled no later than two and one-half months after the end of the calendar year in which such restricted stock unit, performance share or performance unit vests.  Notwithstanding the foregoing, this clause (d) shall not apply to any stock option, stock appreciation right, restricted stock, restricted stock unit, performance share, performance unit or other equity-based award, payment or amount that provides for the "deferral of compensation" (as such term is defined under Code Section 409A).
3.2    Parachute Payments.  Notwithstanding the foregoing, if the total payments and benefits to be paid to or for the benefit of Executive under this Agreement (the "Payment") would cause any portion of those payments and benefits to be "parachute payments" as defined in Code Section 280G(b)(2), or any successor provision, the total payments and benefits to be paid to or for the benefit of Executive under this Agreement shall be reduced by the Company to the Reduced Amount.  The "Reduced Amount" shall be either (x) the largest portion of the Payment that would otherwise result in no portion of the Payment being subject to the excise tax imposed by Code Section 4999 (the "Excise Tax") or (y) the largest portion, up to and including the total, of the Payment, whichever amount, after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in Executive's receipt, on an after-tax basis, of the greater amount of the Payment notwithstanding that all or some portion of the Payment may be subject to the Excise Tax.  If a reduction in payments or benefits is necessary so that the Payment equals the Reduced Amount, reduction shall occur in the following order: first by reducing or eliminating the portion of the Payment that is payable in cash, second by reducing or eliminating the portion of the Payment that is not payable in cash (other than Payments as to which Treasury Regulations Section 1.280G-1 Q/A – 24(c) (or any successor provision thereto) applies (“Q/A-24(c) Payments”)), and third by reducing or eliminating Q/A-24(c) Payments.  In the event that any Q/A-24(c) Payment or acceleration is to be reduced, such Q/A-24(c) Payment shall be reduced or cancelled in the reverse order of the date of grant of the awards.  The independent public accounting firm serving as the Company's auditing firm immediately prior to the effective date of the Change of Control (the "Accountants") shall make in writing in good faith, subject to the terms and conditions of this Section 3.2, all calculations and determinations under this Section, including the assumptions to be used in arriving at such calculations and determinations, whether any payments are to be reduced, and the manner and amount of any reduction in the payments.  For purposes of making the calculations and determinations under this Section, the Accountants may make reasonable assumptions and approximations concerning the application of Code Sections 280G and 4999.  Executive shall furnish to the Accountants and the Company such information and documents as the Accountants or 

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the Company may reasonably request to make the calculations and determinations under this Section.  The Company shall bear all fees and costs the Accountants may reasonably charge or incur in connection with any calculations contemplated by this Section.  The Accountants shall provide its determination, together with detailed supporting calculations regarding any relevant matter, both to the Company and to Executive by no later than ninety (90) days following the Termination of Executive's Employment.  
4.    Withholding; Subsequent Employment.
4.1    Withholding.  All payments provided for in this Agreement are subject to applicable withholding obligations imposed by federal, state and local laws and regulations.
4.2    Offset.  The amount of any payment provided for in this Agreement shall not be reduced, offset or subject to recovery by the Company by reason of any compensation earned by Executive as the result of employment by another employer after termination.
5.    Other Agreements.  Any cash severance pay paid to Executive under any other agreement with the Company or any of its subsidiaries or affiliates (including but not limited to any employment agreement, but excluding for this purpose any stock option, stock appreciation right, restricted stock, restricted stock unit, performance share, performance unit or other similar award agreement that may provide for accelerated vesting or related benefits) shall reduce the amount of cash severance pay payable under this Agreement.
6.    Definitions.
6.1    Termination of Executive's Employment.  Termination of Executive's Employment means that (i) the Company has terminated Executive's employment with the Company (including any subsidiary of the Company) other than for Cause (as defined in Section 6.2), death or Disability (as defined in Section 6.4), or (ii) Executive, by written notice to the Company, has terminated his employment with the Company (including any subsidiary of the Company) for Good Reason (as defined below).  For purposes of this Agreement, "Good Reason" means:
(a)    a material reduction by the Company or the surviving company in Executive's base salary from the highest annual rate in effect at any time within the 12-month period preceding the Change of Control, other than a salary reduction that is part of a general salary reduction affecting employees generally; or
(b)    a material change in the geographic location where Executive is based, provided that such change is more than 25 miles from where Executive's office is located immediately prior to the Change of Control, except for required travel on Company business to an extent substantially consistent with the business travel obligations which Executive undertook on behalf of the Company immediately prior to the Change of Control.
An event described above will not constitute Good Reason unless Executive provides written notice to the Company of Executive's intention to resign for Good Reason and specifying in reasonable detail the breach or action giving rise thereto within 90 days of its initial existence and the Company does not cure such breach or action within 30 days after the date of Executive's notice.  In no instance will a resignation by Executive be deemed to be for Good Reason if it is made more than 24 months following the initial occurrence of any of the events that otherwise would constitute Good Reason hereunder.
A  Termination of Executive's Employment is intended to mean a termination of employment which constitutes a "separation from service" under Code Section 409A.  If any payments are to be made within a specified period of time or during a calendar year, the date of such payment shall be in the sole discretion of the Company, and Executive shall not be permitted, directly or indirectly, to designate the taxable year of payment.
6.2    Cause.  Termination of Executive's Employment for "Cause" shall mean termination upon (a) the willful and continued failure by Executive to perform substantially Executive's reasonably assigned duties with the Company (other than any such failure resulting from Executive's incapacity due to physical or mental 

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illness) after a demand for substantial performance is delivered to Executive by the Board of Directors, the Chief Executive Officer or the President of the Company, which specifically identifies the manner in which the Board of Directors, Chief Executive Officer or the President of the Company believes that Executive has not substantially performed Executive's duties or (b) the willful engaging by Executive in illegal conduct which is materially and demonstrably injurious to the Company.  No act, or failure to act, on Executive's part shall be considered "willful" unless done, or omitted to be done, by Executive without reasonable belief that Executive's action or omission was in, or not opposed to, the best interests of the Company.  Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board of Directors shall be conclusively presumed to be done, or omitted to be done, by Executive in the best interests of the Company.
6.3    Change of Control.  A Change of Control shall mean that one of the following events has taken place:
(a)    The shareholders of the Company approve one of the following:
(i)    Any merger or statutory plan of exchange involving the Company ("Merger") in which the Company is not the continuing or surviving corporation or pursuant to which Common Stock would be converted into cash, securities or other property, other than a Merger involving the Company in which the holders of Common Stock immediately prior to the Merger continue to represent more than 50 percent of the voting securities of the surviving corporation after the Merger; or
(ii)    Any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company; provided that a sale, lease, exchange or other transfer of assets (in one transaction or a series of related transactions) shall not be a sale of substantially all of the assets of the Company for purposes of this Agreement if (x) the Company’s and its other consolidated subsidiaries’ investments in such assets are less than 90% of the total assets of the Company and its subsidiaries consolidated as of the end of the most recently completed fiscal year or (y) the pro forma revenue of the business comprised by such assets as of the end of the most recently completed fiscal year end is less than 90% of the total revenue of the Company and its subsidiaries consolidated as of the end of the most recently completed fiscal year end.
(b)    A tender or exchange offer, other than one made by the Company, is made for Common Stock (or securities convertible into Common Stock) and such offer results in a portion of those securities being purchased and the offeror after the consummation of the offer is the beneficial owner (as determined pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")), directly or indirectly, of securities representing more than 50 percent of the voting power of outstanding securities of the Company.
(c)    The Company receives a report on Schedule 13D of the Exchange Act reporting the beneficial ownership by any person, or more than one person acting as a group, of securities representing more than 50 percent of the voting power of outstanding securities of the Company, except that if such receipt shall occur during a tender offer or exchange offer described in (b) above, a Change of Control shall not take place until the conclusion of such offer.
Notwithstanding anything in the foregoing to the contrary, no Change of Control shall be deemed to have occurred for purposes of this Agreement by virtue of any transaction which results in Executive, or a group of persons which includes Executive, acquiring, directly or indirectly, securities representing 20 percent or more of the voting power of outstanding securities of the Company.
6.4    Disability.  "Disability" means Executive's absence from Executive's full-time duties with the Company for 180 consecutive calendar days as a result of Executive's incapacity due to physical or mental illness, as determined by Executive’s attending physician and in accordance with the Company’s Medical Leave of Absence Policy, unless within 30 days after notice of termination by the Company following such absence Executive 

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shall have returned to the full-time performance of Executive's duties.  This Agreement does not apply if the Executive is terminated due to Disability.
7.    Successors; Binding Agreement.  This Agreement shall be binding on and inure to the benefit of the Company and its successors and assigns.  This Agreement shall inure to the benefit of and be enforceable by Executive and Executive's legal representatives, executors, administrators and heirs.
8.    Entire Agreement.  The Company and Executive agree that the foregoing terms and conditions constitute the entire agreement between the parties relating to the termination of Executive’s employment with the Company under the conditions described in Section 3.1, that this Agreement supersedes and replaces any prior agreements relating to the matters covered by this Agreement, specifically the Executive Change of Control Agreement by and between Executive and the Company dated October 1, 2012 and that there exist no other agreements between the parties, oral or written, express or implied, relating to any matters covered by this Agreement.  Further, Executive waives any entitlement to any severance or other payment under any such agreement and that such waiver shall inure to the benefit of the Company, its successors and assigns, and any third parties.
9.    Resignation of Corporate Offices; Reasonable Assistance.  Executive will resign Executive's office, if any, as a director, officer or trustee of the Company, its subsidiaries or affiliates and of any other corporation or trust of which Executive serves as such at the request of the Company, effective as of the date of termination of employment.  Executive further agrees that, if requested by the Company or the surviving company following a Change of Control, Executive will continue his employment with the Company or the surviving company for a period of up to six months following the Change of Control in any capacity requested, consistent with Executive's area of expertise, provided that Executive receives the same salary and substantially the same benefits as in effect prior to the Change of Control.  Executive agrees to provide the Company such written resignation(s) and assistance upon request and that no severance pay or other benefits will be paid until after such resignation(s) or services are provided.
10.    No Disparagement.  Executive agrees that from and after the date of termination of employment Executive will not disparage or make false or adverse statements (whether written or oral) about the Company and its predecessors and successors, affiliates, and all of each such entity’s officers, directors, employees, insurers, agents, attorneys or assigns, in their individual and representative capacities (the "Parties").  The Company may take actions consistent with breach of this Agreement should it determine that Executive has disparaged or made false or adverse statements (whether written or oral) about the Company or the Parties.  Should the Company determine that Executive has disparaged or made false or adverse statements (whether written or oral) about the Company or the Parties, the Executive shall not be entitled to the severance pay or other benefits provided under this Agreement.
11.    Governing Law.  This Agreement shall be construed in accordance with and governed by the laws of the State of Oregon, without regard to its conflicts of laws provisions.
12.    Amendment.  No provision of this Agreement may be modified unless such modification is agreed to in writing signed by Executive and the Company.
13.    Severability.  If any of the provisions or terms of this Agreement shall for any reason be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other terms of this Agreement, and this Agreement shall be construed as if such unenforceable term had never been contained in this Agreement.
14.    Code Section 409A.  This Agreement and the severance pay and other benefits  provided hereunder are intended to qualify for an exemption from Code Section 409A, provided, however, that if this Agreement and the severance pay and other benefits provided hereunder are not so exempt, they are intended to comply with Code Section 409A to the extent applicable thereto.  Notwithstanding any provision of this Agreement to the contrary, this Agreement shall be interpreted and construed consistent with this intent, provided that the Company shall not be required to assume any increased economic burden in connection therewith.  Although the Company intends to administer this Agreement so that it will comply with the requirements of Code Section 409A, the Company does not represent or warrant that this Agreement will comply with Code Section 409A or any other 

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provision of federal, state, local, or non-United States law.  Neither the Company, its subsidiaries, nor their respective directors, officers, employees or advisers shall be liable to Executive (or any other individual claiming a benefit through Executive) for any tax, interest, or penalties Executive may owe as a result of compensation paid under this Agreement, and the Company and its subsidiaries shall have no obligation to indemnify or otherwise protect Executive from the obligation to pay any taxes pursuant to Code Section 409A.  If any payment or reimbursement, or portion thereof, under this Agreement would be deemed to be a deferral of compensation not exempt from the provisions of Code Section 409A and would be considered a payment upon a separation from service for purposes of Code Section 409A, and Executive is determined to be a "specified employee" under Code Section 409A, then any such payment or reimbursement, or portion thereof, shall be delayed until the date that is the earlier to occur of (i) Executive's death or (ii) the date that is six months and one day following the date of the Termination of Executive's Employment (the "Delay Period").  Upon the expiration of the Delay Period, the payments delayed pursuant to this Section 14 shall be paid to Executive in a lump sum, and any remaining payments due under this Section 14 shall be payable in accordance with their original payment schedule.
15.    Costs and Attorneys' Fees.  In the event of any administrative or civil action brought by Executive to enforce the provisions of this Agreement, the Company shall pay Executive's reasonable attorneys' fees through trial and/or on appeal.  The payment or reimbursement of expenses described in this Section 15 shall be made promptly and in no event later than December 31 of the year following the year in which such expenses were incurred, and the amount of such expenses eligible for payment or reimbursement in any year shall not affect the amount of such expenses eligible for payment or reimbursement in any other year nor shall such right to payment or reimbursement be subject to liquidation or exchange for another benefit. 
16.    Prohibition on Acceleration of Payments.  The time or schedule of any payment or amount scheduled to be paid pursuant to the terms of this Agreement may not be accelerated except as otherwise permitted under Code Section 409A and the guidance and Treasury regulations issued thereunder.
	
				
	RADISYS CORPORATION
	 
	 

	By:
	/s/ Brian Bronson
	 
	/s/ Allen Muhich

	 
	Brian Bronson, President and Chief Executive Officer
	 
	Allen Muhich, Chief Financial Officer and Vice President of Finance

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EXHIBIT A 
 
RELEASE OF CLAIMS
1.Parties.
The parties to Release of Claims (hereinafter "Release") are Allen Muhich and Radisys Corporation, an Oregon corporation, as hereinafter defined.
1.1    Executive and Releasing Parties.
For the purposes of this Release, "Executive" means Allen Muhich, and "Releasing Parties" means Executive and his attorneys, heirs, legatees, personal representatives, executors, administrators, assigns, and spouse.
1.2    The Company and the Released Parties.
For the purposes of this Release, the "Company" means Radisys Corporation, an Oregon corporation, and "Released Parties" means the Company and its predecessors and successors, affiliates, and all of each such entity’s officers, directors, employees, insurers, agents, attorneys or assigns, in their individual and representative capacities.
2.    Background And Purpose.
Executive was employed by the Company.  Executive's employment is ending effective __________ under the conditions described in Section 3.1 of the Executive Change of Control Agreement ("Agreement") by and between Executive and the Company dated February 1, 2013.
The purpose of this Release is to settle, and the parties hereby settle, fully and finally, any and all claims the Releasing Parties may have against the Released Parties, whether asserted or not, known or unknown, including, but not limited to, claims arising out of or related to Executive's employment, any claim for reemployment, or any other claims whether asserted or not, known or unknown, past or future, that relate to Executive's employment, reemployment, or application for reemployment (in each case except as set forth below).
3.    Release.
In consideration for the payments and benefits set forth in Section 3.1 of the Agreement and other promises by the Company all of which constitute good and sufficient consideration, Executive, for and on behalf of the Releasing Parties, waives, acquits and forever discharges the Released Parties from any obligations the Released Parties have and all claims the Releasing Parties may have as of the Effective Date (as defined in Section 4 below) of this Release, including but not limited to, obligations and/or claims arising from the Agreement (other than any claim Executive may have against the Company after the date hereof with respect to nonperformance of the payment obligations of the Company set forth in Section 3.1 of the Agreement) or any other document or oral agreement relating to employment, compensation, benefits, severance or post-employment issues.  Executive, for and on behalf of the Releasing Parties, hereby releases the Released Parties from any and all claims, demands, actions, or causes of action, whether known or unknown, arising from or related in any way to any employment of or past failure or refusal to employ Executive by the Company, or any other past claim that relates in any way to Executive's employment, compensation, benefits, reemployment, or application for employment, with the exception of any claim Executive may have against the Company for enforcement of the Agreement.  The matters released include, but are not limited to, any claims under federal, state or local laws, including the Age Discrimination in Employment Act (“ADEA”) as amended by the Older Workers’ Benefit Protection Act (“OWBPA”), any common law tort, contract or statutory claims, and any claims for attorneys’ fees and costs.  Further, Executive, for and on behalf of the Releasing Parties, waives and releases the Released Parties from any claims that this Release was procured by fraud or signed under duress or coercion so as to make the Release not binding.  Executive is not relying upon any 

A-1

representations by the Company's legal counsel in deciding to enter into this Release.  Executive understands and agrees that by signing this Release Executive, for and on behalf of the Releasing Parties, is giving up the right to pursue any legal claims that Executive or the Releasing Parties may have against the Released Parties with respect to the claims released hereby.  Provided, nothing in this provision of this Release shall be construed to prohibit Executive from challenging the validity of the ADEA release in this Section of the Release or from filing a charge or complaint with the Equal Employment Opportunity Commission or any state agency or from participating in any investigation or proceeding conducted by the Equal Employment Opportunity Commission or state agency.  However, the Released Parties will assert all such claims have been released in a final binding settlement. 
Executive understands and agrees that this Release extinguishes all released claims, whether known or unknown, foreseen or unforeseen.  Executive expressly waives any rights or benefits under Section 1542 of the California Civil Code, or any equivalent statute.  California Civil Code Section 1542 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 fully understands that, if any fact with respect to any matter covered by this Release is found hereafter to be other than or different from the facts now believed by Executive to be true, Executive expressly accepts and assumes that this Release shall be and remain effective, notwithstanding such difference in the facts.
3.1    IMPORTANT INFORMATION REGARDING ADEA RELEASE.  
Executive understands and agrees that:
		
	(a)
	this Release is worded in an understandable way;

		
	(b)
	claims under ADEA that may arise after the date of this Release are not waived;

		
	(c)
	the rights and claims waived in this Release are in exchange for additional consideration over and above any consideration to which Executive was already undisputedly entitled;

		
	(d)
	Executive has been advised to consult with an attorney prior to executing this Release and has had sufficient time and opportunity to do so;

		
	(e)
	Executive has been given a period of time of 21 days (or, if required by applicable law, 45 days) (the “Statutory Period”), if desired, to consider this Release and understands that Executive may revoke his waiver and release of any ADEA claims covered by this Release within seven (7) days from the date Executive executes this Release.  Notice of revocation must be in writing and received by Radisys Corporation, 5435 NE Dawson Creek Drive, Hillsboro, Oregon 97124 Attention:  Vice President, Human Resources within seven (7) days after Executive signs this Release; and

		
	(f)
	any changes made to this Release, whether material or immaterial, will not restart the running of the Statutory Period.

3.2    Reservations Of Rights.
This Release shall not affect any rights which Executive may have under any medical insurance, disability plan, workers' compensation, unemployment compensation, indemnifications, applicable company stock incentive plan(s), or the 401(k) plan maintained by the Company.

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3.3    No Admission Of Liability.
It is understood and agreed that the acts done and evidenced hereby and the release granted hereunder is not an admission of liability on the part of Executive or the Company or the Released Parties, by whom liability has been and is expressly denied.
4.    Effective Date.
The "Effective Date" of this Release shall be the eighth calendar day after it is signed by Executive. 
5.    Confidentiality, Proprietary, Trade Secret And Related Information.
Executive acknowledges the duty and agrees not to make unauthorized use or disclosure of any confidential, proprietary or trade secret information learned as an employee about the Company, its products, customers and suppliers, and covenants not to breach that duty.  Moreover, Executive acknowledges that, subject to the enforcement limitations of applicable law, the Company reserves the right to enforce the terms of any offer letter, employment agreement, confidentially agreement, or any other agreement between Executive and the Company and any section(s) therein.  Should Executive, Executive's attorney or agents be requested in any judicial, administrative, or other proceeding to disclose confidential, proprietary or trade secret information Executive learned as an employee of the Company, Executive shall promptly notify the Company of such request by the most expeditious means in order to enable the Company to take any reasonable and appropriate action to limit such disclosure.
6.    Scope Of Release.
The provisions of this Release shall be deemed to obligate, extend to, and inure to the benefit of the parties; the Company's parents, subsidiaries, affiliates, successors, predecessors, assigns, directors, officers, and employees; and each party’s insurers, transferees, grantees, legatees, agents, personal representatives and heirs, including those who may assume any and all of the above-described capacities subsequent to the execution and Effective Date of this Release.
7.    Entire Release.
This Release and the Agreement signed by Executive contain the entire agreement and understanding between the parties and, except as reserved in Sections 3 and 5 of this Release, supersede and replace all prior agreements, written or oral, prior negotiations and proposed agreements, written or oral.  Executive and the Company acknowledge that no other party, nor agent nor attorney of any other party, has made any promise, representation, or warranty, express or implied, not contained in this Release concerning the subject matter of this Release to induce this Release, and Executive and the Company acknowledge that they have not executed this Release in reliance upon any such promise, representation, or warranty not contained in this Release.
8.    Severability.
Every provision of this Release is intended to be severable.  In the event any term or provision of this Release is declared to be illegal or invalid for any reason whatsoever by a court of competent jurisdiction or by final and unappealed order of an administrative agency of competent jurisdiction, such illegality or invalidity should not affect the balance of the terms and provisions of this Release, which terms and provisions shall remain binding and enforceable.
9.    References.
The Company agrees to follow the applicable policy(ies) regarding release of employment reference information.

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10.    Parties May Enforce Release.
Nothing in this Release shall operate to release or discharge any parties to this Release or their successors, assigns, legatees, heirs, or personal representatives from any rights, claims, or causes of action arising out of, relating to, or connected with a breach of any obligation of any party contained in this Release.
11.    Governing Law.
This Release shall be construed in accordance with and governed by the laws of the State of Oregon, without regard to its conflicts of laws provisions. 

	
					
	 
	 
	Dated:
	 
	 

	Allen Muhich, Chief Financial Officer and Vice President of Finance
	 
	 
	 
	 

	
					
	STATE OF
	 
	)
	 
	 

	 
	 
	) ss.
	 
	 

	County of
	 
	)
	 
	 

Personally appeared the above named Allen Muhich and acknowledged the foregoing instrument to be his voluntary act and deed.
	
						
	Before me:
	 
	 
	NOTARY PUBLIC – OREGON
My commission expires: __________

	 
	 
	 
	 

	RADISYS CORPORATION
	 
	 
	 

	 
	 
	 
	 
	 
	 

	By:
	 
	 
	 
	Dated:
	 

	 
	 
	 
	 
	 
	 

	Its:

	 
	 
	 
	 
	 

	 
	 
	On Behalf of Radisys Corporation and "Company"
	 
	 
	 

A-4ex10_1.htm

EXHIBIT 10.1

 

 

ASSET PURCHASE AGREEMENT

 

by and between

 

ANTRIABIO, INC.

 

and

 

PR PHARMACEUTICALS, INC.

 

Dated as of October 5, 2012

 

  

  

  

TABLE OF CONTENTS

 

	
1.           PURCHASE AND SALE OF ASSETS

	
1

	 	 
	
1.1.           Purchased Assets

	
1

	
1.2.           Excluded Assets

	
2

	 	 
	
2.           ASSUMPTION OF LIABILITIES

	
3

	 	 
	
2.1.           Assumed Liabilities

	
3

	
2.2.           Excluded Liabilities

	
3

	 	 
	
3.           PURCHASE CONSIDERATION

	
3

	 	 
	
3.1.           Closing Payment

	
3

	
3.2.           Contingent Consideration

	
3

	
3.3.           Termination of Buyer’s Obligation under Section 3.2

	
4

	
3.4.           Certain Definitions Related to the Contingent Consideration

	
4

	
3.5.           Escrow Amount and Expenses

	
5

	
3.6.           Contingent Consideration Offset

	
5

	
3.7.           Allocation of Purchase Price

	
5

	 	 
	
4.           CLOSING

	
5

	 	 
	
4.1.           Closing Date

	
5

	
4.2.           Outside Date

	
6

	
4.3.           Closing Conditions

	
6

	
4.4.           Conditions to Seller’s Obligations

	
6

	
4.5.           Conditions to Buyer’s Obligations

	
7

	
4.6.           Buyer Closing Deliveries

	
7

	
4.7.           Seller Closing Deliveries

	
7

	
4.8.           Buyer Development Responsibilities

	
8

	 	 
	
5.           BANKRUPTCY COURT APPROVAL AND BIDDING

	
8

	 	 
	
5.1.           Binding Effect; Entry of Approval Order.

	
8

	
5.2.           Filing of Sale Motion

	
8

	
5.3.           Obligation to Seek Approval Order

	
8

	
5.4.           Approved Order

	
9

	 	 
	
6.           REPRESENTATIONS AND WARRANTIES OF SELLER

	
9

	 	 
	
6.1.           Brokers and Finders

	
9

	
6.2.           Chapter 7 Trustee

	
9

	
6.3.           Location of Purchased Assets

	
9

	 	 
	
7.           REPRESENTATIONS AND WARRANTIES OF BUYER

	
9

 

 

  

  

  

 

 

	 	 
	
7.1.           Organization

	
9

	
7.2.           Power

	
9

	
7.3.           Authority

	
9

	
7.4.           Conflicting Agreements, Governmental Consents

	
9

	
7.5.           Actions, Suits, Proceedings

	
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7.6.           Brokers and Finders

	
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7.7.           Ability to Close

	
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7.8.           Tax Matters

	
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7.9.           Third Party Consents

	
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7.10.          Further Assurances

	
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8.           CHAPTER 7 TRUSTEE POST-CLOSING TRANSITIONAL MATTERS

	
11

	 	 
	
8.1.           Delivery of Tangible Purchased Assets

	
11

	
8.2.           Intellectual Property

	
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9.           GENERAL PROVISIONS

	
11

	 	 
	
9.1.           Interpretation and Construction

	
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9.2.           Entire Agreement

	
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9.3.           Severability

	
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9.4.           Amendment and Waiver

	
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9.5.           Assignment

	
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9.6.           Notices

	
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9.7.           Expenses

	
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9.8.           Choice of Law

	
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9.9.           Facsimile Signature; Counterparts

	
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9.10.         Parties in Interest

	
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9.11.         Schedules

	
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10.           DEFINITIONS

	
14

 

 

  

  

  

ASSET PURCHASE AGREEMENT

 

THIS ASSET PURCHASE AGREEMENT, (this “Agreement”) is dated as of October 5, 2012 (the “Execution Date”), by and between ANTRIABIO, INC. a Delaware corporation, (“Buyer”) and the CHAPTER 7 ESTATE OF PR PHARMACEUTICALS, INC., (“Seller”).

 

RECITALS

 

	
  

	
A.

	
PR Pharmaceuticals, Inc. (“PRP”) filed for reorganization under Chapter 11 of Title 11 of the United States Code, 11 U.S.C. § 101 et. seq., (the “Bankruptcy Code”) on November 14, 2008, in the United States Bankruptcy Court, District of Colorado (the “Bankruptcy Court”), Case Number 08-28223-SBB

 

	
  

	
B.

	
Seller filed for reorganization under Chapter 11 of Title 11 of the United States Code, 11 U.S.C. §  101 et. seq., (the “Bankruptcy Code”) on November 14, 2008, in the United States Bankruptcy Court, District of Colorado (the “Bankruptcy Court”), Case Number 08-28223-SBB.

 

	
  

	
C.

	
The case was converted to a dissolution case under Chapter 7 of the Bankruptcy Code on November 30, 2011.

 

	
  

	
D.

	
Buyer wishes to acquire certain assets related to the business of the Seller upon the Bankruptcy Court’s approval of the terms of this Agreement.

 

	
  

	
E.

	
Seller and Buyer wish to enter into the Agreement under which Buyer would acquire certain assets from the Seller free and clear of liens, claims, encumbrances and interests pursuant to §363 of the Bankruptcy Code, and related assumption and assignment of executory contracts pursuant to  §365 of the Bankruptcy Code (the “Transaction”).

 

TERMS AND CONDITIONS

 

In consideration of the foregoing recitals and of the mutual covenants and conditions contained herein, the Buyer and Seller hereby agree as follows:

 

1.           PURCHASE AND SALE OF ASSETS.

 

1.1.           Purchased Assets.

 

	
  

	
(a)

	
Upon the terms and subject to the conditions of this Agreement, at Closing, Seller will sell, assign, transfer, convey and deliver to Buyer, and Buyer will purchase, acquire and accept all right, title and interest of Seller in, to the following property, rights and assets of Seller existing on the Closing Date related to the Business (together, the “Purchased Assets”):

 

	
  

	
(i)

	
All InsuLAR program data and materials, including associated inventory and intermediate materials, laboratory notebooks, electronic data, and associated regulatory filings/correspondence;

 

  

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(ii)

	
All other data and materials, including associated inventory and intermediate materials, laboratory notebooks, electronic data, and associated regulatory filings/correspondence relating to any other program utilizing Seller technology;

 

	
  

	
(iii)

	
All of Seller’s interest in Seller’s Intellectual Property;

 

	
  

	
(iv)

	
All of Seller’s rights under Seller’s License and Development Agreements (“SurModics License and Development Agreements”) with SurModics (as defined below), excluding Seller’s rights to any contingency payments under the asset purchase agreement between Seller and SurModics, dated November 4, 2008 (the “SurModics Asset Purchase Agreement”);

 

	
  

	
(v)

	
Assignment of all material third party contracts or licenses necessary for the development of (1) InsuLAR and/or (2) any other sustained release product utilizing Seller’s technology;

 

	
  

	
(vi)

	
All of Seller’s manufacturing, laboratory and analytical equipment necessary (1) to make pilot scale batches of InsuLAR and to conduct development of pilot scale formulations of other potential products using the Seller’s technology; and (2) for the development of InsuLAR, as well as the development of other potential products utilizing Seller’s technology; and

 

	
  

	
(vii)

	
All of Seller’s documents, records and know-how related to commercial and clinical material manufacturing of InsuLAR.

 

1.2.           Excluded Assets.  All assets not specifically included in the Purchased Assets shall be excluded from sale to Buyer (the “Excluded Assets”), including:

 

	
  

	
(a)

	
All cash and cash accounts receivable of Seller;

 

	
  

	
(b)

	
Any other existing contractual rights or entitlements from any third parties in relation to any third party products other than InsuLAR;

 

	
  

	
(c)

	
Any contingent payment which may become due from Brookwood Pharmaceuticals, Inc. (now known as Surmodics Pharmaceuticals, Inc. (“Surmodics”)) pursuant to the Surmodics Asset Purchase Agreement;

 

	
  

	
(d)

	
All preference and other avoidance claims and actions of Seller, including, without limitation, any such claims and actions arising under §§ 544, 547, 548, 549, and 550 of the Bankruptcy Code.

 

	
  

	
(e)

	
All insurance proceeds, claims and any causes of action the Chapter 7 Trustee may have against any third parties.

 

  

2

  

	
  

	
(f)

	
Any refunds from tax authorities with regards to tax periods prior to the Execution Date.

 

	
  

	
(g)

	
Any causes of action the Chapter 7 Trustee may have against any third parties.

 

2.           ASSUMPTION OF LIABILITIES.

 

2.1.           Assumed Liabilities.  Subject to the conditions of this Agreement, on the Closing Date Buyer shall assume  and agree to pay, perform and discharge in accordance with their respective terms only the following liabilities of Seller (collectively, the “Assumed Liabilities”):

 

	
  

	
(a)

	
Storage payments due to Exodus Moving Company in Fort Collins, Colorado 80524 (“Exodus”).

 

	
  

	
(b)

	
Any outstanding payments due to McCallum Law Firm (“McCallum”) pursuant to legal services provided by McCallum in connection with Seller’s Intellectual Property.

 

2.2.           Excluded Liabilities.  Any Liabilities of Seller not otherwise assumed by Buyer pursuant to Section 2.1 (collectively the “Excluded Liabilities”) shall remain the responsibility of Seller.  Seller shall be solely liable for all Liabilities arising from or in connection with ownership of the Purchased Assets prior to the Closing Date, whether or not reflected in the books and records of Seller.

 

3.           PURCHASE CONSIDERATION.

 

3.1.           Closing Payment.  On the terms and subject to the conditions of this Agreement, in consideration of the Purchased Assets, Buyer will pay four hundred thousand dollars ($400,000) at Closing, less the Escrow Amount (the “Closing Payment”).

 

3.2.           Contingent Consideration.  In addition to the Closing Payment, and in further consideration for the Purchased Assets, Buyer will pay to Seller, subject to Section 3.6, any contingent consideration (the “Contingent Consideration” and together with the Closing Payment, the “Purchase Price”) that may become due under this Section 3.2 (up to a maximum aggregate amount of forty four million dollars ($44,000,000)) in the following amounts, upon the occurrence of the following events:

 

	
  

	
(a)

	
Two million dollars ($2,000,000) after the initiation of a Phase 2b Clinical Trial, payable within thirty (30) days after successful completion of the first multiple ascending dose safety study in patients in a formal Phase 2b Clinical Trial;

 

	
  

	
(b)

	
Two million dollars ($2,000,000) to be paid within thirty (30) days after the exclusive license by Buyer of InsuLAR in the United States to a commercial pharmaceutical company.

 

  

3

  

	
  

	
(c)

	
Five million dollars ($5,000,000) after the initiation of Phase 3 clinical studies for InsuLAR by the Buyer or a licensee of the Buyer, payable 30 days after the first dosing of a patient in a formal Phase 3 clinical study.

 

	
  

	
(d)

	
Ten million dollars ($10,000,000) upon the approval by the FDA or EMEA to allow the marketing and sales of InsuLAR by Buyer or a licensee of the Buyer, payable 30 days after the receipt of the approval letter or notice from the FDA or EMEA.

 

	
  

	
(e)

	
Twenty five million dollars ($25,000,000) if the twelve (12) month cumulative worldwide Sales of InsuLAR by the Buyer or a licensee of the Buyer reach five hundred million dollars ($500,000,000) in any consecutive twelve month period, so long as such period occurs during the life of the patents included in the Purchased Assets, payable ninety (90) days after the exclusion of such period.

 

3.3.           Termination of Buyer’s Obligation under Section 3.2.  Buyer’s obligation under Section 3.2 shall terminate five (5) years from the Closing Date.

 

3.4.           Certain Definitions Related to the Contingent Consideration.  As used in this Agreement, the following terms have the following meanings:

 

	
  

	
(a)

	
“Phase 2b Clinical Trial” means a human clinical trial related to InsuLAR sponsored by Buyer, or one of its licensees, in any country that would satisfy the requirements of 21 CFR 312.21(c) for a phase 2 clinical study.

 

	
  

	
(b)

	
“Phase 3 Clinical Trial” means a human clinical trial related to InsuLAR sponsored by Buyer, or one of its licensees, in any country that would satisfy the requirements of 21 CFR 312.21(c), or an equivalent phase or clinical trial.

 

	
  

	
(c)

	
“FDA or EMEA Approval “ means that the product is approved for sale either by the Food and Drug Administration (FDA) in the United States of America or the European Medicines Agency (EMEA) in Europe.

 

	
  

	
(d)

	
“Sales”  shall mean the gross sales price of the products invoiced by Buyer, its sublicensee or their respective Affiliates to customers who are not Affiliates (or who are Affiliates but are the end users of the products) less, to the extent reasonable and customary in the pharmaceutical industry and actually paid or accrued by Buyer, its sublicensee or their respective Affiliates (as applicable), (a) credits, allowances, discounts and rebates to, and chargebacks from the account of, such customers for spoiled, damaged, out-dated and returned products; (b) freight and insurance costs incurred by Buyer, its sublicensee or their respective Affiliates (as applicable) in transporting the products in final form to such customers; (c) cash, quantity and trade discounts, rebates and other price reductions for the products given to such customers under price reduction programs that are consistent with price reductions given for similar products by

 

  

4

  

	
  

	
Buyer, its sublicensee or their respective Affiliates (as applicable); (d) sales, use, value-added and other direct taxes incurred on the sale of the Product in final form to such customers; and (e) customs duties, surcharges and other governmental charges incurred in exporting or importing the products in final form to such customers.

 

3.5.           Escrow Amount and Expenses. Buyer will deposit an earnest deposit amount of $100,000 (the “Escrow Amount”) by the Execution Date.  The Escrow Amount will held in an interest bearing bank account at a financial institution of the Buyer’s choice (the “Escrow Account”).  On the Closing Date in Section set forth 4.1, the Escrow Amount will be applied against the Closing Payment in Section set forth 3.1. On the earlier of (1)  rejection of the Sale Motion by the Bankruptcy Court or (2) acceptance by the Bankruptcy Court of a higher and better offer to a party other than and unrelated to Buyer (the “Termination Date”), the Escrow Amount shall be fully refunded with any accrued interest paid by the Escrow Account.  If the Bankruptcy Court approves a higher and better bid of a party other than and unrelated to Buyer (a “Superior Bid”), in addition to the return of the Escrow Amount, Seller will, upon the closing of the transaction in connection with the Superior Bid, reimburse to Buyer all payments Buyer has made to Exodus and McCallum, as made since the date of conversion of Seller’s bankruptcy case from a case under Chapter 11 of the Bankruptcy Code to a case under Chapter 7 of the Bankruptcy Code.

 

3.6.           Contingent Consideration Offset.  Buyer may withhold and offset from any payment that otherwise would be due from Buyer to Seller under Section 3.2, any amount due from Seller to Buyer under the indemnification provisions of Section 9.1.

 

3.7.           Allocation of Purchase Price.  For purposes of this Agreement, the pro forma purchase price of the Purchased Assets (the “Pro Forma Purchase Price”) shall be equal to (a) the payments to be made by Buyer pursuant to Sections 3.1 and 3.2 plus (b) the book value of the Assumed Liabilities.  The Pro Forma Purchase Price (and other capitalizable costs of the transactions contemplated by this all be allocated to the Purchased Assets in accordance with Section 1060 of the Internal Revenue Code of 1986, as amended (the “Code”).  On or prior to the Closing Date, Buyer will deliver to Seller an allocation of the Purchase Price (the “Final Purchase Price Allocation”) to the Purchased Assets for tax and financial accounting purposes.  Neither Seller nor Buyer will take a position inconsistent with the Final Purchase Price Allocation for all federal, state, local and foreign tax purposes for any tax years or periods, including the determination of taxable gain or loss on the sale of the Purchased Assets.  Such allocation will be revised by Buyer in the same manner if any payments are made under Section 3.2.

 

4.           CLOSING.

 

4.1.           Closing Date.  The “Closing” shall be on the later of (1) the first business day following fourteen (14) days after the date of entry of the Approval Order and (2) the date on which all closing conditions set forth in Sections 4.3, 4.4 and 4.5 below have been met (the “Closing Date”).  The Buyer and Seller agree to make good faith efforts to close as soon as possible once the Approved Order has been approved and entered.

 

  

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4.2.           Outside Date.  In no event shall the Closing Date be later than thirty (30) days after entry of the Approved Order (the “Outside Date”).  In the event the conditions to Closing have not been satisfied or waived by the Outside Date, then any party who is not in default hereunder may terminate this Agreement.  Alternatively, the parties may mutually agree to an extended Closing Date.  Until this Agreement is either terminated or the parties have agreed upon an extended Closing Date and/or Outside Date, the parties shall diligently continue to work to satisfy all conditions to Closing and the transaction contemplated herein shall close as soon as such conditions are satisfied or waived.

 

4.3.           Closing Conditions.  Seller’s and Buyer’s obligations to make the deliveries required of each party at the Closing Date shall be subject to the satisfaction or waiver by the parties of each of the following conditions.

 

	
  

	
(a)

	
Entry of the Approval Order, which order shall not have been stayed as of the Closing Date, whereby the Bankruptcy Court orders that (i) all Purchased Assets shall be sold free and clear of all claims, interests, liens or other encumbrances to Buyer pursuant to §363(b) and (f) of the Bankruptcy Code, and (ii) the Seller shall assign to Buyer the Assumed Contracts pursuant to §365 of the Bankruptcy Code.

 

	
  

	
(b)

	
Consent of SurModics to assign to Buyer all of Seller’s rights and obligations under the InsuLAR license and development agreements, as well as all of Seller’s rights to develop additional products utilizing the ProPhas or CoPhase technology.

 

4.4.           Conditions to Seller’s Obligations.  Seller’s obligation to make the deliveries required of Seller at the Closing Date shall be subject to the satisfaction or waiver by Seller of each of the following conditions.

 

	
  

	
(a)

	
All of the representations and warranties of Buyer contained herein shall continue to be true and correct at the Closing in all material respects.

 

	
  

	
(b)

	
Buyer shall have delivered, or shall be prepared to deliver at the Closing, all cash and other documents required of Buyer to be delivered at the Closing, including without limitation the Closing Payment in good funds.  Buyer shall have delivered to Seller appropriate evidence of all necessary partnership or similar action by Buyer in connection with the transactions contemplated hereby, including, without limitation:  (a) certified copies of resolutions duly adopted by Buyer’s partners, mangers or board of directors, as the case may be, approving the transactions contemplated by this Agreement and authorizing the execution, delivery, and performance by Buyer of this Agreement; and (b) a certificate as to the incumbency of partners, officers or members, as the case may be, of Buyer executing this Agreement and any instrument or other document delivered in connection with the transactions contemplated by this Agreement.

 

  

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(c)

	
The Bankruptcy Court shall have entered the Approved Order, as set forth in this Agreement and such Approved Order shall be consistent with the Agreement and shall not have been stayed as of the Closing Date.

 

4.5.           Conditions to Buyer’s Obligations.  Buyer’s obligation to make the deliveries required of Buyer at the Closing shall be subject to the satisfaction or waiver by Buyer of each of the following conditions:

 

	
  

	
(a)

	
All of the representations and warranties of Seller contained  herein shall continue to be true and correct at the Closing in all material respects.

 

	
  

	
(b)

	
Seller shall have performed and complied with all of its covenants under this Agreement in all material respects through Closing;

 

	
  

	
(c)

	
Seller shall have delivered, or shall be prepared to deliver at the Closing, all documents required of Seller to be delivered at the Closing.

 

	
  

	
(d)

	
All other consent required for Seller to consummate the Transaction on substantially the terms set forth herein shall have been obtained

 

	
  

	
(e)

	
The Bankruptcy Court shall have entered the Approved Order, as set forth in this Agreement, shall be in form and substance acceptable to Buyer, and such Approved Order shall not have been stayed as of the Closing Date.

 

4.6.           Buyer Closing Deliveries.  At the Closing, Buyer shall:

 

	
  

	
(a)

	
Deliver or cause to be delivered to Seller the Closing Payment pursuant to Section 3.1;

 

	
  

	
(b)

	
Deliver to Seller copies of all necessary corporate resolutions authorizing the execution, delivery and performance by Buyer of this Agreement, the other Transaction Documents (as hereinafter defined) and the transactions contemplated hereby and thereby, certified to be true, correct, complete, unchanged and in full force and effect on the Closing Date by the Secretary or an Assistant Secretary of Buyer, accompanied by such other certifications by such Secretary or Assistant Secretary as are requested by Seller, in a form acceptable to Seller.

 

4.7.           Seller Closing Deliveries.  At the Closing, Seller shall:

 

	
  

	
(a)

	
Deliver to Buyer the bill of sale (the “Bill of Sale”), executed by Seller and such other documents of transfer as Buyer may reasonably request to evidence the transfer to Buyer the interest of Seller in the Purchased Assets;

 

	
  

	
(b)

	
Deliver to Buyer a valid assignment letter, in form and substance reasonably satisfactory to Buyer, executed by Seller, which assigns all rights to the Intellectual Property as part of the Purchased Assets;

 

  

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(c)

	
Deliver to Buyer copies of all necessary corporate resolutions, including  any required resolutions of the stockholders of Seller, authorizing the execution, delivery and performance by Seller of this Agreement, the other Transaction Documents and the transactions contemplated hereby and thereby, certified to be true, correct, complete, unchanged and in full force and effect on the Closing Date by the Secretary or an Assistant Secretary of Seller, accompanied by such other certifications by such Secretary or Assistant Secretary as are requested by Buyer, in a form acceptable to Buyer.

 

4.8.           Buyer Development Responsibilities.  Upon Closing, Buyer will be solely responsible for developing InsuLAR at Buyer’s expense, but shall have no obligation to do so.

 

5.           BANKRUPTCY COURT APPROVAL AND BIDDING.

 

5.1.           Binding Effect; Entry of Approval Order.  This Agreement is subject to, and will become effective only upon the entry by the Bankruptcy Court of one or more final and binding orders of the Bankruptcy Court (collectively, the “Approval Order”) (a) approving this Agreement and the sale of the Purchased Assets to Buyer pursuant to this Agreement, free and clear of liens, claims, encumbrances, and interests pursuant to Sections 363(b) and (f) of the Bankruptcy Code, and (b) approving the assignment to Buyer of certain Assumed Contracts pursuant to Section 365 of the Bankruptcy Code.

 

5.2.           Filing of Sale Motion.   Seller agrees to file a motion (the “Sale Motion”) as promptly as practicable on or about the Execution Date, and to seek Bankruptcy Court approval of this Agreement, including Expense Reimbursement (as defined below), and the Transaction contemplated hereby, subject to higher and better offers.  The resulting order shall be the Approved Order.  Seller shall confer with Buyer regarding any written objections filed with the Bankruptcy Court with respect to the Sale Motion.  Seller and Buyer acknowledge and agree that this Agreement and the Transaction contemplated hereby are subject to Seller’s right to accept a Superior Bid at the auction and contingent upon the approval and authorization of the Bankruptcy Court.

 

5.3.           Obligation to Seek Approval Order.  Following the filing of the Sale Motion and to the extent Buyer is declared the successful bidder, Seller shall use reasonable efforts to obtain entry of the Approval Order and to perform such other acts as may be necessary to permit Seller to consummate the Transaction contemplated by this Agreement.  Any changes to the form of the Approval Order must be approved by Buyer and Seller.  Notwithstanding any modification, the Approval Order shall contain findings of fact and conclusions of law establishing, among other things, that: (a) Seller is authorized to transfer to Buyer all interests of Seller in the Purchased Assets free and clear of liens, claims, encumbrances, and interests of any nature whatsoever, to the fullest extent allowable under the Bankruptcy Code; (b) Seller is authorized to assign the Assumed Contracts to Buyer; and (c) Buyer is a good-faith purchaser entitled to the protections of § 363(m) of the Bankruptcy Code.  In the event an Appeal is filed, Seller and Buyer shall each use commercially reasonable efforts to defend such Appeal or, by mutual written agreement, shall close the Transaction contemplated hereby unless such closing is subject to a stay.  Seller shall keep Buyer reasonably informed of the status of its efforts to 

  

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obtain the entry of the Approval Order.  Seller shall give Buyer reasonable advance written notice of any hearings regarding motions respecting the Approval Order, and Buyer shall have the right to appear and be heard at any such hearings.

 

5.4.           Approved Order.  Buyer and Seller acknowledge that they are bound by the terms of the Approved Order as applicable to this Agreement and the Transaction contemplated hereby.  Any changes to the form of Approved Order affecting the economic terms of the Transaction contemplated by this Agreement, or the closing conditions thereto, must be approved jointly by Buyer and Seller or by order of the Bankruptcy Court.

 

6.           REPRESENTATIONS AND WARRANTIES OF SELLER.  Subject to the disclosures set forth in the Schedules of the Seller, as of the date hereof (except in case when the representation speaks to another date), Seller hereby represents and warrants to Buyer that:

 

6.1.           Brokers and Finders.  Seller has not retained or engaged any broker, finder or other financial intermediary in connection with the transactions contemplated by this Agreement.

 

6.2.           Chapter 7 Trustee.  Seller is the Chapter 7 estate of PR Pharmaceuticals, Inc. Kimberley Tyson is the duly appointed Chapter 7 Trustee for the estate.

 

6.3.           Location of Purchased Assets.  The Chapter 7 Trustee has not relocated any of the Purchased Assets since the conversion of the case.

 

7.           REPRESENTATIONS AND WARRANTIES OF BUYER.  Buyer hereby represents and  warrants to Seller as follows:

 

7.1.           Organization.  Buyer is a limited liability company duly organized and validly existing, is in good standing under the laws of the State of Delaware, and has the corporate power and authority to own its properties and carry on its business as now being conducted.

 

7.2.           Power.  Buyer has the power to execute and deliver the Transaction Documents and to consummate the transactions contemplated thereby.

 

7.3.           Authority.  All actions on the part of the Buyer necessary for the authorization, execution and delivery of the Transaction Documents and the consummation of the transactions contemplated thereby have been taken.  The Transaction Documents are, or when delivered will be, legal, valid and binding obligations of Buyer, enforceable against Buyer in accordance with their respective terms.

 

7.4.           Conflicting Agreements, Governmental Consents.  The execution and delivery by Buyer of the Transaction Documents, the consummation of the transactions contemplated thereby, and the performance or observance by Seller of any of the terms or conditions thereof will not (i) conflict with, or result in a material breach or violation of the terms or conditions of, or constitute a material default under the Articles of Incorporation or Bylaws of Buyer, any award of any arbitrator, or any indenture, material contract or material agreement (including any agreement with security holders), material instrument, order, judgment, decree, statute, law, rule or regulation to which Buyer is subject, or (ii) require any filing or registration with, or any consent or approval of, any federal, state or local governmental agency or authority.

 

  

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7.5.           Actions, Suits, Proceedings.  There are no requests, notices, investigations, claims, demands, actions, suits or other legal or administrative proceedings pending or, to the Knowledge of Buyer, threatened against Buyer or any of its property in any court or before any federal, state, municipal or other governmental agency, nor is Buyer in default with respect to any order of any court or governmental agency entered against it that would reasonably be expected to prevent, delay or impair the Buyer’s ability to consummate the transactions contemplated by the Transaction Documents.

 

7.6.           Brokers and Finders.  Buyer has not retained or engaged any broker, finder or other financial intermediary in connection with the transaction contemplated by this Agreement that will require the payment of a fee by Seller.

 

7.7.           Ability to Close.  The Buyer at the time of execution of this Agreement has sufficient cash in its bank account to pay the Escrow Amount and the Closing Payment and will at all times through closing maintain such monies for the Closing Payment in its bank account.

 

7.8.           Tax Matters.

 

	
  

	
(a)

	
Transaction Taxes.  PRP’s Chapter 7 bankruptcy estate shall be responsible for any and all Taxes incurred, or that may be payable to any taxing authority, in connection with, the transactions (including the sale, transfer, and delivery of the Purchased Assets) contemplated by this Agreement.

 

	
  

	
(b)

	
Parties’ Responsibility.  PRP’s Chapter 7 bankruptcy estate is and shall remain solely responsible for all Taxes arising from or relating to the Purchased Assets and related businesses for periods ending on or prior to the Closing Date (the “Pre-Closing Period”).  Buyer shall be solely responsible for all Taxes arising from or relating to the Purchased Assets and related businesses for periods beginning after the Closing Date (the “Post-Closing Period”).  Notwithstanding the foregoing Buyer shall be liable for any and all Tax liabilities related to the Assumed Liabilities.  Seller and Buyer shall cooperate concerning all Tax matters relating to this division of responsibility, including the filing of Tax returns and other governmental filings associated therewith.

 

7.9.           Third Party Consents.  Seller’s sole obligation shall be to seek Bankruptcy Court approval authorized the sale of the Purchased Assets pursuant to Bankruptcy Code § 363 free and clear of liens, claims and encumbrances and the related assumption and assignment of executory contracts pursuant to § 365 of the Bankruptcy Code.  It shall be the sole obligation of Buyer to obtain any additionally required consents of third-parties.

 

7.10.           Further Assurances.  From time to time after Closing, without further consideration, Seller will execute and deliver such other instruments of transfer and take such other actions a Buyer may reasonably require to transfer the Purchased Assets to, and vest title of the Purchased Assets in, Buyer, and to put Buyer in possession of the Purchased Assets.  Without limiting the foregoing, Seller shall execute and deliver such instruments and take such other 

 

  

10

  

actions, at Buyer’s expense, as Buyer may reasonably request in connection with Buyer’s efforts to obtain patent, copyright, trademark or other statutory protection for any part of the Intellectual Property.  In the event that it shall be necessary for Seller to qualify to do business as a foreign corporation in any state after the Closing in order for Buyer to enforce any material claim, Seller shall so qualify promptly upon written request of Buyer at Buyer’s expense.

 

8.           CHAPTER 7 TRUSTEE POST-CLOSING TRANSITIONAL MATTERS.

 

8.1.           Delivery of Tangible Purchased Assets.  Buyer shall take possession of the Purchased Assets AS-IS, WHERE-IS.

 

8.2.           Intellectual Property.  Seller will use reasonable efforts to assist Buyer, at Buyer’s expense, in promptly recording in all relevant governmental offices the assignment to Buyer of all issuances, registrations, and applications for Patents, Trademarks, and Copyrights being conveyed to Buyer pursuant to this Agreement.  Seller agrees not to adopt, use, register, or apply to register a Trademark, service mark, trade dress, trade name, corporate name, domain name or any other indication of origin or sponsorship that is confusingly similar to the assigned marks.

 

9.           GENERAL PROVISIONS.

 

9.1.           Interpretation and Construction.  In this Agreement:

 

	
  

	
(a)

	
The table of contents and headings hereof are for reference purposes only and will not affect the meaning or interpretation of this Agreement;

 

	
  

	
(b)

	
Words such as “herein,” “hereof,” “hereunder” and similar words refer to this Agreement as a whole and not to the particular term or Section where they appear.

 

	
  

	
(c)

	
Terms used in the plural include the singular, and vice versa, unless the context clearly otherwise requires;

 

	
  

	
(d)

	
Unless expressly stated herein to the contrary, reference to any agreement, instrument or other document means such agreement, instrument or document as amended or modified and as in effect from time to time in accordance with the terms thereof;

 

	
  

	
(e)

	
“Include,” “including” and variations thereof are deemed to be followed by the words “without limitation” and will not limit the generality of any term accompanying such word;

 

	
  

	
(f)

	
“Or” is used in the inclusive sense of “and/or” and “any” is used in the non-exclusive sense;

 

	
  

	
(g)

	
Unless expressly stated herein to the contrary, reference to a Section, Schedule or Exhibit is to a section, schedule or exhibit, respectively, of this Agreement;

 

  

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(h)

	
All dollar amounts are expressed in United States dollars and will be paid in cash in United States currency;

 

	
  

	
(i)

	
Each party was represented by legal counsel in connection with this Agreement and each party and each party’s counsel has reviewed and revised, or had ample opportunity to review and revise, this Agreement and any rule of construction to the effect that ambiguities are to be resolved against the drafting party will not be employed in the interpretation hereof; and

 

	
  

	
(j)

	
Each representation, warranty, covenant and agreement herein will have independent significance, and if any party has breached any representation, warranty, covenant or agreement herein in any respect, the fact that there exists another representation, warranty, covenant or agreement relating to the same subject matter (regardless of the relative levels of specificity) that such party has not breached will not detract from or mitigate the fact that such party is in breach of such first representation, warranty, covenant or agreement.

 

9.2.           Entire Agreement.  This Agreement, including the exhibits and schedules attached to this Agreement and the other Transaction Documents, constitute the entire agreement and understanding among Seller and Buyer with respect to the sale and purchase of the Purchased Assets and the other transactions contemplated by this Agreement.  All prior representations, understandings and agreements between the parties with respect to the purchase and sale of the Purchased Assets and the other transactions contemplated by this Agreement are superseded by the terms of this Agreement and the other Transaction Documents.

 

9.3.           Severability.  The provisions of this Agreement shall, where possible, be interpreted so as to sustain their legality and enforceability, and for that purpose the provisions of this Agreement shall be read as if they cover only the specific situation to which they are being applied.  The invalidity or unenforceability of any provision of this Agreement in a specific situation shall not affect the validity or enforceability of that provision in other situations or of other provisions of this Agreement.

 

9.4.           Amendment and Waiver.  Any provision of this Agreement may be amended or waived only by a writing signed by the party against which enforcement of the amendment or waiver is sought.

 

9.5.           Assignment.  This Agreement may not be assigned by any party hereto without the prior written consent of the other party, except that Buyer may assign this Agreement to any of its Affiliates, whether currently in existence or created subsequent to the date hereof.  No assignment by Buyer will relieve Buyer of responsibility for performance of its obligations hereunder.  This Agreement shall be binding upon and shall inure to the benefit of the parties hereto, their successors and permitted assigns, and no person, firm or corporation other than the parties, their successors and permitted assigns shall acquire or have any rights under or by virtue of this Agreement.  Notwithstanding the foregoing, the Chapter 7 Trustee may assign the rights to the Contingent Consideration to third parties.

 

  

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9.6.           Notices. All notices given pursuant to this Agreement shall be in writing and shall be delivered by hand or sent by United States registered mail, postage prepaid, addressed as follows (or to another address or person as a party may specify on notice to the other):

 

	
  

	
(i)

	
If to Seller:

 

Chapter 7 Trustee for Estate of

PR Pharmaceuticals, Inc.

c/o Kimberley H. Tyson

Bankruptcy Chapter 7 Trustee

1675 Broadway, Suite 2600

Denver, CO  80202

Telephone:  (303) 623-2700

 

With a simultaneous copy to:

Kutner Miller Brinen, P.C.

303 E. 17th Ave., Suite 500

Denver, CO 80203

Attention:  Aaron A. Garber

Telephone:  (303) 832-3047

 

	
  

	
(ii)

	
If to Buyer:

 

AntriaBio, Inc.

890 Santa Cruz Avenue

Menlo Park, CA 94025

Attn:  Nevan Flam

Telephone:  (408) 835-3886

 

With a simultaneous copy to:

 

Dorsey & Whitney LLP

1400 Wewatta Street, Suite 400

Denver, CO 80202

Attn:  Michael Weiner

Telephone: (303) 629-3400

 

9.7.           Expenses.  Each party shall pay all of the costs and expenses incurred by it in negotiating and preparing this Agreement (and all other agreements, certificates, instruments and documents executed in connection herewith), in performing its obligations under this Agreement, and in otherwise consummating the transactions contemplated by this Agreement, including its attorneys’ fees and accountants’ fees.

9.8.           Choice of Law.  This Agreement shall be construed and interpreted in accordance with the laws of the State of Colorado, without regard to the conflict of laws provisions thereof, as though all acts and omissions related to this Agreement occurred in the State of Colorado.  The Parties to this Agreement irrevocably consent to the Exclusive jurisdiction of the U.S. 

  

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Bankruptcy Court for the District of Colorado in connection with any proceedings which may be brought by either Party arising from or relating to, or seeking to enforce, the provisions of this Agreement.

 

9.9.           Facsimile Signature; Counterparts.  This Agreement may be executed by facsimile signature and in counterparts, each of which shall be considered an original.

 

9.10.           Parties in Interest.  This Agreement shall be binding upon and inure solely to the benefit of the parties hereto and their successors and permitted assigns, and nothing in this Agreement, expressed or implied, is intended to confer upon any other person any rights or remedies of any nature under or by reason of this Agreement.

 

9.11.           Schedules.  Information disclosed in any numbered or lettered part of the schedules to this Agreement shall be deemed to relate to and to qualify (a) the particular representation or warranty or provision set forth in the corresponding numbered or lettered section in this Agreement, (b) any representation or warranty or provision cross-referenced to such representation, warranty or provision and (c) other representations and warranties or provisions to the extent that the applicability of the disclosure or qualification is readily apparent from the nature of the disclosure.  Where any representation or warranty is limited or qualified by the materiality of the matters to which the representation or warranty is given, the inclusion of any matter in the schedules to this Agreement does not constitute a determination by Seller that such matter is material.  Nothing in the schedules to this Agreement constitutes an admission of any liability or obligation of Seller to any third party, nor an admission against Seller’s interests.  Nothing in the schedules to this Agreement gives any third party a claim against Seller and no third party may rely upon any matter in a schedule to this Agreement to make any claim against Seller.  Any statements included in the schedules to this Agreement are made as of the date hereof.

 

10.           DEFINITIONS.

 

“Affiliate” means, with respect to any Person, any other Person directly, or indirectly through one or more intermediaries, controlling, controlled by or under common control with such Person.  For purposes of such definition, the terms “controlling,” “controlled by” or “under common control with” mean the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

 

“Agreement” is defined in the preamble of this Agreement.

 

“Assumed Liabilities” is defined in Section 2.1.

 

“Bankruptcy Code” is defined in the preamble of this Agreement.

 

“Bankruptcy Court” is defined in the preamble of this Agreement.

 

“Bill of Sale” is defined in Section 4.7(a).

 

“Buyer” is defined in the preamble of this Agreement.

  

14

  

 

“Chapter 7 Trustee” is defined in the preamble of this Agreement.

 

“Closing” is defined in Section 4.1.

 

“Closing Date” is defined in Section 4.1.

 

“Closing Payment” is defined in Section 3.1.

 

“Contingent Consideration” is defined in Section 3.2.

 

“Copyrights” means all computer code or programs, whether in the source code or object code version (together with and including any algorithm, flowchart, schematic, diagram, header file, library, object, specification, annotation, or other documentation related thereto, and together with and including any prebuilt solutions and scripts), artwork, illustrations, graphics, icons, audio works, video clips, audio-visual works, photographs, descriptive or other text, data, databases, research, reports, analyses, forecasts, and business plans, all other works of authorship and any other works recognized as copyrightable subject matter under the laws of any country or political subdivision thereof or any bilateral or international convention or treaty, together with all worldwide copyrights therein (and all applications, rights to make applications, registrations, recordations, renewals, extensions, reversions or restorations thereof and therefor).

 

“Encumbrance” means any mortgage, charge, royalty, license fee, lien, security interest, easement, right of way, pledge, encumbrance or cloud on title of any nature whatsoever.

 

“Escrow Account” is defined in Section 3.5.

 

“Escrow Amount” is defined in Section 3.5.

 

“Excluded Assets” is defined in Section 1.3.

 

“Excluded Liabilities” is defined in Section 2.2.

 

“Execution Date” is defined in the preamble of this Agreement.

 

“Exodus” is defined in Section 2.1(a).

 

“Final Purchase Price Allocation” is defined in Section 3.6.

 

“Intellectual Property” means all Copyrights, Patent rights, Trademarks, service marks and trade dress rights, Trade Secret rights, know-how, license rights, contract rights, distribution rights, moral rights (and waivers thereof), mask works, rights of publicity, rights in the nature of unfair competition rights, rights to sue for passing off, and all other intellectual property rights therein that are, or may in the future be, recognized under the laws of any country, or any political subdivision thereof, or under any bilateral or international convention or treaty.

 

“Liability” means any liability or obligation of whatever kind or nature (whether known or unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, or due or to become due).

  

15

  

 

“Losses” means any and all losses, injuries, damages, deficiencies, claims, Liabilities (other than Assumed Liabilities), costs (including reasonable legal and other costs), penalties, interest, expenses and obligations (other than Assumed Liabilities); provided, however, that Losses shall not include punitive, exemplary, remote or speculative damages, except to the extent paid by an Indemnitee to a third party.

 

“McCallum” is defined in Section 2.1(b).

 

“Outside Date” is defined in Section 4.2.

 

“Patents” means all inventions, improvements, innovations, ideas, concepts, designs, processes, methods and techniques and know-how (whether patentable, patented, reduced to practice or not), and all other subject matter recognized as patentable under the laws of any country, or any political subdivision thereof, or under any bilateral or international treaty or convention, together with all patent rights granted therein (or applications therefor) and all reissues, reexaminations and extensions thereof, and all divisionals, substitutions, renewals, continuations and continuations-in-part, thereof.

 

“Person” means any individual, partnership, corporation, limited liability company, association, joint stock company, trust, joint venture, unincorporated organization or any other business entity or association or any government authority.

 

“Phase 2b Clinical Trial” is defined in Section 3.4(a).

 

“Phase 3 Clinical Trial” is defined in Section 3.4(b).

 

“Post-Closing Period” is defined in Section 7.8(b).

 

“Pre-Closing Period” is defined in Section 7.8(b).

 

“Pro Forma Purchase Price” is defined in Section 3.6.

 

“Purchase Price” is defined in Section 3.2.

 

“Purchased Assets” is defined in Section 1.1(a).

 

“Seller” is defined in the preamble of this Agreement.

 

“SurModics” is defined in Section 1.1(a)(iv).

 

“SurModics Asset Purchase Agreement” is defined in Section 1.1(a)(iv).

 

“SurModics License and Development Agreements” is defined in Section 1.1(a)(iv).

 

“Tax” means all federal, state, local and foreign income, alternative or add-on minimum income, gains, franchise, excise, property, property transfer, sales, use, employment, license, payroll, services, ad valorem, documentary, stamp, withholding, occupation, recording, value added or transfer taxes, customs duties or other taxes of any kind whatsoever (whether payable 

  

16

  

directly or by withholding), and, with respect to any such taxes, any estimated tax, interest, fines and penalties or additions to tax and interest on such fines, penalties and additions to tax.

 

“Trade Secrets” means all confidential information or other items recognized as “trade secrets” under the laws of any country, or any political subdivision thereof, or under any international convention or treaty.

 

“Trademarks” means all trademarks, trade names, service marks, slogans, logos, trade dress, internet domain names, other electronic communications identifications and other sources of business identification recognized in any country, or any political subdivision thereof or under any bilateral or international treaty or convention (whether registered or unregistered), together with all related contract rights and all registrations, recordings and renewals thereof (and all applications in connection therewith) and together with the goodwill associated therewith.

 

“United States” means the Unites States of America.

 

[Remainder of page intentionally left blank]

 

  

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The parties have caused this Agreement to be executed and delivered by their duly authorized officers as of the date and year first above written.

 

 

	 	
PR PHARMACEUTICALS, INC.

	 	 
	 	By:     /s/ Kimberley H. Tyson         
	 	 	
Kimberley H. Tyson, Chapter 7 Trustee

 

 

	 	

ANTRIABIO, INC.

	 	 
	 	By:     /s/ Nevan Elam           
	 	 	

Nevan Elam

President and Chief Executive Officer

 

 

                                           

  

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