Document:

Memorandum of Understanding

 EXHIBIT 10.1 
 MEMORANDUM OF UNDERSTANDING 
 WHEREAS, on
December 14, 2009, California Micro Devices Corporation (“CAMD” or the “Company”) and ON Semiconductor Corporation (“ONNN”) entered into an Agreement and Plan of Merger (the “Merger Agreement”) pursuant
to which CAMD would be acquired by ONNN in a cash transaction by means of an all-cash tender offer (the “Tender Offer”) and second-step merger valued at approximately $108 million (together, the “Proposed Transaction”). Under the
terms of the Merger Agreement, ONNN has commenced the Tender Offer to purchase all of the outstanding shares of CAMD’s common stock for $4.70 per share in cash. The closing of the Tender Offer is subject to customary conditions, including the
tender of a number of shares that constitutes at least a majority of CAMD’s outstanding shares of common stock on a fully diluted basis. The Tender Offer commenced during the week of December 28, 2009, and will run for and expire after 20
business days assuming at least a majority of CAMD’s shares (determined on a fully diluted basis) are tendered to ONNN and the other closing conditions have been satisfied or waived. The Tender Offer is scheduled to expire on January 26,
2010. The Merger Agreement also provides that the parties effect, subject to the satisfaction or waiver of customary conditions, a merger following the completion of the Tender Offer, which will result in all shares of CAMD common stock being
converted into the right to receive the same $4.70 per share in cash paid in the Tender Offer, and in CAMD becoming an indirect, wholly-owned subsidiary of ONNN. By virtue of the “top-up option” granted by CAMD to ONNN in the Merger
Agreement, no stockholder meeting will be needed unless fewer than approximately 80% of CAMD outstanding shares are tendered in the Tender Offer; 

 WHEREAS, on or about December 17, 2009, plaintiff Robert Varrenti filed a lawsuit
brought in the Superior Court for the State of California, in and for Santa Clara County, California, entitled Varrenti v. Dickinson, et al. (Case No. 1-09-CV-159649) (the “California Action”), which seeks, among other things,
injunctive and equitable relief against CAMD, its directors (the “Individual Defendants” and, together with CAMD, the “CAMD Defendants”), ONNN and Pac-10 Acquisition Corporation (“Pac-10”), with respect to the Proposed
Transaction; 
 WHEREAS, on or about December 21, 2009, plaintiff Annamarie Medeiros filed a lawsuit in the Court of
Chancery of the State of Delaware (the “Delaware Court”), entitled Medeiros v. CAMD Corporation, et al. (Docket No. 5159-VCP) (the “Medeiros Action”), which seeks, among other things, injunctive and equitable relief
against CAMD, the Individual Defendants, ONNN and Pac-10 with respect to the Proposed Transaction; 
 WHEREAS, Pac-10 commenced
the Tender Offer on December 28, 2009. On the same day, Pac-10 and CAMD, respectively, filed a Schedule TO and Schedule 14D-9, setting forth, among other things, the terms of the Tender Offer; 
 WHEREAS, on December 30, 2009, the plaintiff in the California Action amended the Varrenti complaint to attack the disclosures
in the Schedule TO and the Schedule 14D-9; 
 WHEREAS, on January 4, 2010, a third action, Israni v. California Micro
Devices Corporation et al., (Docket No. 5181-VCS) was filed in the Delaware Court (the “Israni Action, and collectively with the Medeiros Action the “Delaware Action”). The Israni Action challenged, among other things, the
Proposed Transaction as a breach of the Individual Defendants’ fiduciary duties, in addition to the disclosures asserted in the Schedule 14D-9 and the Schedule TO; 
 WHEREAS, on January 7, 2010, plaintiff Medeiros amended her complaint to add claims challenging the disclosures asserted in the Schedule 14D-9 and the Schedule TO; 
  

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 WHEREAS, on the Delaware Court consolidated the Mederios Action and Israni Action into the
Delaware Action (the Delaware Action and California Action collectively will be referred to as the “Actions,” and the plaintiffs in the Actions will be referred to as “Plaintiffs”); 
 WHEREAS, the Plaintiffs challenge the Proposed Transaction, including the disclosures in the Schedule 14D-9 and certain terms of the Merger
Agreement, alleging, among other things, that the Individual Defendants breached fiduciary duties to the stockholders of CAMD by, among other things, failing to adequately disclose certain material information in the Schedule 14D-9 concerning the
Merger, and that CAMD, ONNN and Pac-10 aided and abetted such breaches; 
 WHEREAS, counsel for the Plaintiffs have reviewed the
Schedule 14D-9; 
 WHEREAS, the operative complaints in the Delaware Action and the California Action (the
“Complaints”) make specific allegations about the adequacy of disclosures in the Schedule 14D-9, and counsel for the Plaintiffs have made requests to counsel for the Defendants concerning additional disclosures to add to the Schedule 14D-9
before the Tender Offer’s scheduled expiration date on January 26, 2010; 
 WHEREAS, counsel for the Plaintiffs and
counsel for the Defendants have engaged in extensive arm’s-length negotiations concerning a possible settlement of the Actions; 
 WHEREAS, counsel for the Defendants have provided Plaintiffs with documents concerning the CAMD Board’s approval of the Proposed Transaction, including the production of minutes of meetings of the CAMD Board concerning the Proposed
Transaction, documents provided to the CAMD Board regarding the Proposed Transaction, and written presentations made to the CAMD Board by CAMD’s financial advisor, Needham & Co. (“Needham”), that relate to the Proposed
Transaction; and Defendants have provided Plaintiffs with appropriate depositions concerning the Board’s approval of the Proposed Transaction; 
  

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 WHEREAS, counsel for plaintiffs in the Actions have retained a financial consultant to
assist in the prosecution of the Actions, as well as to review the documents and information produced by Defendants, and to provide financial advice with respect thereto; 
 WHEREAS, supplemental information relating to the Proposed Transaction substantially in the form set forth in Exhibit A hereto will be filed as an amendment to the Schedule 14D-9 (the
“Supplemental Disclosure”) with the United States Securities and Exchange Commission (the “SEC”) prior to and sufficiently in advance of the scheduled expiration of the Tender Offer such that it forms the basis for a settlement
of the Actions; 
 WHEREAS, subject to the additional discovery as to be agreed to herein, counsel for all Plaintiffs have
concluded that the terms contained in this Memorandum of Understanding (“MOU”) are fair and adequate to CAMD, its stockholders, and members of the Class (as defined below), and the parties believe that it is reasonable to pursue the
settlement of the Actions based upon the procedures and terms outlined herein and the benefits and protections offered hereby, and the parties wish to document their agreement in this MOU; 
 WHEREAS, all Defendants have denied, and continue to deny, that they have committed or aided and abetted in the commission of any violation
of law of any kind or engaged in any of the wrongful acts alleged in the Actions, and expressly maintain that they have diligently and scrupulously complied with their fiduciary and other legal duties, including without limitation providing
sufficient, correct, and proper disclosure to CAMD stockholders in connection with the Tender Offer, and are entering into this MOU solely to eliminate the burden and expense of further litigation; 
 WHEREAS, Plaintiffs’ entry into this Memorandum is not an admission as to the lack of any merit of any of the claims asserted in the
Actions; 
  

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 WHEREAS, all parties recognize the time and expense that would be
incurred by further litigation of the. Actions and the
uncertainties inherent in such litigation; 
 NOW, THEREFORE, as of this 19th day of January, 2010, counsel for the parties have
reached an agreement, expressed in this MOU, providing for the settlement of the Actions (that agreement is herein referred to as the “Settlement Agreement” and the acts, terms and conditions contemplated thereby are referred to as the
“Settlement”) between and among the Plaintiffs and the Defendants, on the terms and subject to the conditions set forth below: 
 1. Supplemental Disclosure. Counsel for the Plaintiffs (alternatively referred to herein as “Plaintiffs’ Counsel”) and counsel for the CAMD Defendants have conferred on
certain disclosures supplemental to those contained in the Schedule 14D-9, and, as requested by the Plaintiffs and as agreed upon by the CAMD Defendants and the Plaintiffs, CAMD will file electronically with the SEC the Supplemental Disclosure
substantially in the form set forth in Exhibit A hereto. 
 2. Benefits A Result of the Settlement.
Defendants agree that the pendency of the Actions and the efforts of Plaintiffs and their counsel were the sole cause of the inclusion and dissemination of the Supplemental Disclosure. The Plaintiffs acknowledge that their counsel has reviewed the
aforementioned subject matters to be contained in the Supplemental Disclosure and deem them an adequate basis for settling the Actions, subject to additional discovery as to be agreed to by the parties. 
 3. Confirmatory Discovery. Defendants have provided to Plaintiffs’ counsel reasonable confirmatory discovery as agreed by
the parties, including additional depositions, to confirm the fairness and reasonableness of the Settlement. 
  

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 4. Stipulation of Settlement; Cooperation. The parties to
the Actions and their respective counsel agree to cooperate fully and to use their best efforts to effectuate the Settlement, and the parties shall negotiate and execute an appropriate Stipulation of Settlement (the “Stipulation”), to be
filed in the California Action, which shall: (i) upon Final Approval of the Settlement (as defined herein) resolve and provide for the dismissal with prejudice and without costs to any party, except as set forth in paragraphs 6 and 7 herein, of
all claims asserted or that could have been asserted in the California Action (which the parties agree includes, without limitation, any and all claims that were or could have been asserted in the Delaware Action) and all other claims (as described
hereinafter), if any, arising out of or relating, in whole or in part, to the Proposed Transaction; (ii) provide for a stay of all proceedings in the Delaware Action pending Final Approval of the Settlement, at which time the Stipulation shall
provide for the filing in Delaware of a joint stipulation of dismissal with prejudice and without costs to any party, except as set forth in paragraphs 6 and 7 herein, of all claims asserted or that could have been asserted in the Delaware Action
and all other claims (as described hereinafter), if any, arising out of or relating, in whole or in part, to the Proposed Transaction or any act or omission in connection with the Proposed Transaction; and (iii) provide for the preparation and
filing of such other documentation as may be necessary to obtain approval of the Stipulation upon and consistent with the terms set forth in this MOU. As used herein, “Final Approval” of the Settlement means that the Court in the
California Action has entered a final order and judgment approving the Settlement, certifying the class alleged in the California Action, dismissing the California Action with prejudice and with each party to bear its own costs (except for the costs
set forth in paragraphs 6 and 7), and providing for such release language as is contained herein, and that such final.
 order and judgment is finally affirmed on appeal or is no longer subject to appeal and the time for any petition for reargument, appeal or review, by

  

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certiorari or otherwise, has expired; provided, however, and notwithstanding any provision to the contrary in this MOU, Final Approval shall not include (and the Settlement is expressly
not conditioned on) the approval of attorneys’ fees, costs and expenses of Plaintiffs’ counsel as provided in paragraph 6 and any appeal related thereto. 
 5. Certain Terms of the Stipulation. The Stipulation will also expressly provide, inter alia: 
 (a) for certification by the Court in the California Action, for settlement purposes only, pursuant to California Code of Civil Procedure 382, of a non-opt-out settlement class consisting of all record
and beneficial holders of the common stock of the Company at any time during the period beginning on and including December 14, 2009 (the date that the Proposed Transaction was publicly announced) through and including the effective date of
consummation of the Proposed Transaction, including any and all of their respective legal representatives, heirs, successors, successors in interest, predecessors, predecessors in interest, trustees, executors, administrators, transferees and
assigns, and any person or entity acting for or on behalf of, or claiming under, any such foregoing holders, immediate and remote, except for the Defendants and their “affiliates” and “associates” (as those terms are defined in
Rule 12b-2 promulgated pursuant to the Securities Exchange Act of 1934) (the “Class”); 
 (b) that upon the Court in
the California Action’s entry of a final order and judgment approving the Settlement, certifying the class alleged in the California Action, and dismissing the California Action with prejudice, the parties to the Delaware Action will promptly
file a joint stipulation of dismissal of the Delaware Action with prejudice and without costs; 
  

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 (c) that the Company shall cause a dissemination by mail of notice of the Settlement to
members of the Class, or as required by the Court in the California Action, and shall pay all costs and expenses incurred in providing such notice to members of the Class, and that said notice will provide that members of the Class shall have an
opportunity to object to the Settlement; 
 (d) that all the Defendants have vigorously denied, and continue to vigorously deny,
any wrongdoing or liability with respect to all claims asserted in the Actions, including that they have committed any violations of law, that they have acted improperly in any way, that they have any liability or owe any damages of any kind to the
Plaintiffs and the Class, but are entering into this MOU and will execute the Stipulation solely because they consider it desirable that the Actions be settled and dismissed with prejudice in order to (i) eliminate the burden, inconvenience,
expense, risk and distraction of further litigation, (ii) finally put to rest and terminate all the claims which were or could have been asserted against the Defendants in the Actions, and (iii) thereby permit the Proposed Transaction to
proceed without risk of injunctive or other relief; 
 (e) for the release and full and complete discharge, dismissal with
prejudice, settlement and release of all claims, rights, demands, suits, matters, issues, actions or causes of action, liabilities, damages, losses, obligations and judgments of any kind or nature whatsoever, whether known or unknown, contingent or
absolute, suspected or unsuspected, disclosed or undisclosed, matured or unmatured, that have been, could have been, or in the future might be asserted in the Actions (including without limitation the Delaware Action and the California Action) or in
any court, tribunal or proceeding (including, but not limited to, any claims arising under federal, state, or foreign law related to the alleged breach of any duty, negligence, violations of the federal securities laws or

  

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otherwise) by the Plaintiffs, or by or on behalf of any member of the Class, whether in an individual, class, direct, derivative, representative, legal, equitable, or any other type of capacity
against all the Defendants (or any one of them) or any of their respective families, affiliates, parents, or subsidiaries and each and all of their respective past, present or future officers, directors, stockholders, members, employees, agents,
attorneys, advisors, insurers, accountants, trustees, financial or investment advisors, commercial bankers, persons who provided fairness opinions, investment bankers, associates, representatives, general partners, limited partners, partnerships,
heirs, executors, personal representatives, estates, administrators, predecessors, successors and assigns (herein collectively “Defendants’ Affiliates”), whether under state, federal, or foreign law, including but not limited to the
federal securities laws (except for the rights conferred by this Settlement), and whether directly, derivatively, representatively or arising in any other capacity, in connection with, or that arise out of, any of the allegations, facts, practices,
events, transactions, acts, claims that were or could have been brought in the Actions, or that arise now or hereafter out of, or that relate in any way to, the acts, facts or the events alleged in the Actions, including without limitation the
Supplemental Disclosure, the Schedule 14D-9, the Proposed Transaction and the other transactions contemplated by the Merger Agreement, the negotiation and consideration of the Merger Agreement and the transactions contemplated by the Merger
Agreement, including, without limitation, the Merger, and any disclosures relating thereto, and any acts, allegations, facts, matters, events, transactions, occurrences, statements, conduct, representations, misrepresentations or omissions relating
to or arising out of the subject matter referred to in the Actions, and the fiduciary and disclosure obligations of any of the Defendants or Defendants’ Affiliates with respect to any of the foregoing (whether or not such claim could have been
asserted in the Actions) (collectively the “Released Claims”); provided, however, that the Released Claims shall not include any claims to enforce the Settlement or any claims for appraisal brought pursuant to 8 Del. C. § 262;

  

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 (f) that the release contemplated by this MOU and by the Stipulation shall extend to claims
that the releasing parties do not know or suspect to exist at the time of the release, which, if known, might have affected the releasing parties’ decision to enter into the release; that the releasing parties shall be deemed to relinquish, to
the extent applicable, and to the full extent permitted by law, the provisions, right and benefits of Section 1542 of the California Civil Code, which provides: 
 A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY
AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR; 
 and that the releasing parties shall be deemed to waive any and all provisions, rights and
benefits conferred by any law of any state or territory of the United States, or principle of common law, which is similar, comparable or equivalent to California Civil Code Section 1542. The parties to this MOU acknowledge that the foregoing
waiver was separately bargained for and is a material term of this MOU; 
 (g) for the entry of a final and binding judgment
dismissing with prejudice (whether voluntary or involuntary) the Actions upon the Final Approval of the Settlement; 
 (h) that
the Defendants and Defendants’ Affiliates release all claims against Plaintiffs, members of the Class, and their counsel arising out of or relating to the institution, prosecution, and resolution of the Actions; 
  

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 (h) that all the Defendants shall have the right to withdraw from the Settlement in the
event that (i) any court enjoins or otherwise precludes the Proposed Transaction, including the Merger or any of the transactions contemplated by the Merger Agreement, (ii) any claim related to the subject matter of the Actions, the Merger
Agreement, the transactions contemplated by the Merger Agreement, including the Merger, or the Released Claims is commenced or prosecuted against any of the Defendants in any court prior to Final Approval of the Settlement, and (following a motion
by the Defendants) any such claim is not dismissed with prejudice or stayed in contemplation of dismissal with prejudice, or (iii) the Proposed Transaction, including any amendment thereto, is not otherwise successfully completed. In the event
that any such claim is commenced or prosecuted against any of the Defendants, the parties shall cooperate and use best efforts to secure the dismissal with prejudice (or a stay in contemplation of dismissal with prejudice, following Final Approval
of the Settlement) thereof; 
 (i) that, subject to an order of the Court in the California Action, pending final determination
of whether the Settlement and Stipulation should be approved, the Plaintiffs and all members of the Class, or any of them, are barred and enjoined from commencing, prosecuting, instigating, or in any way participating in the commencement or
prosecution of any action asserting any claims against any of the Defendants or Defendants’ Affiliates. 
 6.
Attorneys’ Fees. Levi & Korsinsky LLP, as counsel for the plaintiff and the Class in the California Action (“California Counsel”), shall apply to the Court in the California Action for an award to
Plaintiffs’ Counsel of attorneys’ fees, costs and expenses in the California Action (the “Attorneys’ Fee Application”) in an amount not to exceed $495,000 to be paid by the Company or any successor thereto subject to the
approval of the Court in the California Action and subject to the Proposed Transaction being consummated. Counsel for the Defendants acknowledge that Plaintiffs’ Counsel have a claim for an Attorneys’ Fee Application based

  

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on the substantial benefits the settlement has and will provide to CAMD shareholders and Defendants have agreed to the Attorneys’ Fee Application. CAMD (or any successor thereto) and
its insurers shall pay any award of attorneys’ fees, costs and expenses (the “Attorneys’ Fee Award”), as directed by the Court in the California Action, if and solely to the extent that such Attorneys’ Fee Award does
not exceed $495,000. All parties agree that, notwithstanding anything in this MOU to the contrary, or any order of the Court in the California Action making or approving an Attorneys’ Fee Award, in no event shall CAMD or its successors be
obliged to pay to Plaintiffs, the Class or Plaintiffs’ counsel any amount in excess of $495,000 for attorneys’ fees, costs and expenses in connection with the Actions (other than those expenses incurred in disseminating the notice of
Settlement by mail in accordance with paragraph 5(c), which notice CAMD shall prepare and mail at its expense), and in no event shall any Defendant other than CAMD or its successors be obliged to pay any part of the Attorneys’ Fee Award or any
of Plaintiffs’ attorneys’ fees, costs and expenses. 
 7. Payment of Awarded Fees. Subject to the
approval of the Court in the California Action, Plaintiffs’ Counsel in the Actions shall allocate any Attorneys’ Fee Award among themselves, subject to the unanimous agreement of all Plaintiffs’ Counsel. The Stipulation will provide
that the Court-approved payment of attorneys’ fees and expenses will be made five (5) calendar days after entry of the last order of dismissal, with prejudice, in any of the Actions. Any such payment shall be made subject to
Plaintiffs’ Counsel’s respective obligations to make refunds or repayment to CAMD (or any successor entity) if any specified condition to the Settlement is not satisfied or, as a result of any appeal and/or further proceedings on remand,
or successful collateral attack, any dismissal order is reversed or the fee or costs award is reduced or reversed. Payment by or on behalf of CAMD (or any successor

  

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entity or insurer) of the attorneys’ fees and expenses to Plaintiffs’ Counsel will discharge in full any obligation of CAMD or its successors to pay any and all attorney’s fees or
expenses for any and all attorneys representing Plaintiffs or the Class. Defendants and Plaintiffs’ Counsel hereby expressly acknowledge that the provisions herein relating to the attorneys’ fees and expenses that CAMD (or any successor
entity) will pay or cause to be paid was negotiated by Defendants and Plaintiffs’ counsel only after the parties had agreed to all of the substantive terms of the settlement contained herein. 
 8. Notice to the Court. The parties will promptly advise the Court in the Delaware Action of the pending Settlement and
request that further proceedings in the Delaware Action be deferred during the pendency of the Settlement approval. The parties will also promptly advise the Court in the California Action of the Settlement and present the Settlement for hearing and
approval as soon as practicable. 
 9. Court Approval Required. This MOU and any Stipulation of Settlement shall
be null and void and of no force and effect if Final Approval of the Settlement does not occur for any reason. In such event, the parties shall return to their respective litigation positions in each of the Actions as of the time immediately prior
to the date of the execution of this MOU, as though it were never executed or agreed to, and this MOU shall not be deemed to prejudice in any way the positions of the parties with respect to the Actions, or to constitute an admission of fact by any
party, shall not entitle any party to recover any costs or expenses incurred in connection with the implementation of this MOU or the Settlement, and neither the existence of this MOU nor its contents shall be admissible in evidence or be referred
to for any purposes in the Actions or in any litigation or judicial proceeding, other than to enforce the terms hereof. 
  

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 10. Stay Pending Approval. The parties agree to stay any further proceedings
in the Actions, or any similar proceedings in any court, pending submission of the Settlement to the Court in the California Action for approval and, if necessary, request and stipulate that the respective Courts enter Orders Staying the Actions.
The parties’ respective times to respond to any filed pleadings is extended indefinitely. The Plaintiffs will stay, and will not initiate, any other proceedings other than those incident to the Settlement. The parties also agree to use their
best efforts to prevent, stay or seek dismissal of or oppose entry of any interim or final relief in favor of any member of the Class in any other litigation against any of the parties to this MOU, or which challenges the Settlement, the Merger
Agreement, any of the transactions contemplated by the Merger Agreement, including, without limitation, the Proposed Transaction or the Merger, or otherwise involves a Released Claim. 
 11. Return of Documents. Counsel for the Plaintiffs agree that within ten (10) days of receipt of a written request by
any producing party following Final Approval of the Settlement, they will return to the producing party all discovery material obtained from, including all documents produced by and/or deposition testimony given by, any of the Defendants or
Defendants’ Affiliates in the Actions (herein “Discovery Material”), or certify in writing that such Discovery Material has been destroyed. Provided, however, that plaintiffs’ counsel shall be entitled to retain all filings,
court papers, and attorney work product, subject to the requirement that Plaintiffs’ counsel shall not disclose any information contained or referenced in such materials to any person except pursuant to court order or agreement with Defendants.
The parties agree to submit to the Court in the California Action any dispute concerning the return or destruction of Discovery Material. 
 12. Execution in Counterparts. This MOU may be executed in multiple counterparts by the signatories hereto, including by email in PDF format or by telecopier, and as so executed shall
constitute one agreement. 
  

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 13. Governing Law. This MOU and the Settlement contemplated by it, and all
disputes arising out of or relating to it, shall be governed by, and construed in accordance with, the substantive laws of Delaware and procedural laws of California. 
 14. Written Modifications. This MOU constitutes the entire agreement among the parties with respect to the subject matter hereof, supersedes all written or oral communications, agreements or
understanding that may have existed prior to the execution of this MOU, and may be modified or amended only by a writing signed by the parties hereto. 
 15. Successors, Assigns and Third Party Beneficiaries. This MOU shall be binding upon and inure to the benefit of the parties (including members of the Class) and their respective agents,
executors, heirs, successors and assigns; provided, that no party shall assign or delegate its rights or responsibilities under this MOU without the prior written consent of the other parties hereto. The Defendants’ Affiliates are
intended third party beneficiaries under this MOU entitled to enforce this MOU in accordance with its terms. 
 16.
Severability. Should any part of this MOU be rendered or declared invalid by a court of competent jurisdiction, such invalidation of such part or portion of this MOU should not invalidate the remaining portions thereof, and they shall
remain in full force and effect. 
 17. Representation of Named Plaintiffs. Plaintiffs represent and
warrant that they have been stockholders in CAMD throughout the period covered by the Actions (including without limitation the Delaware Action and the California Action) and the Settlement and have not assigned, encumbered, or in any manner
transferred in whole or in part the claims in the Actions. 
  

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 18. Consent under Merger Agreement Pursuant to Section 6.9 of the Merger
Agreement, ONNN hereby consents to the settlement contemplated hereby. 
 19. Authority. This MOU is being
executed by counsel for the parties, each of whom represents and warrants that he or she has been granted full and complete authority from his or her client or clients to enter into this MOU, which has full force and effect as a binding obligation
of such clients. 
 WHEREFORE, the parties hereto have executed this MOU as of this 19th day of January, 2010. 
  

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	LEVI & KORSINSKY, LLP
		
	By:	 	 /s/    David E. Bower

		 	David E. Bower (SBN 119546)
	
	600 Corporate Pointe, Suite 1170
	 Culver City, CA 90230-7600
 Tel: (310) 839-0442
  
 -and-

  
 Eduard Korsinsky (pro hac vice to be filed)
 Juan E. Monteverde (admitted pro hac vice to be filed)
 30 Broad Street, 15th Floor
 New York, NY
10004
 Tel: (212) 363-7500

	
	Attorneys for Plaintiff
	ROBERT VARRENTI
	
	SAXENA WHITE P.A.
		
	By:	 	 /s/    Lester R. Hooker

		 	Lester R. Hooker (SBN 241590)
	
	Maya Saxena
	Joseph E. White III
	Christopher S. Jones
	Lester R. Hooker
	2424 North Federal Highway, Suite 257
	Boca Raton, FL 33431
	Tel: (561) 394-3399
	Fax: (561) 394-3382
	
	Attorneys for Plaintiff
	SANJAY ISRANI

  

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	RIGRODSKY & LONG, P.A.
		
	By:	 	 /s/ Brian D. Long

		 	Brian D. Long
	
	Seth D. Rigrodsky
	Brian D. Long
	919 N. Market Street, Suite 980
	Wilmington, DE 19801
	(302) 295-5310
	
	STULL STULL & BRODY
	Jules Brody
	Aaron Brody
	6 East 45th Street
	New York, NY 10017
	(212) 687-7230
	
	WEISS & LURIE
	Joseph H. Weiss
	551 Fifth Avenue
	New York, NY 10176
	(212) 682-3025
	
	Attorneys for Plaintiff
	ANNAMARIE MEDEIROS
	
	PILLSBURY WINTHROP SHAW PITTMAN LLP
		
	By:	 	 /s/ David Furbush

		 	David Furbush (SBN 83447)
	
	2475 Hanover Street
	Palo Alto, CA 94304-1114
	Tel: (650) 233-4623

 Attorneys for Defendants 
 ROBERT DICKINSON, EDWARD ROSS, DAVID 
 WITTROCK, JON CASTOR, JOHN FICHTHORN, J. 
 MICHAEL GULLARD, KENNETH POTASHNER, 
 CALIFORNIA
MICRO DEVICES CORPORATION 
  

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	DLA PIPER
		
	By:	 	 /s/    David Priebe

		 	David Priebe (SBN 148679)
	
	2000 University Ave
	 East Palo Alto, CA 94303
 Tel: (650) 833-2000

 Attorneys for Defendants 
 ON SEMICONDUCTOR CORPORATION, and PAC-10 
 ACQUISITION CORPORATION 
  

 19Engagement Letter, dated January 8, 2010

 Exhibit 10.1 
  

			
	

	  	 Canaccord Adams Inc.
 99 High Street
 Boston, MA 02110
 T: 617.371.3900

 CONFIDENTIAL 
 COPY ONE OF TWO 
 January 8, 2010 
 EnteroMedics Inc. 
 2800 Patton Road 
 St. Paul, MN 55113 
  

			
	Attention:	  	Mark B. Knudson
		  	President and Chief Executive Officer

 Dear Mr. Knudson, 
 This letter (the “Agreement”) will confirm the basis upon which EnteroMedics, Inc. (“Client”) has engaged Canaccord Adams Inc. (together with its affiliates, control persons, officers,
directors, employees and agents, “CA”) to act as Client’s exclusive agent and financial advisor in connection with the placement, on a best efforts basis, of one or more classes or series of securities (the “Securities”).
The Securities may take the form of (i) debt securities, including secured or unsecured senior or subordinated notes or debentures (but excluding senior loans from a commercial bank), whether convertible or exchangeable into equity securities,
or otherwise, or (ii) equity securities, including common or preferred stock, securities convertible into common or preferred stock (including convertible preferred stock and convertible), or any other derivative or similar securities the value
of which is derived, in whole or in part, from the value of the underlying equity security. The placement of the Securities shall be referred to as the “Placement.” 
 As of the date of this Agreement, Client intends to issue shares of the Securities which, in the aggregate, equate approximately to an amount of $5,500,000. The Securities will be offered on a limited
basis to accredited investors (the “Investors”). The selection of each Investor shall be from a list of potential Investors assembled by Client and CA and the Client’s other advisors. The number and price of the Securities the Client
shall ultimately agree to issue is entirely within Client’s sole discretion. 
 The sale of Securities in the Placement shall be made by
Client directly to Investors pursuant to an effective registration statement filed with the United States Securities and Exchange Commission. 
  

	 	1.	Services to be Rendered. In performing its agency and advisory roles, CA will: 

  

	 	a)	Familiarize itself to the extent it deems appropriate and feasible with the business, operations, properties, financial condition and prospects of Client;

  

	 	b)	Assist Client in the development of descriptive textual and financial materials for distribution to potential Investors; 

  

	 	c)	Review with Client a list of potential Investors; and 

  

	 	d)	Solicit offers from potential Investors, collaborate with Client in the development and proposal of terms of any offers, and participate in, and assist Client with,
negotiations in connection with the consummation of the Placement. 

			
	CONFIDENTIAL	  	COPY ONE OF TWO
	  
 EnteroMedics Inc.
 January 8, 2010
  Page
 2
 of 7
	  	

  

	 	2.	Best Efforts. It is understood that the CA’s involvement in the Placement is strictly on a best efforts basis and that the consummation of the
Placement will be subject to, among other things, market conditions. 

  

	 	3.	Client’s Responsibilities, Representations and Warranties. Client hereby agrees to the following: 

  

	 	a)	The sale of Securities to any Investor will be evidenced by a purchase agreement (each a “Purchase Agreement”) between Client and each such Investor in a form
reasonably satisfactory to Client and CA. Prior to the signing of any Purchase Agreement, officers of the Client with responsibility for financial affairs will be available to answer inquiries from prospective Investors. The Client
(i) represents and warrants that the representations and warranties contained in the Purchase Agreements will be true and correct in all respects on the date of such Purchase Agreements and on the Closing Date and (ii) agrees that CA shall
be entitled to rely on such representations and warranties as if they were made directly to CA. 

  

	 	b)	The selling price of the Securities to be issued and sold by Client pursuant to the Purchase Agreements will be specified in writing by the CA on behalf of Client to
the prospective Investors prior to the execution of the Purchase Agreements, subject to Client’s approval. 

  

	 	c)	Client represents and warrants that it will, at all times during the term of this Agreement, comply with all SEC rules and regulations, including, but not limited to,
the rules and regulations promulgated pursuant to Regulation FD (Fair Disclosure) under the Securities and Exchange Act of 1934, as amended, relating to the selective disclosure of material nonpublic information. 

  

	 	d)	For a period of ninety (90) days from the date of the Placement, Client will not, without the prior written consent of CA, sell, contract to sell or otherwise
dispose of or issue any securities of Client, except pursuant to previously issued options, any agreements providing for anti-dilution or other stock purchase or share issuance rights in existence on the date hereof, any employee benefit or similar
plan of Client in existence on the date hereof or duly adopted hereafter, or any technology license agreement, strategic alliance or joint venture in existence on the date hereof or which Client may enter into hereafter. 

  

	 	4.	Fees. In consideration for its services hereunder, Client shall pay to CA the following fees with such cash amounts payable by wire transfer of
immediately available funds: 

  

	 	a)	Upon and subject to the closing of a Placement, a Success Fee equal to 6.0% of the Gross Proceeds (as hereinafter defined). 

 For purposes hereof, the term “Gross Proceeds” shall mean the aggregate proceeds received by Client from any Investor or Investors
at the closing (or closings if there shall be more than one) of the Placement. 
  

	 	5.	Expenses. In addition to any fees that may be payable to CA hereunder and regardless of whether any Placement is proposed or consummated, Client hereby
agrees, from time to time upon CA’s request, to reimburse CA for (a) all reasonable fees and disbursements of counsel retained by CA with Client’s consent, (b) all of CA’s reasonable travel and related expenses arising out
of CA’s engagement hereunder, and (c) any other reasonable out-of-pocket expenses incurred by CA in connection with the performance of its services hereunder. 

			
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	 	6.	Confidentiality. Client acknowledges that this Agreement and all opinions and advice (whether written or oral) given by CA to Client in connection with
CA’s engagement are intended solely for the benefit and use of Client. Client further acknowledges that neither the terms of this Agreement nor any of CA’s opinions or financial advice will be disclosed to any third party, without the
prior written consent of CA, except as required by law. CA agrees that any non-public information relating to Client or any potential Investor received by CA from or at the direction of Client will be used by CA solely for the purpose of performing
its agency and advisory roles and that CA will maintain the confidentiality thereof. Notwithstanding the foregoing, CA may disclose confidential information hereunder (i) to such of its employees and advisors as CA determines have a need to
know and who are bound to hold such information confidential, and (ii) to the extent necessary to comply with any order or other action of a court or administrative agency of competent jurisdiction. 

  

	 	7.	Due Diligence. It is understood that CA’s role in the Placement will be subject to the satisfactory completion of investigation and inquiry into the
affairs of Client as CA deems appropriate and necessary under the circumstances (“Due Diligence”) and the approval of CA’s internal committee. CA shall have the right, in its sole discretion, to terminate its involvement in the
Placement if the outcome of the Due Diligence is not to its satisfaction or if approval of its internal committee is not obtained (“Early Termination”). 

  

	 	8.	Exclusivity. During the term of this Agreement Client will not, and will not permit its representatives, to: (i) contact or solicit institutions,
corporations or other entities as potential purchasers of the Securities; or pursue any financing transaction which would be in lieu of the contemplated Placement. Furthermore, Client agrees that during the term of this Agreement, all inquiries,
whether direct or indirect, from prospective Investors will be referred to CA and will be deemed to have been contacted by CA in connection with the Placement. Client may reject any potential Investor if, in its discretion, Client believes that the
inclusion of such Investor in as a purchaser of the Securities would be incompatible with the best interests of Client. Client shall not be obligated to sell the Securities or to accept any offer thereof, and the terms of such Securities and the
final decision to issue the same shall be subject to the discretionary approval of Client. 

  

	 	9.	Term and Termination of Engagement. The term of this Agreement shall extend from the date hereof until the first anniversary of the date hereof or earlier
termination under this Section 9. CA’s engagement hereunder shall terminate prior to expiration upon the earlier to occur of: (i) Early Termination; (ii) the closing of the Placement; (iii) the earlier termination of this
Agreement by either Client or CA at any time for any reason, upon thirty (30) days written notice to the other party. The agreement may be extended beyond the initial one (1) year term if both Client and CA agree to such extension in
writing. In the event this Agreement expires or is terminated prior to the closing of the Placement, the rights and obligations of the parties shall cease except as set forth in Section 6 and Section 9(a) and 9(b) below.

  

	 	a)	Unless terminated by CA pursuant to clauses (i) or (iii) above, CA will be entitled to its full fee under Section 4 hereof in the event that at any time
prior to the expiration of twelve (12) months after the termination or expiration of this Agreement: (i) a Placement or other similar non-public transaction (other than any transaction in which Client is the acquiror) is consummated; or
(ii) Client reaches an agreement in principle for the sale of the Securities to any Investor which CA previously solicited or sought to solicit but was not permitted to do so due to Client’s rejection of such proposed Investor. Upon
Client’s request, at the termination or expiration of this Agreement, CA will supply Client with a list of Investors which the CA has solicited (or sought to solicit but was not permitted to do so due to Client’s rejection of such proposed
Investors); and 

			
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	 	b)	The provisions of this Section 9 and of Sections 3, 4, 5, 6, 10 and 11 hereof shall survive such termination. 

  

	 	10.	Indemnification; Contribution. In consideration of and as a condition precedent to Canaccord Adams undertaking the engagement contemplated by this letter,
the Company agrees to the indemnification provisions and other matters set forth in Annex A, which is incorporated by reference into this Agreement. 

  

	 	11.	Governing Law; Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts without
regard to the conflicts of law provisions thereof. Any right to trial by jury with respect to any claim, action, suit or proceeding arising out of this Agreement or any of the matters contemplated hereby is waived by Client and CA. Client and CA
hereby submit to the non-exclusive jurisdiction of the Federal and State courts located in Boston, Massachusetts, in connection with any dispute related to this Agreement or any of the matters contemplated hereby. 

  

	 	12.	Reliance on Others. Client confirms that it will rely on its own counsel and accountants for legal and accounting advice. 

  

	 	13.	Attorneys Fees. In the event of any dispute or litigation or other proceeding between the parties with respect to any provision of this Agreement or
arising from the engagement contemplated under this Agreement, the prevailing party shall be entitled to recover from the non-prevailing party any and all of the reasonable fees and disbursements of the prevailing party’s attorney to the extent
that they relate to such dispute, litigation, or other proceeding. 

  

	 	14.	Miscellaneous. Nothing in this Agreement is intended to obligate or commit CA to provide any services other than as set forth above. This Agreement may be
executed in counterparts, each of which shall be deemed an original, but which together shall be considered a single instrument. This Agreement constitutes the entire agreement between the parties hereto, and supersedes all prior agreements and
understandings (both written and oral) of the parties hereto with respect to the subject matter hereof, and cannot be amended or otherwise modified except in writing executed by the parties hereto. Neither party may assign its rights or delegate its
obligations hereunder without the prior written consent of the other party. Client and CA represent and warrant that each has the requisite power and authority to enter into and carry out the terms and provisions of this Agreement and that the
execution, delivery and performance of this Agreement does not breach or conflict with any agreement, document or instrument to which it is a party or bound. 

			
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 If you are in agreement with the foregoing, please sign both copies, retain Copy One for your records
and return Copy Two, whereupon the Agreement shall become effective as of the date hereof. 
  

			
	Sincerely,
	
	Canaccord Adams Inc.
		
	By:	 	  

		 	Jeffrey G. Barlow
		 	Managing Director
	
	Accepted and Agreed:
	
	EnteroMedics Inc.
		
	By:	 	  

		 	Mark B. Knudson
		 	President and Chief Executive Officer

			
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 Annex A 
 In the event that Canaccord Adams Inc. or any of its affiliates (“Canaccord Adams”), the respective shareholders, directors, officers, agents or employees of Canaccord Adams, or any other person
controlling Canaccord Adams (collectively, together with Canaccord Adams, “Indemnified Persons”) becomes involved in any capacity in any action, claim, suit, investigation or proceeding, actual or threatened, brought by or against any
person, including stockholders of EnteroMedics Inc. (the “Company”), in connection with or as a result of (i) the engagement contemplated by the letter agreement to which this Annex A is attached (the “engagement”), or
(ii) any untrue statement or alleged untrue statement of a material fact contained in any offering materials, including but not limited to private placement memoranda used to offer securities of the Company in a transaction subject to the
engagement as such materials may be amended or supplemented (and including but not limited to any documents deemed to be incorporated therein by reference) (collectively, the “Offering Materials”), or any omission or alleged omission to
state therein a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, the Company will reimburse such Indemnified Person for its legal and other expenses
(including without limitation the costs and expenses incurred in connection with investigating, preparing for and responding to third party subpoenas or enforcing the engagement) incurred in connection therewith as such expenses are incurred;
provided, however, that with respect to clause (i) above if it is finally determined by a court or arbitral tribunal in any such action, claim, suit, investigation or proceeding that any loss, claim damage or liability of Canaccord Adams or any
other Indemnified Person has resulted primarily and directly from the gross negligence or willful misconduct of Canaccord Adams in performing the services that are the subject of the engagement, then Canaccord Adams will repay such portion of
reimbursed amounts that is attributable to expenses incurred in relation to the act or omission of Canaccord Adams which is the subject of such determination. The Company will also indemnify and hold harmless each Indemnified Person from and against
any losses, claims, damages or liabilities (including actions or proceedings in respect thereof) (collectively, “Losses”) related to or arising out of (i) the engagement, or (ii) any untrue statement or alleged untrue statement
of a material fact contained in the Offering Materials, or any omission or alleged omission to state therein a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not
misleading, except, with respect to clause (i) above, to the extent any such Losses are finally determined by a court or arbitral tribunal to have resulted primarily and directly from the willful misconduct or gross negligence of Canaccord
Adams in performing the services that are the subject of the engagement. 
 If such indemnification is for any reason not available or
insufficient to hold an Indemnified Person harmless (except by reason of the gross negligence or willful misconduct of Canaccord Adams as described above), the Company and Canaccord Adams shall contribute to the Losses involved in such proportion as
is appropriate to reflect the relative benefits received (or anticipated to be received) by the Company, on the one hand, and by Canaccord Adams, on the other hand, with respect to the engagement or, if such allocation is determined by a court or
arbitral tribunal to be unavailable, in such proportion as is appropriate to reflect other equitable considerations such as the relative fault of the Company on the one hand and of Canaccord Adams on the other hand; provided, however, that in no
event shall the amounts to be contributed by Canaccord Adams exceed the fees actually received by Canaccord Adams in the engagement. Relative benefits to the Company, on the one hand, and Canaccord Adams, on the other hand, shall be deemed to be in
the same proportion as (i) the total value paid or proposed to be paid or received or proposed to be received by the Company or its security holders, as the case may be, pursuant to the transaction(s), whether or not consummated, contemplated
by the engagement, bears to (ii) all fees actually received by Canaccord Adams in the engagement. 
 The Company also agrees that neither
Canaccord Adams nor any other Indemnified Person shall have any liability to the Company or any person asserting claims on behalf or in right of the Company in connection with or as a result of the engagement or any matter referred to in the
engagement, except to

			
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the extent that any Losses incurred by the Company are finally determined by a court or arbitral tribunal to have resulted primarily and directly from the willful misconduct or gross negligence
of Canaccord Adams in performing the services that are the subject of the engagement. 
 The Company’s obligations hereunder shall be in
addition to any rights that any Indemnified Person may have at common law or otherwise. The letter to which this Annex A is attached, including this Annex A, and any other agreements relating to the engagement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts, applicable to contracts made and to be performed therein and, in connection therewith, the parties hereto consent to the exclusive jurisdiction of the state and federal courts of the
Commonwealth of Massachusetts. Notwithstanding the foregoing, solely for purposes of enforcing the Company’s obligations hereunder, the Company consents to personal jurisdiction, service and venue in any court proceeding in which any claim
subject to this Annex A is brought by or against any Indemnified Person. CANACCORD ADAMS HEREBY AGREES, AND THE COMPANY HEREBY AGREES ON ITS OWN BEHALF AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ON BEHALF OF ITS SECURITY HOLDERS, TO WAIVE ANY
RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY CLAIM, COUNTER-CLAIM OR ACTION ARISING OUT OF THE ENGAGEMENT OR CANACCORD ADAMS’S PERFORMANCE OF SERVICES THAT ARE THE SUBJECT THEREOF. 
 The provisions of this Annex A shall apply to the engagement (including related activities prior to the date hereof) and any modification thereof and shall remain in full force and effect regardless of
the completion or termination of the engagement. If any term, provision, covenant or restriction herein is held by a court of competent jurisdiction to be invalid, void or unenforceable or against public policy, the remainder of the terms,
provisions and restrictions contained herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

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