Document:

exv10w12

Exhibit 10.12

Text Marked By [* * *] Has Been Omitted Pursuant To A Request For Confidential

Treatment And Was Filed Separately With The Securities And Exchange Commission.

EXCLUSIVE LICENSE AGREEMENT

BETWEEN

THE HENRY M. JACKSON FOUNDATION FOR THE

ADVANCEMENT OF MILITARY MEDICINE, INC.

AND

RXI PHARMACEUTICALS CORPORATION

     THIS EXCLUSIVE LICENSE AGREEMENT (“Agreement”) is entered into as of the date of the last
signature on the signature page of this document (the “Effective Date”), by and among The Henry M.
Jackson Foundation for the Advancement of Military Medicine, Inc., a tax-exempt corporation
organized under the laws of the State of Maryland and having its principal offices at 1401
Rockville Pike, Suite 600, Rockville, Maryland 20852 (the “Foundation”) and RXi Pharmaceuticals
Corporation (“RXi”), a corporation organized under the laws of the State of Delaware and having its
principal offices at 60 Prescott Street, Worcester, MA 01605 and its wholly-owned subsidiary,
Apthera, Inc. (“Apthera”). This Agreement grants a license that can be exploited by either or both
of RXi and Apthera, and RXi and Apthera are referred to both individually and collectively
throughout as “Licensee” but any termination of this Agreement with respect to either of RXi or
Apthera shall terminate this Agreement as to both RXi and Apthera. The Foundation and Licensee
sometimes are referred to collectively herein as the “Parties” or individually as a “Party.”

     WHEREAS the Foundation and the Uniformed Services University of the Health Sciences, an
institution of higher learning within the Department of Defense, an agency of the United States
Government, located at 4301 Jones Bridge Road, Bethesda, Maryland 20814 (“USU”) have agreed to
collaborate in the development and commercialization of inventions, patents, trade secrets, and
other intellectual property rights; and

     WHEREAS, the Foundation and USU are committed to the policy that ideas or creative works
produced at the Foundation and USU should be used for the greatest possible public benefit and that
every reasonable incentive should be provided for the prompt introduction of such ideas into public
use, all in a manner consistent with the public interest; and

     WHEREAS the Foundation, by virtue of assignments from USU (which received assignment(s) from
USU inventor(s)), is an owner of certain Patent Rights (as hereinafter defined) and has the right
to grant licenses of said Patent Rights, subject only to a royalty-free, nonexclusive license
heretofore granted to or retained by the United States Government; and

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     WHEREAS Licensee has represented to Foundation, to induce Foundation to enter into this
Agreement, that Licensee is experienced in the development, production, manufacture, marketing, and
sale of products similar to the Licensed Products and the use of processes similar to the Licensed
Processes (both as hereinafter defined) and is willing to undertake as provided in this Agreement a
thorough, vigorous, and diligent program of exploiting the Patent Rights so that public utilization
may result therefrom; and

     WHEREAS Licensee desires to obtain from the Foundation, and the Foundation agrees to grant to
Licensee, a license upon the terms and conditions set forth herein;

     NOW, THEREFORE, in consideration of the mutual promises and covenants set forth in this
Agreement, the Parties, intending to be legally bound, agree as follows:

ARTICLE I

DEFINITIONS

     As used in this Agreement, the following terms shall have the following meanings:

     1.1 “Affiliate” means, with respect to any Person, any other Person that directly or
indirectly through one or more intermediaries controls, is controlled by, or is under common
control with such Person. For purposes of this definition, the term “controls” (including its
correlative meanings “controlled by” and “under common control with”) means the possession,
directly or indirectly, 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.

     1.2 “Agreement” means this Agreement, including all Appendices hereto, as the same may be
amended from time to time in accordance with the terms hereof.

     1.3 “Business Day” means any day other than a Saturday, a Sunday, or a day on which banking
institutions in Montgomery County, Maryland are closed.

     1.4 “Confidential Information” means information, disclosed by one Party to the other Party,
that is treated as proprietary or confidential by the disclosing Party and, at the time of
disclosure, that is marked “proprietary” or “confidential” or that bears a marking or legend of
like import restricting its use, copying, or dissemination or that is identified as being
confidential in a letter or other written communication sent to the receiving Party prior to or
contemporaneously with disclosure to the receiving Party. Any such information that is in another
form when disclosed, such as oral or visual, shall be treated as Confidential Information only if
and to the extent the disclosing Party informs the receiving Party of the proprietary or
confidential nature of the information prior to or at the time of the disclosure, and thereafter
creates a written record of the disclosure (marked in accordance with this Agreement) and delivers
the written record to
the receiving Party promptly, but in no event more than thirty (30) days after the original
disclosure to the receiving Party. Confidential Information does not include any

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information that
(i) was known to the receiving Party without a duty of confidentiality before receipt from the
disclosing Party as evidenced by written records made prior to such receipt or disclosure (when
such prior knowledge did not become known to such receiving Party through disclosure by a third
party known to the receiving Party to be subject to an obligation to maintain the confidentiality
thereof); (ii) is or becomes a matter of public knowledge through no fault of the receiving Party
or any of its agents; (iii) is rightfully received by the receiving Party from a third party
without a duty of confidentiality; or (iv) is independently developed by the receiving Party as
evidenced by written records of the receiving Party.

     1.5 “Field” means (a) with respect to Patent 1, the field of human therapeutics, biomarkers,
and diagnostics, and (b) with respect to Patent 2, use of the HER family peptide E75 in combination
with Herceptin® and only in the field of human therapeutics, biomarkers, and diagnostics
(no licensed use is granted in connection with any other peptides). “Patent 1” and “Patent 2” are
defined in Appendix A.

     1.6 The term “License” has the meaning set forth in Section 2.1.

     1.7 “Licensed Process” means any process that: (a) is covered in whole or in part by an
unexpired issued or pending claim contained in the Patent Rights, or (b) utilizes any Technology
Rights.

     1.8 “Licensed Product” means any product or part thereof that: (a) is covered in whole or in
part by an unexpired issued or pending claim contained in the Patent Rights, or (b) is manufactured
by using or is employed to practice a Licensed Process or Technology Rights.

     1.9 “Marketing Approval” means the approval or authorization required for the marketing of
Licensed Product or Licensed Process in the United States, the European Union, or other country
within the Territory, such as the issuance of an approval action by the United States Food and Drug
Administration (“FDA”) on an NDA in the United States, or the issuance of its equivalent by the
European Medicines Agency in the European Union.

     1.10 “MDACC” means The University of Texas M. D. Anderson Cancer Center.

     1.11 “NDA” means a New Drug Application or Biologics License Application filed with the FDA
for Marketing Approval of a Licensed Product or Licensed Process, or an equivalent application
filed with any equivalent agency or governmental authority outside the United States.

     1.12 “Net Sales” means the gross revenues received by Licensee or any sublicensee(s) or
Affiliate(s) from sales, leases, or other transfers of Licensed Products or Licensed Processes,
less the sum of the following: sales discounts actually granted and taken; sales or use taxes
actually paid; import or export duties actually paid; outbound
transportation expenses actually prepaid or actually allowed; and amounts actually allowed or
credited due to returns (not exceeding the original billing or invoice amount),

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all as recorded by
Licensee in Licensee’s official books and records in accordance with generally accepted accounting
practices and consistent with Licensee’s financial statements and regulatory filings with the
United States Securities and Exchange Commission, if any. No deductions shall be made for
commissions paid to individuals, whether they be with independent sales agencies or regularly
employed by and on the payroll of Licensee or sublicensees, or for the cost of collections.

     1.13 “Non-commercial Research Purposes” means use of Patent Rights for academic research or
other not-for-profit scholarly purposes that are undertaken at a non-profit or governmental
institution that does not use the Patent Rights in the production or manufacture of products for
sale or the performance of services for a fee.

     1.14 “Non-royalty Sublicense Income” means all sublicense issue fees, sublicense maintenance
fees, sublicense milestone payments, and similar non-royalty payments made by sublicensees to
Licensee on account of sublicenses pursuant to this Agreement.

     1.15 “Patent Rights” means any or all of the following intellectual property to the extent
owned or controlled by the Foundation:

          (a) The United States and foreign patents and patent applications listed in Appendix A
(including any and all patents and patent applications, if any, that may be added by a future
modification or amendment of this Agreement that satisfies the requirements of the last sentence of
Section 10.19), and all divisions and continuations of such applications;

          (b) United States and foreign patents issued from the applications listed in Appendix A or
from divisionals or continuations of such applications;

          (c) Claims of United States and foreign continuation-in-part applications, and all divisions
and continuations of such continuation-in-part applications, and of the resulting patents, to the
extent that the claims are directed to subject matter specifically described in the United States
or foreign patent applications listed in Appendix A;

          (d) Claims of all foreign and United States counterpart patent applications to (a), (b), or
(c) above, and of the resulting patents, to the extent that the claims are directed to subject
matter specifically described in the patents or patent applications described in (a), (b), or (c)
above; and

          (e) Any reissues, renewals, extensions, or supplementary protection certificates of patents
described in (a), (b), (c), or (d) above.

Patent Rights shall not include (c), (d), or (e) above to the extent that the claims are directed
to new matter that is not the subject matter described in (a) above.

     1.16 “Person” means any individual, corporation, limited liability company, general or limited
partnership, joint venture, association, joint stock company, trust,

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unincorporated business or
organization, government or agency or political subdivision thereof, or other entity, whether
acting in an individual, fiduciary, or other capacity.

     1.17 “Phase III Clinical Trial” means: (a) that portion of the drug development and review
process in which an expanded clinical trial is conducted to gather the additional information about
effectiveness and safety that is needed to evaluate the overall benefit-risk relationship of an
investigational new drug, as more specifically defined by the rules and regulations of the FDA,
including 21 C.F.R. § 312.21 or any future revisions or substitutes therefore; or (b) a similar
clinical trial in the European Union or any nation other than the United States. Commencement of a
Phase III Clinical Trial shall be deemed to occur upon the administration of Licensed Product (or
Licensed Process) or placebo to the first patient enrolled in the Phase III Clinical Trial.

     1.18 “Technology Rights” means the Foundation’s rights in any technical information, know-how,
trade secret, process, procedure, composition, device, method, formula, protocol, technique,
software, design, drawing, or data that are: (a) created before the Effective Date by one or more
of the inventor(s) listed in Appendix A, and (b) not specifically claimed in Patent Rights but that
are necessary for practicing Patent Rights.

     1.19 “Territory” means worldwide.

     1.20 “Valid Claim” means a claim of: (a) any issued, unexpired Patent Right that has not been
revoked or held unenforceable or invalid by a decision of a court or governmental agency of
competent jurisdiction from which no appeal can be taken, or with respect to which an appeal is not
taken within the time allowed for appeal; or (b) any pending application for Patent Right that has
not been cancelled, withdrawn, or abandoned.

ARTICLE II

GRANT OF RIGHTS

     2.1 The Foundation hereby grants to Licensee and Licensee accepts, subject to the terms and
conditions hereof, in the Territory and for the Field, a non-exclusive license to practice under
the Technology Rights and an exclusive (even as to Foundation, except as provided in Section 2.4,
and except when termination of the exclusivity of the license occurs pursuant to Article IX)
license (collectively, the “License”) to practice under the Patent Rights and, to the extent not
prohibited by other patents, to make, have made, use, have used, sell, have sold, export and import
Licensed Products and to practice Licensed Processes, until the expiration of this Agreement,
unless this Agreement shall be sooner terminated in accordance with the terms hereof.

     2.2 In order to establish a period of commercial exclusivity for Licensee, the Foundation
agrees that it will not grant, in the Territory for the Field, any other license to
practice under the Patent Rights or to make, have made, use, have used, sell, have sold,
export or import Licensed Products or to practice the Licensed Processes, except as

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required by the
obligations related to Section 2.4(a) or as permitted in Section 2.4(b), during the period of time
commencing with the Effective Date and ending with the first to occur of:

          (a) The expiration of all Patent Rights;

          (b) A court or tribunal, in a final decision not subject to further appeal, declaring invalid
or unenforceable all claims in the Patent Rights;

          (c) The abandonment of all claims in the Patent Rights; or

          (d) The termination of this Agreement or the termination of the exclusivity of the License in
accordance with Article IX

     2.3 Subject to the Foundation’s prior approval, which approval shall not be unreasonably
withheld or delayed, Licensee shall have the right to grant sublicenses hereunder via written
sublicense agreements. The License granted to Licensee hereunder does not extend to any Affiliate
of Licensee unless and until such Affiliate enters into a written sublicense agreement with
Licensee that is consistent with the requirements hereof and the Foundation approves the written
sublicense agreement.

          (a) In all sublicenses granted hereunder, Licensee shall provide that the sublicense is
subject and subordinate to all terms and conditions of this Agreement, except: (i) the sublicensee
may not grant any sublicenses except with the Foundation’s prior express written approval, and (ii)
any royalty or other payment paid by the sublicensee to Licensee may exceed the rate set forth in
this Agreement. Licensee shall attach a copy of this Agreement to any sublicense agreement and
shall provide a complete copy of the sublicense agreement to the Foundation promptly after signing
by the parties thereto.

          (b) Licensee may not receive from any sublicensee anything of value in lieu of cash payments
in consideration for any sublicense under this Agreement, without the Foundation’s prior express
written approval, which shall not be unreasonably withheld or delayed.

          (c) Sublicenses may extend past the expiration date of the exclusive period but any
exclusivity of such sublicenses shall expire upon the termination or expiration of Licensee’s
exclusivity. Upon any termination of this Agreement, sublicensees’ rights shall also terminate,
subject to Section 9.3.

     2.4 The granting and exercise of the License is subject to the following conditions:

          (a) The U.S. Government retains a nonexclusive, nontransferable, irrevocable, world-wide,
paid-up license to practice all invention(s) covered by the Patent Rights or Technology Rights and
to have such invention(s) practiced by or on behalf of
the U.S. Government and on behalf of any foreign government or international organization
pursuant to any existing or future treaty or agreement to which the U.S.

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Government is a signatory.

          (b) The Foundation and the USU reserve the rights to make and use, and grant to others
non-exclusive licenses to make and use for Non-commercial Research Purposes the subject matter
described and claimed in Patent Rights or Technology Rights.

          (c) Licensee shall cause any Licensed Product produced for use or sale in the United States to
be manufactured substantially in the United States.

     2.5 The License granted hereunder shall not be construed to confer any rights upon Licensee
(or sublicensees, if any) by implication, estoppel, or otherwise as to any technology not included
in the Patent Rights or the Technology Rights as defined herein.

ARTICLE III

LICENSE FEES AND MILESTONE AND

ROYALTY PAYMENTS

     3.1 Licensee shall pay to the Foundation a non-creditable, non-refundable License issue
royalty in the sum of [* * *] ([* * *] for Patent 1 Patent Rights and [* * *] for Patent 2 Patent
Rights) within thirty (30) after the Effective Date.

     3.2 No later than July 1 of each calendar year after the Effective Date of this Agreement,
Licensee shall pay to the Foundation the following minimum annual non-refundable license
maintenance royalties: [* * *] for Patent 1 Patent Rights and [* * *] for Patent 2 Patent Rights.
Commencing on January 1 of the calendar year immediately after the first sale of a Licensed Product
or Licensed Process anywhere in the Territory, and continuing annually thereafter, such minimum
annual non-refundable license maintenance royalties shall increase to: [* * *] for Patent 1 Patent
Rights and [* * *] for Patent 2 Patent Rights. Payments under this Section 3.2 shall be creditable
against other royalties (but not against milestone payments, if any) due pursuant to Sections 3.3
and 3.4 in the same calendar year only, but shall not be credited against any milestone payments
nor against royalties due for any other calendar year.

     3.3 In further consideration for the rights to Patent Rights and Technology Rights granted
hereunder, Licensee shall pay to the Foundation semi-annually, within sixty (60) days after each
calendar half year ending June 30 and December 31, a royalty according to the following schedule
and provisions:

          (a) For sales of Licensed Products or Licensed Processes in the U.S.: a royalty of [*
* *] of Net Sales until the expiration or termination of the E75 license agreement dated September
11, 2006 between Apthera, MDACC and the Foundation; thereafter [* * *] of Net Sales through the
remaining term of this Agreement;

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For sales of Licensed Products or Licensed Processes outside the U.S., on a country-by-country
basis, a royalty of:

               (i) [* * *] of Net Sales in any and all jurisdictions in which a Licensed Product or Licensed
Process is covered by at least one Valid Claim, and

               (ii) In all other jurisdictions, [* * *] of Net Sales until the expiration or termination of
the E75 license agreement dated September 11, 2006 between Apthera, MDACC and the Foundation, and
[* * *] of Net Sales thereafter.

          (b) Overriding provisions on royalty rates

               (i) Royalty rates for the intellectual property licensed under this Agreement are reduced on a
pro rata basis among all licensors such that combined stacking royalties with existing E75
intellectual property are limited to [* * *] where a Licensed Product or Licensed Process is
covered by at least one Valid Claim and [* * *] where not covered by a Valid Claim.

               (ii) If the license pursuant to this Agreement is converted to a non-exclusive one and if
other non-exclusive licenses in the same field and territory are granted, after such conversion the
above royalty rates shall not exceed the royalty rate to be paid by other licensees in the same
field and territory during the term of the non-exclusive license.

               (iii) On sales of Licensed Products or Licensed Processes between Licensee and its
sublicensees for resale, the royalty shall be paid only on the Net Sales of the sublicensees and
not on the Net Sales by Licensee to its sublicensees for resale.

          (c) In the case of sublicenses, Licensee shall also pay to the Foundation a royalty on
Non-royalty Sublicense Income according to the following schedule and provisions:

               (i) [* * *] until the expiration or termination of the E75 license agreement dated September
11, 2006 between Apthera, MDACC and the Foundation, and thereafter

               (ii) [* * *] throughout the remaining term of this Agreement.

     3.4 Licensee shall pay to the Foundation the following milestone payment(s) after the
associated milestone occurs (in each instance):

          (a) [* * *]; due within thirty (30) days following the issuance of the first patent in the
Territory related to any portion of the intellectual property included within the Patent Rights.

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          (b) [* * *]; due within thirty (30) days following the start (administration of the first dose
to the first patient) of any Phase III trial.

          (c) [* * *]; due within thirty (30) days following the first filing of the first NDA (or
equivalent filing) for any Licensed Product.

          (d) [* * *]; due within thirty (30) days following the first Marketing Approval of any
Licensed Product; and

          (e) [* * *]; due within six (6) months of the first commercial sale of any Licensed Product
anywhere in the Territory.

     3.5 All payments due hereunder shall be paid in full, without deduction for any taxes or other
fees imposed by any government or any transfer, collection, or similar charges; any such tax, fee,
or charge shall be paid by Licensee.

     3.6 Royalty payments shall be paid, by check or by wire transfer, in United States dollars in
Rockville, Maryland, or at such other place and manner as the Foundation may designate in writing
consistent with the laws and regulations controlling in any foreign country. If any currency
conversion is required in connection with any payments due hereunder, such conversion shall be made
by using the exchange rate existing in the United States as reported in The Wall Street Journal on
the last Business Day of the calendar half-year reporting period to which such payments relate.

     3.7 [* * *] shall be due to the Foundation for any Licensed Product as to which the
manufacture, use, lease, or sale, is or shall be covered by more than one Patent Rights patent
application or Patent Rights patent licensed hereunder.

     3.8 If Licensee is required to pay royalties to a third party to avoid infringing such third
party’s intellectual property rights, as documented by a written advice of Licensee’s patent
counsel, Licensee shall be entitled to reduce the royalty payments made pursuant to Section 3.3 by
the amounts paid to such thirty party; provided, however, that the amounts paid pursuant to Section
3.3 will not be reduced by more than [* * *] and in no event shall be less than [* * *]. Such
reduction of royalty payments paid pursuant to Section 3.3 shall occur only in the same calendar
year as such required payment is made to such third party. Any such required payment shall not be
applied to reduce any milestone payments, nor to reduce any royalties due for any other calendar
year.

ARTICLE IV

DUE DILIGENCE

     4.1 Licensee shall use its commercially reasonable efforts to bring one or more of the
Licensed Products and the Licensed Processes to market, in the Territory for the Field, through a
thorough, vigorous, and diligent program for exploitation of the Patent Rights and to continue
active, diligent development and marketing efforts for such

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Licensed Products and Licensed Processes throughout the life of this Agreement. Thereafter,
until the expiration of this Agreement, Licensee shall endeavor to keep the Licensed Products and
the Licensed Processes continuously available to the public in the Territory for the Field.

     4.2 In addition, Licensee shall adhere to the following milestones:

          (a) Licensee shall deliver to the Foundation on or before sixty (60) days following the
Effective Date a business plan showing the estimated amount of money, number and kind of personnel,
and time budgeted and planned for each phase of development of the Licensed Products and the
Licensed Processes during the period ending on the first anniversary of the Effective Date.
Licensee shall provide an updated, similarly detailed business plan to the Foundation each year on
or before the anniversary of the Effective Date.

          (b) Licensee shall enter into a Phase III Clinical Trial no later than December 31, 2012 and
shall have commenced the first sale of any Licensed Product no later than ten (10) years after the
Effective Date. Upon thirty (30) calendar days written notice from Licensor, Licensor may
terminate this Agreement if Licensee fails to initiate a Phase III Clinical Trial in the intended
patient population of node positive, HER2 1+ and/or 2+ breast cancer in the United States, the
European Union, Eastern Europe, Japan, India, China, or other country(ies) as may be mutually
agreed by the Parties hereto on or before December 31, 2012, unless before the end of such thirty
(30) calendar day period, Licensee provides evidence satisfactory to Licensor that it has initiated
the Phase III Clinical Trial. For the avoidance of doubt, Licensee must initiate a Phase III
Clinical Trial on or before December 31, 2012 unless specifically requested or demanded otherwise
by a strategic collaborative partner (identified by Licensee in writing to Licensor) or the U.S.
FDA or equivalent foreign regulatory agency. The December 31, 2012 deadline may be extended as
follows:

               (i) At the election of the Licensee, prior to the December 31, 2012 deadline, Licensee may pay
to Licensor a [* * *] extension fee (the “Option 1 Fee”) and receive a six (6) month extension of
the December 31, 2012 deadline (as extended, the “Option 1 Clinical Trial Date”);

               (ii) Upon Licensee’s timely payment of the Option 1 Fee and upon the mutual agreement of the
Parties, prior to the Option 1 Clinical Trial Date, Licensee may pay to Licensor a [* * *]
extension fee (the “Option 2 Fee”) and receive a second six (6) month extension of the Option 1
Clinical Trial Date (as extended, the “Option 2 Clinical Trial Date”);

               (iii) Upon Licensee’s timely payments of the Option 1 Fee and the Option 2 Fee and upon the
mutual agreement of the Parties, prior to the Option 2 Clinical Trial Date, Licensee may pay to
Licensor a [* * *] extension fee (the “Option 3 Fee”) and receive a third six (6) month extension
of the Option 2 Clinical Trial Date (as extended, the “Option 3 Clinical Trial Date”).

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ARTICLE V

REPORTING

     5.1 No later than sixty (60) days after December 31 of each calendar year, Licensee shall
provide to the Foundation a written annual Progress Report describing progress on research and
development, regulatory approvals, manufacturing, sublicensing, marketing, and sales during the
most recent twelve (12) month period ended December 31 and plans for the forthcoming year. The
Progress Report shall describe the status of Licensee’s efforts to develop and commercialize
Licensed Product(s) or Licensed Process(es) in sufficient detail to enable the Foundation to
reasonably determine whether anticipated performance and payment milestones have been met and to
provide assurance that Licensee is developing Licensed Product(s) or Licensed Process(es). If
multiple technologies are covered by the License hereunder, the Progress Report shall provide the
information set forth above for each technology. If progress differs in any material respect from
that anticipated in the plan required under Section 4.2(a), Licensee shall explain the reasons for
the difference and propose a modified development plan for the Foundation’s review and approval,
not to be unreasonably withheld. Licensee shall also provide any reasonable additional data the
Foundation requires to evaluate Licensee’s performance.

     5.2 Licensee shall report to the Foundation the date of the first sale of Licensed Products
(or use or sale of Licensed Processes) in each country within thirty (30) days of occurrence.

     5.3 Royalty Reports.

          (a) Licensee shall, commencing December 31, 2011, submit to the Foundation, within sixty (60)
days after each calendar half year ending June 30 and December 31 during the term of this
Agreement, a Royalty Report setting forth for such half year at least the following information:

               (i) the number of Licensed Products sold by Licensee and all sublicensees in each country;

               (ii) total dollar amount of billings, invoices, and receipts for Licensed Products sold by
Licensee and all sublicensees in each country (together with an accounting for currency
conversions, if any);

               (iii) an accounting for all Licensed Processes used or sold by Licensee and all sublicensees
in each country;

               (iv) the calculation of Net Sales, including applicable deductions;

               (v) the amount of Non-royalty Sublicense Income received by Licensee;

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               (vi) an accounting for any deduction made pursuant to Section 3.8; and

               (vii) the amount of royalty due to the Foundation for the reporting period or, if no royalties
are due for any reporting period, the statement that no royalties are due.

Such Royalty Report shall be certified as correct by an officer of Licensee and shall include a
detailed listing of all deductions from royalties otherwise due pursuant to this Agreement.

          (b) Contemporaneous with the submission of each Royalty Report, Licensee shall pay to the
Foundation the amount of royalty due with respect to such half year. If multiple technologies are
covered by the License granted hereunder, Licensee shall specify which Patent Rights are utilized
for each Licensed Product and Licensed Process included in the Royalty Report.

          (c) Late payments shall be subject to a charge of one and one-half percent (1-1/2%) per month,
or $250, whichever is greater.

     5.4 In the event of an acquisition, merger, change of corporate name, or change of
organization or identity, Licensee shall notify the Foundation in writing within thirty (30) days
of such event.

     5.5 If Licensee or any Affiliate or sublicensee (or optionee) does not qualify or ceases to
qualify as a “small entity” as provided by the United States Patent and Trademark Office, Licensee
shall notify the Foundation immediately.

ARTICLE VI

RECORD KEEPING

     6.1 Licensee shall keep, and shall require its sublicensees to keep, accurate records
(together with supporting documentation) of Licensed Products and Licensed Processes made, used or
sold under this Agreement, appropriate to determine the amount of royalties due to the Foundation
hereunder. Such records shall be retained for at least three (3) years following the end of the
reporting period to which they relate. They shall be available during normal business hours, on not
less than ten (10) days’ prior notice from the Foundation, for examination by an accountant
selected by the Foundation, for the sole purpose of verifying reports and payments hereunder,
provided that the Foundation shall have the right to conduct such an examination not more than once
in any calendar year and only with respect to prior years that have not previously been subject to
such examination. In conducting examinations pursuant to this section, the Foundation’s accountant
shall have access to all records that the Foundation reasonably believes to be relevant to the
calculation of royalties and other payments required under Article III.

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     6.2 The Foundation’s accountant shall not disclose to the Foundation any information other
than information relating to the accuracy of reports and payments made hereunder. In cases of
inaccurate reports and payment, Licensee shall promptly pay the Foundation any additional sum that
would have been payable to the Foundation had the Licensee reported correctly, plus interest on
said sum at the rate of one and one half percent (1-1/2%) per month.

     6.3 Such examination by the Foundation’s accountant shall be at the Foundation’s expense,
except that if such examination shows an underreporting or underpayment in excess of the greater of
(i) five percent (5%) or (ii) Ten Thousand Dollars ($10,000) for any twelve (12) month period, then
Licensee shall pay the Foundation the reasonable cost of such examination (as well as any
additional sum that would have been payable to the Foundation had the Licensee reported correctly,
plus interest on said sum at the rate of one and one half percent (1-1/2%) per month). In addition,
if such examination shows an underreporting or underpayment in excess of fifteen percent (15%) or
more for any calendar year period, then in addition to the above, Licensee shall pay the Foundation
an underpayment penalty fee equal to twenty-five percent (25%) of the amount of the additional sum
that would have been payable to the Foundation had the Licensee reported correctly.

ARTICLE VII

DOMESTIC AND FOREIGN PATENT FILING AND MAINTENANCE

     7.1 Patent 1 Patent Rights.

          (a) Licensee Prosecution

               (i) Foundation grants Licensee the right to be responsible for the preparation, filing,
prosecution and maintenance of any and all Patent Rights that relate to the intellectual property
described under the “Patent 1” heading of Appendix A (“the Patent 1 Patent Rights”). Licensee
agrees to prosecute and maintain at Licensee’s expense the patent applications listed under the
“Patent 1” heading of Appendix A. Licensee further agrees to file at Licensee’s expense any
additional continuation or divisional application(s) required to retain all embodiments of Patent 1
Patent Rights contained in said patent applications. Licensee agrees not to abandon or otherwise
undermine prosecution of any Patent 1 Patent Rights without the prior written approval of the
Foundation.

               (ii) Licensee shall consult with the Foundation as to the preparation, filing, prosecution and
maintenance of the Patent 1 Patent Rights and agrees to keep the Foundation promptly and fully
informed of the course of patent prosecution of the Patent 1 Patent Rights, by providing the
Foundation with copies of all documents relevant to any such preparation, filing, prosecution, or
maintenance, including but not limited to substantive communications and notices, search reports,
third party observations submitted to or received from patent offices throughout the Territory,

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foreign patent applications, Office Actions and Examination Reports from patent offices, and
proposed draft responses. The Foundation shall have the right to review all such documents, prior
to their submission, and may offer recommendations to Licensee to amend such contemplated
preparation, filing, prosecution, or maintenance, and provide a list of the countries where the
Foundation desires Licensee to file patent applications. Licensee will make a reasonable effort to
implement such Foundation recommendations, provided the Foundation recommendations are acceptable
to outside patent counsel and are received in sufficient time to meet any pertinent deadlines. The
Foundation shall provide such patent consultation to Licensee at no cost to Licensee.

               (iii) In the event the Licensee elects not to, or fails to, continue prosecution, in whole or
in part, of any Patent 1 Patent Rights in any particular country or countries, the Foundation shall
have the right (but not the obligation) at its own expense to undertake the prosecution and
maintenance of the Patent 1 Patent Rights. The Licensee shall notify the Foundation in writing of
any election not to pursue the prosecution or maintenance of any Patent 1 Patent Rights at least
sixty (60) days prior to any applicable deadline or loss of rights.

                    (A) Licensee shall have an obligation to pay a royalty on Net Sales of Licensed Products or
Licensed Processes in any country in which Licensee discontinued prosecuting or abandoned Patent 1
Patent Rights. In addition, Licensee shall reimburse Foundation for all patent prosecution
expenses that Foundation reasonably incurs pursuant to its election to prosecute Patent 1 Patent
Rights under this Section 7.1(a)(iii) in any country in which Licensee has Net Sales.

               (iv) Foundation shall provide reasonable efforts to aid Licensee in obtaining signatures or
inventor assistance as necessary to further prosecution and to secure the full protection and
ownership of all rights in and to the Licensed Products and the Licensed Processes, but Licensee
acknowledges that inventors include employees of the U.S. Government and other individuals, none of
whom are employed by the Foundation.

          (b) After execution of this Agreement and within thirty (30) days of the Foundation’s
submission of an invoice, Licensee shall reimburse the Foundation for [* * *], which is the total
of all third party expenses the Foundation has incurred and paid prior to the Effective Date for
the preparation, filing, prosecution, and maintenance of Patent 1 Patent Rights. If expenses are
incurred by Foundation after the Effective Date that are reimbursable by Licensee under the terms
hereof, the Licensee shall reimburse the Foundation for all such future third party expenses within
thirty (30) days after Licensee’s receipt of invoices from the Foundation. Payment of these
invoices that is made more than the number of days specified above after submission shall be
considered late and subject to interest charges of one and one-half percent (1-1/2%) per month.

          (c) The Foundation and Licensee shall cooperate fully in the preparation, filing, prosecution
and maintenance of Patent 1 Patent Rights licensed to Licensee hereunder, executing all papers and
instruments or requiring employees or

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agents to execute such papers and instruments so as to enable the Foundation or Licensee to
apply for, to prosecute, and to maintain patent applications and patents in the Foundation’s name
in any country. Each Party shall provide to the other prompt notice as to all matters that come to
its attention and that may affect the preparation, filing, prosecution, or maintenance of any such
patent applications or patents.

          (d) Licensee may elect to surrender its Patent 1 Patent Rights in any country upon sixty (60)
days written notice to the Foundation. Such notice shall not relieve Licensee from responsibility
for Patent 1 Patent Right-related expenses incurred prior to the expiration of the sixty (60)-day
notice period (or such longer period specified in Licensee’s notice).

     7.2 Patent 2 Patent Rights

          (a) The Foundation, in its sole discretion, shall be responsible for the preparation, filing,
prosecution, and maintenance of any and all patent applications and patents relating to the
intellectual property described under the “Patent 2” heading of Appendix A (the “Patent 2 Patent
Rights”), and Licensee shall be responsible for [* * *] of the expenses incurred by the Foundation
for such preparation, filing, prosecution, and maintenance (all of such expenses constituting the
“Patent 2 Patent Expenses”). The Foundation shall consult with Licensee as to the preparation,
filing, prosecution and maintenance of such patent applications and patents and shall furnish to
Licensee copies of documents relevant to any such preparation, filing, prosecution, or maintenance.

          (b) After execution of this Agreement and within thirty (30) days of the Foundation’s
submission of an invoice, Licensee shall reimburse the Foundation for [* * *], which is [* * *] of
all third party expenses the Foundation has incurred and paid prior to the Effective Date for the
preparation, filing, prosecution, and maintenance of Patent 2 Patent Expenses. Thereafter,
Licensee shall reimburse the Foundation for [* * *] of all subsequently incurred Patent 2 Patent
Expenses within thirty (30) days after Licensee’s receipt of invoices from the Foundation. Late
payment of these invoices shall be subject to interest charges of one and one-half percent (1 1/2%)
per month.

          (c) The Foundation and Licensee shall cooperate fully in the preparation, filing, prosecution
and maintenance of Patent 2 Patent Rights licensed to Licensee hereunder, executing all papers and
instruments or requiring employees or agents to execute such papers and instruments so as to enable
the Foundation to apply for, to prosecute, and to maintain patent applications and patents in the
Foundation’s name in any country. Each Party shall provide to the other prompt notice as to all
matters that come to its attention and that may affect the preparation, filing, prosecution, or
maintenance of any such patent applications or patents.

          (d) Licensee may elect to surrender its Patent 2 Patent Rights in any country upon sixty (60)
days written notice to the Foundation. Such notice shall not relieve Licensee from responsibility
to reimburse the Foundation for [* * *] of Patent 2 Patent Expenses incurred prior to the
expiration of the sixty (60)-day notice period (or such longer period specified in Licensee’s
notice).

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ARTICLE VIII

INFRINGEMENT

     8.1 With respect to any Patent Rights that are exclusively licensed to Licensee pursuant to
this Agreement, Licensee shall have the right, within the Territory, to prosecute in its own name
and at its own expense any infringement of such patent, so long as such License is exclusive at the
time of the commencement of such action. The Foundation agrees to notify Licensee promptly of each
infringement of such patents of which the Foundation is or becomes aware. Before Licensee
commences an action with respect to any infringement of such patents, Licensee shall give careful
consideration to the views of the Foundation and to potential effects on the public interest in
making its decision whether or not to sue.

          (a) If Licensee elects to commence an action as described above, Foundation may, to the extent
permitted by law and at the Foundation’s own expense, elect to join as a party in that action.
Regardless of whether the Foundation elects to join as a party, the Foundation shall cooperate
fully with Licensee in connection with any such action.

          (b) If the Foundation elects to join as a party pursuant to subsection (a), the Foundation
shall jointly control the action with Licensee.

     8.2 If Licensee elects to commence an action as described above, Licensee may deduct from its
royalty payments to the Foundation with respect to the patent(s) subject to suit an amount not
exceeding [* * *] of Licensee’s expenses and costs of such action, including reasonable attorneys’
fees; provided, however, that such reduction shall not exceed [* * *] of the total royalty due to
the Foundation with respect to the patent(s) subject to suit for each calendar year. If such [* *
*] of Licensee’s expenses and costs exceeds the amount of royalties deducted by Licensee for any
calendar year, Licensee may to that extent reduce the royalties due to the Foundation from Licensee
in succeeding calendar years, but never by more than [* * *] of the total royalty due in any one
year with respect to the patent(s) subject to suit.

     8.3 No settlement, consent, judgment or other voluntary final disposition of the suit may be
entered into without the prior written consent of the Foundation, which consent shall not be
unreasonably withheld or delayed.

     8.4 Recoveries or reimbursements from actions commenced pursuant to this Article shall first
be applied to reimburse Licensee and the Foundation for litigation costs (excluding Licensee
litigation costs deducted from royalty payments pursuant to Section 8.2) not paid from royalties
and then to reimburse the Foundation for royalties deducted by Licensee pursuant to Section 8.2.
Licensee and the Foundation shall share any remaining recoveries or reimbursements [* * *].

     8.5 If Licensee elects not to exercise its right to prosecute an infringement of the Patent
Rights pursuant to this Article, the Foundation may do so at its own expense,

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controlling such action and retaining all recoveries therefrom. Licensee shall cooperate
fully with the Foundation in connection with any such action.

     8.6 Without limiting the generality of Section 8.5, the Foundation may, at its election and by
notice to Licensee, establish a time limit of sixty (60) days for Licensee to decide whether to
prosecute any infringement of which the Foundation is or becomes aware. If, by the end of such
sixty (60)-day period, Licensee has not commenced such an action, the Foundation may prosecute such
an infringement at its own expense, controlling such action and retaining all recoveries therefrom.
With respect to any such infringement action prosecuted by the Foundation in good faith, Licensee
shall pay over to Foundation any payments (whether or not designated as “royalties”) made by the
alleged infringer to Licensee under any existing or future sublicense authorizing Licensed Products
or Licensed Processes, up to the amount of the Foundation’s unreimbursed litigation expenses
(including, but not limited to, reasonable attorneys’ fees).

     8.7 If a declaratory judgment action is brought naming Licensee as a defendant and alleging
invalidity of any of the Patent Rights, the Foundation may elect to take over the sole defense of
the action at its own expense. Licensee shall cooperate fully with the Foundation in connection
with any such action.

     8.8 During the exclusive period of the Licensee’s License hereunder, Licensee shall have the
sole right, in accordance with the terms and conditions hereof, to sublicense any alleged infringer
within the Territory for the Field. Any upfront fees paid in connection with such sublicense shall
be shared [* * *] between Licensee and the Foundation; other royalties shall be treated in
accordance with Article III.

ARTICLE IX

TERMINATION OF AGREEMENT

     9.1 This Agreement, unless terminated as provided herein, shall remain in effect until the
last patent or patent application in Patent Rights has expired or been abandoned.

     9.2 The Foundation may terminate this Agreement in the circumstances set forth in this
Section, and any such termination shall be effective immediately upon the Foundation giving written
notice to Licensee of any of the following:

          (a) if Licensee does not make a payment due hereunder and fails to cure such non-payment
(including the payment of interest in accordance with Section 5.3(c)) within thirty (30) days after
the date of notice in writing of such non-payment by the Foundation;

          (b) if Licensee defaults in any of its material obligations under Sections 10.4(c), 10.4(d),
and 10.4(e) to procure and maintain insurance;

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          (c) at any time after two (2) years from the Effective Date of this Agreement, the
Foundation may, in its sole discretion, either terminate this Agreement and the License granted
hereunder or render the exclusive portion of the License non-exclusive if, in the Foundation’s
reasonable judgment, the Progress Reports furnished by Licensee do not demonstrate that Licensee
has:

               (i) either (A) put the licensed subject matter into commercial use in the Territory, directly
or through a sublicense, and is keeping the licensed subject matter continuously available to the
public, or (B) has been and continues to be engaged in research, development, manufacturing,
marketing or sublicensing activity appropriate to achieving the purposes set forth in Section 4.1;
and

               (ii) met all relevant performance milestone(s) for the period covered by the most recent
Progress Report and all preceding Progress Reports, or the Parties have mutually agreed in writing
on a plan for meeting such milestone within twelve (12) months thereafter;

          (d) if Licensee: is unable to pay its debts as such debts become due; makes a general
assignment for the benefit of creditors; has a petition in bankruptcy or a suit seeking
reorganization, liquidation, dissolution, or similar relief filed against it and such petition or
suit is not dismissed within sixty (60) days of its filing; or files or permits the filing of any
petition or answer seeking to adjudicate itself bankrupt or insolvent, or seeking for itself any
liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or
composition of Licensee or its debts under any law relating to bankruptcy, insolvency, or
reorganization or relief of debtors, or seeking or consenting to the appointment of a trustee,
custodian, receiver, liquidator or other similar official for Licensee or for any substantial part
of its property; or takes any corporate action to authorize any of the foregoing actions;

          (e) if an examination by Foundation’s accountant pursuant to Article VI shows a willful or
intentionally fraudulent underreporting or underpayment by Licensee in excess of fifteen percent
(15%) for any twelve (12) month period;

          (f) if Licensee is convicted of a felony relating to the manufacture, use, or sale of any
Licensed Product or Licensed Process; or

          (g) except as provided in subsections (a), (b), (c), (d), (e) and (f) above, if Licensee
defaults in the performance of any obligations under this Agreement and the default has not been
remedied within ninety (90) days after the date of notice in writing of such default by the
Foundation.

     9.3 Licensee shall provide, in all sublicenses granted by it under this Agreement, that
Licensee’s interest in such sublicenses shall at the Foundation’s option terminate or be assigned
to the Foundation upon termination of this Agreement.

     9.4 This Agreement may be terminated at any time by mutual written agreement between the
Parties, subject to any terms herein which survive termination. Upon termination, Licensee shall
submit a final Royalty Report to the Foundation and

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any royalty payments, including royalty
payments on any and all future sales of Licensed Products made but not yet sold at the time of
termination, and unreimbursed patent expenses invoiced under this Agreement by the Foundation prior
to termination shall become immediately payable.

     9.5 Upon termination, Licensee shall promptly provide to Foundation all data, including all
pre-clinical data, clinical data, manufacturing data, and marketing data, derived during
development or attempted development of Licensed Products or Licensed Processes. Licensee shall
also provide to Foundation copies of all FDA submissions and correspondence related to Licensed
Products or Licensed Processes. In addition, Licensee shall promptly provide Foundation the entire
official file wrapper concerning prosecution of Patent 1 whether from outside counsel or internal
counsel.

     9.6 Upon termination, Licensee grants to Foundation a nonexclusive royalty-bearing license
with the right to sublicense with respect to improvements made by Licensee (including improvements
licensed by Licensee from third parties to the extent Licensee has the right to grant such
sublicenses). Licensee and Foundation agree to negotiate in good faith the royalty rate for such
nonexclusive license. Foundation’s right to sublicense others hereunder is solely for the purpose
of permitting others to develop and commercialize the entire technology related to the subject
matter of this Agreement.

     9.7 Articles I and VI and Sections 2.5, 5.3 (only as it relates to any overdue Royalty
Report(s) and to the Royalty Report for the half year during which the termination occurs), 7.2,
8.3, 8.4, 9.5, 9.6, 9.7, 10.1 through 10.8 inclusive, 10.10, 10.11, and 10.13 through 10.20
inclusive shall survive any expiration or termination of this Agreement indefinitely.
Additionally, any rights or remedies arising out of a breach or violation of any terms of this
Agreement will survive any expiration or termination of this Agreement. The expiration or
termination of this Agreement shall not discharge either Party from any obligation that it owes to
the other Party by reason of any loss, cost, damage, expense, liability, or contractual duty that
occurs or arises (or the circumstances, events, or basis of which occurs or arises) prior to such
expiration or termination, and shall not affect the right of either Party to institute or maintain
any action for damages relating to any breach of this Agreement by the other Party prior to the
date of termination. It is the intent of the Parties that any such obligation owed by a Party to
the other Party arising before the date of expiration or termination (whether the same shall be
known or unknown at such date, or whether the circumstances, events, or basis of the same shall be
known or unknown at such date), including royalty obligations (computed in accordance with Article
III) on sales made or ordered prior to the date of termination or expiration, indemnification
obligations, and confidentiality obligations, shall survive the expiration or termination of this
Agreement.

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ARTICLE X

MISCELLANEOUS PROVISIONS

     10.1 Rules of Construction. This Agreement is to be interpreted in accordance with
the following rules of construction:

               (a) Number and Gender. All definitions of terms apply equally to both the singular
and plural forms of the terms defined. Whenever the context may require, any pronoun shall include
the corresponding masculine, feminine, and neuter forms.

               (b) Including; Herein; Etc. The words “include,” “includes,” and “including” are
deemed to be followed by the phrase “without limitation.” The words “herein,” “hereof,” and
“hereunder” and words of similar import refer to this Agreement (including all Appendices) in its
entirety and are not limited to any part hereof, unless the context shall otherwise require. The
word “or” is not exclusive and means “and/or.”

               (c) Sales. The terms “sold,” “sell,” and “sale(s)” include leases and other transfers
and similar transactions for consideration.

               (d) Subdivisions and Attachments. All references in this Agreement to Articles,
Sections, subsections, paragraphs, and Appendices are, respectively, references to Articles,
Sections, subsections, and paragraphs of, and Appendices to, this Agreement, unless otherwise
specified.

               (e) References to Documents and Laws. All references to this Agreement or any
Appendix hereof are to it as amended, modified, and supplemented from time to time in accordance
with the terms of this Agreement. All references to (i) any other agreement or instrument or (ii)
any statute, law, regulation, permit, or similar item are to it as amended and supplemented from
time to time (and, in the case of a statute, law or regulation, to any corresponding provisions of
successor statutes, laws, or regulations), unless otherwise specified.

               (f) References to Days. Any reference in this Agreement to a “day” or number of
“days” (without the explicit qualification “Business”) is a reference to a calendar day or number
of calendar days. If any action or notice is to be taken or given on or by a particular calendar
day, and such calendar day is not a Business Day, then such action or notice may be taken or given
on the next Business Day.

               (g) Examples. If, in any provision of this Agreement any example is given (through
the use of the words “such as,” “for example,” “e.g.,” or otherwise) of the meaning,
intent, or operation of any provision of this Agreement, such example is intended to be
illustrative only and not exclusive.

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               (h) Currency. Except as expressly provided herein, all prices or other monetary
amounts stated in this Agreement are, and all monetary amounts stated in any report to be delivered
pursuant hereto shall be, stated in United States Dollars.

               (i) Participation in Drafting. Both Parties and their respective legal counsel have
participated, or had the opportunity to participate, in the drafting of this Agreement, and this
Agreement will be construed simply and according to its fair meaning and not strictly for or
against either Party.

     10.2 Representations and Warranties.

               (a) Each Party covenants, represents, and warrants to the other Party that: it is a
corporation duly organized and validly existing under the laws of the jurisdiction in which it is
incorporated; this Agreement is legally binding upon it and enforceable in accordance with its
terms; and the execution, delivery and performance of this Agreement does not conflict with any
agreement, instrument or understanding, oral or written, to which it is a party or by which it may
be bound, nor violate any material law or regulation of any governmental or regulatory authority
having jurisdiction over it.

               (b) Foundation further covenant, represent, and warrant to Licensee that:

                    (i) Foundation is the sole owner of the Patent Rights and has the right to grant the License
to Licensee as set forth in this Agreement;

                    (ii) Foundation has not granted any rights in the Licensed Patents or the Licensed Process
that are inconsistent with or that limit the rights granted to Licensee under this Agreement; and

                    (iii) Foundation is not aware that any of the Licensed Patents or the Licensed Process
infringes the rights of any third party.

               (c) Foundation does not warrant the validity of the Patent Rights licensed hereunder and makes
no representations whatsoever with regard to the scope of the licensed Patent Rights or that such
Patent Rights may be exploited by Licensee or any sublicensee without infringing other patents.

               (d) EXCEPT AS EXPRESSLY PROVIDED IN SECTION 10.2(a) AND (b), FOUNDATION EXPRESSLY DISCLAIMS
ANY AND ALL IMPLIED AND EXPRESS WARRANTIES AND MAKES NO WARRANTIES OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE OF THE PATENT RIGHTS, OR INFORMATION SUPPLIED BY THE FOUNDATION, OR OF THE
LICENSED PROCESSES OR LICENSED PRODUCTS CONTEMPLATED BY THIS AGREEMENT.

     10.3 Limitation of Liability. IN NO EVENT SHALL ANY PARTY BE LIABLE FOR ANY INDIRECT,
SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES (INCLUDING DAMAGES FOR LOSS OF PROFITS OR EXPECTED

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SAVINGS OR OTHER ECONOMIC LOSSES, OR FOR INJURY TO PERSONS OR PROPERTY) ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT OR ITS SUBJECT MATTER, REGARDLESS OF WHETHER SUCH PARTY KNOWS OR
SHOULD KNOW OF THE POSSIBILITY OF SUCH DAMAGES. THE FOUNDATION’S AGGREGATE LIABILITY FOR ALL
DAMAGES OF ANY KIND RELATING TO THIS AGREEMENT OR ITS SUBJECT MATTER SHALL NOT EXCEED THE AMOUNT
PAID BY LICENSEE TO THE FOUNDATION UNDER THIS AGREEMENT. The foregoing exclusions and limitations
shall apply to all claims and actions of any kind, whether based on contract, tort (including but
not limited to negligence), or any other grounds.

     10.4 Indemnification and Insurance.

          (a) Licensee shall indemnify, defend and hold harmless the Foundation and its current and
former directors, board members, trustees, officers, employees, and agents and their respective
successors, heirs and assigns (collectively, the “Indemnitees”), from and against any and all
claims, liabilities, costs, expenses, damages, deficiencies, losses or obligations of any kind or
nature (including reasonable attorneys’ fees and other costs and expenses of litigation)
(collectively “Claims”) based upon, arising out of, or otherwise relating to this Agreement,
including without limitation any cause of action relating to product liability concerning any
product, process, or service made, used, or sold pursuant to any right or license granted under
this Agreement.

          (b) Licensee shall, at its own expense, provide attorneys reasonably acceptable to the
Foundation to defend against any actions brought or filed against any Indemnitee(s) hereunder with
respect to the subject of indemnity contained herein, whether or not such actions are rightfully
brought.

          (c) Beginning at the time any such product, process or service is being commercially
distributed or sold (other than for the purpose of obtaining regulatory approvals) by Licensee or
by any sublicensee or agent of Licensee, Licensee shall, at its sole cost and expense, procure and
maintain commercial general liability insurance in amounts not less than $2,000,000 per incident
and $4,000,000 annual aggregate and naming the Indemnitees as additional insureds. During clinical
trials of any such product, process, or service, Licensee shall, at its sole cost and expense,
procure and maintain commercial general liability insurance in such equal or lesser amount as the
Foundation shall require, naming the Indemnitees as additional insureds. Such commercial general
liability insurance shall provide (i) product liability coverage and (ii) broad form contractual
liability coverage for Licensee’s indemnification under this Agreement. If Licensee elects to
self-insure all or part of the limits described above (including deductibles or retentions that are
in excess of $250,000 annual aggregate) such self-insurance program must be acceptable to the
Foundation in its sole discretion. The minimum amounts of insurance coverage required shall not be
construed to create a limitation of Licensee’s liability with respect to its indemnification under
this Agreement.

          (d) Licensee shall provide the Foundation with written evidence of such insurance upon request
of the Foundation. Licensee shall provide the Foundation

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with written notice at least fifteen (15)
days prior to the cancellation, non-renewal, or material change in such insurance; if Licensee does
not obtain replacement insurance providing comparable coverage within such fifteen (15) day period,
the Foundation shall have the right to terminate this Agreement effective at the end of such
fifteen (15) day period without notice or any additional waiting periods.

          (e) Licensee shall maintain such commercial general liability insurance beyond the expiration
or termination of this Agreement during (i) the period that any product, process, or service,
relating to, or developed pursuant to, this Agreement is being commercially distributed or sold by
Licensee or by a sublicensee or agent of Licensee and (ii) a reasonable period, but in no event
less than five (5) years, after the period referred to in clause (i), above.

     10.5 Limitation on Advertising and Publicity. Except as required by law, including
applicable rules and regulations of the U.S. Securities and Exchange Commission and stock exchange
listing requirements, Licensee shall not use the Foundation’s or USU’s name or insignia, or the
name or insignia of the U.S. Government or any agency thereof, or any adaptation of the foregoing,
or the name of any of Foundation’s or USU’s inventors, in any press release, public announcement,
advertising, promotional, or sales literature without the prior written approval of the Foundation
or USU, as the case may be.

     10.6 Assignment. Neither this Agreement nor the rights granted hereunder shall be
transferred or assigned in whole or in part by Licensee to any person, whether voluntarily or
involuntarily, by operation of law, or otherwise, without the prior written consent of the
Foundation, which will not unreasonably be withheld or delayed. Notwithstanding the foregoing,
this Agreement and Licensee’s rights hereunder may be assigned or transferred to an entity that
acquires all or substantially all of the assets or business of Licensee or Licensee’s business unit
holding the License, whether through merger, sale of stock, sale of assets, reorganization, or
otherwise. This Agreement shall be binding upon and inure to the benefit of the Parties and their
respective successors, legal representatives, and permitted assignees.

     10.7 Governing Law. This Agreement shall be governed by and construed and interpreted
in accordance with the laws of the State of Maryland, as to all matters, including matters of
validity, construction, effect, performance, and remedies, irrespective of any contrary choice of
law that otherwise would be applicable under the choice of laws principles of any jurisdiction.

     10.8 Compliance with Laws and Regulations. Licensee shall comply with all applicable
laws and regulations, including United States laws and regulations controlling exports. Licensee
agrees that it will be solely responsible for any violation of applicable laws or regulations by
Licensee or its Affiliates or sublicensees, and that it will defend and hold the Foundation
harmless in the event of any legal action of any nature occasioned by such violation.

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     10.9 Regulatory Approvals; Patent Markings. Licensee agrees (i) to obtain all
regulatory approvals required for the manufacture and sale of Licensed Products and Licensed
Processes and (ii) to utilize appropriate patent marking on such Licensed Products. Licensee also
agrees to register or record this Agreement as is required by law or regulation in any country
where the License is in effect.

     10.10 Confidential Information and Intellectual Property. Except as specifically
required to comply with obligations set forth in this Agreement, neither Party shall be obligated
to disclose or furnish to the other Party any Confidential Information of such first Party or any
confidential or proprietary information, technology, or intellectual property of any third party in
such first Party’s possession or control. If, however, the Parties have heretofore entered or
hereafter enter into a confidential information nondisclosure agreement or similar agreement (the
“NDA”), neither Party may terminate the NDA prior to the termination or expiration of this
Agreement. If the Parties have not entered into an NDA, each Party agrees, for the greater of a
period of five (5) years after each disclosure or during the pendency of this Agreement, to
maintain in confidence all Confidential Information disclosed to it by the other Party and to
protect such Confidential Information by using the same degree of care, but no less than a
reasonable degree of care, as the receiving Party uses to protect its own similar confidential
information.

     10.11 Headings. The article, section, and other headings contained in this Agreement
are for reference purposes only and are not intended to describe, interpret, define, or limit the
scope, extent, or intent of this Agreement.

     10.12 Counterpart Execution. This Agreement and any modification or amendment thereof
may be executed in counterparts, including counterparts transmitted by electronic mail or facsimile
transmission, all of which shall be considered one and the same agreement, and shall become
effective when such counterparts have been signed by each of the Parties and delivered to the other
Party.

     10.13 Waivers; Remedies Generally. The observance of any term of this Agreement may be
waived (whether generally or in a particular instance and either retroactively or prospectively) by
the Party entitled to enforce such term, but any such waiver will be effective only if in a writing
signed by the Party against which such waiver is to be asserted. Except as otherwise provided in
this Agreement, no failure or delay of either Party in exercising any power, right, or remedy under
this Agreement will operate as a waiver thereof, nor will any single or partial exercise of any
such right, power, or remedy, preclude any other or further exercise thereof or the exercise of any
other right, power, or remedy. A waiver by either Party shall be limited to the specific instance
in which it is given and, therefore, any waiver by either Party of any obligation of the other
Party under or breach by the other Party of this Agreement or of any power, right, or remedy of the
waiving Party shall not be a waiver of any other obligation or further or future performance of the
same obligation, of any other or succeeding breach, of any other or further exercise of such power,
right, or remedy or any other power, right, or remedy.

RXi — Foundation License — Optimized E75 (Peoples)

24

 

     10.14 Severability. To the extent that any provision of this Agreement shall be
judicially unenforceable in any one or more jurisdictions, such provision shall not be affected
with respect to any other jurisdiction, each provision with respect to each jurisdiction being
construed as several and independent. If any term or provision of this Agreement or the
application thereof to any person or circumstance is, to any extent, declared or found to be
illegal, unenforceable, or void, then both Parties will be relieved of all obligations arising
under such term or provision, but only to the extent that such term or provision is illegal,
unenforceable, or void, it being the intent and agreement of the Parties that this Agreement will
be deemed amended by modifying such term or provision to the extent necessary to make it legal and
enforceable while preserving its intent or, if that is not possible, by substituting therefor
another term or provision that is legal and enforceable and achieves the same objective. If the
remainder of this Agreement will not be affected by such declaration or finding and is capable of
substantial performance, then each term and provision not so affected will be enforced to the
extent permitted by law. If necessary to effect the intent of the Parties, the Parties will
negotiate in good faith to amend this Agreement to replace the unenforceable language with
enforceable language that as closely as possible reflects such intent and to amend any other term
or provision thereby rendered incapable of substantial performance or otherwise affected thereby to
the extent necessary to permit the practical realization, insofar as legally possible, of the
intent of the Parties.

     10.15 Relationship of the Parties; Disclaimer of Agency.

          (a) Independent Contractors. In entering into and carrying out this Agreement, the
Parties will be acting solely as independent contractors. Nothing in this Agreement creates, has
created, or will create any partnership, joint venture, or other business association between the
Parties, nor any duties or responsibilities of partners, venturers, or members of a business
association.

          (b) No Agency. Except for provisions in this Agreement expressly authorizing one
Party to act for the other, this Agreement will not constitute either Party as a legal
representative or agent of the other Party, nor will either Party have the right or authority to
assume, create, or incur any liability or any obligation of any kind, expressed or implied, against
or in the name or on behalf of the other Party unless otherwise expressly permitted by such Party.

     10.16 No Third Party Beneficiaries. The representations, warranties, covenants, and
undertakings contained in this Agreement are for the sole benefit of the Parties, their
sublicensees, and the Parties’ permitted successors and assigns and shall not be construed as
creating any third party beneficiaries of this Agreement or as conferring any rights whatsoever on
any third party.

     10.17 Notices. Unless otherwise expressly agreed by the Party receiving notice, any
notice, demand, or other communication required or permitted to be given by either Party under any
provision of this Agreement must be in writing, in the English language, and mailed (certified or
registered mail, postage prepaid, return receipt requested) or sent

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25

 

by hand or overnight courier,
or by facsimile (with acknowledgment received), charges prepaid and addressed to the intended
recipient at such Party’s address set forth below, or to such other address or number as such Party
may from time to time specify by notice to the other Party as provided in this Section. All
notices and other communications given in accordance with the provisions of this Agreement will be
deemed to have been given and received (i) when actually delivered by hand, by mail, or by courier,
or (ii) when transmitted by facsimile (with acknowledgment received and a copy of such notice is
sent no later than the next Business Day by a reliable overnight or two-day courier service, with
acknowledgment of receipt).

     If to RXi:

RXi Pharmaceuticals Corporation

ATTN: President and CEO

60 Prescott Street

Worcester, MA 01605

Fax: 508-767-3862

     If to Apthera:

Apthera, Inc.

ATTN: President and CEO

60 Prescott Street

Worcester, MA 01605

Fax: 508-767-3862

     If to the Foundation:

The Henry M. Jackson Foundation for

    the Advancement of Military Medicine, Inc.

ATTN: General Counsel

1401 Rockville Pike, Suite 600

Rockville, MD 20852

Fax: 301-294-8130

     10.18 Disputes. In the event of any controversy or claim arising out of or relating
to any provision of this Agreement or the breach thereof, the Parties shall try to settle such
conflict amicably. Subject to the limitation stated in the final sentence of this Section, any
such conflict that the Parties are unable to resolve promptly shall be settled through arbitration
conducted in accordance with the rules of the American Arbitration Association. The demand for
arbitration shall be filed within a reasonable time after the controversy or claim has arisen, and
in no event after the date upon which institution of legal proceedings based on such controversy or
claim would be barred by the applicable statute of limitations. Such arbitration shall be held in
Montgomery County, Maryland. The award through arbitration shall be final and binding. Either
Party may enter any such award in a court having jurisdiction or may make application to such court
for judicial

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26

 

acceptance of the award and an order of enforcement, as the case may be.
Notwithstanding the foregoing, either Party may, without recourse to arbitration, assert against
the other Party a third-party claim or cross-claim in any action brought by a third party, to which
the subject matter of this Agreement may be relevant.

     10.19 Entire Agreement; Modifications. This Agreement constitutes the complete
agreement between the Parties concerning the subject matter hereof and replaces any prior oral or
written communications between the Parties. There are no conditions, understandings, agreements,
representations, or warranties, express or implied, that are not specified herein, and neither
Party shall be obligated by any condition or representation other than those expressly stated
herein or as may be subsequently agreed by the Parties in writing. Any purported modification or
amendment of the express terms or provisions of this Agreement shall be effective only if contained
in a written instrument signed by each Party.

     10.20 Force Majeure. No Party shall be liable to the other Party for any losses or
damages to the extent and for the period of time that they are attributable to a default or breach
of this Agreement that is the result of war (whether declared or undeclared), acts of God,
revolution, acts of terrorism, fire, earthquake, flood, pestilence, riot, enactment of change of
law following the Effective Date, accident, labor trouble, or shortage of or inability to obtain
material equipment or transport or any other cause beyond the reasonable control of such Party;
provided, however, that if such a cause occurs, then the Party affected will promptly notify the
other Party of the nature and likely result and duration (if known) of such cause and use
commercially reasonable efforts to mitigate any adverse effects under this Agreement. If the event
lasts for a period longer than three (3) months, the Parties shall meet and discuss appropriate
modifications to this Agreement or other remedial measures.

SIGNATURE PAGE FOLLOWS

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27

 

THE FOUNDATION AND LICENSEE HAVE READ THIS AGREEMENT INCLUDING ALL APPENDICES HERETO AND
AGREE TO BE BOUND BY ALL THE TERMS AND CONDITIONS HEREOF AND THEREOF.

IN WITNESS WHEREOF, the Parties have entered into this License Agreement as of
the Effective Date.

	 	 	 	 	 
	 	THE HENRY M. JACKSON FOUNDATION FOR THE

ADVANCEMENT OF MILITARY MEDICINE, INC.

 	 
	 	/s/ John W. Lowe
 	 
	 	John W. Lowe 	 
	 	President 	 
	 
	 	7/11/2011 

 

Date
 	 
	 
	 	RXI PHARMACEUTICALS CORPORATION

 	 
	 	/s/ Mark J. Ahn, Ph.D.
 	 
	 	Mark J. Ahn, Ph.D. 	 
	 	President and CEO 	 
	 
	 	7/11/2011 

 

Date
 	 
	 
	 	
APTHERA, INC.

 	 
	 	/s/ Mark J. Ahn, Ph.D.
 	 
	 	Mark J. Ahn, Ph.D. 	 
	 	President and CEO 	 
	 
	 	7/11/2011 

 

Date
 	 
	 

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28

 

APPENDIX A

The following patent applications are included in the Patent Rights:

     Patent 1

     Title: Vaccine for the Prevention of Breast Cancer Relapse

     Inventors: Peoples and Ponniah

     as described in U.S. Provisional Application No. 60/941,524 filed on 06/01/2007; and

     as described in International Patent Application No. PCT/US2008/060044 filed on
04/11/2008, claiming priority to U.S. Provisional Application No. 60/941,524, and all
corresponding National Stage Applications including but not limited to Australian Patent
Application No. 2008260399 filed on 11/06/2009, Canadian Patent Application No. 2,687,368
filed on 11/16/2009, Mexican Patent Application No. MX/a/2009/012858 filed on 11/27/2009,
Japanese Patent Application No. 2010-510385 and U.S. Patent Application No. 12/602,214
filed on 11/30/2009, Chinese Patent Application No. 200880018401.2 filed on 12/01/2009,
European Patent Application No. 08745615.8 filed on 12/18/2009, and Korean Patent
Application No. 10-2009-7027587 filed on 12/31/2009.

     Patent 2

     Title: Targeted Identification of Immunogenic Peptides

     Inventors: Peoples, Ponniah, Flora and Storrer

     as described in U.S. Provisional Application No. 60/714,865 filed on 09/08/2005; and

     as described in International Patent Application No. PCT/US2006/035171 filed on
09/08/2006, claiming priority to U.S. Provisional Application No. 60/714,865, and all
corresponding National Stage Applications including but not limited to Canadian Patent
Application No. 2,622,036 and U.S. Patent Application No. 12/045,402 filed on 03/10/2008,
Australian Patent Application No. 2008201427 filed on 03/28/2008, and European Patent
Application No. 06824918.4 and Japanese Patent Application No. 2008-530244 filed on
03/31/2008; and

     as described in International Patent Application No. PCT/GB2008/050227 filed on
03/28/2008, claiming priority to Canadian Patent Application No. 2,622,036 and U.S. Patent
Application No. 12/045,402, and all corresponding National Stage Applications including but
not limited to European Patent Application No. 08719072.4 filed on 10/08/2010.

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29exv10w2

Exhibit 10.2

KiOR, INC.

2011 LONG-TERM INCENTIVE PLAN

1. Plan. This KiOR, Inc. 2011 Long-Term Incentive Plan (this “Plan”) was adopted by the Board of Directors of
KiOR, Inc., a Delaware corporation (the “Company”), to reward certain officers, employees and directors of the Company
and its Subsidiaries by enabling them to acquire shares of Common Stock and by providing for certain cash benefits.

2. Objectives. This Plan is designed to attract and retain officers, employees and directors of the Company and
its Subsidiaries, to encourage the sense of proprietorship of such officers, employees and directors, to stimulate the
active interest of such persons in the development and financial success of the Company and its Subsidiaries, and to
provide such persons with additional incentive and reward opportunities designed to enhance the profitable growth of
the Company and its Subsidiaries. These objectives are to be accomplished by making Awards under this Plan and thereby
aligning the interests of Participants and the Company’s stockholders, motivating Participants to act in the long-term
best interests of the Company and its Subsidiaries, and providing Participants with a proprietary interest in the
growth and performance of the Company and its Subsidiaries.

3. Definitions. As used herein, the terms set forth below shall have the following respective meanings:

(a) “Award” means any Option, SAR, Stock Award, Restricted Stock Unit Award, Performance Stock Unit Award, Cash
Award or Performance Award granted, whether singly, in combination or in tandem, to a Participant pursuant to such
applicable terms, conditions and limitations (including treatment as a Performance Award) as the Committee may
establish.

(b) “Award Agreement” means a written notice or agreement setting forth the terms, conditions and limitations
applicable to an Award, to the extent the Committee determines such agreement is necessary.

(c) “Board” means the Board of Directors of the Company.

(d) “Cash Award” means an award denominated in cash.

(e) “Change in Control” means a change in ownership or control of the Company effected through any of the
following transactions, but only if such transaction constitutes a change in the ownership or effective control of a
corporation or a change in the ownership of a substantial portion of the assets of a corporation under Section 409A of
the Code and accompanying U.S. Treasury regulations:

i. a merger, consolidation or other reorganization approved by the Company’s stockholders, unless
securities representing more than 50% of the total combined voting power of the voting securities of the
successor company are immediately thereafter beneficially owned, directly or indirectly and in substantially
the same proportion, by the persons who beneficially owned the Company’s outstanding voting securities
immediately prior to such transaction, or

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ii. a stockholder-approved sale, transfer or other disposition of all or substantially all of the
Company’s assets in complete liquidation or dissolution of the Company, or

iii. the acquisition, directly or indirectly by any person or related group of persons (other than the
Company or a person that directly or indirectly controls, is controlled by, or is under common control with,
the Company), of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of securities
possessing more than 50% of the total combined voting power of the Company’s outstanding securities pursuant
to a tender or exchange offer made directly to the Company’s stockholders.

(f) In no event shall any public offering of the Company’s securities be deemed to constitute a Change in Control.

(g) “Code” means the Internal Revenue Code of 1986, as amended.

(h) “Committee” means such committee of two or more members of the Board as is designated by the Board to
administer this Plan, or the full Board if so designated.

(i) “Common Stock” means the Class A Common Stock, par value $.0001 per share, of the Company.

(j) “Company” means KiOR, Inc., a Delaware corporation.

(k) “Disabled” or “Disability” means an individual (i) is unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than 12 months or (ii) is, by reason of any medically determinable
physical or mental impairment which can be expected to result in death or can be expected to last for a continuous
period of not less than 12 months, receiving income replacement benefits for a period of not less than three months
under a Company-sponsored accident and health plan. Notwithstanding the foregoing, with respect to an Incentive Stock
Option, “Disability” means a permanent and total disability, within the meaning of Section 22(e)(3) of the Code, as
determined by the Plan Committee in good faith, upon receipt of medical advice from one or more individuals, selected
by the Plan Committee, who are qualified to give professional medical advice.

(l) “Director” means a member of the Board of Directors of the Company.

(m) “Effective Date” means the date on which the Company first receives payment for the shares of Common Stock it
sells under the first registration statement filed under the Securities Act of 1933, as amended, and respecting an
underwritten primary offering by the Company of shares of Common Stock that is declared effective under that Act and
the shares registered by that registration statement are issued and sold by the Company (otherwise than pursuant to the
exercise of any overallotment option).

(n) “Employee” means an employee or officer of the Company or any of its Subsidiaries.

(o) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

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(p) “Fair Market Value” means, as of a particular date, (i) if the shares of Common Stock are listed on a national
securities exchange, the final closing sales price per share of Common Stock as reported on the consolidated
transaction reporting system of such national securities exchange on that date, or, if there shall have been no such
sale so reported on that date, on the last preceding date on which such a sale was so reported, (ii) if the shares of
Common Stock are not so listed but are quoted by The NASDAQ Stock Market LLC, the mean between the highest and lowest
sales price per share of Common Stock on the consolidated transaction reporting system for The NASDAQ Stock Market LLC
on that date, or, if there shall have been no such sale so reported on that date, on the last preceding date on which
such a sale was so reported, (iii) if the shares of Common Stock are not so listed or quoted, the mean between the
closing bid and asked price on that date, or, if there are no quotations available for such date, on the last preceding
date on which such quotations shall be available, as reported by The NASDAQ Stock Market LLC, or, if not reported by
The NASDAQ Stock Market LLC, by OTC Markets Group Inc., or (iv) if none of the above are applicable, the fair market
value of a share of Common Stock as determined in good faith by the Committee.

(q) “Grant Date” means the date an Award is granted to a Participant pursuant to this Plan.

(r) “Grant Price” means the price at which a Participant may exercise his or her right to receive cash or Common
Stock, as applicable, under the terms of an Award.

(s) “Incentive Stock Option” means an Option that is intended to comply with the requirements set forth in Section
422 of the Code.

(t) “Non-Qualified Performance Award” means a Performance Award that is not intended to qualify as qualified
performance-based compensation under Section 162(m) of the Code, as described in Section 8(a)(vii)(A) of this Plan.

(u) “Non-Qualified Stock Option” means an Option that is not an Incentive Stock Option.

(v) “Option” means a right to purchase a specified number of shares of Common Stock at a specified Grant Price,
which may be an Incentive Stock Option or a Non-Qualified Stock Option.

(w) “Participant” means an Employee or Director to whom an Award has been granted under this Plan.

(x) “Performance Award” means an Award made pursuant to this Plan that is subject to the attainment of one or more
performance goals.

(y) “Performance Goal” means a standard established by the Committee to determine in whole or in part whether a
Qualified Performance Award shall be earned.

(z) “Performance Stock Unit” means a unit evidencing the right to receive in specified circumstances one share of
Common Stock or equivalent value in cash.

(aa) “Performance Stock Unit Award” means an Award of Performance Stock Units that, upon attainment of the
performance goals, entitles the Participant to shares of Common Stock.

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3

 

(bb) “Plan” has the meaning set forth in Section 1.

(cc) “Qualified Performance Award” means a Performance Award made to a Participant who is an Employee that is
intended to qualify as qualified performance-based compensation under Section 162(m) of the Code, as described in
Section 8(a)(vii)(B) of this Plan.

(dd) “Restricted Stock” means Common Stock that is restricted or subject to forfeiture provisions.

(ee) “Restricted Stock Unit” means a unit evidencing the right to receive in specified circumstances one share of
Common Stock or equivalent value in cash that is restricted or subject to forfeiture provisions.

(ff) “Restricted Stock Unit Award” means an Award in the form of Restricted Stock Units.

(gg) “Restriction Period” means a period of time beginning as of the Grant Date of an Award of Restricted Stock or
Restricted Stock Units and ending as of the date upon which the Common Stock subject to such Award is issued (if not
previously issued), no longer restricted or no longer subject to forfeiture provisions.

(hh) “Stock Appreciation Right” or “SAR” means a right to receive a payment, in cash or Common Stock, equal to the
excess of the Fair Market Value or other specified valuation of a specified number of shares of Common Stock on the
date the right is exercised over a specified Grant Price.

(ii) “Stock Award” means an Award in the form of shares of Common Stock, including an Award of Restricted Stock.

(jj) “Subsidiary” means (i) with respect to any Awards other than Incentive Stock Options, any corporation,
limited liability company or similar entity of which the Company directly or indirectly owns shares representing more
than 50% of the voting power of all classes or series of equity securities of such entity, which have the right to vote
generally on matters submitted to a vote of the holders of equity interests in such entity, and (ii) with respect to
Awards of Incentive Stock Options, any subsidiary within the meaning of Section 424(f) of the Code.

4. Duration; Transition Relief.

(a) Duration. This Plan will expire on the tenth anniversary of the Effective Date or, if later,
the tenth anniversary of any subsequent approval of the Plan by stockholders, and no Awards may be granted on
or after the expiration of this Plan; provided, however, that any Award granted prior to the expiration of
this Plan shall remain outstanding in accordance with its terms.

(b) Transition Relief. This Plan qualifies for the transition relief from the deductibility
limitation of Section 162(m) of the Code as provided under Treasury Regulation § 162(m)-27(f).

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4

 

5. Administration.

(a) Authority of the Committee. This Plan shall be administered by the Committee except as
otherwise provided herein. Subject to the provisions hereof, the Committee shall have full and exclusive
power and authority to administer this Plan and to take all actions that are specifically contemplated hereby
or are necessary or appropriate in connection with the administration hereof. The Committee shall also have
full and exclusive power to interpret this Plan and to adopt such rules, regulations and guidelines for
carrying out this Plan as it may deem necessary or proper, all of which powers shall be exercised in the best
interests of the Company and in keeping with the objectives of this Plan. Subject to Section 5(c) hereof, the
Committee may, in its discretion, provide for the extension of the exercisability of an Award, accelerate the
vesting or exercisability of an Award, eliminate or make less restrictive any restrictions contained in an
Award, waive any restriction or other provision of this Plan (insofar as such provision relates to Awards) or
an Award or otherwise amend or modify an Award in any manner that is (i) not adverse to the Participant to
whom such Award was granted, (ii) consented to by such Participant or (iii) authorized by Section 15 hereof;
provided, however, that no such action shall permit the term of any Option to be greater than ten years from
the applicable Grant Date. The Committee may correct any defect or supply any omission or reconcile any
inconsistency in this Plan or in any Award in the manner and to the extent the Committee deems necessary or
desirable to further the purposes of this Plan. Any decision of the Committee with respect to Awards or in
the interpretation and administration of this Plan shall lie within its sole and absolute discretion and shall
be final, conclusive and binding on all parties concerned.

(b) Indemnification. No member of the Committee or officer of the Company to whom the Committee
has delegated authority in accordance with the provisions of Section 5(d) hereof shall be liable for anything
done or omitted to be done by him or her, by any member of the Committee or by any officer of the Company in
connection with the performance of any duties under this Plan, except for his or her own willful misconduct or
as expressly provided by statute.

(c) Prohibition on Repricing of Awards. No Option or SAR may be repriced, replaced, regranted
through cancellation or modified without stockholder approval (except in connection with a change in the
Company’s capitalization), if the effect would be to reduce the Grant Price for the shares underlying such
Award.

(d) Delegation of Authority. The Committee may delegate to the President and to other senior
officers of the Company its duties under this Plan pursuant to such conditions or limitations as the Committee
may establish with respect to Awards, except that the Committee may not delegate to any person the authority
to grant Awards to, or take other action with respect to, Participants who are subject to Section 16 of the
Exchange Act. The Committee may engage or authorize the engagement of a third party administrator to carry
out administrative functions under this Plan.

6. Eligibility. All Employees and Directors are eligible for Awards under this Plan. The Committee shall select
the Participants in this Plan from time to time for the grant of Awards under this Plan. In no event will an Incentive
Stock Option be granted to any person other than an Employee.

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7. Common Stock Available for Awards. Subject to the provisions of Section 15 hereof, no Award shall be granted
if it shall result in the aggregate number of shares of Common Stock issued under this Plan plus the number of shares
of Common Stock covered by or subject to Awards then outstanding (after giving effect to the grant of the Award in
question) to exceed 10% of number of shares of Common Stock and Class B Common Stock, par value $.0001 per share, of
the Company outstanding on the Effective Date. All shares of Common Stock available under this Plan may be the subject
of Incentive Stock Options.

The number of shares of Common Stock that are the subject of Awards under this Plan that are forfeited, terminated
or expire unexercised shall again immediately become available for Awards hereunder. The number of shares of Common
Stock available under this Plan shall not be increased by shares of Common Stock tendered, surrendered or withheld in
connection with the exercise or settlement of an Award or the Company’s tax withholding obligations. The Committee may
from time to time adopt and observe such procedures concerning the counting of shares against the maximum shares
available under this Plan as it may deem appropriate. The Board and the appropriate officers of the Company shall from
time to time take whatever actions are necessary to file any required documents with governmental authorities, stock
exchanges and transaction reporting systems to ensure that shares of Common Stock are available for issuance pursuant
to Awards.

8. Awards.

(a) The Committee shall determine the type or types of Awards to be made under this Plan and shall
designate from time to time the individuals who are to be the recipients of such Awards. Each Award shall be
evidenced in such communications as the Committee deems appropriate, including in an Award Agreement, and
shall contain such terms, conditions and limitations as shall be determined by the Committee in its sole
discretion. Awards may consist of those listed in this Section 8(a) and may be granted singly, in combination
or in tandem. Awards may also be granted in combination or in tandem with, in replacement of, or as
alternatives to, grants or rights under this Plan or any other plan of the Company or any of its Subsidiaries,
including the plan of any acquired entity; provided, however, that, except as contemplated in Section 15
hereof, no Option or SAR may be issued in exchange for the cancellation of an Option or SAR with a higher
Grant Price nor may the Grant Price of any Option or SAR be reduced. All or part of an Award may be subject
to conditions established by the Committee. Upon the termination of employment by a Participant, any
unexercised, deferred, unvested or unpaid Awards shall be treated as set forth in the applicable Award
Agreement or in any other agreement with the Participant.

(i) Option. An Award may be in the form of an Option. An Option awarded to an Employee
pursuant to this Plan may consist of either an Incentive Stock Option or a Non-Qualified Stock
Option. An Option awarded to a Director may only consist of a Non-Qualified Stock Option. On the
Grant Date, the Grant Price of an Option shall not be less than the Fair Market Value of the Common
Stock subject to such Option. The term of the Option shall extend no more than ten years after the
Grant Date. Options may not include provisions that “reload” the Option upon exercise. Subject to
the foregoing provisions, the terms, conditions and limitations applicable to any Options awarded
pursuant to this Plan, including the Grant Price, the term of the Options, the number of shares
subject to the Option and the date or dates upon which they become exercisable, shall be determined
by the Committee.

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The aggregate Fair Market Value of shares of Common Stock with respect to which Incentive Stock
Options are exercisable for the first time by a Participant during any calendar year under this Plan
and any other stock option plan of the Company or any of its Subsidiaries shall not exceed $100,000.
Such Fair Market Value shall be determined as of the date on which each such Incentive Stock Option
is granted. In the event that the aggregate Fair Market Value of shares of Common Stock with respect
to such Incentive Stock Options exceeds $100,000, then Incentive Stock Options granted hereunder to
such Participant shall, to the extent and in the order required by regulations promulgated under the
Code (or any other authority having the force of regulations), automatically be deemed to be
Non-Qualified Stock Options, but all other terms and provisions of such Incentive Stock Options shall
remain unchanged. In the absence of such regulations (and authority), or in the event such
regulations (or authority) require or permit a designation of the Options which shall cease to
constitute Incentive Stock Options, Incentive Stock Options granted hereunder shall, to the extent of
such excess and in the order in which they were granted, automatically be deemed to be Non-Qualified
Stock Options, but all other terms and provisions of such Incentive Stock Options shall remain
unchanged.

No Incentive Stock Option may be granted to an individual if, at the time of the proposed grant,
such individual owns stock possessing more than ten percent of the total combined voting power of all
classes of stock of the Company or any of its Subsidiaries, unless (i) the exercise price of such
Incentive Stock Option is at least one hundred and ten percent of the Fair Market Value of a share of
Common Stock at the time such Incentive Stock Option is granted and (ii) such Incentive Stock Option
is not exercisable after the expiration of five years from the date such Incentive Stock Option is
granted.

(ii) Stock Appreciation Rights. An Award may be in the form of an SAR. On the Grant Date, the
Grant Price of an SAR shall be not less than the Fair Market Value of the Common Stock subject to
such SAR. The holder of a tandem SAR may elect to exercise either the Option or the SAR, but not
both. The exercise period for an SAR shall extend no more than ten years after the Grant Date. SARs
may not include provisions that “reload” the SAR upon exercise. Subject to the foregoing provisions,
the terms, conditions and limitations applicable to any SARs awarded pursuant to this Plan, including
the Grant Price, the term of any SARs and the date or dates upon which they become exercisable, shall
be determined by the Committee.

(iii) Stock Award. An Award may be in the form of a Stock Award. The terms, conditions and
limitations applicable to any Stock Award, including, but not limited to, vesting or other
restrictions, shall be determined by the Committee.

(iv) Restricted Stock Unit Awards. An Award may be in the form of a Restricted Stock Unit
Award. The terms, conditions and limitations applicable to a Restricted Stock Unit Award, including,
but not limited to, the Restriction Period and the right to dividend equivalents, shall be determined
by the Committee.

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(v) Performance Stock Unit Awards. An Award may be in the form of a Performance Stock Unit
Award. The terms, conditions and limitations applicable to any Performance Stock Unit Award,
including, but not limited to, vesting or other restrictions, shall be determined by the Committee.
Performance Stock Unit Awards shall be in the form of a Non-Qualified Performance Award or a
Qualified Performance Award and shall have a minimum performance period of one year from the date of
grant.

(vi) Cash Award. An Award may be in the form of a Cash Award. The terms, conditions and
limitations applicable to any Cash Awards pursuant to this Plan, including, but not limited to,
vesting or other restrictions, shall be determined by the Committee.

(vii) Performance Award. Without limiting the type or number of Awards that may be made under
the other provisions of this Plan, an Award described above that is granted to an Employee may also
be in the form of a Performance Award. The terms, conditions and limitations applicable to an Award
that is a Performance Award shall be determined by the Committee. The Committee shall set
performance goals in its discretion which, depending on the extent to which they are met, will
determine the value and/or amount of Performance Awards that will be paid and/or the portion that may
be exercised.

(A) Non-Qualified Performance Awards. Performance Awards granted to Employees that are
not intended to qualify as qualified performance-based compensation under Section 162(m) of
the Code shall be based on achievement of such goals and be subject to such terms,
conditions and restrictions as the Committee shall determine.

(B) Qualified Performance Awards. Performance Awards granted to Employees under this
Plan that are intended to qualify as qualified performance-based compensation under Section
162(m) of the Code shall be paid, vest or otherwise deliverable solely on account of the
attainment of one or more pre-established, objective Performance Goals established by the
Committee prior to the earlier to occur of (x) 90 days after the commencement of the period
of service to which the Performance Goal relates or (y) the lapse of 25% of the period of
service (as scheduled in good faith at the time the goal is established), and in any event
while the outcome is substantially uncertain. A Performance Goal is objective if a third
party having knowledge of the relevant facts could determine whether the goal is met. Such
a Performance Goal may be based on one or more business criteria that apply to the Employee,
one or more business segments, units, or divisions of the Company, or the Company as a
whole, and if so desired by the Committee, by comparison with a peer group of companies. A
Performance Goal may include one or more of the following:

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	 	•	 	Cash flow measures (including but not limited to before or after tax
cash flow, cash flow per share, cash flow return on capital, net cash
flow or attainment of working capital levels);

	 	•	 	Expense measures (including but not limited to overhead cost, research
and development expense, general and administrative expense and
improvement in or attainment of expense levels);

	 	•	 	Income measures (including but not limited to net income and income
before or after taxes);

	 	•	 	Operating measures (including operating income, funds from operations,
cash from operations, after-tax operating income, net operating profit
after tax, operating efficiency, production volumes and production
efficiency);

	 	•	 	Return measures (including but not limited to return on capital
employed, return on equity, return on investment and return on assets);

	 	•	 	Stock price measures (including but not limited to price per share,
growth measures and total stockholder return);

	 	•	 	Earnings per share (actual or targeted growth);

	 	•	 	Earnings before interest, taxes, depreciation, and amortization
(“EBITDA”);

	 	•	 	Net earnings;

	 	•	 	Market share;

	 	•	 	Debt to equity ratio;

	 	•	 	Debt reduction;

	 	•	 	Acquisition of financings;

	 	•	 	Economic value added (or an equivalent metric);

	 	•	 	Cash available for distribution;

	 	•	 	Cash available for distribution per share;

	 	•	 	Operating income;

	 	•	 	Margins;

	 	•	 	Implementing or completion of critical projects, including a
commercial production facility;

	 	•	 	Obtaining regulatory approvals;

	 	•	 	Satisfaction of offtake agreement requirements;

	 	•	 	Revenue or sales;

	 	•	 	Total market value;

	 	•	 	Reliability;

	 	•	 	Productivity;

	 	•	 	Acquisition of feedstock; and

	 	•	 	Corporate values measures (including but not limited to diversity
commitment, ethics compliance, environmental and safety, product
liability claims).

Unless otherwise stated, such a Performance Goal need not be based upon an increase or
positive result under a particular business criterion and could include, for example,
maintaining the status quo or limiting economic losses (measured, in each case, by reference
to specific business criteria). In interpreting Plan provisions applicable to Performance
Goals and Qualified Performance Awards, it is the intent of this Plan to conform with the
standards of Section 162(m) of the Code and Treasury Regulation §1.162-27(e)(2)(i), as to
grants to those Employees whose compensation is, or is likely to be, subject to Section
162(m) of the Code, and the Committee in establishing such goals and interpreting this Plan
shall be guided by such provisions. Prior to the payment of any compensation based on the
achievement of Performance Goals, the Committee must certify in writing that applicable
Performance Goals and any of the material terms thereof were, in fact, satisfied. Subject
to the foregoing provisions, the terms, conditions and limitations applicable to any
Qualified Performance Awards made pursuant to this Plan shall be determined by the
Committee.

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(b) Notwithstanding anything to the contrary contained in this Plan, no Employee may be granted, during
the term of this Plan, Awards consisting of, relating to, or exercisable for more than 500,000 shares of
Common Stock (this limitation being hereinafter referred to as “Stock Based Awards Limitation”).

9. Change in Control. The Committee may provide in an Award Agreement for accelerated vesting and exercisability
of any Award in connection with a Change in Control; this provision does not limit the authority of the Board to
provide for adjustments as described under Section 15.

10. Payment of Awards.

(a) General. Payment of Awards may be made in the form of cash or Common Stock, or a combination
thereof, and may include such restrictions as the Committee shall determine, including, but not limited to, in
the case of Common Stock, restrictions on transfer and forfeiture provisions. For an Award of Restricted
Stock, the certificates evidencing the shares of such Restricted Stock (to the extent that such shares are so
evidenced) shall contain appropriate legends and restrictions that describe the terms and conditions of the
restrictions applicable thereto. For an Award of Restricted Stock Units or Performance Stock Units, the
 shares of Common Stock that may be issued at the end of the Restriction Period shall be evidenced by book
entry registration or in such other manner as the Committee may determine.

(b) Deferral. With the approval of the Committee, amounts payable in respect of Awards may be deferred
and paid either in the form of installments or as a lump-sum payment; provided, however, that if deferral is
permitted, such deferral shall be in compliance with the requirements of Section 409A of the Code. The
Committee may permit selected Participants to elect to defer payments of some or all types of Awards in
accordance with procedures established by the Committee. Any deferred payment pursuant to an Award, whether
elected by the Participant or specified by the Award Agreement or the terms of the Award or by the Committee,
may be forfeited if and to the extent that the Award Agreement or the terms of the Award so provide.

(c) Dividends; Dividend Equivalents and Interest. Rights to dividends and dividend equivalents shall not
be extended to and made part of any Award. The Committee may establish rules and procedures for the crediting
of interest on deferred cash payments for Awards.

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11. Option Exercise. The Grant Price shall be paid in full at the time of exercise in cash or, if elected by the
Participant, the Participant may purchase such shares by means of tendering Common Stock or surrendering another Award,
including Restricted Stock, valued at Fair Market Value on the date of exercise, or any combination thereof. The
Committee shall determine acceptable methods for Participants to tender Common Stock or other Awards. The Committee
may provide for procedures to permit the exercise or purchase of such Awards by use of the proceeds to be received from
the sale of Common Stock issuable pursuant to an Award (including “cashless exercise”). Unless otherwise provided in
the applicable Award Agreement, in the event shares of Restricted Stock are tendered as consideration for the exercise
of an Option, a number of the shares issued upon the exercise of the Option, equal to the number of shares of
Restricted Stock used as consideration thereof, shall be subject to the same restrictions as the Restricted Stock so
submitted as well as any additional restrictions that may be imposed by the Committee. The Committee may adopt
additional rules and procedures regarding the exercise of Options from time to time, provided that such rules and
procedures are not inconsistent with the provisions of this Section.

12. Taxes. The Company or its designated third party administrator shall have the right to deduct applicable
taxes from any Award payment and withhold, at the time of delivery or vesting of cash or shares of Common Stock under
this Plan, an appropriate amount of cash or number of shares of Common Stock or a combination thereof for payment of
taxes or other amounts required by law or to take such other action as may be necessary in the opinion of the Company
to satisfy all obligations for withholding of such taxes or other amounts. The Committee may also permit withholding
to be satisfied by the transfer to the Company of shares of Common Stock theretofore owned by the holder of the Award
with respect to which withholding is required. If shares of Common Stock are used to satisfy tax withholding, such
shares shall be valued based on the Fair Market Value on the date the tax withholding is required to be made.

13. Amendment, Modification, Suspension or Termination of this Plan. The Board may amend, modify, suspend or
terminate this Plan for the purpose of meeting or addressing any changes in legal requirements or for any other purpose
permitted by law, except that (i) no amendment or alteration that would adversely affect the rights of any Participant
under any Award previously granted to such Participant shall be made without the consent of such Participant and
(ii) no amendment or alteration shall be effective prior to its approval by the stockholders of the Company to the
extent such approval is required by applicable legal requirements or the requirements of the securities exchange on
which the Common Stock is listed.

14. Assignability. Except as otherwise provided herein, no Award granted under this Plan shall be sold,
transferred, pledged, assigned or otherwise alienated or hypothecated by a Participant other than by will or the laws
of descent and distribution, and during the lifetime of a Participant, any Award shall be exercisable only by the
Participant, or, in the case of a Participant who is mentally incapacitated, the Award shall be exercisable by the
Participant’s guardian or legal representative. The Committee may prescribe and include in applicable Award Agreements
other restrictions on transfer. Any attempted assignment or transfer in violation of this Section 14 shall be null and
void. Upon the Participant’s death, the personal representative or other person entitled to succeed to the rights of
the Participant (the “Successor Participant”) may exercise such rights. A Successor Participant must furnish proof
satisfactory to the Company of his or her right to exercise the Award under the Participant’s will or under the
applicable laws of descent and distribution.

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Notwithstanding any provision of this Plan to the contrary, the Committee may permit transfers of Non-Qualified
Stock Options, SARs, Stock Awards, Restricted Stock Unit Awards or Cash Awards to Family Members (including, without
limitation, transfers as a result of a domestic relations order which has been approved as to form by the Committee)
subject to such terms and conditions as the Committee shall determine. “Family Members” means as to a Participant, any
(i) child, stepchild, grandchild, parent, stepparent, grandparent, spouse, mother-in-law, father-in-law, son-in-law or
daughter-in-law (including adoptive relationships), (ii) trusts for the exclusive benefit of one or more such persons
and/or the Participant and (iii) other entity owned solely by one or more such persons and/or the Participant.

15. Adjustments.

(a) The existence of outstanding Awards shall not affect in any manner the right or power of the Company
or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other
changes in the capital stock of the Company or its business or any merger or consolidation of the Company, or
any issue of bonds, debentures, preferred or prior preference stock (whether or not such issue is prior to, on
a parity with or junior to the existing Common Stock) or the dissolution or liquidation of the Company, or any
sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding of any
kind, whether or not of a character similar to that of the acts or proceedings enumerated above.

(b) In the event of any subdivision or consolidation of outstanding shares of Common Stock, declaration
of a dividend payable in shares of Common Stock or other stock split, then (i) the number of shares of Common
Stock reserved under this Plan, (ii) the number of shares of Common Stock covered by outstanding Awards in the
form of Common Stock or units denominated in Common Stock, (iii) the Grant Price or other price in respect of
such Awards, (iv) the appropriate Fair Market Value and other price determinations for such Awards, and (v)
the Stock Based Awards Limitation shall each be proportionately adjusted by the Board as appropriate to
reflect such transaction. In the event of any other recapitalization or capital reorganization of the
Company, any consolidation or merger of the Company with another corporation or entity, the adoption by the
Company of any plan of exchange affecting Common Stock or any distribution to holders of Common Stock of
securities or property (other than normal cash dividends or dividends payable in Common Stock), the Board
shall make appropriate adjustments to (i) the number of shares of Common Stock covered by Awards in the form
of Common Stock or units denominated in Common Stock, (ii) the Grant Price or other price in respect of such
Awards, (iii) the appropriate Fair Market Value and other price determinations for such Awards, and (iv) the
Stock Based Awards Limitation to reflect such transaction; provided that such adjustments shall only be such
as are necessary to maintain the proportionate interest of the holders of the Awards and preserve, without
increasing, the value of such Awards.

(c) In the event of a corporate merger, consolidation, acquisition of property or stock, separation,
reorganization or liquidation, the Board may make such adjustments to Awards or other provisions for the
disposition of Awards as it deems equitable, and shall be authorized, in its discretion, (i) to provide for
the substitution of a new Award or other arrangement (which, if applicable, may be exercisable for such
property or stock as the Board determines) for an Award or the assumption of the Award, regardless of whether
in a transaction to which Section 424(a) of the Code applies, (ii) to provide, prior to the transaction, for
the acceleration of the vesting and exercisability of, or lapse of restrictions with respect to, the Award
and, if the transaction is a cash merger, provide for the termination of any portion of the Award that remains
unexercised at the time of such transaction, or (iii) to cancel any such Awards and to deliver to the
Participants cash in an amount that the Board shall determine in its sole discretion is equal to the fair
market value of such Awards on the date of such event, which in the case of Options or SARs shall be the
excess of the Fair Market Value of Common Stock on such date over the Grant Price of such Award.

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(d) No adjustment or substitution pursuant to this Section 15 shall be made in a manner that results in
noncompliance with the requirements of Section 409A of the Code, to the extent applicable.

16. Restrictions. No Common Stock or other form of payment shall be issued with respect to any Award unless the
Company shall be satisfied based on the advice of its counsel that such issuance will be in compliance with applicable
federal and state securities laws. Certificates evidencing shares of Common Stock delivered under this Plan (to the
extent that such shares are so evidenced) may be subject to such stop transfer orders and other restrictions as the
Committee may deem advisable under the rules, regulations and other requirements of the Securities and Exchange
Commission, any securities exchange or transaction reporting system upon which the Common Stock is then listed or to
which it is admitted for quotation and any applicable federal or state securities law. The Committee may cause a
legend or legends to be placed upon such certificates (if any) to make appropriate reference to such restrictions.

17. Unfunded Plan. This Plan shall be unfunded. Although bookkeeping accounts may be established with respect to
Participants who are entitled to cash, Common Stock or rights thereto under this Plan, any such accounts shall be used
merely as a bookkeeping convenience. The Company shall not be required to segregate any assets that may at any time be
represented by cash, Common Stock or rights thereto, nor shall this Plan be construed as providing for such
segregation, nor shall the Company, the Board or the Committee be deemed to be a trustee of any cash, Common Stock or
rights thereto to be granted under this Plan. Any liability or obligation of the Company to any Participant with
respect to an Award of cash, Common Stock or rights thereto under this Plan shall be based solely upon any contractual
obligations that may be created by this Plan and any Award Agreement, and no such liability or obligation of the
Company shall be deemed to be secured by any pledge or other encumbrance on any property of the Company. None of the
Company, the Board and the Committee shall be required to give any security or bond for the performance of any
obligation that may be created by this Plan.

18. Section 409A of the Code. The Awards are intended to comply with or be exempt from Section 409A of the Code
and the provisions of the Award Agreement will be construed accordingly. If a provision of an Award would result in the
imposition of an applicable tax under Section 409A of the Code, such provision shall be reformed to avoid imposition of
the applicable tax if permissible and no such action taken to comply with Section 409A of the Code shall be deemed to
adversely affect the rights or benefits under such Award.

If an Award is intended to comply with Section 409A of the Code, all payments to be made upon a termination of
employment under such Award may only be made upon a “separation from service” (as defined in Section 409A of the Code).
For purposes of Section 409A of the Code, each payment under an Award is treated as a separate payment for purposes of
applying Section 409A of the Code. In no event may the Participant, directly or indirectly, designate the calendar
year of payment.

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If the Participant is deemed to be a “specified employee” as of the date of his or her “separation from service”
(each as defined in Section 409A of the Code) as determined by the Company, the payment of any amount under an Award on
account of separation from service that is deferred compensation subject to Section 409A of the Code and not otherwise
exempt from Section 409A of the Code, shall not be paid before the earliest of (i) the first business day that is at
least six months after the date of the Participant’s separation from service, (ii) the date of the Participant’s
death, or (iii) the date that otherwise complies with the requirements of Section 409A of the Code. This provision
shall be applied by accumulating all payments that otherwise would have been paid within six months of the
Participant’s separation from service and paying such accumulated amounts, without interest, at the earliest date as
described in the preceding sentence and any remaining payments due under such Award shall be paid or provided in
accordance with the normal payment dates specified therein.

19. Parachute Payment Limitation. Notwithstanding any contrary provision of this Plan, the Committee may provide
in an Award Agreement or in any other agreement with the Participant for a limitation on the acceleration of vesting
and exercisability of unmatured Awards to the extent necessary to avoid or mitigate the impact of the golden parachute
excise tax under Section 4999 of the Code on the Participant or may provide for a supplemental payment to be made to
the Participant as necessary to offset or mitigate the impact of the golden parachute excise tax on the Participant.
In the event the Award Agreement or other agreement with the Participant does not contain any contrary provision
regarding the method of avoiding or mitigating the impact of the golden parachute excise tax under Section 4999 of the
Code on the Participant, then notwithstanding any contrary provision of this Plan, the aggregate present value of all
parachute payments payable to or for the benefit of a Participant, whether payable pursuant to this Plan or otherwise,
shall be limited to three times the Participant’s base amount less one dollar and, to the extent necessary, the
exercisability of an unmatured Award shall be reduced in order that this limitation not be exceeded, with the order of
reduction applied first against the Award with the latest vesting date and continuing, as necessary, to those Awards
with earlier vesting dates. For purposes of this Section 19, the terms “parachute payment,” “base amount” and “present
value” shall have the meanings assigned thereto under Section 280G of the Code. It is the intention of this Section 19
to avoid excise taxes on the Participant under Section 4999 of the Code or the disallowance of a deduction to the
Company pursuant to Section 280G of the Code.

20. Right to Employment. Nothing in this Plan or an Award Agreement shall interfere with or limit in any way the
right of the Company or a Subsidiary to terminate any Participant’s employment or other service relationship at any
time, nor confer upon any Participant any right to continue in the capacity in which he or she is employed or otherwise
serves the Company or a Subsidiary.

21. Successors. All obligations of the Company under this Plan with respect to Awards granted hereunder shall be
binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect
purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the
Company.

22. Governing Law. This Plan and all determinations made and actions taken pursuant hereto, to the extent not
otherwise governed by mandatory provisions of the Code or the securities laws of the United States, shall be governed
by and construed in accordance with the laws of the State of Texas.

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