Document:

Development and clinical supply agreement

 Exhibit 10.27 
 DEVELOPMENT AND CLINICAL SUPPLY AGREEMENT 
 DPT LABORATORIES,
LTD. 
 AND 
 PEPLIN, INC. 
  
  
  

			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406
of the Securities Act of 1933, as amended.

  

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 DEVELOPMENT AND CLINICAL SUPPLY AGREEMENT 
 This Development And Manufacturing Agreement (this “Agreement”), effective as of this October 23, 2007 (the “Effective Date”), is made by and between Peplin, Inc., a Delaware
corporation with its principal place of business at 6475 Christie Avenue, Emeryville, California 94608 (“COMPANY”), and DPT Laboratories, Ltd., a Texas Limited Partnership with its principal place of business at 307 E. Josephine,
San Antonio, Texas 78215 (“DPT”). 
 RECITALS 
 WHEREAS, DPT has expertise and experience in pharmaceutical development, manufacturing, and packaging services; and 
 WHEREAS, COMPANY is engaged in the business of researching and developing dermatological pharmaceutical products, and desires to engage DPT to
provide certain development, manufacturing, and packaging services with respect to one of its products under development. 
 NOW,
THEREFORE, in consideration of the mutual covenants hereinafter expressed, the parties agree as follows: 
 1 — Definitions. For
purposes of this Agreement, the following definitions shall apply, and the terms defined herein in plural shall include the singular and vice-versa. 
  

			
	1.1	 	“API” means the active pharmaceutical ingredient of the Product.
		
	1.2	 	“cGMPs” means current Good Manufacturing Practices, regulations and guidelines applicable to the manufacture and testing of pharmaceutical products in the United States,
including those in 21 CFR Parts 210 and 211.
		
	1.3	 	“Claims” has the meaning given in Section 9.1.
		
	1.4	 	“Company Confidential Information” has the meaning given in Section 5.1.
		
	1.5	 	“Company Technology” has the meaning given in Section 4.2(a).
		
	1.6	 	“Confidential Information” has the meaning given in Section 5.1.
		
	1.7	 	“Data” has the meaning given in Section 6.3.
		
	1.8	 	“Deliverables” “has the meaning given in Section 2.5.
		
	1.9	 	“DPT Confidential Information” has the meaning given in Section 5.1.
		
	1.10	 	“Equipment” has the meaning given in Section 2.4.
		
	1.11	 	“Facility” means DPT’s manufacturing facility located in San Antonio, Texas.

  
  
  

			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406
of the Securities Act of 1933, as amended.

  

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	1.12	 	“GMP Batch or Batches” means the final bulk Product produced in accordance with current Good Manufacturing Practices and resulting from completion of the compounding process
and reconciliation prior to the packaging process.
		
	1.13	 	“Inventions” has the meaning given in Section 6.2.
		
	1.14	 	“Know-how” has the meaning given in Section 6.1.
		
	1.15	 	“Materials” has the meaning given in Section 2.3(b).
		
	1.16	 	“MSDS” means Material Safety Data Sheets prepared in accordance with regulations promulgated by the Occupational Safety & Health Administration.
		
	1.17	 	“Process Inventions” has the meaning given in Section 6.2(b).
		
	1.18	 	“Product” means PEP005 formulated into a topical gel at a 0.05% (or other concentration or formulations as may be required) for use in Phase III clinical
trials.
		
	1.19	 	“Product Inventions” has the meaning given in Section 6.2(a).
		
	1.20	 	“Project Scope Document” or “PSD” means the document attached hereto as Exhibit A and incorporated herein by reference, as it may be modified from time
to time upon written agreement of the parties. In the event of any conflict between the terms of this Agreement and the PSD, the terms of this Agreement shall govern.
		
	1.21	 	“Protocol” has the meaning given in Section 2.2.
		
	1.22	 	“Recipient” has the meaning given in Section 5.2.
		
	1.23	 	“Services” has the meaning given in Section 2.1.

 2 — Services and Deliverables 
 2.1    Project Scope. DPT shall use commercially reasonable, good faith efforts to perform the services
outlined in the Project Scope Document and the Protocols (collectively, the “Services”), in accordance with the schedule attached hereto as Exhibit B and incorporated herein by reference, and to accomplish the desired results.
Such efforts shall include efforts to manufacture all Product batches, other than the feasibility/placebo batch, in accordance with all applicable cGMPs and, except as provided in Section 4.3(c), with respect to the GMP Batches, DPT makes no
warranties or representations that it will be able to achieve the desired results. 
 2.2    Project
Protocols. Prior to beginning each of the tasks outlined on Exhibit B, (a) DPT shall prepare a written Protocol that details, specifically, the work to be performed in connection with the task, the Deliverables to be produced
and/or delivered to COMPANY, and the itemized costs of the task (a “Protocol”), all of which shall be consistent with the PSD and prior Protocols, subject to Section 2.6. DPT shall not commence (or charge Company for) any

  
  
  

			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406
of the Securities Act of 1933, as amended.

  

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work described in a Protocol unless and until the Protocol has been signed by both parties. For the avoidance of doubt, no batch of Product shall be produced
(and no work on such production shall begin) unless the parties have signed a Protocol authorizing such production and work. 
 2.3    Materials 
  

	 	(a)	COMPANY shall provide DPT with all API required for the performance of the Services. Prior to delivery of API to DPT, and as a condition precedent of any testing or formulation work
by DPT pursuant to this Agreement, COMPANY shall provide DPT with the MSDS for the API. COMPANY also shall be responsible for any necessary or desired cGMP audits of the API supplier. All API shall be and shall remain the property of COMPANY and
shall be treated as COMPANY’S Confidential Information pursuant to Sections 5.1 - 5.4. 

  

	 	(b)	DPT shall be responsible for the acquisition of all raw materials other than API, and all packaging components necessary to produce and supply the Product (collectively, the
“Materials”), subject to Section 3.2, and for ensuring that Materials suppliers have been qualified in accordance with DPT’s supplier qualification procedures. All Materials shall be the sole and exclusive property of
COMPANY. DPT agrees to handle and store the Materials in accordance with all applicable laws and regulations, and under conditions prescribed by the manufacturer, in order to maintain their quality and suitability for use. 

2.4    Equipment. DPT has purchased certain capital equipment, on Company’s behalf, with which to
manufacture and/or package Product, and it may purchase additional such equipment, upon written agreement of the parties, on Company’s behalf (the “Equipment”). Subject to Section 3.2, the Equipment shall be the exclusive
property of Company; provided, however, that DPT shall have the right to use the Equipment, with Company’s prior written consent, which shall not be unreasonably withheld, as long as (a) the Equipment is located at the Facility and
(b) such use does not interfere with scheduled Product production. As soon as reasonably practicable, upon request by Company (or at any later date requested by Company), or expiration or termination of the Agreement, DPT shall have the option,
subject to approval by the Company in the form of written consent which shall not be unreasonably withheld to either (i) purchase the Equipment, at its then depreciated value, or (ii) transfer the Equipment to COMPANY, at COMPANY’S
sole expense. In the event that DPT exercises such option, and the Company does not accept the option by providing its written consent, the Parties will jointly develop a transition plan to ensure uninterrupted production of Company and other
products utilizing the Equipment. 
 2.5    Deliverables. The deliverables to be produced
(and, unless the parties agree otherwise in writing, provided to Company by DPT) hereunder are (a) the eight Product batches identified on page 2 of the PSD, (b) a pharmaceutical development report, stability reports and validation
reports, as provided at page 
  
  
  

			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406
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4 of the PSD and (c) any other deliverables specifically identified as such in a Protocol (collectively, the “Deliverables”). Following
completion of manufacture of each Product-batch, DPT shall do one or more of the following, as directed by COMPANY in writing: (i) store the batch on DPT’s premises, (ii) destroy it, and/or (iii) ship the batch to a third party
designated by COMPANY, according to COMPANY’S instructions, at COMPANY’S sole cost and expense. (Charges for storage and destruction shall be at DPT’s standard rates for such activities.) 
 2.6    Changed Services. Both parties understand that, during any development project, unforeseen events
may occur, including unacceptable results, leading to termination of the project, or marginal results leading to significant re-evaluation and modification of the project. DPT shall promptly notify COMPANY of any such unforeseen events before
proceeding further with the Services, at which time either COMPANY or DPT may terminate this Agreement, upon written notice to the other party, or may agree to a change in Services, pursuant to an amendment to this Agreement or a Protocol. In either
case, COMPANY will be obligated to pay for all tasks that have been completed through the date of DPT’s notice of the unforeseen events, as described in a Protocol issued thereafter, and for all Materials in inventory, other than those that
DPT, using commercially reasonable efforts, can return or use for other purposes, and Materials on order, if the order cannot be cancelled. 
 3 —
Costs, Invoicing & Payment 
 3.1    Costs of Services.
Costs of Services are based on the assumptions stated in the PSD. They include costs of labor for all reasonably foreseeable development, testing, scale-up and stability-testing activities, as well as all other reasonably foreseeable events and
expenses (other than costs of Materials). 
 3.2    Costs of Materials and Equipment.
Materials delivered to DPT, and any Equipment acquired in accordance with Section 2.4, will be charged to COMPANY at their actual cost, plus **** percent (****%), plus any applicable sales taxes, use taxes and freight charges (and installation
costs, where applicable to Equipment). Costs will be invoiced to COMPANY in accordance with Section 3.3. 
 3.3    Invoicing and Payment. Costs of technical Services shall be invoiced as indicated in the relevant Protocol. Any differences between such costs and those provided in the PSD, and the
changes in assumptions and/or circumstances that led to such differences, shall be noted and explained in the Protocol or otherwise provided to the Company in writing. Costs of Services and Materials directly related to Product manufacture will be
invoiced to COMPANY at the time of shipment of the Deliverables to which they apply and shall be consistent with the costs provided for in the PSD/Protocol. Payments shall be due within thirty (30) days of COMPANY’S receipt of all relevant
Deliverables and applicable invoice. Except for those Services and Materials performed or ordered in connection with replacement any GMP Batches described in Section 4.3(c), costs of completed Services and of Materials previously ordered that
DPT cannot, after using commercially reasonable efforts, return or use for other 
  
  
  

			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406
of the Securities Act of 1933, as amended.

  

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purposes, shall be paid to DPT, regardless of whether DPT is able to accomplish the results that COMPANY requested. 
 3.4    Collateral Security. As collateral security for COMPANY’S payment obligations contained in
this Agreement, COMPANY grants to DPT a security interest in all raw materials, inventory, work-in-progress, and finished goods. Chapter 9 of the Texas Uniform Commercial Code shall govern the rights and obligations of the parties relative to
the security interests granted herein. 
 4 — Compliance 
 4.1    Joint Responsibilities. The parties shall use commercially reasonable and good faith efforts to agree in writing, on the following criteria, within the
time-periods provided: 
  

	 	(a)	Specifications and other criteria which have been mutually agreed by both parties to which cGMP Product must conform, including the test methods to be used in determining whether
Product conforms thereto: at least two (2) weeks before the scheduled commencement of manufacture of the 1st GMP Batch. 

  

	 	(b)	Specifications for the containers in which Product will be filled: at least two (2) weeks before the scheduled commencement of manufacture of any Batch.

  

	 	(c)	Specifications for bulk-packaging containers: at least two (2) weeks before the scheduled commencement of manufacture of the final GMP Batches. 

  

	 	(d)	The terms, conditions, roles and responsibilities of the parties with respect to quality matters, either in a separate quality agreement or in Protocols, as required by applicable
regulations: as soon as reasonably practicable after the Effective Date, and in any event, at least two (2) weeks prior to the commencement of manufacture of any Batch. 

  

	 	(e)	The content of the Chemistry and Manufacturing Controls (CMC) portions of any submission for regulatory approval in connection with the manufacture or sale of Product (e.g., a
document to be filed in support of a New Drug Application to the FDA or a new product application as specified by the International Conference on Harmonization of Technical Requirements for Registration of Pharmaceuticals for Human Use), and COMPANY
shall use such agreed-upon information as the source of the CMC portion of any such submission. If additional information is requested or required by any regulatory agency or required for any regulatory filing, COMPANY shall provide DPT with a copy
of the documents incorporating such information, and DPT will have ten (10) business days to review them, unless the parties agree otherwise, in writing, in order to verify the accuracy of (i) such documents as they relate to

  
  
  

			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406
of the Securities Act of 1933, as amended.

  

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 the data generated by DPT hereunder, and (ii) the description of the work performed and
manufacturing processes used by DPT hereunder. 
 4.2    COMPANY’S Responsibilities.

  

	 	(a)	COMPANY will transfer to DPT the Product formulation, tests and other technology and information (collectively, the “Company Technology”). All Company Technology
shall be and shall remain the sole property of COMPANY and shall be deemed Company Confidential Information, subject to Sections 5.1 — 5.4. COMPANY hereby grants to DPT a non-exclusive, nontransferable, royalty-free license to use the
Company Technology solely for purposes of performing the Services. 

  

	 	(b)	The API provided to DPT for use in manufacturing the GMP Batches shall, at the time of delivery to DPT, conform to the specifications therefor. 

  

	 	(c)	COMPANY shall bear sole responsibility for the validity of all test methods to be used for Product development and manufacture, and the appropriateness for use of all Product and
Product packaging. 

  

	 	(d)	Except as otherwise provided in Section 4.1(e), COMPANY shall bear sole responsibility for all regulatory approvals, filings, and registrations, including the adequacy of all
validation, stability, and preservative efficacy studies required therefor. 

 4.3    DPT’s Responsibilities 
  

	 	(a)	DPT warrants and agrees that (i) it shall perform all of its obligations hereunder in accordance with all applicable laws, regulations and rules, (ii) it has and shall
maintain all licenses and permits required in order to manufacture Product at the Facility, (iii) it has not been debarred and has not and will not knowingly use in any capacity the services of any person debarred under subsections 306(a) or of
the United States Generic Drug Enforcement of 1992 or any comparable law of any foreign jurisdiction. 

  

	 	(b)	DPT shall not subcontract any Services without COMPANY’S prior written consent. 

  

	 	(c)	DPT agrees that each GMP Batch produced hereunder shall be manufactured at the Facility, in accordance with cGMPs, at the time of delivery to Company, provided that the API intended
for use in the GMP Batches conforms, at the time of delivery to DPT, to the specifications therefor. In the event that any GMP Batch fails to meet the foregoing requirements, DPT, at its sole cost and expense, shall replace the failing batch(es)
with conforming batch(es), 

  
  
  

			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406
of the Securities Act of 1933, as amended.

  

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 provided that Company supplies the API needed for such replacement batches. 
  

	 	(d)	DPT shall maintain all original documents relating to the development, manufacture and control of the Product, the Materials and the API, including inventory records, testing
procedures and specifications, master and lot manufacturing instructions, data from testing and inspections, and original records of experimental work performed to establish capability to manufacture and test the Product. DPT shall store these
original documents in a safe and organized manner so that they may be provided upon request to COMPANY or to the U.S. Food and Drug Administration or other federal or state regulatory agencies within two (2) business days of their request. In
the event that COMPANY elects not to pursue marketing, sale, license, or transfer of the Product, DPT shall surrender all original documents to COMPANY within ten (10) business days of receipt of a written request for such.

 4.4    Safety. DPT shall be responsible for maintaining safety procedures and
required training documentation for DPT’s handling and manufacture of the Product, the Materials and the API. DPT acknowledges that it has been advised that the API is a hazardous or potentially hazardous substance, and DPT shall ensure that
all of its employees and contractors providing Services have been (a) duly advised, in advance, of the hazardous nature of the API and of all handling instructions contained in the MSDS therefor, and (b) trained in the proper handling of
the API and the Product. 
 4.5    Observation of Product Manufacture. During the term of this
Agreement, upon reasonable advance written notice to DPT, and at mutually agreed dates and times, COMPANY may have up to three (3) representatives present at the Facility to observe any and/or all steps relating thereto. 
 4.6    Compliance Audits. Once per year during the term of this Agreement and for one year thereafter, on
dates and at times agreed upon by the parties, COMPANY shall have the right to have up to two (2) representatives present at the Facility, for up to two (2) days, in order to conduct a compliance audit of DPT’s facilities pertaining
to the manufacture, laboratory work, packaging, storage, testing, shipping or receiving of the Product and its components. 
 4.7    Waste Handling. DPT shall be responsible for maintaining procedures for the generation, treatment, storage and disposal of wastes resulting from the Services (including any rejected or
obsolete Product in its possession), all of which shall comply with all federal, state and local environmental and occupational safety and health requirements (including those applicable to hazardous substances, as defined by the U.S. Occupational
Safety and Health Administration and/or the U.S. Environmental Protection Agency). 
 5 — Confidentiality and Non-Use of Information 

5.1    Definitions; Ownership. During the term of this Agreement, (a) DPT 
  
  
  

			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406
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may generate for the benefit of COMPANY, and (b) each party may provide to the other information, including proprietary materials, proprietary
technologies, economic information, business or research strategies, trade secrets and material embodiments thereof. Except as set forth in the following sentence, all such written information shall be marked “confidential,” and all such
oral information shall be confirmed in a writing marked “confidential” within thirty (30) days of the disclosure (collectively, “Confidential Information”). Confidential Information also shall include any
manufacturing operations or processes or technologies of either party or their affiliates that are learned by the other party or its representatives in connection with this Agreement. For purposes of this Agreement, all Confidential Information
provided by COMPANY to DPT hereunder and all Data shall be deemed “Company Confidential Information,” which shall be solely owned by Company. All other information provided by DPT to COMPANY, including Know-how and information
pertaining directly to Process Inventions, hereunder shall be deemed “DPT Confidential Information,” which shall be solely owned by DPT. 
 5.2    Obligations. During the term of this Agreement and for a period of five (5) years thereafter, the party receiving or in possession of Confidential
Information belonging to the other party (the “Recipient”) (a) shall maintain such Confidential Information in confidence, (b) shall use such information solely to exercise its rights and perform its obligations under this
Agreement, unless otherwise mutually agreed in writing, and (c) shall at all times protect such information from misuse or disclosure with at least the same degree of care it uses to protect its own Confidential Information, such care to be of
the type and degree that would be used by a reasonable and prudent business person in the biopharmaceutical industry. 
 5.3    Exclusions. Confidential Information (other than Company Confidential Information generated by DPT) shall not include information that (a) the Recipient can demonstrate, through
contemporaneous documentation, (i) was in its possession prior to receipt from the party that owns the Confidential Information (the “Owner”) or (ii) was furnished to the Recipient by a third party without breach of a duty
of confidentiality, (b) was or became, through no fault of the Recipient, publicly known, or (c) is required by law, regulation or rule to be disclosed, provided that the Recipient notifies the Owner of such requirement as soon as
reasonably practicable and cooperates in any action that the Owner reasonably elects to take in order to protect the confidentiality of such Confidential Information. 
 5.4    Return. Upon termination or expiration of this Agreement, the Recipient shall return or destroy (at the election of the Owner) all Confidential Information of the
Owner in its possession (including but not limited to all copies, abstracts or summaries thereof), other than that information it is required by law or regulation to retain (which the Recipient shall destroy when such requirement no longer applies),
and shall provide the Owner with a written verification of such return or destruction. Thereafter, the Recipient shall make no further use and shall not allow any of its officers, employees or agents to make any use of the Owner’s Confidential
Information for any purpose, other than as expressly allowed under this Agreement. Notwithstanding the preceding sentence, the Recipient’s legal counsel may retain one copy of the other party’s Confidential Information in a 
  
  
  

			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406
of the Securities Act of 1933, as amended.

  

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secure location solely for purposes of identifying such party’s obligations under this Agreement. 
 5.5    Inapplicability of Prior Agreement. For the avoidance of doubt, the confidentiality of all
information generated pursuant to the Agreement or disclosed by one party to the other hereunder shall be governed solely by this Agreement; that certain Confidentiality Agreement between the parties dated August 14, 2006 shall not apply.

 5.6    Confidentiality of Agreement Terms. Either party may disclose the existence and the
general subject matter, but not the financial terms of this Agreement, except that COMPANY may disclose this Agreement and the terms thereof to its potential or actual investors, collaborators and licensees, provided that provided that such parties
are bound by a duty of confidentiality at least as restrictive as those provided in Sections 5.1 — 5.4. 
 6 — Intellectual Property 

 6.1    Know-how. During the term of this Agreement, DPT may use and adapt its proprietary
knowledge, information and know-how and develop new proprietary knowledge, information and know-how (“Know-how”) in an attempt to perform the Services to COMPANY’S satisfaction. Except to the extent required by subpart 6.2 of
this Section, the Know-how shall be solely owned by DPT, which hereby grants to COMPANY a non-exclusive, perpetual, paid-up, royalty-free, irrevocable license (including the right to sub-license) to use the Know-how solely for the manufacture, use
and/or commercialization of the Product. COMPANY acknowledges that the business of DPT, as a contract manufacturing organization, involves the application of its expertise, technology and know-how to numerous pharmaceutical and other products, and
that DPT retains the right, subject to its obligations expressly provided herein, to apply such expertise, technology and know-how to a variety of products or services. 
 6.2    Inventions. The party making any patentable invention, development, improvement, process or the like, that is conceived or first reduced to practice in the course
of performance of the Services (an “Invention”) shall promptly disclose the Invention, in writing, to the other party. Inventions shall be owned as follows: 
  

	 	(a)	COMPANY shall own all right, title, and interest in and to any Inventions that constitute modifications or improvements to the physical structure, composition, activity, or potency
of the API, or that are otherwise solely related to the Product and not to pharmaceutical products in general (“Product Inventions”). DPT hereby irrevocably assigns and transfers to COMPANY DPT’s entire right, title, and
interest in and to Product Inventions. DPT shall cooperate with COMPANY, at COMPANY’S sole expense, as may be necessary for the perfection, enforcement or defense of COMPANY’S rights in any Product Inventions. DPT is hereby granted a
non-exclusive, perpetual, paid-up, royalty-free license, without the right to sub-license, to use Product Inventions solely in the performance of the Services. 

  
  
  

			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406
of the Securities Act of 1933, as amended.

  

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	 	(b)	DPT shall own all right, title and interest in and to any Inventions that constitute new or modified methods or processes that apply generally to the manufacture of pharmaceutical
products and not specifically to the Product (“Process Inventions”). COMPANY hereby irrevocably assigns and transfers to DPT COMPANY’S entire right, title, and interest in and to Process Inventions. COMPANY shall cooperate with
DPT, at DPT’s sole expense, as may be necessary for the perfection, enforcement, or defense of DPT’s rights in any Process Inventions. COMPANY is hereby granted a non-exclusive, perpetual, paid-up, royalty-free license, with the right to
sub-license, to use Process Inventions solely for the formulation, development and/or manufacture of COMPANY’S Product. 

 6.3    Data. All data and information (other than Know-how or Inventions) developed, generated or derived by or on behalf of DPT for COMPANY during the term of this Agreement (collectively,
“Data”) is the property of COMPANY, subject to any regulations requiring that DPT retain the data at the Facility. Reports containing such Data shall be provided by DPT to COMPANY as mutually agreed by the parties. 
 7 — Limitations on Warranties and Damages 
 7.1    Disclaimer of Warranties. EXCEPT AS SPECIFICALLY PROVIDED HEREIN, DPT AND COMPANY MAKE NO WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE PRODUCT, API, LABELING OR PACKAGING. ALL
OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, ARE HEREBY DISCLAIMED. 
 7.2    Limitation on Damages. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES RESULTING FROM BREACH OF THIS
AGREEMENT. 
 8 — Force Majeure 
 Each party shall be excused from the performance of its obligations hereunder to the extent such performance is rendered impossible by an act of God, regulations or laws enacted by any competent government authority, civil commotion,
strike, shortage of raw materials, unavailability of necessary equipment, substantial damage to or destruction of production facilities or material by fire, earthquake or storm, epidemic, failure of public utilities or common carriers, or other
cause that was unavoidable or beyond the control of such party, provided that (a) such event was not due to any legal violation, breach, default, negligence or willful misconduct of the party seeking to be excused, (b) written notice of
the event and its expected duration is promptly given to the other party and (c) the notifying party uses its best efforts to resume performance hereunder as soon as practicable, and provided further, that if such force majeure event prevents
performance beyond three (3) months, the unaffected party may terminate this Agreement upon notice to the affected party. 
  
  
  

			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406
of the Securities Act of 1933, as amended.

  

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 9 — Indemnification and Insurance 
 9.1    Indemnification by DPT. DPT agrees to defend, indemnify and hold harmless COMPANY, its employees,
officers, directors and representatives from and against any third-party claims, losses, damages or expenses, including reasonable attorneys’ fees paid or incurred by any of them (collectively, “Claims”) up to the extent of
insurance coverage as required under Section 9.2 and arising out of: 
  

	 	(a)	DPT’s failure to comply with its obligations under this Agreement, which were within its control; except to the extent that such Claims arise out of the gross negligence or
willful misconduct of COMPANY, 

  

	 	(b)	the infringement of any third-party rights in the course of performing the Services, other than infringement by the use of any formula, component, art work or process provided by
COMPANY to DPT. 

 9.2    Insurance of DPT. DPT warrants that it currently has,
and shall maintain insurance covering its risks hereunder, including the following: 
  

	 	•	Products liability Insurance coverage with minimum amounts of $**** per occurrence and $**** annual aggregate, 

  

	 	•	Contractual liability insurance with minimum amounts of with minimum amounts of $**** per occurrence and $**** annual aggregate, and 

  

	 	•	Worker’s Compensation insurance in compliance with all applicable laws, including employer’s liability insurance with respect to DPT’s employees, with minimum limits
of One Million Dollars ($****) per accident, per disease, and per employee, and 

  

	 	•	Business personal property insurance covering all Materials, Product, intermediates and Equipment at the Facility that have been paid for and/or are owned by COMPANY, with
coverage of at least full replacement value. 

 9.3    Indemnification by
COMPANY. COMPANY agrees to defend, indemnify and hold harmless DPT, its employees, officers, directors and representatives for any Claims arising out of (a) any ownership, testing, use (including in clinical trials), application,
consumption, distribution, marketing or sale of Product, following its delivery by DPT to COMPANY, except to the extent that such Claims arise out of the gross negligence or willful misconduct of DPT, and (b) any infringement of third-party
rights or violation of patent, copyright or trademark laws by any COMPANY-designated formulas, components or artwork related to the Product, and (c) COMPANY’S failure to comply with its obligations under this Agreement. 
  
  
  

			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406
of the Securities Act of 1933, as amended.

  

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 9.4    Insurance of COMPANY. COMPANY warrants that it
currently has, and shall maintain insurance covering its risks hereunder, including (a) products liability insurance, (b) contractual liability insurance and (c) clinical trials insurance (including coverage for any negligence on the
part of COMPANY in the conduct of any clinical trials, as well as for any defects or negligence in the design of the clinical trial process) coverage. Insurance coverage for each of the foregoing subsections shall be in the minimum amounts of Ten
Million Australian Dollars (AUD $10,000,000) per occurrence with an annual aggregate amount of Ten Million Australian Dollars (AUD $10,000,000). COMPANY’S product liability coverage shall be primary and non-contributing. 
 10 — Term and Termination 
 10.1    Term of Agreement. The term of this Agreement shall be four (4) years from the Effective Date, unless earlier terminated pursuant to Section 10.2. 
 10.2    Termination. This Agreement may be terminated early, as follows: 
  

	 	(a)	By either party, as provided in Section 2.6. 

  

	 	(b)	By either party if the other party defaults or breaches any material provision of this Agreement, upon thirty (30) days’ written notice to the defaulting party (which
notice shall cite this § 10.2(c) and shall explain, in reasonable detail, the nature of the breach), unless the breach is cured within such 30-day period. 

  

	 	(c)	By either party, upon any of the following events: (i) the other party makes an assignment for the benefit of its creditors or files a voluntary petition under applicable
bankruptcy or insolvency laws, (ii) a receiver or custodian is appointed for all or substantially all of the other party’s business, (iii) proceedings are instituted against the other party applicable bankruptcy or insolvency laws
that have not been stayed or dismissed within sixty (60) days, (iv) all or substantially all of the other party’s business or assets become subject to attachment, garnishment or other process or (v) a court or other governmental
authority of competent jurisdiction determines that the other party is insolvent. 

  

	 	(d)	By COMPANY at any time, with or without cause, on sixty (60) days’ written notice to DPT, provided that COMPANY pays for all Services rendered through the date of the
notice of termination, all other work reasonably necessary to terminate the Services, and all Materials. 

  

	 	(e)	By either party, as provided in Article 8. 

 10.3    Obligations upon Termination or Expiration. Upon termination or expiration of this Agreement, (a) each party shall comply with the provisions of Section 5.4, and (b) DPT
shall (i) deliver to COMPANY all finished Product in DPTs possession that COMPANY has paid for, (ii) return to COMPANY or COMPANY’S designee, as requested by COMPANY in writing, all Materials and 
  
  
  

			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406
of the Securities Act of 1933, as amended.

  

 13 

 Product intermediates in its possession and (iii) arrange for the delivery to COMPANY or its
designee of any Equipment in its possession. Costs of freight and insurance for those activities described in subsections (b)(ii) and (b)(iii) shall be borne by COMPANY. 
 10.4    Survival. Expiration or termination of this Agreement for any reason shall not release either party from any liability, obligation or agreement that has
already accrued. The provisions of Articles 5, 6, 9 and 11 and Sections 3.3, 4.1(e), 4.3(d), 4.4, 4.6, 4.7, 7.2, 10.3, 10.4, 12.4 and 12.5 shall survive any expiration or termination of this Agreement. 
 11 — Technology Transfer. 
 Upon request by
COMPANY, DPT shall provide COMPANY or its designee with reasonable assistance in transferring any and all of COMPANY’S rights in Know-how, Inventions, Data and any other technology, processes, methodologies and information (except for any that
is proprietary to DPT and to which COMPANY has no rights hereunder) that would be necessary or useful in the scale-up, processing, manufacture, filling, packaging or shipment of Product, to such third parties as COMPANY may designate, subject to
COMPANY’S payment of DPT’s customary charges for such assistance. 
 12 — Miscellaneous 
 12.1    Assignment. This Agreement shall be binding upon and shall inure to the benefit of the
successors or permitted assigns of each of the parties and may not be assigned or transferred by either party without the prior written consent of the other, except that (a) such consent will not be required for any assignment to a third party
that acquires (i) substantially all of the assignor’s business or assets, or (ii) acquires the assignor pursuant to a merger or consolidation, and (b) DPT’s consent will not be required for an assignment by COMPANY to any
third party acquiring rights in the Product. No assignment, including sale, transfer, or license of brand or Products, shall release an original party hereto from its obligations under this Agreement. 
 12.2    Notices. Any notice required hereunder shall be effective upon receipt and may be served by either
party on the other by personal delivery, or by sending same, post prepaid, by registered or by certified mail to the address first set forth above. 
 12.3    Independent Contractors. The relationship between the parties under this Agreement shall be strictly that of independent contractors. Neither party is hereby constituted an agent or
legal representative of the other party for any purpose whatsoever, and neither party is granted any right or authority hereunder to assume or create any obligation, express or implied, or to make any representation, warranties or guarantees, except
as are expressly granted or made in this Agreement. 
  
  
  

			
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of the Securities Act of 1933, as amended.

  

 14 

 12.4    Governing Law. The validity, interpretation and
effect of this Agreement shall be governed by and construed under the laws of the State of New Jersey. 
 12.5    Dispute Resolution. Any dispute arising under this Agreement shall be resolved in the following manner: 
  

	 	(a)	Either party may initiate resolution of the dispute by providing to the other party a brief and concise statement of the initiating party’s claims, together with relevant facts
supporting them, and referring to this Section 12.5(a). For a period of thirty (30) days from the date of such statement, or such longer period as the parties may agree upon in writing, the parties shall make good faith efforts to settle
the dispute. Such efforts shall include full presentation of the parties’ respective positions to executive officers of their respective companies. 

  

	 	(b)	Except as otherwise provided in Section 12.5(c), in the event the parties are unable to resolve the dispute pursuant to Section 12.5(a), the dispute shall be finally
settled without recourse to the courts, in accordance with the Commercial Arbitration Rules of the American Arbitration Association then in effect, by a single arbitrator designated in accordance with those rules. The arbitration shall be held in
San Francisco, California, if initiated by DPT, and in San Antonio, Texas, if initiated by COMPANY. All decisions of the arbitrator shall be final and binding on the parties, and may be enforced in any court of competent jurisdiction. The arbitrator
may allocate the fees and expenses of the arbitration between the parties in any manner that the arbitrator deems equitable. 

  

	 	(c)	Notwithstanding anything stated in above in this Section 12.5, each party shall have the right, before or during the arbitration, to seek equitable relief from any court of
competent jurisdiction. 

 12.6    Waiver. No waiver of any term or condition of
this Agreement shall be valid or binding on either party unless made in writing by the party to be charged. The failure of either party at any time to enforce, or to require performance by the other party of any provisions of this Agreement shall in
no way be construed as a present or future waiver of such provisions, nor shall it in any way affect the validity of either party to enforce each and every such provision thereafter. 
 12.7    Severability. If any provision of this Agreement is held to be void or unenforceable, such
provision shall be replaced by a valid and enforceable provision that will achieve, as far as possible, the economic and business intentions of the parties. Those provisions not held to be void or unenforceable shall remain in full force and effect,
to the extent consistent with the parties’ economic and business intentions. 
 12.8    Counterparts. This Agreement may be executed in two or more counterparts (including by means of telecopied signature pages), each of which 
  
  
  

			
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of the Securities Act of 1933, as amended.

  

 15 

 
shall be deemed an original and all of which together shall constitute one instrument. 
 12.9    Entire Agreement. This Agreement sets forth the entire agreement and understanding of the
parties and supersedes all prior written or oral agreements or understandings with respect to the subject matter hereof, and shall supersede any conflicting portions of DPT’s quotation and acknowledgment forms and COMPANY’s Purchase Order
and other written forms. No modification of any of the terms of this Agreement, or any amendments thereto, shall be deemed to be valid unless in a writing signed by both parties. 
 IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be executed by their duly authorized officers as of the date first above
written. 
  

									
		 	PEPLIN, INC.	 		 		 	DPT LABORATORIES, LTD.
					
	By:	 	 /s/ Philip K. Moody
	 		 	By:	 	 /s/ Paul Josephs

	Title:	 	 CFO, VP Finance & Operations
	 		 	Title:	 	 VP, Sales & Commercial Operations

  

					
		 	  
 Reviewed by Legal:      /s/     
	  	
		 	 Date:
    10/24/07                    
  
	  	

  
  
  

			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406
of the Securities Act of 1933, as amended.

  

 16 

 EXHIBIT A 
  
 Project Scope Document 
  
  
 between 
 DPT Laboratories, Ltd. 
 and 
 Peplin Operations USA, Inc. 
 for 

 PEP005 Topical Gel, 0.05% 
  
  
  

			
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the Securities Act of 1933, as amended.

  

 Page 1 of 7 

 General Introduction 
 This Project Scope Document (PSD) is between Peplin Operations USA, Inc. (Client) and DPT Laboratories, Ltd., 307 E. Josephine St., San Antonio Texas 78215 (DPT) and provides a cost proposal based on the
assumptions contained herein for the services to be performed by DPT for PEP005 Topical Gel, 0.05%. The effective date of the PSD shall be the latest approval signature date in the “APPROVALS” section. Information provided to DPT
subsequent to the effective date may change the scope or nature of this project and result in mutually agreed changes to the proposal provided herein. 
 By
signing this PSD, Client authorizes DPT to begin ordering project materials and performing one or more of the activities detailed herein. The levels of effort and costs reflected in the PSD are estimates only and are, therefore, subject to change
upon the receipt and review of additional information. Supplemental documentation to drive the various requirements of the services to be provided will be prepared by DPT and signed by DPT and Client as required. This supplemental documentation will
contain requisite detail to implement the technical aspects of each particular stage of the project. 
 This document will be an attachment to the R&D
Agreement. 
 This PSD shall only be effective if the Client signs the PSD within sixty (60) days of the date signed by DPT. 
 Project Introduction 
 This PSD describes in broad
terms with assumptions the tasks involved in the site transfer, process development, and validation of PEP005 Topical Gel, 0.05%. This IND Phase 3 product is for used for the treatment of non-melanoma skin cancer and actinic keratosis and will be
packaged into two configurations. The following manufacturing activities are described: 
  

	 	•	 	 One (1) 8-kg feasibility/placebo batch followed by 

  

	 	•	 	 One (1) 8-kg process development, clinical supply, registration, and stability study batch followed by 

  

	 	•	 	 One (1) 8-kg scale-up, process development, and clinical supply placebo batch followed by 

  

	 	•	 	 Two (2) 8-kg process development, registration, and stability study batches followed by 

  

	 	•	 	 Three (3) 8-kg process validation batches 

 Note: Projection of batch sizes is based on preliminary review of processing requirements. Batch size adjustments may be required based on scaleable path identified. The third 8-kg registration batch can be made at 50-kg if material
is available for batch manufacture. Estimates provided in this PSD are based upon the 8-kg batch size. 
  
  
  

			
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the Securities Act of 1933, as amended.

  

 Page 2 of 7 

 Assumptions 
 The following assumptions, separated into project phases, have been made for this PSD: 
 Research & Development Phase:

  

	 	1.	The client will provide the active ingredient. 

	 	2.	DPT will fully test the active ingredient and introduce it into the DPT system. 

	 	3.	All raw materials will be tested to USP compendial specifications where they exist. 

	 	4.	The client will provide DPT with a fully developed formula for the product. 

	 	5.	DPT will perform forced degradation and solubility studies on the client’s formula. 

	 	6.	DPT will provide package engineering support to arrive at two (2) suitable container configurations for the product. 

	 	7.	Costs related to the purchase of specialized equipment and/or tooling are not included in the cost proposal for this PSD. 

	 	8.	The client will supply the Material Safety Data Sheet (MSDS) for the product. 

	 	9.	DPT will transfer a single stability-indicating product assay method for the active, related substances, and the preservative, benzyl alcohol. 

	 	10.	DPT will validate the cleaning methods to be used. 

	 	11.	DPT will validate Microbial Limits Assay and Antimicrobial Effectiveness Testing for the product to meet USP requirements. 

	 	12.	Except for the feasibility batch which will be completely destroyed after compounding and testing, all remaining batches will be packaged to satisfy all testing requirements and to
provide the client with 1,500 X 0.25gm container for clinical supplies for just one (1) of the container types. 

	 	13.	Testing of bulk product includes description, identification, pH, viscosity, and a single HPLC assay for active and the preservative, benzyl alcohol. 

	 	14.	Testing of finished-product includes description, identification, pH, viscosity, package integrity, and a single HPLC assay for active, related substances, and the preservative,
benzyl alcohol. 

	 	15.	Testing of and stability samples for each of the two (2) 0.25gm container types includes description, identification, pH, viscosity, package integrity, weight loss, and a
single HPLC assay for active, related substances, and the preservative, benzyl alcohol. 

	 	16.	Microbial Limits Testing will be performed upon release and on stability as per the following schedule: 

         ;                    Ix8-kg Scale-up Placebo + 3x8-kg Registration Batches

         ;                    2-8°C – 1/2/3/6/9/12/18/24/30 months 
         ;                    25°C @ 60% RH – 1/2/3/6 months 
  

	 	17.	Antimicrobial Effectiveness Testing will be performed upon release and annually through to the end of the product’s shelf-life: 

         ;                    Ix8-kg Scale-up Placebo + 3x8-kg Registration Batches

         ;                    2-8°C – 12/24/30 months 
         ;                    25°C @ 60% RH – 6 months only 
  
  
  

			
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the Securities Act of 1933, as amended.

  

 Page 3 of 7 

 Assumptions (continued) 
  

	 	18.	Chemistry stability testing will be performed as follows: 

         ;                    1x8-kg Scale-up Placebo Batch 
         ;                    25°C @ 60% RH – 3/6 months 
         ;                    Freeze/Thaw 
         ;                    3x8-kg Registration Batches 
         ;                    2-8°C – 1/2/3/6/9/12/18/24/30 months 
         ;                    25°C @ 60% RH – 1/2/3/6 months 
         ;                    Freeze/Thaw 
         ;                    Photo Stability 
  

	 	19.	Samples stored in the environmental chambers will be stored in the upright, inverted, and horizontal orientations 

 Validations Phase: 
  

	 	20.	DPT will provide Regulatory review of the CMC section of the client’s drug product dossier prior to submission to the FDA. 

	 	21.	Packaging validation will take place on a minimum of three lot codes. 

	 	22.	Process validation will take place on the first three commercial production batches. 

	 	23.	For the three process validation batches, the costs associated with the commercial purchase of the units produced from these batches is not included the in the Cost Proposal
section. 

	 	24.	A 30-day bulk hold study will be conducted on product obtained from the first validation batch. 

	 	25.	Microbial Limits Testing will be performed on the process validation batches upon release only. 

	 	26.	Antimicrobial effectiveness testing will be performed on the process validation batches upon release and at the end of shelf-life. 

	 	27.	Chemistry stability testing will be performed on the process validation batches as follows: 

         ;                    2-8°C – 1/2/3/6/9/12/18/24/30 months 
         ;                    25°C @ 60% RH – 1/2/3/6 months 
  

	 	28.	DPT will provide the following reports: 

  

	 	•	 	 Pharmaceutical Development Report (CTD-ready Q8 format (Word or pdf) sections C-F (2.3 – 2.6) 

  

	 	•	 	 Stability reports 

  

	 	•	 	 Validation reports 

  
  
  

			
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the Securities Act of 1933, as amended.

  

 Page 4 of 7 

 Cost Proposal 
 The summary below provides a cost proposal of the overall project scope based on assumptions in this PSD. During the project, this cost proposal may increase or decrease due to changes in the assumptions or if the scope of the project
changes. Any changes in cost will be detailed in subsequent protocols and agreed to by both parties. 
  

									
	 Allocation
	 	 	Subtotals	 	 	  	 	Cost
	 Research & Development 
	 	 	 	 	 	  	 	 
	 Formulations
	 	$	 ****	 	 	  	 	 
	 Product Technical
Services
	 	$	 ****	 	 	  	 	 
	 MPM Planning and
Organization
	 	$	 ****	 	 	  	 	 
	 Analytical Sciences

	 	$	 ****	 	 	  	 	 
	 Total
Research & Development 
	 	 	 	 	 	  	$	****
	 Total Packaging
Technical Support 
	 	 	 	 	 	  	$	****
	 Manufacturing

	 	 	 	 	 	  	 	 
	 Weighing
	 	$	 ****	 	 	  	 	 
	 Compounding
	 	$	 ****	 	 	  	 	 
	 Packaging
	 	$	 ****	 	 	  	 	 
	 Product
Disposal
	 	$	 ****	 	 	  	 	 
	 Filters &
Hoses
	 	$	 ****	 	 	  	 	 
	 Total
Manufacturing 
	 	 	 	 	 	  	$	****
	 QE Plant
Technical Services 
	 	 	 	 	 	  	 	 
	 Cleaning Validation

	 	$	 ****	 	 	  	 	 
	 Cleaning Detection
Limits
	 	$	 ****	 	 	  	 	 
	 Total QE Plant
Technical Services 
	 	 	 	 	 	  	$	****
	 Chemistry 

	 	 	 	 	 	  	 	 
	 QE Analytical Method
Validation
	 	$	 ****	 	 	  	 	 
	 QE AMV New Component
Testing
	 	$	 ****	 	 	  	 	 
	 QC Component Testing

	 	$	 ****	 	 	  	 	 
	 Product Testing
(Preliminary, Bulk-hold, & Finished Product)
	 	$	 ****	 	 	  	 	 
	 Stability Testing

	 	$	 ****	 	 	  	 	 
	 Laboratory Supplies

	 	$	 ****	 	 	  	 	 
	 Stability Storage
Fees
	 	$	 ****	 	 	  	 	 
	 Total Chemistry

	 	 	 	 	 	  	$	****
	 Microbiology

	 	 	 	 	 	  	 	 
	 Microbial Limits
Assay and Testing
	 	$	 ****	 	 	  	 	 
	 Antimicrobial
Effectiveness Assay and Testing
	 	$	 ****	 	 	  	 	 
	 Total
Microbiology 
	 	 	 	 	 	  	$	****
	 Total Line
Inspections 
	 	 	 	 	 	  	$	****
	 Total Quality
Assurance 
	 	 	 	 	 	  	$	****
	 Regulatory
(CMC) 
	 	 	 	 	 	  	$	**** 
	 Regulatory
— Post-submission 
	 	 	 	 	 	  	$	**** 
	 Subtotal (Process
Development) 
	 	 	 	 	 	  	$	****
	 Validations

	 	 	 	 	 	  	 	 
	 Packaging Validation

	 	$	 ****	 	 	  	 	 
	 Process Validation

	 	$	 ****	 	 	  	 	 
	 Stability in
Conjunction with Process Validation
	 	$	 ****	 	 	  	 	 
	 Total
Validations 
	 	 	 	 	 	  	$	****
	 Total

	 	 	 	 	 	  	$	****

  
  
  

			
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the Securities Act of 1933, as amended.

  

 Page 5 of 7 

 Payment Schedule 
 Upon Client signature of this PSD, the client shall provide: 
  

	 	Ø	Project Deposit of $**** (1/3 of professional fees in the Proposed Project Total) 

  

	 	Ø	Materials Deposit of $**** to acquire materials in conjunction with this project. 

 The Client will pay the Project Deposit and the Materials Deposit upon receipt of the invoice. 
 The Project
Deposit will offset invoices sent by DPT for sequential, future milestones from agreed-upon protocols associated with this project. Once the Project Deposit is consumed, DPT shall continue to invoice the Client as protocol milestones are met, and
the Client shall pay these invoices within 30 days. 
 The Materials Deposit will offset the ordering and use of materials in conjunction with
this project. Any remaining Materials Deposit shall be credited back to the Client upon conclusion of the project. In the event the Materials Deposit is insufficient, DPT may seek additional Materials Deposit in future, agreed-upon protocol(s). 

 NOTE: In the event that this project is cancelled or a request is made that DPT cease working on this project (placed on hold) by the Client, the
Client shall be responsible for the standard value of the work performed and materials sourced by DPT through the date of DPT receiving formal notification of cancellation or work stoppage. The Client will also be financially responsible for all
materials ordered in anticipation of the completion of this project including all fees associated with the disposition of materials in the event of a cancellation or request for work stoppage. 
  
  
  

			
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the Securities Act of 1933, as amended.

  

 Page 6 of 7 

 Approvals 
 IN WITNESS WHEREOF, the parties hereto approve the Project Scope Document and have each caused this Project Scope Document to be signed by their duly authorized persons. 
  

									
	 Peplin Operations USA, Inc.
	  		 		 	 DPT Laboratories, Ltd
	 	
			
	 By:
	 		 	 /s/ Lisa
Waltman                                        
1/15/07

	(Sign above; print name and title below)	  	Date	 		 	Lisa
Waltman                                        
   &nb sp;  Date
		 		 	Research & Development	 	
					
	  
	  		 		 		 	
	(Printed name and title)	  		 		 		 	
					
	  
	  		 		 		 	
	(Department)	  		 		 		 	
			
	 By:
	 		 	 /s/ George
Escalona                                    
1/18/07

	(Sign above; print name and title below)	  	Date	 		 	George
Escalona                                        
    &nbs p;  Date
		 		 	Business Development Manager	 	
	  
	  		 		 	Marketing & Project Management	 	
	(Printed name and title)	  		 		 		 	
					
	  
	  		 		 		 	
	(Department)	  		 		 		 	

 Subsequent to execution of this PSD, DPT will forward to Client a Research & Development Services
Agreement and/or a Letter of Responsibility (LOR) for review and execution prior to any compounding and/or packaging of any product under cGMP guidelines. 
  

 
  

			
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the Securities Act of 1933, as amended.

  

 Page 7 of 7 

 EXHIBIT B 
 

 
  
  
  

			
	 ****
	 	Certain confidential information contained in this document, marked with four asterisks, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of
the Securities Act of 1933, as amended.Plan of Merger and Reorganization

 Exhibit 10.28 
 AGREEMENT AND PLAN OF REORGANIZATION 
 DATED AS OF JUNE 9, 2008 
 AMONG 
 PEPLIN, INC., 
 a Delaware corporation, 
 WEST ACQUISITIONS
CORP., 
 a Delaware corporation, 
 NEOSIL, INC., 
 a Delaware corporation, 
 AND 
 NICOLAS J. SIMON, III, 
 as Company Stockholder Representative 

 TABLE OF CONTENTS 
  

							
	 ARTICLE I. DEFINITIONS
	  	2
		 	 1.1
	  	Defined Terms	  	2
	 ARTICLE II. THE MERGER
	  	11
		 	 2.1
	  	The Merger	  	11
		 	 2.2
	  	Closing	  	11
		 	 2.3
	  	Effective Time	  	11
		 	 2.4
	  	Effects of the Merger	  	11
		 	 2.5
	  	Articles of Incorporation	  	11
		 	 2.6
	  	Bylaws	  	11
		 	 2.7
	  	Officers and Directors of the Surviving Entity	  	11
	 ARTICLE III. EFFECT OF THE TRANSACTION ON THE CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS; EXCHANGE OF
CERTIFICATES
	  	12
		 	 3.1
	  	Effect on Capital Stock in the Merger	  	12
		 	 3.2
	  	Dissenting Shares	  	13
		 	 3.3
	  	Escrow Funds	  	13
		 	 3.4
	  	Miscellaneous Provisions Relating to the Escrow	  	15
		 	 3.5
	  	Company Stockholder Representative	  	15
		 	 3.6
	  	Exchange of Certificates	  	17
		 	 3.7
	  	Calculation of Company Net Cash	  	19
	 ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
	  	21
		 	 4.1
	  	Organization, Standing and Power; Organizational Documents	  	21
		 	 4.2
	  	Capital Structure	  	21
		 	 4.3
	  	Subsidiaries	  	23
		 	 4.4
	  	Authority; No Conflicts	  	23
		 	 4.5
	  	Financial Statements	  	24
		 	 4.6
	  	No Undisclosed Liabilities; Net Value	  	24
		 	 4.7
	  	Payables	  	25
		 	 4.8
	  	Compliance with Applicable Laws; Regulatory Matters	  	25
		 	 4.9
	  	Litigation	  	26
		 	 4.10
	  	Taxes	  	27
		 	 4.11
	  	Absence of Certain Changes or Events	  	29
		 	 4.12
	  	Material Agreements	  	29
		 	 4.13
	  	Employee Benefit Plans; ERISA	  	31
		 	 4.14
	  	Brokers or Finders	  	33
		 	 4.15
	  	Real Property; Personal Property	  	33
		 	 4.16
	  	Affiliated Transactions and Certain Other Agreements.	  	34
		 	 4.17
	  	Environmental Matters	  	34
		 	 4.18
	  	Intellectual Property	  	34
		 	 4.19
	  	Employees and Labor Matters	  	36
		 	 4.20
	  	Insurance	  	37
		 	 4.21
	  	Accounts Receivable	  	37
		 	 4.22
	  	Absence of Certain Business Practices	  	37
		 	 4.23
	  	Books and Records	  	37
		 	 4.24
	  	Foreign Corrupt Practices Act	  	38

  

 i 

							
		 	 4.25
	  	Bank Accounts; Powers of Attorney	  	38
		 	 4.26
	  	Delaware Takeover Statute	  	38
		 	 4.27
	  	Disclosure	  	38
	 ARTICLE V. REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
	  	38
		 	 5.1
	  	Organization, Standing and Power	  	39
		 	 5.2
	  	Capitalization	  	39
		 	 5.3
	  	Issuance of Parent Common Stock	  	39
		 	 5.4
	  	Subsidiaries	  	39
		 	 5.5
	  	Australian Subsidiaries	  	39
		 	 5.6
	  	Authority; No Conflicts	  	40
		 	 5.7
	  	Information Statement; Financial Statements	  	41
		 	 5.8
	  	Litigation	  	41
		 	 5.9
	  	Absence of Certain Changes or Events	  	41
		 	 5.10
	  	Ownership of Merger Sub; No Prior Activities	  	42
		 	 5.11
	  	Brokers or Finders	  	42
		 	 5.12
	  	Affiliated Transactions and Certain Other Agreements	  	42
	 ARTICLE VI. COVENANTS RELATING TO CONDUCT OF BUSINESS
	  	42
		 	 6.1
	  	Covenants of the Company	  	42
		 	 6.2
	  	No Solicitation	  	45
		 	 6.3
	  	Advice of Changes	  	45
		 	 6.4
	  	Tax Matters	  	46
		 	 6.5
	  	Reorganization Matters	  	48
		 	 6.6
	  	Terminations	  	48
		 	 6.7
	  	Stockholder Consents	  	48
		 	 6.8
	  	Termination of 401(k) Plan	  	49
	 ARTICLE VII. ADDITIONAL AGREEMENTS
	  	49
		 	 7.1
	  	Private Placement and Registration Rights	  	49
		 	 7.2
	  	Company Stockholder Approval	  	51
		 	 7.3
	  	Parent Stockholder Approval	  	51
		 	 7.4
	  	Access to Information	  	52
		 	 7.5
	  	Assistance with Financial Statements; Accountant Letter	  	52
		 	 7.6
	  	Approvals and Consents; Cooperation	  	52
		 	 7.7
	  	Fees and Expenses	  	53
		 	 7.8
	  	Public Announcements	  	54
		 	 7.9
	  	ASX Filings	  	54
		 	 7.10
	  	Indemnification	  	54
		 	 7.11
	  	Tax Audit	  	55
		 	 7.12
	  	Further Assurances	  	56
		 	 7.13
	  	Company Affiliates	  	56
	 ARTICLE VIII. CONDITIONS PRECEDENT
	  	56
		 	 8.1
	  	Conditions to Each Party’s Obligation to Effect the Merger	  	56
		 	 8.2
	  	Additional Conditions to Obligations of Parent and Merger Subs	  	57
		 	 8.3
	  	Additional Conditions to Obligations of the Company	  	59
	 ARTICLE IX. RECOURSE TO ESCROW AND INDEMNIFICATION
	  	60
		 	 9.1
	  	Survival of Representations and Warranties	  	60

  

 ii 

							
		 	 9.2
	  	Indemnification	  	60
		 	 9.3
	  	Procedure for Claims between Parties	  	61
		 	 9.4
	  	Defense of Procedure for Third-Party Claims	  	62
		 	 9.5
	  	Effect of Investigation or Knowledge	  	63
		 	 9.6
	  	Resolution of Conflicts and Claims	  	63
		 	 9.7
	  	Limitations on Indemnification; Payment of Damages	  	64
	 ARTICLE X. TERMINATION AND AMENDMENT
	  	65
		 	 10.1
	  	Termination	  	65
		 	 10.2
	  	Effect of Termination	  	66
	 ARTICLE XI. GENERAL PROVISIONS
	  	66
		 	 11.1
	  	Amendment	  	66
		 	 11.2
	  	Extension; Waiver	  	66
		 	 11.3
	  	Notices	  	67
		 	 11.4
	  	Interpretation	  	68
		 	 11.5
	  	Counterparts	  	68
		 	 11.6
	  	Entire Agreement; No Third Party Beneficiaries	  	68
		 	 11.7
	  	Governing Law	  	69
		 	 11.8
	  	Severability	  	69
		 	 11.9
	  	Assignment	  	69
		 	 11.10
	  	Mediation	  	69
		 	 11.11
	  	Waiver of Trial by Jury	  	70
		 	 11.12
	  	Enforcement	  	70

 EXHIBITS 
 Exhibit A
– Consulting and Non-Competition Agreement 
 Exhibit B – Voting Agreement 
 Exhibit C – Stockholder Certificate 
 Exhibit D – Affiliate Agreement 
 Exhibit E– Registration Exemption Certificate 
 SCHEDULES 
 Schedule 1.1(o) – Committed Expenses 
 Schedule 6.1(e) – Payables
and Receivables 
 Schedule 6.1(f) – Severance 
 Schedule
6.1(o) – Company Budget 
 Schedule 7.13 – Company Affiliates 
 Schedule 8.2(d) – Persons to sign Consulting and Non-Competition Agreements 
 Schedule 8.2(h) – Officers and Directors of the Company to
Resign 
 Schedule 8.2(l) – Employee Releases 
 Schedule
8.2(p) – Debt to be Repaid 
 Schedule 8.2(r) – Agreements to be Terminated 
  

 iii 

 GLOSSARY OF DEFINED TERMS 
  

			
	 Definition
	 	 Location of
Defined Term

		
	 AAA
	 	Section 1.1(a)
	 Accounting Firm
	 	Section 3.7(e)
	 Acquisition Proposal
	 	Section 1.1(b)
	 Action
	 	Section 4.9
	 Affiliate
	 	Section 1.1(c)
	 Affiliate Agreement
	 	Section 7.12
	 Aggregate Share Number
	 	Section 1.1(d)
	 Agreement
	 	Preamble
	 Anticipated Closing Date
	 	Section 3.7(a)
	 ASIC
	 	Section 1.1(e)
	 ASTC
	 	Section 1.1(f)
	 ASX
	 	Section 1.1(g)
	 Audited Financial Statements
	 	Section 4.5(a)
	 Australian Corporations Act
	 	Section 1.1(h)
	 Australian Subsidiary
	 	Section 1.1(i)
	 Balance Sheets
	 	Section 4.5(a)
	 Blue Sky Laws
	 	Section 1.1(j)
	 Board of Directors
	 	Section 1.1(k)
	 Business Day
	 	Section 1.1(l)
	 Cal-COBRA
	 	Section 4.13(g)
	 CDI
	 	Section 1.1(m)
	 Certificates
	 	Section 3.6(b)
	 Certificate of Merger
	 	Section 2.3
	 Closing
	 	Section 2.2
	 Closing Date
	 	Section 2.2
	 Closing Price
	 	Section 1.1(n)
	 COBRA
	 	Section 4.13(g)
	 Code
	 	Section 1.1(o)
	 Committed Expenses
	 	Section 1.1(p)
	 Company
	 	Preamble
	 Company 401(k) Plan
	 	Section 6.8
	 Company Affiliates
	 	Section 7.12
	 Company Board Recommendation
	 	Section 4.4(a)
	 Company Capital Stock
	 	Section 1.1(q)
	 Company Common Stock
	 	Section 1.1(r)
	 Company Disclosure Letter
	 	Article IV
	 Company Expenses
	 	Section 1.1(s)
	 Company Material Adverse Effect
	 	Section 1.1(t)
	 Company Net Cash
	 	Section 1.1(u)
	 Company Net Cash Calculation
	 	Section 3.7(a)
	 Company Net Cash Schedule
	 	Section 3.7(a)

  

 iv 

			
	 Company Options
	 	Section 1.1(v)
	 Company Series A Preferred Stock
	 	Section 1.1(w)
	 Company Stockholder
	 	Section 1.1(x)
	 Company Stockholder Action
	 	Section 7.2
	 Company Stockholder Representative
	 	Preamble
	 Confidentiality Agreement
	 	Section 7.4
	 Consulting and Non-Competition Agreement
	 	Recitals
	 D&O Indemnified Parties
	 	Section 7.10(a)
	 Damages
	 	Section 9.2(a)
	 Defense Notice
	 	Section 9.4(a)
	 Delaware Secretary of State
	 	Section 2.3
	 Dissenting Shares
	 	Section 3.2
	 DGCL
	 	Section 1.1(y)
	 Dispute Notice
	 	Section 3.7(b)
	 Effective Time
	 	Section 2.3
	 Encumbrance
	 	Section 1.1(z)
	 Environmental Laws
	 	Section 1.1(aa)
	 Environmental Permits
	 	Section 1.1(bb)
	 Employee Release
	 	Section 6.6
	 Equity Interests
	 	Section 1.1(cc)
	 ERISA
	 	Section 4.13(a)
	 ERISA Affiliate
	 	Section 4.13(a)
	 Escrow Agent
	 	Section 3.3(a)
	 Escrow Agreement
	 	Section 3.3(a)
	 Escrow Fund
	 	Section 3.3(a)(ii)
	 Escrow Shares
	 	Section 3.3(a)(ii)
	 Exchange
	 	Section 1.1(dd)
	 Exchange Act
	 	Section 1.1(ee)
	 Exchange Agent
	 	Section 3.6(a)
	 Exchange Fund
	 	Section 3.6(a)
	 Exchange Ratio
	 	Section 1.1(ff)
	 Expiration Date
	 	Section 10.1(b)
	 FDA
	 	Section 1.1(gg)
	 FDA Act
	 	Section 1.1(hh)
	 Final Audit Report
	 	Section 7.11(a)
	 Financial Statements
	 	Section 4.5(a)
	 GAAP
	 	Section 1.1(ii)
	 General Escrow End Date
	 	Section 3.3(b)
	 General Escrow Fund
	 	Section 3.3(a)
	 General Escrow Shares
	 	Section 3.3(a)
	 Good Clinical Practice
	 	Section 1.1(jj)
	 Good Laboratory Practice
	 	Section 1.1(kk)
	 Good Manufacturing Practice
	 	Section 1.1(ll)
	 Governmental Entity
	 	Section 1.1(mm)
	 Hazardous Materials
	 	Section 1.1(nn)
	 Healthcare Laws
	 	Section 1.1(oo)

  

 v 

			
	 indebtedness
	 	Section 1.1(pp)
	 Indemnifying Party
	 	Section 9.2(a)
	 Independent Expert
	 	Section 1.1(qq)
	 Information Statement
	 	Section 1.1(rr)
	 Intellectual Property
	 	Section 1.1(ss)
	 Intellectual Property Rights
	 	Section 1.1(tt)
	 Interim Balance Sheet
	 	Section 4.5(a)
	 Interim Financial Statements
	 	Section 4.5(a)
	 IRS
	 	Section 1.1(uu)
	 Law
	 	Section 1.1(vv)
	 Liabilities
	 	Section 1.1(ww)
	 Liability Basket
	 	Section 9.7(a)
	 Liability Cap
	 	Section 9.7(a)
	 Lien
	 	Section 1.1(xx)
	 Material Agreement
	 	Section 4.12(a)
	 Merger
	 	Recitals
	 Merger Sub
	 	Preamble
	 Minimum Cash Value
	 	Section 1.1(yy)
	 Notice
	 	Section 9.3
	 Notice of Meeting
	 	Section 1.1(zz)
	 Objection Notice
	 	Section 9.6(a)
	 Order
	 	Section 1.1(aaa)
	 Organizational Documents
	 	Section 1.1(bbb)
	 Parent
	 	Preamble
	 Parent Common Stock
	 	Recitals
	 Parent Common Stock Per Share Value
	 	Section 1.1(ccc)
	 Parent Disclosure Letter
	 	Article V
	 Parent Indemnified Party
	 	Section 9.2(a)
	 Parent Indemnity Claim
	 	Section 9.3
	 Parent Material Adverse Effect
	 	Section 1.1(ddd)
	 Parent Registration Statement
	 	Section 7.1(b)
	 Parent Stockholder
	 	Section 1.1(eee)
	 Permits
	 	Section 4.8(a)
	 Permitted Encumbrances
	 	Section 1.1(fff)
	 Person
	 	Section 1.1(ggg)
	 Plans
	 	Section 4.13(a)
	 Post-Closing Tax Period
	 	Section 6.4(d)
	 Pre-Closing Return
	 	Section 6.4(d)
	 PWC
	 	Section 7.11
	 Real Property
	 	Section 4.15(a)
	 Related Agreements
	 	Section 1.1(hhh)
	 Representatives
	 	Section 6.2(a)
	 Required Parent Stockholder Approval
	 	Section 1.1(iii)
	 Required Regulatory Approvals
	 	Section 7.6(a)
	 Required Stockholder Vote
	 	Section 4.4(b)
	 Response Date
	 	Section 3.7(b)

  

 vi 

			
	 SEC
	 	Section 1.1(jjj)
	 Securities Act
	 	Section 1.1(kkk)
	 Series A Preferred Stock Exchange Ratio
	 	Section 1.1(lll)
	 Straddle Period
	 	Section 6.4(b)
	 Stockholder Release
	 	Section 6.7
	 Subsidiary
	 	Section 1.1(mmm)
	 Survival Period
	 	Section 9.1
	 Surviving Entity
	 	Section 2.1
	 Tax
	 	Section 1.1(nnn)
	 Tax Audit Report
	 	Section 7.11(a)
	 Tax Contest
	 	Section 6.4(d)
	 Tax Escrow Fund
	 	Section 3.3(a)(ii)
	 Tax Escrow Shares
	 	Section 3.3(a)(ii)
	 Tax Liability
	 	Section 7.11(a)
	 Tax Liability Cap
	 	Section 9.7(a)
	 Tax Returns
	 	Section 1.1(ooo)
	 Third-Party Claim
	 	Section 9.4(a)
	 Third-Party Expenses
	 	Section 7.7
	 Transaction Expenses
	 	Section 1.1(ppp)
	 Transfer Taxes
	 	Section 6.4 (e)
	 Treasury Regulations
	 	Section 1.1(qqq)
	 Voting Agreement
	 	Recitals

  

 vii 

 This AGREEMENT AND PLAN OF REORGANIZATION, dated as of June 9, 2008 (this
“Agreement”), by and among PEPLIN, INC., a Delaware corporation (“Parent”), WEST ACQUISITIONS CORP., a Delaware corporation and a wholly-owned subsidiary of Parent (“Merger Sub”), NEOSIL, INC., a
Delaware corporation (the “Company”) and Nicholas J. Simon, III, as the Company Stockholders’ representative (the “Company Stockholder Representative”). 
 R E C I T A L S 
 A.       The respective
Board of Directors of Parent, Merger Sub and the Company believe it is in the best interests of their respective stockholders that Parent acquire the Company through the merger of Merger Sub with and into the Company (the “Merger”),
and, in furtherance thereof, have approved the Merger, this Agreement and the transactions contemplated hereby. 
 B.       At the Effective Time of the Merger, on the terms and subject to the conditions of this Agreement: (i) the Merger will become effective, (ii) all of the shares of Company Series A Preferred
Stock which are issued and outstanding immediately prior to the Effective Time of the Merger will be converted into the right to receive shares of common stock, par value $0.001 per share, of Parent (“Parent Common Stock”) and
(iii) unexercised and outstanding Company Options shall be cancelled, without payment of any consideration. 
 C.       As a further condition and inducement to the willingness of Parent to enter into this Agreement, certain employees of the Company have entered into Consulting and Non-Competition Agreements
substantially in the form attached hereto as Exhibit A, (each a “Consulting and Non-Competition Agreement”), which will become effective at the Effective Time, and certain Company Stockholders have entered into a Support
and Voting Agreement in the form attached hereto as Exhibit B (the “Voting Agreement”), which will become effective as of the date hereof. 
 D.       Parent, Merger Sub and the Company desire to make certain representations, warranties, covenants and agreements in connection with the Merger and also to prescribe various
conditions to the Merger. 
 E.       Parent, Merger Sub and the Company intend, by approving resolutions
authorizing this Agreement, to adopt this Agreement as a “plan of reorganization” within the meaning of Treasury Regulation Section 1.368-2(g) and that the Merger qualify as a “reorganization” within the meaning of
Section 368(a) of the Code. 
 A G R E E M E N T 
 NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth herein, and other
valuable consideration, the sufficiency and receipt of which is hereby acknowledged, and intending to be legally bound hereby, the parties hereto agree as follows: 

 ARTICLE I. 
 DEFINITIONS 
 1.1     Defined Terms. As used in this Agreement, the
terms below shall have the following meanings. Any of such terms, unless the context requires otherwise, may be used in the singular or plural, depending upon the reference. 
 (a)       “AAA” means the American Arbitration Association. 
 (b)       “Acquisition Proposal” shall mean any offer or proposal from any Person relating to, or that
would reasonably be expected to lead to, any direct or indirect (i) merger, consolidation, business combination or similar transaction involving the Company or any Subsidiary of the Company, (ii) sale, lease or other disposition directly
or indirectly by merger, consolidation, business combination, share exchange, joint venture or otherwise of assets of the Company or any Subsidiary of the Company representing ten percent (10%) or more of the consolidated assets of the Company,
(iii) issuance, sale, or other disposition of (including by way of merger, consolidation, business combination, share exchange, joint venture or any similar transaction) securities (or options, rights or warrants to purchase, or securities
convertible into or exchangeable for such securities) representing ten percent (10%) or more of the voting power of the Company other than shares issued upon exercise of Company Options and transfers to family members of stockholders of the
Company as of the date of this Agreement or trusts for such family members which agree to be bound by the terms of this Agreement, (iv) transaction (including tender offer or exchange offer) in which any Person shall acquire beneficial
ownership, or the right to acquire beneficial ownership or any “group” (as defined in Rule 13d-5(b)(1) under the Exchange Act) shall have been formed which beneficially owns or has the right to acquire beneficial ownership of ten
(10%) or more of the outstanding voting capital stock of the Company or (v) any combination of the foregoing (other than the Merger). 
 (c)       “Affiliate” means, as applied to any Person, (i) any other Person directly or indirectly controlling, controlled by or under common control with, that Person, (ii) any other
Person that owns or controls ten percent (10%) or more of any class of equity securities (including any equity securities issuable upon the exercise of any option or convertible security) of that Person or any of its affiliates or (iii) as
to a corporation, each director and officer thereof, and as to a partnership, each general partner thereof, and as to a limited liability company, each managing member or similarly authorized person thereof (including officers), and as to any other
entity, each Person exercising similar authority to those of a director or officer of a corporation. For the purposes of this definition, “control” (including with correlative meanings, the terms “controlling”, “controlled
by”, and “under common control with”) as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Person, whether through ownership of
voting securities or by contract or otherwise. 
 (d)       “Aggregate Share Number” shall be
the aggregate number of shares of Parent Common Stock issuable pursuant to the terms of this Agreement which shall be equal to the value of the Company Net Cash at Signing divided by the Parent Common Stock Per Share Value. 
  

 2 

 (e)       “ASIC” means the Australian Securities and
Investments Commission. 
 (f)       “ASTC” means the ASX Settlement and Transfer Corporation
Pty Ltd ACN 008 504 532. 
 (g)       “ASX” means ASX Limited ACN 008 624 691. 
 (h)       “Australian Corporations Act” means the Australian Corporations Act 2001 (Cth) (including
without limitation the provisions of Chapter 6D of that Act) and the Corporations Regulations made under it. 
 (i)       “Australian Subsidiary” means West Operations Pty Limited ACN 093 317 367, West Research Pty Ltd ACN 081 104 190 or West Biolipids Pty Ltd ACN 105 890 882. 
 (j)       “Blue Sky Laws” means state securities or “blue sky” laws. 
 (k)       “Board of Directors” means the Board of Directors of any specified Person and any properly
serving and acting committees thereof. 
 (l)       “Business Day” means a day other than
Saturday, Sunday or any day on which banks located in the State of California are authorized or obligated to close. 
 (m)       “CDI” refers to Parent’s CHESS Depositary Interests, traded on ASX, and has the meaning given in the operating rules (as defined in the Australian Corporations Act) of the ASTC.

 (n)       “Closing Price” means the volume weighted 10-day trailing average closing price
in Australian Dollars (as displayed on the ASX) in respect of Parent’s CDIs for the Business Day immediately preceding the execution of this Agreement. 
 (o)       “Code” means the Internal Revenue Code of 1986, as amended. 
 (p)       “Committed Expenses” shall mean the expenses of the Company set forth on Schedule 1.1(o). 
 (q)       “Company Capital Stock” means the Company Series A Preferred Stock and the Company Common Stock.

 (r)       “Company Common Stock” means the Company’s common stock, par value $0.0001
per share. 
 (s)       “Company Expenses” is equal to the sum of each of the following:
(i) all Liabilities of the Company as of such date and determined in a manner consistent with the manner in which such items were determined for the Company’s Audited Financial Statements, including without limitation, (A) the sum of
the Company’s accounts payable and accrued expenses, (B) the amount of contractual obligations, (C) the remaining cash cost of any restructuring accruals, and (D) fees and expenses (including, but not limited to, any
attorney’s, accountant’s, financial advisor’s or finder’s fees) as of such date incurred in connection with this 

  

 3 

 
Agreement and the transaction contemplated hereby, including, without duplication, the Company’s Transaction Costs, plus (ii) the cash cost of any
unpaid retention, change of control payments, severance payments or “excess parachute payments” within the meaning of Section 280G(b)(1) of the Code that may become due to any employee of the Company as a result of the Merger and the
transaction contemplated by this Agreement or otherwise, plus (iii) the cash cost of any billed and unpaid Taxes (including estimates from any estimated tax costs arising out of any specific tax review that may be underway at the Effective
Time) for which the Company is liable in respect of any period ending on or before such date, plus (iv) up to $25,000 in expenses incurred in connection with the engagement of PWC for purposes of preparation of the Tax Audit Report and plus
(v) the Committed Expenses; provided that any expenses incurred by the Company which were approved by Parent prior to being incurred as indicated on the Company Net Cash Schedule shall not be deducted from Company Net Cash at the time of
Closing for purposes of Section 8.2(f) and 10.1(h). 
 (t)       “Company Material
Adverse Effect” shall mean any change, event, development or effect that (i) is materially adverse to the business of the Company as currently conducted or financial condition of the Company, taken as a whole or (ii) prevents or
materially delays the consummation of the Merger or otherwise prevents or materially delays the performance by the Company of any of its material obligations under this Agreement, except, in either case, for any such change, event, development or
effect resulting from or arising out of, directly or indirectly, (A) the transactions contemplated by this Agreement or other actions required to be taken or not to be taken pursuant to this Agreement or taken with Parent’s written
consent, (B) the announcement or other disclosure of the transactions contemplated by this Agreement (other than any such announcement or disclosure arising out of a breach of this Agreement by the Company), (C) any federal, state or
foreign governmental actions, including, without limitation, proposed or enacted legislation or regulatory changes general (except to the extent such changes or developments disproportionately affect the Company in any material respect relative to
the other participants in the specialty pharmaceutical industry), (D) changes or developments in the specialty pharmaceutical industry generally (except to the extent such changes or developments disproportionately affect the Company in any
material respect relative to the other participants in such industry), (E) changes or developments in financial or securities markets or the economy in general (except to the extent such changes or developments disproportionately affect the
Company in any material respect relative to the other participants in the specialty pharmaceutical industry), (F) changes (after the date of this Agreement) in GAAP or applicable Laws, or (G) the determination by, or the delay of a
determination by, the FDA or equivalent foreign body, or any panel or advisory body empowered or appointed thereby, with respect to the approval, non-approval or disapproval of any of the Company’s product candidates. 
 (u)       “Company Net Cash” shall mean, as of any particular date (actual or future), without duplication
(i) the sum of the Company’s cash and cash equivalents, short-term investments, short-term (less than thirty (30) days outstanding) accounts receivable and prepayments, in each case as of such date and determined in a manner
substantially consistent with the manner in which such items were determined for the Company’s Audited Financial Statements, minus (ii) the Company Expenses plus (iii) the incremental amount of any fees of the Company’s attorneys
and accountants as of such date incurred in connection with the preparation 

  

 4 

 
of SEC compliant financial statements and other disclosure materials for inclusion in future filings with the SEC. 
 (v)       “Company Options” means options to purchase shares of Company Common Stock. 
 (w)       “Company Series A Preferred Stock” means the Company’s Series A Preferred Stock, par value
$0.0001 per share. 
 (x)        “Company Stockholder” means a holder of Company Capital
Stock. 
 (y)       “DGCL” means the Delaware General Corporation Law. 
 (z)        “Encumbrance” means any lien, pledge, mortgage, security interest, claim, charge,
easement, limitation, commitment, encroachment, restriction (other than a restriction on transferability imposed by federal or state securities laws) or other encumbrance of any kind or nature whatsoever (whether absolute or contingent). 

(aa)     “Environmental Laws” means any federal, state, local or foreign statute, law, ordinance, regulation,
rule, code, treaty, writ or order and any enforceable judicial or administrative interpretation thereof, including any judicial or administrative order, consent decree, judgment, stipulation, injunction, permit, authorization, policy, opinion, or
agency requirement, in each case having the force and effect of law, relating to the pollution, protection, investigation or restoration of the environment, health and safety as affected by the environment or natural resources, including, without
limitation, those relating to the use, handling, presence, transportation, treatment, storage, disposal, release, threatened release or discharge of Hazardous Materials or noise, odor, wetlands, pollution or contamination. 
 (bb)     “Environmental Permits” means any permit, approval, identification number, license and other authorization
required under any applicable Environmental Law. 
 (cc)      “Equity Interests” means any share,
capital stock, partnership, membership or similar interest in any entity, and any option, warrant, right or security (including debt securities) convertible, exchangeable or exercisable therefor. 
 (dd)     “Exchange” means the ASX or the NASDAQ Global Market, as applicable. 
 (ee)      “Exchange Act” means the Securities Exchange Act of 1934, as amended. 
 (ff)       “Exchange Ratio” means the Series A Preferred Stock Exchange Ratio. 
 (gg)     “FDA” means the United States Food and Drug Administration. 
 (hh)     “FDA Act” means the Food Drug and Cosmetic Act, as amended, and its implementing regulations. 

 

 5 

 (ii)       “GAAP” means generally accepted accounting
practices in the United States, as in effect from time to time. 
 (jj)       “Good Clinical
Practice” means the ethical and scientific quality standard for designing, conducting, recording, and reporting trials that involve the participation of human subjects, including the regulations at 21 C.F.R. Parts 50, 54 and 56 and
equivalent Laws of any applicable Governmental Entity. 
 (kk)     “Good Laboratory Practice” means the
current good laboratory practices as regulated by the FDA or other corresponding Governmental Entity, and which assures the quality and integrity of the safety data filed with the FDA or other corresponding Governmental Entity, including the
regulations at 21 C.F.R. Part 58. 
 (ll)       “Good Manufacturing Practices” means the
current good manufacturing practice for methods to be used in, and the facilities or controls to be used for, the manufacture, processing, packing, or holding of a product to assure such product is in compliance with the requirements of Healthcare
Laws as to safety, identity, strength, quality and purity characteristics that it purports or is represented to possess, including the regulations at 21 C.F.R. Parts 210 and 211. 
 (mm)    “Governmental Entity” means any supranational, foreign, national, state, municipal or local government, any
instrumentality, subdivision, court, administrative agency or commission or other authority thereof, or any quasi-governmental or private body exercising any regulatory, taxing, or other governmental or quasi-governmental authority and all health
care related entities. 
 (nn)     “Hazardous Materials” means (i) any petroleum, petroleum
products, byproducts or breakdown products, radioactive materials, asbestos-containing materials or polychlorinated biphenyls or (ii) any chemical, material or other substance defined or regulated as toxic or hazardous or as a pollutant or
contaminant or waste under any applicable Environmental Law. 
 (oo)     “Healthcare Laws” means the FDA
Act, the Controlled Substances Act (21 U.S.C. § 801 et seq.), Medicare (Title XVIII of the Social Security Act) and Medicaid (Title XIX of the Social Security Act), the federal Anti-kickback Statute (42 U.S.C. § 1320a-7b(b)), the
Anti-Inducement Law (42 U.S.C. § 1320a-7a(a)(5)), the civil False Claims Act (31 U.S.C. §§ 3729 et seq.), the administrative False Claims Law (42 U.S.C. § 1320a-7b(a)), the Health Insurance Portability and Accountability Act of
1996 (42 U.S.C. § 1320d et seq.), the exclusion laws (42 U.S.C. 1320a-7), all regulations or guidance promulgated pursuant to such Laws, and any other Law which regulates the design, development, testing, studying, manufacturing, processing,
storing, importing or exporting, licensing, labeling or packaging, distributing or marketing of pharmaceutical products, or related to kickbacks, patient or program charges, recordkeeping, claims process, documentation requirements, medical
necessity, referrals, the hiring of employees or acquisition of services or supplies from those who have been excluded from government health care programs, quality, safety, privacy, security, pharmacy practice and compounding, licensure,
accreditation or any other aspect of providing health care or pharmacy services. 
  

 6 

 (pp)     “indebtedness” means, with respect to any Person, without
duplication, (i) all obligations of such Person for borrowed money, or with respect to deposits or advances of any kind to such Person, (ii) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments,
(iii) all obligations of such Person upon which interest charges are customarily paid, (iv) all obligations of such Person under conditional sale or other title retention agreements relating to property purchased by such Person,
(v) all obligations of such Person issued or assumed as the deferred purchase price of property or services (excluding obligations of such Person or creditors for raw materials, inventory, services and supplies incurred in the ordinary course
of business), (vi) all capitalized lease obligations of such Person, (vii) all obligations of others secured by any Lien on property or assets owned or acquired by such Person, whether or not the obligations secured thereby have been
assumed, (viii) all obligations of such Person under interest rate or currency hedging transactions (valued at the termination value thereof), (ix) all letters of credit issued for the account of such Person and (x) all guarantees and
arrangements having the economic effect of a guarantee by such Person of any indebtedness of any other Person. 
 (qq)     “Independent Expert” means BDO Kendalls or such other independent expert as Parent determines will be responsible for preparing the independent expert’s report for inclusion in the Notice
of Meeting. 
 (rr)     “Information Statement” means the written information supplied by the Company
and sent to the Company Stockholders in connection with the consideration of this Agreement, the Merger, the Related Agreements and the transactions contemplated herein by the Company Stockholders and obtaining the Required Stockholder Vote, which
shall contain the unanimous recommendation of the Board of Directors of the Company that the Company Stockholders approve this Agreement, the Merger, the Related Agreements and the other transactions contemplated herein, and the conclusion of the
Board of Directors that the terms and conditions of the Merger are advisable, and are fair and reasonable to, and in the best interests of, the Company Stockholders. 
 (ss)     “Intellectual Property” means all of the following, owned or used by the Company: (i) trademarks and service marks, trade dress, product configurations, trade names
and other indications of origin, applications or registrations in any jurisdiction pertaining to the foregoing and all goodwill associated therewith, (ii) inventions (whether or not patentable), discoveries, improvements, ideas, know-how,
formula methodology, processes, technology, software (including password unprotected interpretive code or source code, object code, development documentation, programming tools, drawings, specifications and data) and applications and patents in any
jurisdiction pertaining to the foregoing, including re-issues, continuations, divisions, continuations-in-part, renewals or extensions, (iii) trade secrets, including confidential information and the right in any jurisdiction to limit the use
or disclosure thereof, (iv) copyrighted and copyrightable writings, designs, software, mask works or other works, applications or registrations in any jurisdiction for the foregoing and all moral rights related thereto, (v) database
rights, (vi) Internet Web sites, domain names and applications and registrations pertaining thereto and all intellectual property used in connection with or contained in all versions of the Web sites of the Company, (vii) rights under all
agreements relating to the foregoing, (viii) books and records pertaining to the foregoing, and (ix) claims or causes of 

  

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action arising out of or related to past, present or future infringement or misappropriation of the foregoing. 
 (tt)     “Intellectual Property Rights” shall mean any or all of the following and all worldwide common law and
statutory rights in, arising out of, or associated therewith: (i) patents and applications therefor and all reissues, divisionals, renewals, extensions, substitutions, continuations, and continuations-in-part thereof, (ii) copyright
rights, copyright registrations and applications therefor, and all other rights corresponding thereto throughout the world including moral and economic rights of authors, however denominated, (iii) rights in trade marks, service marks, trade
names, business names, logos, slogans, trade dress, and trademark and service mark registrations and applications, and all goodwill associated therewith, (iv) URLs and domain names and (v) trade secret rights, confidential information,
know how and inventions (including, those trade secret rights defined in the Uniform Trade Secrets Act and under corresponding foreign statutory and common law), and rights to limit the use or disclosure thereof by any Person, including databases
and data collections and all rights therein. 
 (uu)     “IRS” means the United States Internal Revenue
Service or any successor agency. 
 (vv)     “Law” or “Laws” means any law, statute,
Order, decree, consent decree, judgment, rule, regulation, ordinance or other pronouncement having the effect of law, whether in the United States, any foreign country, or any domestic or foreign state, county, city or other political subdivision or
of any Governmental Entity. 
 (ww)     “Liabilities” means all indebtedness, obligations and other
liabilities of a Person, whether absolute, accrued, contingent (or based upon any contingency), known or unknown, fixed or otherwise, or whether due or to become due. 
 (xx)     “Lien” means any mortgage, pledge, lien, security interest, conditional or installment sale agreement, charge or other claims of third parties of any kind. 
 (yy)     “Minimum Cash Value” means $6,356,640. 
 (zz)     “Notice of Meeting” means the notice of special meeting of the Parent Stockholders to be prepared by Parent
and sent to the Parent Stockholders in connection with the consideration of this Agreement, the Merger, the Related Agreements, and the transactions contemplated herein, by the Parent Stockholders and obtaining the Required Parent Stockholder
Approval. 
 (aaa)   “Order” means any writ, judgment, decree, injunction or similar order of any Governmental
Entity (in each such case whether preliminary or final). 
 (bbb)   “Organizational Documents” means, with respect
to any entity, the certificate or articles of incorporation, bylaws or other governing documents of such entity. 
 (ccc)  
“Parent Common Stock Per Share Value” means a dollar value equal to the product of (i) the Closing Price multiplied by (ii) twenty (20), multiplied again by (iii) the exchange rate of one (1) Australian dollar to
one (1) U.S. dollar, as published by the Reserve 

  

 8 

 
Bank of Australia on its website as of the close of trading (Sydney time) on the Business Day immediately preceding the execution of this Agreement.

 (ddd)   “Parent Material Adverse Effect” shall mean any change, event, development or effect that (i) is
materially adverse to the business or financial condition of Parent or (ii) prevents or materially delays the consummation of the Merger or otherwise prevents or materially delays the performance by Parent of any of its material obligations
under this Agreement, except, in either case, for any such change, event, development or effect resulting from or arising out of (A) changes or developments in the specialty pharmaceutical industry generally (except to the extent such changes
or developments disproportionately affect Parent in any material respect relative to the other participants in such industry), (B) changes or developments in financial or securities markets or the economy in general (except to the extent such
changes or developments disproportionately affect Parent in any material respect relative to the other participants in the specialty pharmaceutical industry), (C) any change in Parent’s stock price or trading volume, in and of itself (for
the avoidance of doubt this clause (C) shall not preclude, subject to clauses (A), (B), (D), (E) and (F), the Company from asserting that the underlying cause of any such change in stock price or trading volume is a Parent Material Adverse
Effect), (D) any failure by Parent to meet published revenue or earnings projections, in and of itself (for the avoidance of doubt this clause (D) shall not preclude, subject to clauses (A), (B), (C), (E) and (F), the Company from
asserting that the underlying cause of any failure is a Parent Material Adverse Effect), (E) changes (after the date of this Agreement) in GAAP or applicable Laws, or (F) the determination by, or the delay of a determination by, the FDA,
or any panel or advisory body empowered or appointed thereby, with respect to the approval, non-approval or disapproval of any of the Parent’s and its Subsidiaries’ product candidates. 
 (eee)   “Parent Stockholder” means a holder of Parent Common Stock. 
 (fff)     “Permitted Encumbrances” means for any Person (i) Liens for Taxes not yet due and payable or which
are being contested in good faith by appropriate proceedings and as to which appropriate reserves (to the extent required by GAAP) have been established in the books and records of such Person; or (ii) mechanics’, materialmen’s,
carriers’, warehousemen’s, landlord’s and similar liens securing obligations not yet delinquent or which are being contested in good faith by appropriate proceedings and as to which appropriate reserves (to the extent required by
GAAP) have been established in the books and records of such Person; provided, that, in the case of (i) and (ii), such Encumbrances, taken in the aggregate, shall not constitute a materially and adversely affect the value of such
Person’s assets. 
 (ggg)   “Person” means an individual, corporation, partnership, limited liability
company, association, trust, unincorporated organization, entity or group (as defined in the Exchange Act). 
 (hhh)  
“Related Agreements” means this Agreement, the Consulting and Non-Competition Agreement, the Voting Agreement, the Escrow Agreement, the Affiliate Agreement and any other agreement delivered in connection with this Agreement.

 (iii)     “Required Parent Stockholder Approval” means the approval of the majority of the Parent
Stockholders of (i) the Merger and the issuance of Parent Common Stock 

  

 9 

 
in exchange for all the shares of Company Capital Stock as contemplated herein, as required by the listing rules of the ASX and (ii) this Agreement, the
Merger, the Related Agreements and the transactions contemplated herein, as required by the applicable requirements of the DGCL. 
 (jjj)       “SEC” means the United States Securities and Exchange Commission, and any successor thereto. 
 (kkk)     “Securities Act” means the Securities Act of 1933, as amended. 
 (lll)         “Series A Preferred Stock Exchange Ratio” means the quotient obtained by dividing the Aggregate Share Number by the total number of shares of Series A Preferred Stock
outstanding as of the Closing. 
 (mmm) “Subsidiary” when used with respect to any party means any corporation or other
organization, whether incorporated or unincorporated, (i) of which such party or any other Subsidiary of such party is a general partner (excluding partnerships, where the general partnership interests are held by such party or any Subsidiary
of such party and do not constitute a majority of the voting and economic interests in such partnership), or (ii) at least a majority of the securities or other interests of which having by their terms ordinary voting power to elect a majority
of the Board of Directors or others performing similar functions with respect to such corporation or other organization is directly or indirectly owned or controlled by such party or by any one or more of its Subsidiaries, or by such party and one
or more of its Subsidiaries. 
 (nnn)     “Tax” or “Taxes” means any federal, state,
local or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, capital stock, franchise, profits, withholding, social security, unemployment,
disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever, including any interest, penalty, or addition thereto, whether disputed or
not. 
 (ooo)    “Tax Returns” means any return, declaration, report, claim for refund, or information return
or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof. 
 (ppp)     “Transaction Expenses” shall mean all a party’s actual and reasonably documented out-of-pocket fees and expenses (including fees and expenses of counsel, accountants, financial advisors or
consultants and commitment and funding fees) actually incurred by such party and its respective Affiliates on or prior to the termination of this Agreement in connection with the transactions contemplated by this Agreement, including the costs and
expenses incurred in connection with the negotiation of this Agreement, due diligence review and any other matter related to the transactions contemplated by this Agreement. 
 (qqq)     “Treasury Regulations” means the United States Treasury regulations promulgated under the Code.

  

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 ARTICLE II. 
 THE MERGER 
 2.1     The Merger. At the Effective Time of the
Merger, upon the terms and subject to the conditions set forth in this Agreement and in accordance with the DGCL, Merger Sub shall be merged with and into the Company, and the separate existence of Merger Sub shall cease. The Company shall continue
as the surviving corporation in the Merger (the “Surviving Entity”). 
 2.2     Closing. The
closing of the Merger (the “Closing”) will take place as soon as practicable after, but in no event more than three (3) Business Days after, satisfaction or waiver (as permitted by this Agreement and applicable law) of the
conditions (excluding conditions that, by their terms, cannot be satisfied until the Closing Date) set forth in Article VIII (the “Closing Date”), unless another time or date is agreed to in writing by the parties hereto. The
Closing shall be held at the offices of Latham & Watkins LLP, 650 Town Center Drive, Suite 2000, Costa Mesa, California 92626, unless another place is agreed to in writing by the parties hereto. 
 2.3     Effective Time. Immediately after the Closing, the parties shall file with the Secretary of State of the State of
Delaware (the “Delaware Secretary of State”) a certificate of merger or other appropriate documents for the Merger (the “Certificate of Merger”), executed in accordance with the relevant provisions of the DGCL and
shall make all other filings, recordings or publications required under the DGCL in connection with the Merger. The Merger shall become effective at such time as the Certificate of Merger is duly filed with the Delaware Secretary of State, or at
such other time as the parties may agree and specify in the Certificate of Merger (the time the Merger becomes effective being the “Effective Time”). 
 2.4     Effects of the Merger. The Merger shall have the effects set forth in this Agreement and in applicable provisions of the DGCL. 
 2.5     Articles of Incorporation. At the Effective Time of the Merger, the certificate of incorporation of the Company shall
be amended and restated in its entirety to be identical to the certificate of incorporation of Merger Sub, as in effect immediately prior to the Effective Time, until thereafter changed or amended as provided therein or by applicable Law, except
Article I of the certificate of incorporation of the Surviving Corporation shall be amended and restated in its entirety to read as follows: “The name of the Corporation Shall be Neosil, Inc.” 
 2.6     Bylaws. At the Effective Time, the bylaws of the Company shall be amended and restated in its entirety to be identical
to the bylaws of Merger Sub, as in effect at the Effective Time, until thereafter changed or amended as provided therein or by applicable Law. 
 2.7     Officers and Directors of the Surviving Entity. The officers and directors of the Merger Sub immediately prior to the Effective Time shall be the officers and directors of the Surviving Entity, until the
earlier of their resignation or removal or otherwise ceasing to be an officer or director or until their respective successors are duly elected and qualified, as the case may be. The Company shall cause each officer and director of the Company to
tender his or her resignation prior to the Effective Time, with each such resignation to be effective as of the Effective Time as provided for in Section 8.2(i). 
  

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 ARTICLE III. 
 EFFECT OF THE TRANSACTION ON THE CAPITAL STOCK 
 OF THE CONSTITUENT CORPORATIONS; EXCHANGE
OF CERTIFICATES 
 3.1     Effect on Capital Stock in the Merger. As of the Effective Time of the Merger,
by virtue of the Merger and without any action on the part of Parent, Merger Sub, the Company, the Company Stockholders or any holder of shares of the capital stock of Merger Sub: 
 (a)     Capital Stock of Merger Sub. Each issued and outstanding share of capital stock of Merger Sub shall be converted into
and become one (1) fully paid and non-assessable share of common stock, par value $0.001 per share, of the Surviving Entity. 
 (b)     Cancellation of Treasury Stock and Parent-Owned Stock. Each share of Company Capital Stock that is owned by the Company and each share of Company Capital Stock that is owned by Parent, Merger Sub or any
other wholly-owned subsidiary of Parent shall automatically be canceled and retired and shall cease to exist, and no Parent Common Stock or other consideration shall be delivered in exchange therefor. 
 (c)     Conversion of Company Capital Stock. Other than any shares of Company Capital Stock to be cancelled pursuant to
Section 3.1(b), fractional shares (which shall be treated as provided in Section 3.6(e)) and any dissenting shares (as provided in Section 3.2 and subject to Section 3.3, (i) each share of Company
Series A Preferred Stock outstanding immediately prior to the Effective Time shall be cancelled and extinguished and shall be converted automatically into the right to receive a number of shares of Parent Common Stock equal to the Series A Preferred
Stock Exchange Ratio and (ii) each share of Company Common Stock outstanding immediately prior to the Effective Time shall be cancelled and extinguished and not be entitled to receive any shares of Parent Common Stock or any other consideration
hereunder. 
 (d)     Company Options. Subject to the consummation of the Merger, the Company and the Board of
Directors of the Company (or, if appropriate, any committee thereof) shall cause (i) effective as of five (5) Business Days immediately prior to the Effective Time to the Merger, each unexpired and unexercised Company Option, which is
outstanding immediately prior to the Effective Time, to become fully vested and exercisable, (ii) the holders thereof to be entitled to exercise such Company Option to purchase shares of Company Common Stock subject to such Company Options, and
each such purchased share of Company Common Stock will be treated at the Effective Time of the Merger as, and have the same rights and be subject to the same conditions hereunder as, each share of Company Common Stock pursuant to
Section 3.1(c) and (iii) effective as of the Effective Time, any such Company Option that remains unexercised and outstanding to be cancelled, and any such Company Option shall no longer be exercisable by the former holder thereof,
without payment of any consideration. 
 (e)     The Company and the Board of Directors of the Company (or, if
appropriate, any committee thereof) shall take all necessary actions to effect the actions described in this Section 3.1 pursuant to the terms of the applicable Company stock plans and agreements evidencing the Company Options.

  

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 (f)     Adjustments to Exchange Ratio. The Series A Preferred Stock Exchange
Ratio shall be equitably adjusted to reflect fully the effect of any stock split, reverse split, stock combinations, stock dividend (including any dividend or distribution of securities convertible into Parent Common Stock or Company Capital Stock),
reorganization, reclassification, recapitalization or other like change with respect to Parent Common Stock or the Series A Preferred Stock, the effective date of which or the record date for which occurs after the date hereof and prior to the
Effective Time. 
 (g)     Maximum Number of Shares of Parent Common Stock. Notwithstanding anything to the
contrary in this Agreement, the maximum number of shares of Parent Common Stock to be issued in exchange for all shares of Company Capital Stock and Company Options which are issued and outstanding immediately prior to the Effective Time shall not
exceed the Aggregate Share Number. 
 3.2     Dissenting Shares. Notwithstanding anything in this Agreement to the
contrary, shares of Company Capital Stock that are outstanding immediately prior to the Effective Time and held by a holder thereof who shall not have voted to adopt this Agreement and who properly exercises and perfects appraisal rights for such
shares in accordance with Section 262 of the DGCL (the “Dissenting Shares”) will not be converted as described in Section 3.1(c) but shall be converted into the right to receive such consideration as may be
determined to be due pursuant to Section 262 of the DGCL; provided, however, that if any such holder shall fail to perfect or otherwise shall waive, withdraw or lose the right to appraisal and payment under the DGCL, the right of such
holder to such appraisal of its shares of Company Capital Stock shall cease and such shares of Company Capital Stock shall be deemed converted as of the Effective Time into the right to receive shares of Parent Common Stock to which any such holder
is entitled pursuant to Section 3.1(c), any cash in lieu of fractional shares payable to any such holder pursuant to Section 3.6(e) and any dividends or other distributions to which any such holder is entitled pursuant to
Section 3.6(c). The Company shall give Parent (i) prompt notice of any written demands for appraisal received by the Company, withdrawals of such demands, and any other related instruments served pursuant to Section 262 of the
DGCL and received by the Company and (ii) the opportunity to direct in compliance with all applicable Laws all negotiations and proceedings with respect to demands for appraisals under the DGCL; provided, that any definitive actions
taken by the Company at the direction of Parent in respect of any such negotiations and proceedings may be conditioned upon occurrence of the Effective Time. The Company shall not, except with prior written consent of Parent, (i) voluntarily
make any payment with respect to any demands for appraisal for Dissenting Shares, (ii) offer to settle, or settle, any such demands, (iii) waive any failure to timely deliver a written demand for appraisal in accordance with the DGCL or
(iv) agree to do any of the foregoing. 
 3.3     Escrow Funds. 
 (a)     Prior to the Effective Time, Parent shall appoint a bank or trust company or other entity to act as the escrow agent (the
“Escrow Agent”), and shall execute and deliver an escrow agreement in a form that is mutually acceptable to both Parent and the Company, in their reasonable discretion (the “Escrow Agreement”). 
  

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 (i)     Pursuant to the Escrow Agreement, ten percent (10%) of
the aggregate shares of Parent Common Stock (rounded up to the nearest whole share) to be issued to the Company Stockholders (the “General Escrow Shares”) at the Effective Time of the Merger (the “General Escrow
Fund”) pursuant to Section 3.1(c) shall be issued in the name of, and paid to, the Escrow Agent on behalf of the Company Stockholders and retained in escrow pursuant to this Section 3.3, Article IX and the terms of
the Escrow Agreement. 
 (ii)     Pursuant to the Escrow Agreement, ten percent (10%) of the
aggregate shares of Parent Common Stock (rounded up to the nearest whole share) to be issued to the Company Stockholders (the “Tax Escrow Shares” and, together with the General Escrow Shares, the “Escrow Shares”) at
the Effective Time of the Merger (the “Tax Escrow Fund,” and together with the General Escrow Fund, the “Escrow Fund”) pursuant to Section 3.1(c) shall be issued in the name of, and paid to, the Escrow
Agent on behalf of the Company Stockholders and retained in escrow pursuant to this Section 3.3 and Section 7.11 and the terms of the Escrow Agreement. 
 (b)     On the Closing Date, Parent shall deliver to the Escrow Agent a certificate or certificates representing the General Escrow
Shares. The General Escrow Fund shall be held by the Escrow Agent exclusively for the purpose of securing Parent Indemnity Claims pursuant to Article IX hereof. The General Escrow Fund shall be held by the Escrow Agent for a period of twelve
(12) months after the Closing Date (the “General Escrow End Date”) under the Escrow Agreement pursuant to the terms thereof; provided, however, that only so much of the General Escrow Fund will be released to the Company
Stockholders after the General Escrow End Date as having a value (for the General Escrow Shares, as determined by Section 9.7(c)) in excess of the amount of the Parent Indemnity Claims that have been made and that have been determined to
be valid or not yet determined to be invalid pursuant to Article IX hereof as of the Escrow End Date. Except to the extent of such Parent Indemnity Claims which have been made and have been determined to be valid or not yet determined to be
invalid pursuant to Article IX hereof, the General Escrow Shares to be delivered to Company Stockholders on or after the General Escrow End Date shall be delivered in the name of such Company Stockholders. Deliveries of shares of General
Escrow Shares remaining in the General Escrow Fund at the General Escrow End Date shall be made within five (5) Business Days following the General Escrow End Date ratably in proportion to their respective contributions to the General Escrow
Fund as provided in the Escrow Agreement. Each Company Stockholder who would otherwise be entitled to a fraction of a share of Parent Common Stock (after aggregating all fractional shares of Parent Common Stock to be received by such holder) shall
be entitled to receive from the Exchange Agent within five (5) Business Days following the General Escrow End Date an amount of cash in accordance with Section 3.6(e). Within five (5) Business Days of the resolution of the
Parent Indemnity Claims that have been made as of the General Escrow End Date and for which General Escrow Shares were held back in the General Escrow Fund pursuant to this Section 3.3(b), the remaining General Escrow Shares and cash for
payment in lieu of fractional General Escrow Shares shall be delivered to Company Stockholders ratably in proportion to their respective contributions to the General Escrow Fund as provided in the Escrow Agreement. The Stockholder Representative
shall provide Parent with such services and assistance as reasonably requested by Parent in satisfying its duties under this Section 3.3(b). 
  

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 (c)     On the Closing Date, Parent shall deliver to the Escrow Agent a certificate
or certificates representing the Tax Escrow Shares. The Tax Escrow Fund shall be held by the Escrow Agent exclusively for the purpose of securing Tax Liability claims owed to Parent pursuant to Section 7.11 hereof (the “Tax
Liability Claims”). The Tax Escrow Fund shall be held by the Escrow Agent until the later of (i) the Closing or (ii) the delivery of a Final Tax Audit Report, under the Escrow Agreement pursuant to the terms thereof; provided,
however, that only so much of the Tax Escrow Fund will be released to the Company as having a value (for the Tax Escrow Shares, as determined by Section 9.7(c)) in excess of the amount of the Tax Liability Claims and any other
amounts owed to Parent pursuant to Section 7.11. The Tax Escrow Shares shall be delivered to Company Stockholders in the name of such Company Stockholders. Deliveries of Tax Escrow Shares remaining in the Tax Escrow Fund in excess of the
Tax Liability Claims shall be made within five (5) Business Days following the payment to the Parent pursuant to Section 7.11(b) ratably in proportion to their respective contributions to the Tax Escrow Fund as provided in the
Escrow Agreement. Each Company Stockholder who would otherwise be entitled to a fraction of a share of Parent Common Stock (after aggregating all fractional shares of Parent Common Stock to be received by such holder) shall be entitled to receive
from the Exchange Agent within five (5) Business Days following payment to the Parent pursuant to Section 7.11(b) an amount of cash in accordance with Section 3.6(e). The Stockholder Representative shall provide Parent
with such services and assistance as reasonably requested by Parent in satisfying its duties under this Section 3.3(c). 
 3.4     Miscellaneous Provisions Relating to the Escrow. 
 (a)     Any shares of
Parent Common Stock, dividends thereon, or other equity equivalents issued or distributed by Parent in respect of Escrow Shares which have not been released from the Escrow Fund shall be added to, and shall be deemed, Escrow Shares. 
 (b)     The adoption of this Agreement and the approval of the Merger by the Company Stockholders shall constitute approval of the
Escrow Agreement and of all arrangements relating thereto, including, without limitation, the placement of the Escrow Fund in escrow and the appointment of the Escrow Agent and the Company Stockholder Representative. 
 3.5     Company Stockholder Representative. 
 (a)     Nicolas Simon, III, shall be the Company Stockholder Representative and as such shall serve as and have all powers as agent and attorney-in-fact of each Company Stockholder, for and on
behalf of such Company Stockholders: (i) to give and receive notices and communications, (ii) to have authority to agree to, negotiate, enter into settlements and compromises of, and demand mediation and arbitration and comply with orders
of courts and awards of arbitrators with respect to any disputes involving any Parent Indemnity Claims made by Parent and the retaining of any portion of the Escrow Fund by Parent thereunder, (iii) to litigate, mediate, arbitrate, defend,
enforce or to take any other actions and execute any documents that the Company Stockholder Representative deems advisable in connection with enforcing any rights or obligations or defending any claim or action under this Agreement or the Escrow
Agreement on behalf of the Company Stockholders or their property or against any Person who has caused a loss or damage to the Company Stockholders in connection with the transactions contemplated herein, (iv) to sign receipts, consents, or
other documents to effect the 

  

 15 

 
transactions contemplated hereby, (v) to have the authority to withhold or direct the disposition of the Escrow Fund pursuant to
Section 3.5(e) and (vi) to take any and all actions necessary or appropriate in the judgment of the Company Stockholder Representative for the accomplishment of the foregoing. If Nick Simon ceases to act as Company Stockholder
Representative for any reason, such Company Stockholder Representative or his agent shall notify Parent of such Company Stockholder Representative’s intent to resign as Company Stockholder Representative, at least thirty (30) days prior to
the effective date of such resignation, and the Company Stockholders entitled to receive a majority of the Escrow Shares shall, by written notice to Parent, appoint a successor Company Stockholder Representative within thirty (30) days. Notice
or communications to or from any Company Stockholder Representative shall constitute notice to or from each of the Company Stockholders. 
 (b)     Subject to Section 3.5(a), in the event of: (i) the death or permanent disability of the Company Stockholder Representative, (ii) his, her or its resignation as a Company Stockholder
Representative, or (iii) the removal of the Company Stockholder Representative by Company Stockholders entitled to receive a majority of the Escrow Shares, a successor Company Stockholder Representative shall be elected by the Company
Stockholders entitled to receive a majority of the Escrow Shares. Each successor Company Stockholder Representative shall have all of the power, authority, rights and privileges conferred by this Agreement upon the original Company Stockholder
Representative, and the term “Company Stockholder Representative” as used herein shall be deemed to include successor Company Stockholder Representatives. 
 (c)     The Company Stockholder Representative may, in all questions arising under this Agreement and the Escrow Agreement, rely on the advice of counsel, and shall not be liable to the Company
Stockholders for any action taken or not taken as a Company Stockholder Representative in the absence of such Company Stockholder Representative’s willful misconduct. 
 (d)     A decision, act, consent or instruction of the Company Stockholder Representative shall constitute a decision of all the
Company Stockholders, and shall be final, binding and conclusive upon each of the Company Stockholders, and Parent, the Company and the Escrow Agent may rely upon any decision, act, consent or instruction of the Company Stockholder Representative as
being the decision, act, consent or instruction of each and all of the Company Stockholders. Parent, the Company and the Escrow Agent are relieved from any liability to any person for any acts done by them in accordance with such decision, act,
consent or instruction. Although the Company Stockholder Representative shall not be obligated to obtain instructions from the Company Stockholders prior to any decision, act, consent or instruction, if, and to the extent that, the Company
Stockholder Representative receives any written instructions from the Company Stockholders entitled to receive a majority of the Escrow Shares held by the Escrow Agent, the Company Stockholder Representative shall comply with such instructions.

 (e)     The Company Stockholders shall share, on a pro rata basis in relation to their holdings of Parent Common Stock
immediately after the Effective Time, the professional fees and expenses of any attorney, accountants or other advisors retained by the Company 

  

 16 

 
Stockholder Representative in connection with any action taken or not taken as a Company Stockholder Representative. 
 (f)     The Company Stockholders shall jointly and severally indemnify, defend and save harmless the Company Stockholder
Representative and its members, managers, directors, officer, agents and employees from and against any and all loss, liability or expense (including the fees and expenses of in house or outside counsel and experts and their staffs and all expense
of document location, duplication and shipment) arising out of or in connection with the Company Stockholder Representative’s execution and performance of this Agreement, to the extent that such loss, liability or expense is finally adjudicated
to have been primarily caused by the gross negligence or willful misconduct of the Company Stockholder Representative. The Company Stockholders acknowledge and agree that the foregoing indemnities shall survive the resignation or removal of the
Company Stockholder Representative or the termination of this Agreement. 
 3.6     Exchange of Certificates.

 (a)     Exchange Agent. Immediately following the Effective Time, Parent shall deposit with Mellon Bank, N.A.,
or such other bank or trust company as may be designated by Parent and the Company (the “Exchange Agent”), for the benefit of the Company Stockholders, for exchange in accordance with this Article III, through the Exchange
Agent, certificates representing the shares of Parent Common Stock issuable pursuant to Section 3.1 in exchange for outstanding shares of Company Capital Stock together with amounts sufficient in the aggregate to provide all funds
necessary for the Exchange Agent to make payments in lieu of fractional shares pursuant to Section 3.6(e) (such shares of Parent Common Stock and funds, together with any dividends or distributions with respect thereto with a record date
after the Effective Time, being hereinafter referred to as the “Exchange Fund”). 
 (b)     Exchange
Procedure. As soon as reasonably practicable after the Effective Time, the Exchange Agent shall mail to each holder of record of a certificate or certificates (the “Certificates”), which immediately prior to the Effective Time
represented outstanding shares of Company Capital Stock, other than shares to be canceled or retired in accordance with Section 3.1(b) or dissenting shares pursuant to Section 3.2: (i) a letter of transmittal (which
shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon delivery of the Certificates to the Exchange Agent and shall be in such form and have such other provisions as Parent may reasonably
specify) and (ii) instructions for use in effecting the surrender of the Certificates in exchange for certificates representing shares of Parent Common Stock. Upon surrender of a Certificate for cancellation to the Exchange Agent or to such
other agent or agents as may be appointed by Parent, together with such letter of transmittal, duly executed, and such other documents as may reasonably be required by the Exchange Agent, the holder of such Certificate shall be entitled to receive
in exchange therefor a certificate representing that number of whole shares of Parent Common Stock which such holder has the right to receive pursuant to the provisions of this Article III, cash in lieu of fractional shares pursuant to
Section 3.6(e) and any dividends or other distributions to which the holder is entitled to pursuant to Section 3.6(c) and the Certificate so surrendered shall forthwith be canceled. In the event of a transfer of ownership of
Company Capital Stock which is not registered in the transfer records of the Company, a certificate representing the proper number of shares of Parent 

  

 17 

 
Common Stock may be issued to a Person other than the Person in whose name the Certificate so surrendered is registered, if such Certificate shall be
properly endorsed or otherwise be in proper form for transfer and the Person requesting such payment shall pay any transfer or other Taxes required by reason of the issuance of shares of Parent Common Stock to a Person other than the registered
holder of such Certificate or establish to the satisfaction of Parent that such Tax has been paid or is not applicable. Until surrendered as contemplated by this Section 3.6, each Certificate shall be deemed at any time after the
Effective Time to represent only the right to receive upon such surrender the certificate representing the appropriate number of whole shares of Parent Common Stock, cash in lieu of any fractional shares of Parent Common Stock pursuant to
Section 3.6(e) and dividends and other distributions pursuant to Section 3.6(c). No interest will be paid or will accrue on any cash payable in lieu of any fractional shares of Parent Common Stock. 
 (c)     Distributions with Respect to Unexchanged Shares. No dividends or other distributions with respect to Parent Common
Stock with a record date after the Effective Time shall be paid to the holder of any unsurrendered Certificate with respect to the shares of Parent Common Stock represented thereby, and no cash payment in lieu of fractional shares shall be paid to
any such holder pursuant to Section 3.6(e) until the surrender of such Certificate in accordance with this Article III. Subject to the effect of applicable Laws, following surrender of any such Certificate, there shall be paid to
the holder of the certificate representing whole shares of Parent Common Stock issued in exchange therefor, without interest at the time of such surrender, the amount of any cash payable in lieu of a fractional share of Parent Common Stock to which
such holder is entitled pursuant to Section 3.6(e) and the amount of dividends or other distributions with a record date after the Effective Time theretofore paid with respect to such whole shares of Parent Common Stock. 
 (d)     No Further Ownership Rights in Company Capital Stock. All shares of Parent Common Stock issued or cash paid upon the
surrender for exchange of Certificates in accordance with the terms of this Article III (including any cash paid pursuant to Section 3.6(e)) shall be deemed to have been issued and paid in full satisfaction of all rights
pertaining to the shares of Company Capital Stock theretofore represented by such Certificates, and there shall be no further registration of transfers on the stock transfer books of the Surviving Entity of the shares of Company Capital Stock which
were outstanding immediately prior to the Effective Time of the Merger. If, after the Effective Time of the Merger, Certificates are presented to the Surviving Entity for any reason, they shall be canceled and exchanged as provided in this
Article III, except as otherwise provided by law. 
 (e)     No Fractional Shares. 
 (i)     No certificate representing fractional shares of Parent Common Stock shall be issued upon the surrender for exchange of
Certificates, and such fractional share interests will not entitle the owner thereof to vote or to any rights of a stockholder of Parent. 
 (ii)     Each holder of a Certificate issued and outstanding at the Effective Time of the Merger who would otherwise be entitled to receive a fractional share of Parent Common Stock upon surrender of such Certificate for
exchange pursuant to this Article III (after taking into account all shares of Company Capital Stock then held by such holder) shall receive, 

  

 18 

 
in lieu thereof, cash in an amount equal to the value of such fractional share, which shall be equal to the fraction of a share of Parent Common Stock that
would otherwise be issued multiplied by the Parent Common Stock Per Share Value. 
 (iii)     As soon as practicable
after the determination of the amount of cash, if any, to be paid to holders of Certificates with respect to any fractional share interests, Parent shall promptly pay such amounts, without interest, to such holders of such Certificates subject to
and in accordance with this Article III. 
 (f)     No Liability. None of Parent, Merger Sub or the Company
shall be liable to any Person in respect of any shares of Parent Common Stock (or dividends or distributions with respect thereto), cash to be distributed in lieu of fractional shares, delivered or paid to a public official pursuant to any
applicable abandoned property, escheat or similar Law. 
 (g)     Lost Certificates. Notwithstanding anything to
the contrary set forth in this Section 3.6, in the event that any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such Certificate to be lost, stolen or destroyed
and, if required by Parent, the written agreement of such Person to indemnify Parent against any claim that may be made against it with respect to such Certificate, Parent will issue in exchange for such lost, stolen or destroyed Certificate, Parent
Common Stock, and any cash in lieu of fractional shares and any unpaid dividends or distributions with respect to such Parent Common Stock, to which they are entitled pursuant hereto. 
 (h)     Withholding Rights. Parent and its agents shall be entitled to deduct and withhold from the consideration otherwise
payable pursuant to this Agreement to any former holder of shares of Company Common Stock such amounts as Parent is required to deduct and withhold with respect to the making of such payment under the Code, or any provision of state, local or
foreign tax law, or any court order. To the extent that amounts are so withheld by Parent or its agents, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Company Stockholders in respect of which
such deduction and withholding was made by Parent or its agents. 
 3.7     Calculation of Company Net Cash.

 (a)     “Determination Date” for the purposes
of this Section 3.7 shall mean the date that is ten (10) Business Days prior to the anticipated date for Closing, but in no event later than August 31, 2008, as agreed upon by the Company and Parent (the “Anticipated
Closing Date”). On the third (3rd) Business Day after the Determination Date, the Company shall deliver to Parent a schedule (the
“Company Net Cash Schedule”) setting forth, in reasonable detail, the Company’s calculation of Company Net Cash (using an estimate of the Company’s accounts payable and accrued expenses as of such date and determined in a
manner substantially consistent with the manner in which such items were determined for the Company’s most recent audited financial statements) (the “Company Net Cash Calculation”) as of the Determination Date. Upon delivery,
the accuracy of the Company Net Cash Schedule shall be certified by the Company’s Chief Financial Officer. If at any time subsequent to the delivery of the Company Net Cash Schedule, the Company determines that such schedule or the Company Net
Cash Calculation set forth therein contained any error, misrepresentation or miscalculation, the 

  

 19 

 
Company shall promptly following discovery of such error, misrepresentation or miscalculation deliver to Parent a revised Company Net Cash Schedule, the
accuracy of which revised schedule shall be certified by the Company’s Chief Financial Officer. The Company shall make the work papers and back-up materials used in preparing the Company Net Cash Schedule available to Parent and Representatives
at reasonable times and upon reasonable notice. 
 (b)     Within three (3) Business Days after the Company delivers
the Company Net Cash Schedule (the “Response Date”), Parent shall have the right to dispute any part of such Company Net Cash Schedule, and the Company Net Cash Calculation set forth herein by delivering a written notice to that
effect to the Company (a “Dispute Notice”). Any Dispute Notice shall identify in reasonable detail the nature of any proposed revisions to the Company Net Cash Calculation. 
 (c)     If on or prior to the Response Date, (i) Parent notifies the Company in writing that it has no objections to the Company
Net Cash Calculation or (ii) Parent fails to deliver a Dispute Notice as provided in Section 3.7(b), then the Company Net Cash Calculation as set forth in the Company Net Cash Schedule shall be deemed to have been finally determined
for purposes of this Agreement and to represent the Company Net Cash at the Determination Date for purposes of Sections 8.2(f) and 10.1(h) hereto. 
 (d)     If Parent delivers a Dispute Notice on or prior to the Response Date, then the Company and Parent shall promptly meet and attempt in good faith to resolve the disputed item(s) and negotiate
an agreed-upon determination of Company Net Cash, which agreed upon Company Net Cash amount shall be deemed to have been finally determined for purposes of this Agreement and to represent the Company Net Cash at the Determination Date for purposes
of Sections 8.2(f) and 10.1(h) hereto. 
 (e)     If the Company and Parent are unable to negotiate an
agreed-upon determination of Company Net Cash at the Determination Date pursuant to Section 3.7(d) within three (3) Business Days after delivery of the Dispute Notice (or such other period as the Company and Parent may mutually
agree upon), then the Company and Parent shall jointly select an independent auditor of recognized national standing (the “Accounting Firm”) to resolve any remaining disagreements as to the Company Net Cash Calculation. The Company
shall promptly deliver to the Accounting Firm the work papers and back-up materials used in preparing the Company Net Cash Schedule, and the Company and Parent shall use their best efforts to cause the Accounting Firm to make its determination
within fifteen (15) Business Days of accepting its selection. Parent and the Company shall be afforded the opportunity to present to the Accounting Firm any material related to the unresolved disputes and to discuss the issues with the
Accounting Firm; provided, however, that no such presentation or discussion shall occur without the presence of a Representative of each of Parent and the Company. The determination of the Accounting Firm shall be limited to the disagreements
submitted to the Accounting Firm. The determination of the amount of Company Net Cash made by the Accounting Firm shall be deemed to have been finally determined for purposes of this Agreement and to represent the Company Net Cash at the
Determination Date for purposes of Sections 8.2(f) and 10.1(h) hereto. The fees and expenses of the Accounting Firm shall be allocated between the Company and Parent in the same proportion that the disputed amount of the Company Net
Cash that was 

  

 20 

 
unsuccessfully disputed by such Party (as finally determined by the Accounting Firm) bears to the total disputed amount of the Company Net Cash amount.

 ARTICLE IV. 
 REPRESENTATIONS AND WARRANTIES OF THE COMPANY 
 The Company represents and warrants to Parent that the statements
contained in this Article IV are true, correct and complete as of the date of this Agreement and will also be correct and complete as of the Closing Date, except as set forth in the disclosure letter delivered to Parent on the date hereof
(the “Company Disclosure Letter”). The Company Disclosure Letter is arranged in paragraphs corresponding to the lettered and numbered paragraphs contained in this Article IV, and the disclosures in any such paragraph of the
Company Disclosure Letter shall qualify the corresponding paragraph in this Article IV and such other paragraphs in this Agreement only to the extent it is readily apparent from the text of such disclosure that such other paragraph is
also qualified. 
 4.1     Organization, Standing and Power; Organizational Documents. The Company has been duly
incorporated or formed and is validly existing and in good standing under the Laws of the State of Delaware and has the requisite power and authority to carry on its business as now being conducted and proposed to be conducted prior to the Closing.
The Company is duly qualified and in good standing to do business in each jurisdiction in which the failure to be so qualified would have a Company Material Adverse Effect. The copies of the Company’s Organizational Documents and all minute
books of the Company which were previously furnished to Parent are true, complete and correct copies of as of the date of this Agreement. The Company is not in violation of its Organizational Documents in any material respects. True and complete
copies of all minute books of the Company have been made available to Parent. 
 4.2     Capital Structure.

 (a)     The authorized capital stock of the Company consists of (i) 55,800,000 shares of Company Common Stock, of
which 13,621,874 shares are issued and outstanding as of the date hereof, and (ii) 32,900,000 shares of Company Series A Preferred Stock, of which 32,100,000 shares are issued and outstanding as of the date hereof. All outstanding shares of
Company Capital Stock are duly authorized, validly issued, fully paid and nonassessable and are not subject to preemptive or first refusal rights created by statute, the Organizational Documents of the Company or any agreement or document to which
the Company is a party or by which it is bound. As of the date hereof, the outstanding shares of Company Series A Preferred Stock are convertible into 32,100,000 shares of Company Common Stock. As of the date hereof, there is a warrant (the
“Warrant”) outstanding to purchase 500,000 shares of Company Series A Preferred Stock. The Company has reserved an aggregate of (i) 32,900,000 shares of Company Common Stock for issuance upon conversion of the Company Series A
Preferred Stock and (ii) 500,000 shares of Company Series A Preferred Stock upon exercise of the outstanding Warrant. The Company has reserved an aggregate of 7,000,000 shares of Company Common Stock for issuance pursuant to the Company’s
2004 Equity Incentive Plan, under which, as of the date hereof, there are outstanding Company Options to purchase an aggregate of 4,554,926 shares of Company Common Stock and 2,323,200 shares of Company Common Stock are available for 

  

 21 

 
grant. As of the date hereof, no shares of Company Common Stock are subject to outstanding Company Options issued outside of any stock incentive or similar
plan of the Company, and no shares of Company Common Stock have been reserved for issuance upon the exercise of such Company Options. All shares of Company Common Stock subject to issuance upon the exercise of Company Options outstanding as of the
date hereof, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. 
 (b)     Section 4.2(b) of the Company Disclosure Letter sets forth, as of the date hereof, a complete and accurate
list of the Company Stockholders as reflected in the Company’s books and records, setting forth the number of shares of Company Capital Stock held by each Company Stockholder. Section 4.2(b) of the Company Disclosure Letter
also sets forth as of the date hereof, a list of all holders of record of the outstanding Warrant and Company Options (excluding any Company Options exercised as of the date hereof) as reflected in the Company’s books and records,
indicating with respect to each Warrant or Company Option, the exercise price, date of grant, and, with respect to Company Options, the stock incentive plan under which such Company Option was granted or, if granted outside of such plans, a
reference to the agreement to which such Company Option was granted. Section 4.2(b) of the Company Disclosure Letter sets forth the number of shares of Parent Common Stock, if any, each Company Stockholder or holder of the Warrant or
Company Options is entitled to receive pursuant to this Agreement. Holders of Company Common Stock are not entitled to receive shares of Parent Common Stock, or any other consideration, pursuant to the terms of this Agreement. 
 (c)     Except as set forth in Section 4.2(b) of the Company Disclosure Letter, there are no outstanding
(i) shares of capital stock, membership interest or other Equity Interests of the Company (including any capital stock equivalents), (ii) securities of the Company convertible into or exchangeable for shares of capital stock, membership
interests or voting securities of the Company, (iii) options, preemptive or other rights to acquire from the Company, and no obligation of the Company, to issue any capital stock, voting securities or securities convertible into or exchangeable
for capital stock, membership interest or voting securities of the Company and (iv) equity equivalent interest in the ownership or earnings of the Company or other similar rights. There are no obligations, contingent or otherwise, of the
Company to repurchase, redeem or otherwise acquire any shares of the Company Capital Stock or to provide funds to or make any material investment (in the form of a loan, capital contribution or otherwise) in any Person. The Company is not a party to
any employment or other agreements and has not made any offers for employment that contemplate or obligate the Company to grant any options or issue any Equity Interests of the Company. There are no voting trusts, proxies or other voting agreements
or understandings to which the Company is a party or by which it is bound with respect to the issued or unissued Company Capital Stock or other Equity Interests of the Company. 
 (d)     No bonds, debentures, notes or other indebtedness of the Company having the right to vote on any matters on which
shareholders or equity holders may vote are issued or outstanding. 
  

 22 

 4.3     Subsidiaries. The Company has, and prior to the Closing will have, no
Subsidiaries and does not (and prior to the Closing will not) otherwise hold any equity, membership, partnership, joint venture or other Equity Interest in any Person. 
 4.4     Authority; No Conflicts. 
 (a)     The Company has
all necessary corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions to which it is a party that are contemplated by this Agreement. The execution and delivery of
this Agreement by the Company and the consummation of the transaction contemplated by this Agreement by the Company have been duly and validly authorized by all necessary corporate action and no other corporate proceedings on the part of the
Company, subject, in the case of consummation of the Merger only, to the adoption of this Agreement and the approval of the Merger by the stockholders of the Company pursuant to the Required Stockholder Vote, and no other stockholder vote is
necessary, to authorize this Agreement and the Related Agreements or to consummate the transactions contemplated hereby or thereby. This Agreement has been duly executed and delivered by the Company and constitutes a valid and binding agreement of
the Company, enforceable against the Company in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and similar laws relating to or affecting creditors generally and by
general equity principles. The Board of Directors of the Company has unanimously (i) determined that the Merger is advisable and fair to, and in the best interests of, the Company and the Company Stockholders, (ii) has approved this
Agreement, the Merger and the other transactions contemplated by this Agreement and has deemed this Agreement advisable and (iii) has determined to recommend adoption of this Agreement and the approval of the Merger by the Company Stockholders
(collectively, the “Company Board Recommendation”). The Company Board Recommendation has not been rescinded, revoked or adversely modified. 
 (b)     The affirmative vote of the holders of a majority of the outstanding shares of Company Capital Stock and sixty-six and two thirds (66 2/3%) of the holders of Company Series A Preferred
Stock as required by the Company’s Organizational Documents and the DGCL (the “Required Stockholder Vote”), is the only vote of the holders of any class or series of the Company securities necessary to approve the Merger, this
Agreement, the Related Agreements and the transactions contemplated hereby. 
 (c)     Except as set forth in
Section 4.4(c) of the Company Disclosure Letter, the execution and delivery of this Agreement by the Company does not, and the performance of this Agreement and the consummation of the transactions contemplated herein by the Company will
not, (i) conflict with or violate any provision of the Company’s Organizational Documents, (ii) assuming that all consents, approvals, authorizations and permits described in Section 4.4(d) have been obtained and all
filings and notifications described in Section 4.4(d) have been made, conflict with or violate any Law applicable to the Company or by which any property or asset of the Company is bound or affected or (iii) require any consent or
approval under, result in any breach of or any loss of any benefit under, constitute a change of control or default (or an event which with notice or lapse of time or both would become a default) under or give to others any right of termination,
vesting, amendment, acceleration or cancellation of, or result in the creation of a lien or other encumbrance on any property or asset of the Company pursuant to, any note, 

  

 23 

 
bond, mortgage, indenture, contract, agreement, lease, license, Permit or other instrument or obligation, except in the case of clause (iii) for any
such consent, approval, breach, loss or default which would not, individually or in the aggregate, reasonably be expected to result in a Company Material Adverse Effect. 
 (d)     The execution and delivery of this Agreement by the Company does not, and the performance of this Agreement and the transactions contemplated herein by the Company will not, require any
consent, approval, authorization or permit of, or filing with or notification to, any Governmental Entity or any other Person, except (i) under the Securities Act, any applicable Blue Sky Law, the rules and regulations of the Exchanges, and the
filing and recordation of the Certificate of Merger as required by the DGCL and (ii) where failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications to a Person other than a Governmental
Entity, would not, individually or in the aggregate, reasonably be expected to result in a Company Material Adverse Effect. 
 (e)     At the Closing, Parent shall own all of the issued and outstanding shares of capital stock or membership interests of the Company, free and clear of any and all Encumbrances. 
 4.5     Financial Statements. 
 (a)     The Company has delivered to Parent: (i) the audited consolidated balance sheets of the Company as of December 31 for the fiscal years 2005 through 2007 (the “Balance
Sheets”), and the related statements of income, stockholders’ equity, and cash flows for each of the fiscal years then ended, including in each case the notes thereto, together with the auditors’ report thereon of PWC (the
“Audited Financial Statements”), and (ii) the unaudited consolidated balance sheet of the Company as of March 31, 2008 (the “Interim Balance Sheet”) and the related unaudited statements of income,
stockholders’ equity and cash flows for the period then ended (the “Interim Financial Statements” and together with the Audited Financial Statements, the “Financial Statements”). 
 (b)     Each of the Financial Statements (including, in each case, any notes thereto) (i) was prepared in accordance GAAP in
effect at the time of such preparation applied on a consistent basis throughout the periods involved (except, in the case of the Interim Financial Statements, as may be indicated in the notes to such financial statements) and (iii) fairly
presented in all material respects the financial position of the Company as of the dates, and the consolidated results of its operations and cash flows for the periods, indicated (subject, in the case of the Interim Financial Statements to the
absence of footnotes and normal and recurring year-end adjustments which would not be material in amount); provided that the Financial Statements do not account for any changes, adjustments, additions or other accounting that may result directly
from entry into this Agreement or the transactions contemplated hereby. The books and records of the Company and each Subsidiary of the Company have been, and are being, maintained in accordance with applicable legal and accounting requirements as
necessary to permit preparation of financial statements in accordance with GAAP and to maintain asset accountability. 
 4.6     No Undisclosed Liabilities; Net Value. 
  

 24 

 (a)     Except as set forth on Section 4.6(a) of the Company Disclosure
Letter, the Company has no Liability or obligation of any nature (whether accrued, absolute, contingent or otherwise), except for: (i) Liabilities accrued or reserved against on the balance sheets included in the Audited Financial Statements or
the Interim Balance Sheet, (ii) current Liabilities which have arisen after the date of the Interim Balance Sheet in the ordinary course of business consistent with past practice and which are not material in amount and (iii) Liabilities
which result directly from entry into this Agreement and the transactions contemplated herein, that, individually or in the aggregate, would not reasonably be expected to have a Company Material Adverse Effect. 
 (b)     The aggregate indebtedness of the Company on the date hereof is $2,450,800. There are no contracts, agreements or other
documents that give rise to any indebtedness of the Company. 
 (c)     Section 4.6(c) of the Company
Disclosure Letter sets forth (i) the Company Net Cash at Signing and (ii) the components used to calculate such amount, including the Company’s good faith estimates of the Transaction Expenses to be incurred by the Company from the
date of Signing through the Closing. 
 4.7     Payables. Other than with respect to expenses related to the
transactions contemplated by this Agreement, (i) all accounts payable of the Company have arisen in the ordinary course of business consistent with past practice, (ii) all items which are required by GAAP to be reflected as payables on the
Interim Balance Sheet and on the books and records of the Company are so reflected and have been recorded in accordance with GAAP applied consistently and (iii) there has been no change since the date of the Interim Balance Sheet in the amount
or delinquency of accounts payable of the Company, either individually or in the aggregate, that would reasonably be expected to have a Company Material Adverse Effect. 
 4.8     Compliance with Applicable Laws; Regulatory Matters. 
 (a)     The Company holds all necessary approvals, permits, licenses, certificates, franchises, registrations, variances, exemptions, orders and approvals of all Governmental Entities necessary for the operation of its
businesses (the “Permits”). The Company is in material compliance with the terms of the Permits and all such Permits are valid and in full force and effect. To the knowledge of the Company, the Company (i) is not being and has
not been conducted in, and the Company has not received any written notice that it is under investigation with respect to, violation of any Law during the past three (3) years applicable to the Company’s business, assets or properties and
(ii) has filed all reports and has all licenses or registrations required to be filed with any Governmental Entity on or prior to the date hereof and relating to the Company’s business, assets or properties. The Company has not received
any warning, notice, notice of violation or probable violation, notice of revocation, or other communication from or on behalf of any Governmental Entity, alleging any violation of any Permit or any applicable Law. No investigation or inquiry by any
Governmental Entity with respect to the Company is pending or, to the knowledge of the Company, threatened. 
 (b)     To
the knowledge of the Company, all reports, documents, claims, notices or approvals required to be filed, obtained, maintained, or furnished to any Governmental Entity 

  

 25 

 
by the Company has been so filed, obtained, maintained or furnished. All such reports, documents, claims and notices were complete and correct in all
material respects on the date filed (or were corrected in or supplemented by a subsequent filing). 
 (c)     Except as
set forth on Section 4.8(c) of the Company Disclosure Letter, the Company has not, and to the Company’s knowledge, none of its officers, directors, or managing employees have, engaged in any activities which would be expected to
result in: (i) debarment under 21 U.S.C. Section 335(a) or any similar Law, or (ii) exclusion under 42 U.S.C. Section 1320(a)(7) or any similar Law. As of the date hereof, no claims, actions, proceedings or investigations that
would reasonably be expected to result in such a material debarment or exclusion are pending or threatened against the Company, or the officers, directors, or managing employees of the Company. 
 (d)     (i) The manufacturing operations by or on behalf of the Company have been and are being conducted in compliance with
applicable Good Manufacturing Practices, and the respective counterparts thereof promulgated by Governmental Authorities in countries outside the United States, (ii) all pre-clinical, clinical and other studies and tests, conducted by or on
behalf of or sponsored by the Company have been and are being conducted (A) to the extent applicable, in compliance with accepted professional standards and Law, including the Good Laboratory Practice and Good Clinical Practices and regulations
or guidance of Governmental Entities and, if applicable, the requirements of the FDA Act and its applicable implementing regulations at 21 C.F.R. Parts 11, 50, 54, 56, 58, and 312, and 314 and (B) to the extent applicable, in compliance with
counterpart regulations in all other countries and (iii) to the knowledge of the Company, there has been no notice or communication from any Governmental Entity, or any institutional review board, requiring the termination, suspension, or
material modification of any non-clinical or clinical study. 
 (e)     The Company has made available and disclosed to
Parent all material information in the possession of the Company concerning the active pharmaceutical ingredient, methods of manufacturing, validation, storage, safety, efficacy, side effects or toxicity (in animals or humans or otherwise), derived
from any pre-clinical or clinical use, studies, investigations or tests (in animals or humans or otherwise) conducted by the Company that have been submitted to the FDA or equivalent foreign body, or studied by the Company. 
 4.9     Litigation. Section 4.9 of the Company Disclosure Letter sets forth a true and complete list of all
litigation as of the date hereof, including reasonable detail regarding the current status of such litigation, to which the Company is or, to the Company’s knowledge, is threatened to be, a party or as to which its property or assets may be
bound that, individually or in the aggregate, would reasonably be expected to have a Company Material Adverse Effect. There is no litigation, arbitration, claim, suit, action, investigation, inquiry, notice of noncompliance, audit or proceeding by
or before any Governmental Entity or arbitrator (“Action”) pending or threatened against or affecting the Company, nor have any events occurred that could give rise to an Action, nor is there any judgment, award, decree,
injunction, rule or order of any Governmental Entity or arbitrator outstanding against the Company that, individually or in the aggregate, would reasonably be expected to have a Company Material Adverse Effect. Except as set forth in
Section 4.9 of the Company Disclosure Letter, there have 

  

 26 

 
been no Actions by any Governmental Entity against or involving the Company during the most recent three (3) years. 
 4.10     Taxes. 
 (a)     The Company has timely filed, or has caused to be timely filed on its behalf, all Tax Returns required to be filed by it. All such Tax Returns are complete and accurate in all material respects. All Taxes due and
payable by the Company (whether or not shown on any Tax Return) have been paid in full. The Company is not currently the beneficiary of any extension of time within which to file any Tax Return. No claim has ever been made in writing by an authority
in a jurisdiction where the Company does not file Tax Returns that the Company is or may be subject to taxation by that jurisdiction. 
 (b)     There are no Liens with respect to Taxes upon any asset of the Company other than Liens for Taxes not yet due and payable. 
 (c)     The Company has deducted, withheld and paid to the appropriate Governmental Entity Taxes required to be deducted, withheld or paid in connection with amounts paid or owing to any employee,
independent contractor, creditor, member, stockholder or other Person. 
 (d)     No deficiencies for Taxes of the
Company have been claimed, proposed or assessed by any Governmental Entity. There is no dispute, audit, investigation, proceeding or claim concerning any Tax liability of the Company pending, being conducted, claimed, noticed, raised or threatened
in writing by a Governmental Entity. There are no matters under discussion with any Tax authority, or of which the Company has knowledge, with respect to Taxes that are likely to result in an additional liability for Taxes with respect to the
Company. The Company has not waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency, nor has any request been made in writing for any such extension or waiver. The
Company has made available to the Buyer true and complete copies of all Tax Returns, examination reports, and statements of deficiencies filed, assessed against, or agreed to by the Company with respect to all Tax years from and after 2005.

 (e)     No closing agreements, private letter rulings, technical advice memoranda or similar agreements or rulings
relating to Taxes have been entered into or issued by any Governmental Entity with or in respect of the Company. 
 (f)     The unpaid Taxes of the Company did not as of the date of the Financial Statements exceed the reserve for Taxes (excluding any reserve for deferred Taxes established to reflect timing differences between book and
Tax income) set forth on the face of the Interim Balance Sheet (rather than in any notes thereto). Since the date of the Interim Balance Sheet, the Company has not incurred any liability for Taxes arising (i) from extraordinary gains or losses
within the meaning of GAAP, or (ii) outside of the ordinary course of business consistent with past practice. 
 (g)     The Company is not a party to, and does not owe any amount under, any Tax sharing, Tax indemnity or Tax allocation agreement and, after the Closing, the Company 

  

 27 

 
shall not be bound by any such Tax-sharing agreements or similar arrangements or have any liability thereunder for amounts due in respect of periods prior to
the Closing. 
 (h)    The Company (i) has no liability for the Taxes of any Person (other than the Company) under
Treasury Regulation Section 1.1502-6 (or any similar provision of state, local or foreign Law) as a transferee or successor, by Contract or otherwise, and (ii) has never been a member of an affiliated group (within the meaning of
Section 1504(a) of the Code) filing a consolidated federal income Tax Return (other than a group the common parent of which was the Company). 
 (i)     The Company is not nor has ever been required to make any adjustment pursuant to Section 481(a) of the Code (or any predecessor provision) or any similar provision of state, local or foreign tax law by
reason of any change in any accounting methods or otherwise, and is not expected to be required to make such an adjustment as a result of the transactions contemplated hereunder. There is no application pending with any Governmental Entity
requesting permission for any changes in the Company’s accounting methods for Tax purposes. No Governmental Entity has proposed in writing any such adjustment or change in accounting method. 
 (j)     The Company (i) has not made an election and is not required to treat any of its assets as owned by another Person
pursuant to the provisions of Section 168(f) of the Internal Revenue Code of 1954 or as tax-exempt bond financed property or tax-exempt use property within the meaning of Section 168 of the Code; (ii) has not made a consent dividend
election under Section 565 of the Code; (iii) has not elected at any time to be treated as an S corporation within the meaning of Sections 1361 or 1362 of the Code; (iv) has not acquired nor owns any assets that directly or indirectly
secure any debt the interest on which is tax-exempt under Section 103(a) of the Code; and (v) has not made any of the foregoing elections nor is required to apply any of the foregoing rules under any comparable state or local Tax
provision. 
 (k)     The Company is not and has never been (i) a “United States real property holding
corporation” within the meaning of Section 897(c)(2) of the Code, (ii) a “personal holding company” within the meaning of Section 542 of the Code (or any similar provision of state, local or foreign law), (iii) a
shareholder in a controlled foreign corporation within the meaning of Section 957 of the Code or (iv) a shareholder in a passive foreign investment company within the meaning of Section 1297 of the Code. 
 (l)      The Company has not entered into a “listed transaction” within the meaning of Treasury Regulation
Section 1.6011-4(b)(2). 
 (m)    The Company has at no time constituted either a “distributing corporation” or
a “controlled corporation” in a distribution of stock intended to qualify for tax-free treatment under Section 355 of the Code (i) in the two years prior to the date of this Agreement or (ii) in a distribution which could
otherwise constitute part of a “plan” or “series of related transactions” (within the meaning of Section 355(e) of the Code) in conjunction with the transactions described in this Agreement. 
  

 28 

 (n)     The Company will not be required to include any item of income in, or exclude
any item of deduction from, taxable income for any Tax period (or portion thereof) ending after the Closing Date as a result of any (i) “closing agreement” as described in Section 7121 of the Code (or any corresponding or similar
provision of state, local or foreign income Tax law) executed on or prior to the Closing Date, (ii) installment sale or open transaction disposition made on or prior to the Closing Date or (iii) prepaid amount received on or prior to the
Closing Date. 
 (o)     The Company (i) is not and has never been a “surrogate foreign corporation”
within the meaning of Section 7874(a)(2)(B) of the Code or is treated as a U.S. corporation under Section 7874(b) of the Code and (ii) was not created or organized in the United States such that the Company would be taxable in
the United States as a domestic entity pursuant to Treasury Regulation Section 301.7701-5(a). 
 4.11   Absence of Certain
Changes or Events. Since December 31, 2007, except as set forth in Section 4.11 of the Company Disclosure Letter, the Company has conducted its business in the ordinary course consistent with past practice and, since such date,
there has not been: (i) a Company Material Adverse Effect or an event or development that would, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect or (ii) any action taken by the Company, if
taken during the period from the date of this Agreement through the Effective Time, would constitute a breach of Section 6.1(a). 
 4.12   Material Agreements. 
  (a)   The Company has made available to Parent true and correct
copies of the following contracts or agreements (oral or written) to which the Company is a party or by which the Company is bound (each, a “Material Agreement”): 
 (i)       all contracts or agreements (oral or written) under which the Company has any outstanding indebtedness,
obligation or Liability for borrowed money or the deferred purchase price of property or has the right or obligation to incur any such indebtedness, obligation or Liability; 
 (ii)      all bonds or agreements of guarantee or indemnification under which the Company acts as surety, guarantor or
indemnitor with respect to any obligation (fixed or contingent) in an individual amount or potential amount greater than $10,000 or in the aggregate more than $25,000; 
 (iii)     all partnership and joint venture agreements; 
 (iv)      all agreements relating to acquisitions or dispositions of any business or product line; 
 (v)       all agreements creating any obligation or commitment to purchase goods, materials or services in an amount
greater than $10,000 or in the aggregate more than $25,000; 
  

 29 

 (vi)     all bonus, profit sharing, compensation, severance, termination, stock
option, pension, retirement, deferred compensation, employment or other employee benefit agreements, any agreements providing for any payments upon a change in control, trusts, plans, funds or other arrangements for the benefit or welfare of any
director, officer or employee of the Company; 
 (vii)    all leases related to real property; 
 (viii)   all leases related to personal property in which such personal property leases have a value in excess of $10,000 individually or
$25,000 in the aggregate; 
 (ix)     all agreements with brokers that are not terminable by the Company upon sixty
(60) days’ notice without penalty or Liability; 
 (x)      all material agreements related to the
license or other transfer of Intellectual Property, except for non-exclusive licenses in the ordinary course of business; 
 (xi)     each agreement containing covenants limiting, in any material respect, the freedom of the Company to conduct business in any area or territory or line of business, to buy or sell particular goods or services, to
buy or sell goods or services from any other Person or to solicit customers, employees or other service providers; 
 (xii)    each agreement containing a change of control provision; 
 (xiii)   each agreement pursuant to
which the Company obtains from, or grants to, any third party the right to manufacture any product; 
 (xiv)    each
agreement relating to the research, design, development, testing, manufacture, or clinical trials; 
 (xv)     all
contracts or agreements which any of the benefits to any party of which will be increased, or the vesting of the benefits to any party of which will be accelerated, by the occurrence of any of the transactions contemplated by this Agreement or any
the Related Agreements, or the value of any benefits to any party of which will be calculated on the basis of any of the transactions contemplated by this Agreement or any Related Agreement 
 (xvi)    any other agreement material to the Company’s business or under which the consummation of the transactions contemplated by
this Agreement would constitute a default thereunder (with or without notice or lapse of time, or both) without the prior consent of or notice to another party thereto; and 
 (xvii)   each other agreement (or group of agreements) not discussed above, the loss of which would reasonably be expected to have,
directly or indirectly, individually or in the aggregate, a Company Material Adverse Effect; 
 (b)       As of
the date of this Agreement, the Company has made available to Parent true and complete copies of the Material Agreements identified in Section 4.12(a) of the Company Disclosure Letter. Each Material Agreement is legally valid,
binding, enforceable 

  

 30 

 
against the Company and, to the knowledge of the Company, against each other Person party to such Material Agreement (except, in each case, as such
enforceability may be limited by (i) bankruptcy, insolvency, moratorium, reorganization and other similar laws affecting creditors’ rights generally and (ii) the general principles of equity), and is in full force and effect.

 (c)     (i) Each of the Material Contracts is valid and binding upon the Company or, as the case may be (and, to the
Company’s knowledge, on all other parties thereto), in accordance with its terms and is in full force and effect, (ii) the Company has in all respects performed all obligations required to be performed by it as of the date hereof under
each Material Contract and, to the Company’s knowledge, each other party to each Material Contract has in all respects performed all obligations required to be performed by it under such Material Contract, (iii) there is no breach or
violation of or default by the Company under any of the Material Contracts, and (iv) no event has occurred with respect to the Company which, with notice or lapse of time or both, would constitute a breach, violation or default of, or give rise
to a right of termination, modification, cancellation, foreclosure, imposition of a lien, prepayment or acceleration under, any of the Material Contracts, except for such breaches, violations, defaults, terminations, modifications, cancellations,
foreclosures, impositions of a Lien, prepayments or accelerations referred to in clause (ii), (iii) or (iv), alone or in the aggregate with other such breaches, violations, defaults, terminations, modifications, cancellations, foreclosures,
impositions of a lien, prepayments or accelerations referred to in clause (ii), (iii) or (iv), would be reasonably likely to have a Company Material Adverse Effect. 
 4.13     Employee Benefit Plans; ERISA. 
 (a)    
Existence of Plans. Section 4.13(a) of the Company Disclosure Letter sets forth a correct and complete list of all “employee benefit plans”, as that term is defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”), and all other benefit plans, programs, agreements or arrangements, including pension, retirement, profit sharing, deferred compensation, stock option, change in control, retention, equity
or equity-based compensation, stock purchase, employee stock ownership, severance pay, vacation, bonus or other incentive plans, all medical, vision, dental or other health plans, all life insurance plans, and all other material employee benefit
plans or fringe benefit plans, in each case, whether oral or written, funded or unfunded, or insured or self-insured, maintained or sponsored by the Company or any Company Subsidiary, or to which the Company or any Company Subsidiary contributes or
is obligated to contribute thereunder, or with respect to which the Company or any Company Subsidiary has or may have any Liability or obligation (contingent or otherwise) (the “Plans”). Neither the Company nor any of the ERISA
Affiliates have announced or otherwise made any commitment to create or amend any Plan. For purposes of this Agreement, “ERISA Affiliate” means any Person that, together with the Company as of any relevant date, was or is required
to be treated as a single employer under Code Section 414 or ERISA. There are no Plans which Parent or the Company will not be able to terminate immediately after the Closing in accordance with their terms and ERISA. 
 (b)     Multiemployer Plan. None of the Plans (i) is or was a “multiemployer plan,” as defined in
Section 3(37) or 4001(a)(3) of ERISA, (ii) is or was subject to Section 412 of the Code or Section 302 or Title IV of ERISA, (iii) provides or provided post-retirement medical, health or other welfare benefits other than as
required by applicable law, and (iv) is or 

  

 31 

 
was a “welfare benefit fund,” as defined in Section 419(e) of the Code, or an organization described in Sections 501(c)(9) or 501(c)(20) of
the Code, and the Company and ERISA Affiliates do not, and have never been required to, contribute to, provide benefits or have any Liability or obligation under any such Plan, fund or organization. 
 (c)     Plan Descriptions. The Company has made available to Parent true and complete copies of: (i) each of the Plans,
or descriptions of any unwritten Plan, including all amendments thereto, and any related funding agreements thereto (including trust agreements or insurance contracts), all of which are legally valid and binding and in full force and effect and
there are no defaults thereunder, (ii) the currently effective summary plan description pertaining to each of the Plans, if any, (iii) the three (3) most recent annual reports of Form 5500 for each of the Plans (including all related
schedules), if any, (iv) the most recent IRS determination letter, opinion, notification or advisory letter (as the case may be) for each Plan which is intended to constitute a qualified plan under Section 401 of the Code, and (v) for
each unfunded Plan, financial statements consisting of (A) the statement of assets and liabilities of such Plan as of its most recent valuation date, and (B) the statement of changes in fund balance and in financial position or the
statement of changes in net assets available for benefits under such Plan for the most recently-ended plan year, which such financial statements shall fairly present the financial condition and the results of operations of such Plan in accordance
with GAAP, consistently applied, as of such dates. 
 (d)     Penalties; Reportable Events. Neither the Company
nor any ERISA Affiliate is subject to any material Liability, Tax or penalty with respect to a Plan under ERISA or the Code, and neither the Company nor any ERISA Affiliate has any knowledge of any circumstances which reasonably might result in any
such material Liability, Tax or penalty. Each Plan which is required to comply with the provisions of Sections 4980B and 4980C of the Code or the Treasury Regulations thereunder, or with the requirements referred to in Section 4980D of the Code
or the Treasury Regulations thereunder, has complied in all material respects. No event has occurred which would subject any Plan to Tax under Section 511 of the Code or the Treasury Regulations thereunder 
 (e)     Deficiencies; Qualification. Neither the Company nor any ERISA Affiliate has any unfunded Liability under ERISA in
respect of any of the Plans. All contributions required to be made by the Company or any of its ERISA Affiliates to any Plan have been made in accordance with the terms of that Plan, ERISA, the Code or any other applicable Laws. With respect to each
of such Plans, at the Closing there will be no unrecorded material Liabilities in accordance with the Company’s normal accounting practices with respect to the establishment, implementation, operation, administration or termination of any such
Plan, or the termination of the participation in any such Plan by the Company or any of its ERISA Affiliates. Each of the Plans which is intended to be a qualified plan under Section 401(a) of the Code has received a favorable determination
letter, opinion, notification or advisory letter from the IRS, and has been operated in accordance with its terms and with the provisions of the Code. All of the Plans have been administered and maintained in compliance in all material respects with
ERISA, the Code and all other applicable laws. 
 (f)     Parachute Payments. Neither this Agreement (or the
consummation of the Merger), nor any Plan or other agreement or contract between the Company or any Company 

  

 32 

 
Subsidiary and an employee or other individual, could reasonably be expected to result in (i) any “excess parachute payment” within the
meaning of Section 280G(b)(1) of the Code, or (ii) any obligation or Liability under Section 4999 of the Code. 
 (g)     COBRA. With respect to each Plan which provides health care coverage, the Company and each ERISA Affiliate have complied in all material respects with (i) the applicable health care continuation and
notice provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the applicable COBRA regulations, and the California Continuation Benefits Replacement Act, as amended
(“Cal-COBRA”) and (ii) the applicable requirements of the Health Insurance Portability and Accountability Act of 1996 and the regulations thereunder. 
 (h)     Code Section 409A. There is no Plan or other contract, agreement or benefit arrangement covering any current or
former employee or independent contractor of the Company which is subject to Section 409A of the Code and the Treasury Regulations thereunder and fails to comply with the requirements of Section 409A(a)(2), (3) or (4) of the
Code, or under which any such current or former “service provider” (as such term is defined in Section 409A of the Code and the Treasury Regulations and Internal Revenue Service guidance thereunder) has or will become subject to
taxation under Section 409A of the Code. In addition, no Company Option is subject to Section 409A of the Code. 
 4.14     Brokers or Finders. Except as disclosed in Section 4.14 of the Company Disclosure Letter, no agent, broker, investment banker, financial advisor or other firm or Person is or will be entitled
to any broker’s or finder’s fee or any other similar commission or fee in connection with any of the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Company. 
 4.15     Real Property; Personal Property. 
 (a)     Section 4.15(a) of the Company Disclosure Letter contains a complete list by address of all real property leased, operated or used by the Company (collectively, the
“Real Property”). The Company does not own, and has not previously owned, any real property. True and complete copies of such leases and subleases have been made available to Parent. To the knowledge of the Company, no litigation,
condemnation, expropriation, eminent domain or similar proceeding affecting all or any portion of any Real Property is pending or threatened. There are no oral agreements with respect to any Real Property. Except as set forth on
Section 4.15(a) of the Company Disclosure Letter, no option to extend, renew or purchase with respect to any Real Property has been exercised. No guaranty or other undertaking with respect to the performance of any obligation
arising under any agreement or document related to the Real Property has been delivered by the Company. 
 (b)     The
Company has legal and valid title to, or in the case of leased assets and properties, valid and subsisting leasehold interests in, all of the tangible personal properties and assets used in the operation of the Company’s business, free and
clear of all Encumbrances, except for Permitted Encumbrances. None of the real or tangible personal property or assets owned, leased, operated or used by the Company is subject to any lease, sublease, license, 

  

 33 

 
sublicense or other agreement granting to any other Person any right to the use, occupancy or enjoyment of such property or any portion thereof.

 4.16     Affiliated Transactions and Certain Other Agreements. Other than as set forth in
Section 4.16(a) of the Company Disclosure Letter, there are no agreements or Liabilities between the Company, on the one hand, and any officer, employee, director or stockholder of the Company or Affiliates, on the other hand and no
officer, employee, director or stockholder of the Company or Affiliate provides or causes to be provided any assets, services or facilities to the Company. 
 4.17     Environmental Matters. 
 (a)     The Company
(i) is in material compliance with all, and is not subject to any liability with respect to any, applicable Environmental Laws, (ii) holds or has applied for all Environmental Permits necessary to conduct its current operations and
(iii) is in material compliance with its respective Environmental Permits. 
 (b)     The Company has not received
any written notice, demand, letter, claim or request for information alleging that the Company may be in violation of, or liable under, any Environmental Law, and it not aware of any unasserted claim or request. 
 (c)     The Company (i) has not entered into or agreed to any consent decree or order or is subject to any judgment, decree or
judicial order relating to compliance with Environmental Laws, Environmental Permits or the investigation, sampling, monitoring, treatment, remediation, removal or cleanup of Hazardous Materials and, to the knowledge of the Company, no
investigation, litigation or other proceeding is pending or threatened in writing with respect thereto or (ii) is not an indemnitor in connection with any claim threatened or asserted in writing by any third-party indemnitee for any liability
under any Environmental Law or relating to any Hazardous Materials. 
 (d)     None of the real property owned or leased
by the Company is listed or, to the knowledge of the Company, proposed for listing on the “National Priorities List” under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, as updated through the
date hereof, or any similar state or foreign list of sites requiring investigation or cleanup. 
 4.18    
Intellectual Property. 
 (a)     Section 4.18(a) of the Company Disclosure Letter sets forth all
Intellectual Property owned or licensed by the Company. Each item of Intellectual Property that is shown as registered, filed, issued, or applied for in Section 4.18(a) of the Company Disclosure Letter has been duly registered in, filed
in or issued by the official governmental registers and/or issuers (or officially recognized registers or issuers) for such Intellectual Property. Each such registration, filing, issuance and/or application (i) has not expired or lapsed or
been abandoned or cancelled, (ii) has been maintained effective by all requisite filings, renewals and payments and (iii) remains in full force and effect. 
  

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 (b)     The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby will not (i) constitute a breach of any instrument or agreement governing any Intellectual Property, (ii) cause the forfeiture or termination or give rise to a right of forfeiture or
termination of any Intellectual Property, (iii) cause any option or license or give rise to a right to be granted an option or license to any Intellectual Property, or (iv) impair the right of the Company to exploit any Intellectual
Property. 
 (c)     The Company owns and possesses all right, title and interest in and to (or has the right to use
pursuant to a valid and enforceable license or similar agreement listed on Section 4.18(c) of the Company Disclosure Letter) all Intellectual Property that is necessary for or used or held for use in the conduct of the
Company’s business as presently conducted or currently proposed to be conducted. With respect to each item of Intellectual Property, (i) the Company is the sole owner and possesses all right, title, and interest in and to the item, free
and clear of any Encumbrances and (ii) no action, suit, proceeding, hearing, investigation, charge, complaint, claim, or demand is pending or, to the knowledge of the Company, is threatened that challenges the legality, validity,
enforceability, registration, use, or ownership of the item. The Company has not received any written notice or claim during the five (5) years prior to the Closing Date (or earlier, if presently not resolved) and does not have knowledge
that the conduct of the Company’s businesses as presently conducted or currently proposed to be conducted, or the exploitation of any Intellectual Property, infringes on or misappropriates the Intellectual Property Rights of any third party.
The Company has not received any written notice or claim that any Intellectual Property is invalid or unenforceable, and to the knowledge of the Company, there is no basis for such a claim. 
 (d)     The Company has complied with the required duty of candor and good faith in dealing with the U.S. Patent and Trademark Office
and any other foreign offices having similar requirements, including the duty to disclose to the U.S. Patent and Trademark Office all information believed to be material to the Intellectual Property as defined in 37 C.F.R. § 1.56. 

(e)     All Intellectual Property that derives independent economic value, actual or potential, from not being generally known to
the public or to other persons who can obtain economic value from its disclosure or use has been maintained in confidence in accordance with protection procedures customarily used in the industry to protect rights of like importance. To the
knowledge of the Company, there has been no unauthorized use or disclosure of any Intellectual Property. All former and current officers, directors, employees, personnel, consultants, advisors, agents, and independent contractors of the Company and
each of its predecessors who have contributed to or participated in the conception and development of Intellectual Property for the Company have entered into valid and binding proprietary rights agreements with the Company vesting ownership of such
Intellectual Property in the Company. To the knowledge of the Company, no employee of the Company has entered into any contract or agreement that restricts or limits in any way the scope or type of work in which the employee may be engaged or
requires the employee to transfer, assign, or disclose information concerning his work to anyone other than the Company. The Company has not received written notice from any current or prior directors, officers, employees, consultants or contractors
of the Company claiming to have an ownership interest in any of the Intellectual Property and, to the knowledge of Company, there is no basis for such a claim. 
  

 35 

 (f)     To the knowledge of the Company, there is no infringement or misappropriation
of any Intellectual Property by any third party and the Company has not asserted in writing any such claim against any third party during the five (5) years prior to the Closing Date. 
 (g)     Except as may be required under the agreements set forth on Section 4.18(g) of the Company Disclosure Letter,
there is no requirement of the Company to pay royalties, honoraria, fees or other payments for the continued use or other exploitation of the Intellectual Property. 
 (h)     No complaint relating to an improper use or disclosure of, or a breach of security of, any personally identifiable information collected by Company has been made or threatened. 

4.19     Employees and Labor Matters. 
 (a)     The Company has made available to Parent an organizational chart of executive officers and key employees. 
 (b)     During the past five (5) years, the Company has not experienced any work stoppage, slow-down, picket, strike, lock-out or other labor disturbance, nor is any such work stoppage,
slow-down, picket, strike, lock-out or other labor disturbance presently occurring or, to the knowledge of the Company, threatened. To the knowledge of the Company, (i) there are no organizational efforts presently being made or threatened by
or on behalf of any labor union with respect to any employees of the Company, and (ii) during the last five (5) years, no union or other labor organization has attempted to organize any current or former employees of the Company. Neither
the Company nor any of its ERISA Affiliates are or were a party to any collective bargaining agreement. 
 (c)     There
are no claims, controversies, labor disturbances, investigations, proceedings or complaints pending or threatened, by any Governmental Entity, any employee of the Company, any party or parties representing any such employee, or any former employer
of a current employee of the Company, against the Company before any court, arbitrator or other tribunal. There are no unfair labor practice charges, charges of discrimination, wrongful termination or other similar complaints pending against the
Company involving employees now or previously employed by the Company, nor, to the Company’s knowledge, do any facts or circumstances exist that could provide a reasonable basis for the same. 
 (d)     The Company has complied with all applicable Laws, regulations and rules relating to employees, the employment of labor, and
the safety and health of employees, including without limitation, all laws, regulations and rules relating to occupational health and safety, discrimination, unemployment, wages, hours, the family and medical leave act, collective bargaining, and
the collection and payment of withholding Taxes and similar Taxes. To the knowledge of the Company, no facts or circumstances exist that could provide a reasonable basis for a claim of wrongful termination by a current or former employee of the
Company. 
  

 36 

 (e)     No member of the existing or prior work force of the Company has been
subjected to any occupational health or safety hazard as a result of his or her service to the Company that could reasonably be expected to be materially adverse to the Company. 
 (f)     Section 4.19(f) of the Company Disclosure Letter contains a list of all agreements: (i) restricting the
right of the Company to terminate any of its employees at-will; or (ii) requiring any payment, other than wages earned through the date of termination and accrued, unused vacation pay, upon termination of the employment of any employee of the
Company. All Company employees are employed at-will. 
 4.20     Insurance. The Company maintains insurance
coverage with reputable insurers, or maintains self-insurance practices, in such amounts and covering such risks as are in accordance with normal industry practice for companies engaged in businesses similar to that of the Company (taking into
account the cost and availability of such insurance). The Company has made available to Parent all insurance policies held by the Company, or which name the Company as a beneficiary. All of such policies are in full force and effect, are valid and
effective in accordance with their respective terms, and there is not, under any such policy, any existing material default or event of default (or event which with notice or lapse of time or both, would constitute a material default. 
 4.21     Accounts Receivable. The net accounts receivable set forth on the Interim Balance Sheet, and all net accounts
receivable arising since the date of the Interim Balance Sheet, represent bona fide claims of the Company against debtors for sales, services performed or other charges arising on or before the date hereof, and all the goods delivered and services
performed which gave rise to said accounts were delivered or performed in accordance with the applicable orders, agreements or customer requirements. Such net accounts receivable are subject to no defenses, counterclaims or rights of setoff and are
fully collectible in the ordinary course of business without cost in collection efforts therefor, except to the extent of the appropriate reserves for bad debts on accounts receivable as set forth on the Interim Balance Sheet and, in the case of
accounts receivable arising since the date of the Interim Balance Sheet, to the extent of a reasonable reserve rate for bad debts on accounts receivable which is not greater than the rate reflected by the reserve for bad debts on the Interim Balance
Sheet. 
 4.22     Absence of Certain Business Practices. Neither the Company, nor any of its directors, officers,
employees or agents have directly or indirectly (i) made any contribution or gift which contribution or gift is in violation of any applicable Law, (ii) made any bribe, rebate, payoff, influence payment, kickback or other payment to any
Person, regardless of form, whether in money, property or services, in violation of any Law or legal requirement, or (iii) established or maintained any fund or asset of the Company that has not been recorded in the books and records of the
Company. 
 4.23     Books and Records. The Company has made and kept (and given Parent access to) true,
correct and complete books and records and accounts, which, in reasonable detail, accurately and fairly reflect the activities of the Company as required by Section 6001 of the Code and the Treasury Regulations thereunder. The minute books of
the Company previously made available to Parent accurately and adequately reflect all action previously taken by the Company Stockholders, members, board of directors and committees of the Board of Directors 

  

 37 

 
of the Company. The copies of the stock book records of the Company previously made available to Parent are true, correct and complete, and accurately
reflect all transactions effected in the Company’s equity securities or membership interest through and including the date of this Agreement. 
 4.24     Foreign Corrupt Practices Act. Neither the Company nor, to the knowledge of the Company, any of its officers, directors, employees or agent thereof or any Company Stockholder thereof acting on behalf of
the Company has done any act or authorized, directed or participated in any act, in violation of any provision of the United States Foreign Corrupt Practices Act of 1977, as amended, applied to such Person. Furthermore, the Company represents that
it has not been limited in claiming any U.S. Tax benefits as prescribed by Section 162(c) of the Code and the Treasury Regulations thereunder. 
 4.25     Bank Accounts; Powers of Attorney. Section 4.25 of the Company Disclosure Letter sets forth the name of each bank in which the Company has an account, lock box or safe deposit box, the number
of each such account, lock box and safe deposit box, and the names of all Persons authorized to draw thereon or have access thereto. Except as set forth in Section 4.25 of the Company Disclosure Letter, no Person holds any power of
attorney from the Company. 
 4.26     Delaware Takeover Statute. The Company has taken all appropriate actions so
that the restrictions on business combinations contained in Section 203 of the DGCL will not apply with respect to or as a result of this Agreement or any Related Agreement and the transactions contemplated hereby and thereby, without any
further action on the part of the stockholders of the Company or the Company’s Board of Directors. True and complete copies of all resolutions of the Company’s Board of Directors reflecting such actions have been previously provided to
Parent. No other state takeover statute or similar statute or regulation is applicable to or purports to be applicable to the transactions contemplated by this Agreement or any Related Agreement. 
 4.27     Disclosure. No representation or warranty of the Company in this Agreement and no statement in the Company Disclosure
Letter omits to state a material fact necessary to make the statements herein or therein, in light of the circumstances in which they were made, not misleading. No notice given pursuant to Section 6.4 will contain any untrue statement or
omit to state a material fact necessary to make the statements therein or in this Agreement, in light of the circumstances in which they were made, not misleading. 
 ARTICLE V. 
 REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB 
 Parent represents and warrants to the Company that the statements contained in this Article V are correct and complete as of the date of this
Agreement and will also be correct and complete as of the Closing Date, except as set forth in the disclosure letter delivered to the Company on the date hereof (the “Parent Disclosure Letter”). The Parent Disclosure Letter is
arranged in paragraphs corresponding to the lettered and numbered paragraphs contained in this Article V, and the disclosures in any such paragraph of the Parent Disclosure Letter shall qualify the corresponding paragraph in this
Article V and such other paragraphs in this Agreement only 

  

 38 

 
to the extent it is readily apparent from the text of such disclosure that such other paragraph is also qualified. 
 5.1     Organization, Standing and Power. Parent is duly incorporated and is validly existing and in good standing under the
laws of the State of Delaware and has the requisite power and authority to carry on its business as now being conducted. Parent is duly qualified and in good standing to do business in each jurisdiction in which the failure to be so qualified would
have a Company Material Adverse Effect. The copies of Parent’s Organizational Documents are true, complete and correct copies of such documents as in effect on the date of this Agreement. Section 5.1 of the Parent Disclosure Letter
sets forth a complete and accurate list of each of Parent’s Subsidiaries. 
 5.2     Capitalization. The
authorized capital stock of Parent consists of (i) 100,000,000 shares of Parent Common Stock, of which 10,341,484 shares are issued and outstanding as of the date hereof, (ii) 1 share of Class B Common Stock, par value $0.001 per share, of
which no shares are issued and outstanding as of the date hereof, and (iii) 10,000,000 shares of preferred stock, par value $0.001 per share, of which no shares are issued and outstanding as of the date hereof. All outstanding shares of Parent
Common Stock are duly authorized, validly issued, fully paid and nonassessable and are not subject to preemptive or first refusal rights created by statute, the Organizational Documents of Parent or any agreement or document to which Parent is a
party or by which it is bound. As of the date hereof, Parent has reserved (i) an aggregate of 1,836,611 shares of Parent Common Stock for issuance upon exercise of options to acquire shares of Parent Common Stock, (ii) an aggregate of
58,987 shares of Parent Common Stock for issuance upon exercise of outstanding warrants to acquire shares of Parent Common Stock at an exercise price of $15.26 per share and (iii) an aggregate of 519,337 shares of Parent Common Stock reserved
for issuance pursuant to Parent’s 2007 Incentive Award Plan. 
 5.3     Issuance of Parent Common Stock. The
shares of Parent Common Stock to be issued pursuant to the Merger, when issued, will be duly authorized, validly issued, fully paid, non-assessable and issued in compliance with applicable federal and state securities Laws, subject to the truth and
accuracy of the representations made by the Company in Section 4.2. 
 5.4     Subsidiaries. Except
for the Australian Subsidiaries discussed in Section 5.5, each Subsidiary is duly organized, validly existing and, where applicable, in good standing under the laws of its jurisdiction of organization and has the requisite power and
authority to own, lease, license and operate its assets and properties and to carry on its business as it is now being conducted, and each Subsidiary is qualified to transact business, and is in good standing, in each jurisdiction in which the
properties owned, leased, licensed or operated by it, or the nature of the business conducted by it, makes such qualification necessary. 
 5.5     Australian Subsidiaries. Each Australian Subsidiary is duly incorporated and validly exists under the laws of Australia, and has the requisite power and authority to own, lease, license and operate its
assets and properties and to carry on its business as it is now being conducted, and each Australian Subsidiary is qualified to transact business in each jurisdiction in which the properties owned, leased, licensed or operated by it, or the nature
of the business conducted by it, makes such qualification necessary. 
  

 39 

 5.6     Authority; No Conflicts. 
 (a)     Each of Parent and the Merger Sub has all necessary corporate power and authority to execute and deliver this Agreement, to
perform its obligations hereunder and to consummate the transactions to which it is a party that are contemplated by this Agreement. The execution and delivery of this Agreement by Parent and the Merger Sub and the consummation of the transaction
contemplated by this Agreement by Parent and the Merger Sub have been duly and validly authorized by all necessary corporate action and no other corporate proceedings on the part of Parent and the Merger Sub, subject, in the case of consummation of
the Merger only, to the adoption of this Agreement and the approval of the Merger by the stockholders of Parent and the Merger Sub, and no other stockholder vote is necessary, to authorize this Agreement and the Related Agreements or to consummate
the transactions contemplated hereby or thereby. 
 (b)     This Agreement has been duly executed and delivered by Parent
and Merger Sub and constitutes a valid and binding agreement of Parent and Merger Sub, enforceable against each of them in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium
and similar laws relating to or affecting creditors generally and by general equity principles. 
 (c)     The execution
and delivery of this Agreement by Parent and the Merger Sub does not, and the performance of this Agreement and the consummation of the transactions contemplated herein by Parent and the Merger Sub will not, (i) conflict with or violate any
provision of Parent’s or Merger Sub’s Organizational Documents, (ii) assuming that all consents, approvals, authorizations and permits described in Section 5.6(d) have been obtained and all filings and notifications
described in Section 5.6(d) have been made, conflict with or violate any Law applicable to Parent or Merger Sub or by which any property or asset of Parent or Merger Sub is bound or affected or (iii) require any consent or approval
under, result in any breach of or any loss of any benefit under, constitute a change of control or default (or an event which with notice or lapse of time or both would become a default) under or give to others any right of termination, vesting,
amendment, acceleration or cancellation of, or result in the creation of a lien or other encumbrance on any property or asset of Parent or Merger Sub pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease, license, Permit or
other instrument or obligation, except in the case of clause (iii), for any such consent, approval, breach, loss or default which would not, individually or in the aggregate, reasonably be expected to result in a Parent Material Adverse Effect.

 (d)     The execution and delivery of this Agreement by Parent and Merger Sub does not, and the performance of this
Agreement and the transactions contemplated herein by Parent and Merger Sub will not, require any consent, approval, authorization or permit of, or filing with or notification to, any Governmental Entity or any other Person, except (i) under
the Securities Act, any applicable Blue Sky Law, the rules and regulations of the Exchanges, the Australian Corporations Act and the filing and recordation of the Certificate of Merger as required by the DGCL and (ii) where failure to obtain
such consents, approvals, authorizations or permits, or to make such filings or notifications to a Person other than a Governmental Entity, would not, individually or in the aggregate, reasonably be expected to result in a Parent Material Adverse
Effect. 
  

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 5.7     Information Statement; Financial Statements. 
 (a)     All information in the Information Statement will be accurate at the time the Information Statement is supplied to the
Company by Parent and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which such
statements were made; provided, however, Parent makes no representation as to the accuracy of any information supplied by the Company for inclusion in the Information Statement. The audited consolidated financial statements and unaudited
interim consolidated financial statements (including, in each case, the notes, if any, thereto) of Parent to be included in the Information Statement, to the extent they relate solely to Parent, will comply as to form in all material respects with
the published rules and regulations of the SEC with respect thereto, were prepared in accordance with GAAP applied on a consistent basis during the periods involved (except as may be indicated therein or in the notes thereto and except with respect
to unaudited statements as permitted by Form 10-Q of the SEC) and fairly present (subject, in the case of the unaudited interim financial statements included therein, to normal year-end adjustments and the absence of complete footnotes) in all
material respects the consolidated financial position of Parent and its consolidated Subsidiaries as of the respective dates thereof and the consolidated results of their operations and cash flows for the respective periods then ended. 

(b)     The audited consolidated financial statements and unaudited interim consolidated financial statements (including, in each
case, the notes, if any, thereto) of Parent to be included in the Information Statement, to the extent they relate solely to Parent, comply as to form in all material respects with the published rules and regulations of the SEC with respect thereto,
were prepared in accordance with GAAP applied on a consistent basis during the periods involved (except as may be indicated therein or in the notes thereto and except with respect to unaudited statements as permitted by Form 10-Q of the SEC) and
fairly present (subject, in the case of the unaudited interim financial statements included therein, to normal year-end adjustments and the absence of complete footnotes) in all material respects the consolidated financial position of Parent and its
consolidated Subsidiaries as of the respective dates thereof and the consolidated results of their operations and cash flows for the respective periods then ended. 
 5.8     Litigation. As of the date hereof, (i) there is no suit, claim, action, proceeding or investigation pending or, to the knowledge of Parent, threatened in writing against Parent
or any of its Subsidiaries and (ii) neither Parent nor any of its Subsidiaries is subject to any outstanding Order, writ, judgment, injunction or decree of any Governmental Entity which, in the case of (i) or (ii), would, individually or
in the aggregate, reasonably be expected to result in a Parent Material Adverse Effect. 
 5.9     Absence of Certain
Changes or Events. Since March 31, 2008, except as specifically contemplated by, or as disclosed in, this Agreement or in Section 5.9 of the Parent Disclosure Letter, Parent has not experienced a Parent Material Adverse Effect
or an event or development that would, individually or in the aggregate, reasonably be expected to have a Parent Material Adverse Effect. 
  

 41 

 5.10     Ownership of Merger Sub; No Prior Activities. 
 (a)     Merger Sub was formed solely for the purpose of engaging in the transactions contemplated by this Agreement. 
 (b)     All of the outstanding capital stock of Merger Sub is owned directly by Parent. There are no options, warrants or other
rights (including registration rights), agreements, arrangements or commitments to which Merger Sub is a party of any character relating to the issued or unissued capital stock of, or other Equity Interests in, Merger Sub or obligating Merger Sub to
grant, issue or sell any shares of the capital stock of, or other Equity Interests in, Merger Sub, by sale, lease, license or otherwise. There are no obligations, contingent or otherwise, of Merger Sub to repurchase, redeem or otherwise acquire any
shares of the capital stock of Merger Sub. 
 (c)     Except for obligations or liabilities incurred in connection with
its incorporation or organization and the transactions contemplated by this Agreement, Merger Sub has not and will not have incurred, directly or indirectly, through any Subsidiary or Affiliate, any obligations or Liabilities or engaged in any
business activities of any type or kind whatsoever or entered into any agreements or arrangements with any Person. 
 5.11     Brokers or Finders. No agent, broker, investment banker, financial advisor or other firm or Person is or will be entitled to any broker’s or finder’s fee or any other similar commission or fee
in connection with any of the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Parent or Merger Sub. 
 5.12     Affiliated Transactions and Certain Other Agreements. Except as set forth on Section 5.12 of the Parent Disclosure Letter, no event has occurred that would be required to be reported by Parent
pursuant to Item 404 of Regulation S-K promulgated by the SEC. 
 ARTICLE VI. 
 COVENANTS RELATING TO CONDUCT OF BUSINESS 
 6.1     Covenants of the Company. The Company agrees that, between the date of this Agreement and the Effective Time (except as expressly contemplated or permitted by this Agreement, as set
expressly forth in the Company Disclosure Letter delivered as of the date hereof, or to the extent that Parent shall otherwise consent in writing, in its sole and absolute discretion) the Company shall carry on its business in the usual, regular and
ordinary course consistent with past practice, shall not enter into any contracts or arrangements other than in the ordinary course of its business consistent with past practice, and shall use all reasonable efforts to keep available the services of
the current officers, key employees and consultants of the Company and preserve intact its present business organizations and preserve its relationships with suppliers and other Persons with which the Company has significant business relations as is
necessary to preserve substantially intact its business organization. Without limiting the foregoing, and as an extension thereof, the Company shall not (unless required by applicable Law) between the date of this Agreement and the Effective Time,
directly or indirectly, do, or 

  

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agree to do, any of the following without the prior written consent of Parent, which shall not be unreasonably withheld: 
 (a)     (i) declare or pay any dividends on or make any other distributions in respect of any Company Capital Stock,
(ii) split, combine or reclassify any Company Capital Stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for, shares of Company Capital Stock or (iii) repurchase, redeem
or otherwise acquire any shares of Company Capital Stock or any securities convertible into or exercisable for any shares of Company Capital Stock; 
 (b)     issue, grant, deliver or sell, or authorize or propose the issuance, grant, delivery or sale of, any shares of Company Capital Stock of any class or any Equity Interests, or enter into any agreement with respect
to any of the foregoing; 
 (c)     amend or propose to amend its Organizational Documents; 
 (d)     (i) incur any indebtedness for borrowed money or guarantee any such indebtedness or issue or sell any debt securities or
warrants or rights to acquire any debt securities of the Company or guarantee any debt securities of other Persons, (ii) make any loans, advances or capital contributions to, or investments in, any other Person, (iii) pay, discharge or
satisfy any claims, Liabilities or obligations other than in the ordinary course of business consistent with past practice or (iv) enter into any derivative contracts, investments in marketable securities, payments, discharges or satisfactions;

 (e)     Other than as set forth on Schedule 6.1(e), (i) pre-pay any long-term debt, (ii) except in
the ordinary course of business, pay, discharge or satisfy any claims, Liabilities or obligations, (iii) accelerate or delay collection of notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same
would have been collected in the ordinary course of business consistent with past practice or (iv) delay or accelerate payment of any accounts payable in advance of or beyond its due date or the date such liability would have been paid in the
ordinary course of business consistent with past practice; 
 (f)     (i) increase the compensation payable or to become
payable to any of its executive officers or employees, (ii) other than as set forth in Schedule 6.1(f), grant any rights to severance or termination pay to, or enter into any employment or severance agreement with, any director, officer
or other employee of the Company, or grant any rights to severance or termination pay to, or enter into any employment or severance agreement with, any director, officer or other employee of the Company, or establish, adopt, enter into or amend any
Plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee, except to the extent required by applicable Law or the terms of a collective bargaining agreement in existence on the date of this Agreement,
(iii) adopt any new Plan, or (iv) amend or modify, or accelerate the vesting, exercisability or funding of, any Plan, except as required by Law; 
 (g)     acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets) or agree to acquire: (i) any business or any corporation, partnership, limited
liability company, joint venture, association or other business organization or 

  

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division thereof or (ii) any assets that would be material, individually or in the aggregate, to the Company; 
 (h)     sell, pledge, lease, transfer, guarantee, license, mortgage or otherwise Encumber or subject to any Lien or otherwise dispose
of any of the Company’s property or assets (including Intellectual Property); 
 (i)     write off any notes or
accounts receivable; 
 (j)     adopt or change any accounting methods, principles or practices, except as required by
GAAP; 
 (k)     reduce the amount of any insurance coverage provided by its existing insurance policies; 
 (l)     terminate or waive any contractual right of substantial value; 
 (m)     make any new or change in any Tax election, settlement or compromise of any claim, notice, audit report or assessment in
respect of Taxes, change in any annual Tax accounting period, adoption or change in any method of Tax accounting, filing of any amended Tax Return, entrance into any tax allocation agreement, tax sharing agreement, tax indemnity agreement or closing
agreement relating to any Tax, surrender of any right to claim a Tax refund, or consent to any extension or waiver of the statute of limitations period applicable to any Tax claim or assessment; 
 (n)     incur or enter into any agreement or commitment in excess of $10,000 individually or $15,000 in the aggregate; 
 (o)     make or agree to make any new capital expenditure or expenditures, except pursuant to the budget set forth on Schedule
6.1(o) hereto; 
 (p)     hire any employee or consultant; 
 (q)     enter into or amend any agreement pursuant to which any other party is granted any exclusive marketing or other exclusive
right of any type or scope with respect to any of the Company’s product candidates or technology; 
 (r)     (i)
enter into any agreement that would be a Material Agreement to the Company, or (ii) terminate or amend any Material Agreement listed in Section 4.12(a) of the Company Disclosure Letter or take any action that would result in, or
reasonably be expected to lead to, a default (with or without notice, lapse of time or both) under, amendment or termination of such Material Agreements; 
 (s)     take any action to exempt any Person or make any Person not subject to: (i) the provisions of Section 203 of the DGCL or (ii) any other state takeover law or state law that
purports to limit or restrict business combinations or the ability to acquire or vote shares; 
  

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 (t)     enter into any agreement, contract, commitment or arrange to do any of the
foregoing, or to authorize or announce an intention to do any of the foregoing; and 
 (u)     take any action that could
reasonably be expected to result in: (i) any of the representations or warranties of the Company set forth in this Agreement that are qualified as to materiality becoming untrue, (ii) any of such representations and warranties that are not
so qualified becoming untrue in any material respect or (iii) any of the conditions to the Merger set forth in Article VIII not being satisfied. 
 6.2     No Solicitation. 
 (a)     Upon the earlier of the
Effective Time and the date of the termination of this Agreement pursuant to the provisions of Section 10.1, neither the Company nor any of its officers, directors or employees shall, and the Company shall use best efforts to cause its
attorneys, accountants, investment bankers, financial advisors, agents and other representatives (collectively, “Representatives”) not to, directly or indirectly: (i) enter into, solicit, initiate, conduct or continue any
discussions or negotiations with, or encourage or respond to any inquiries or proposals by, or provide any information to, or otherwise cooperate in any other way with, any Person or group of Persons, other than Parent and Merger Sub, concerning a
Acquisition Proposal, (ii) approve or agree to or enter into any letter of intent or similar document or any contract or agreement (whether binding or not) contemplating or otherwise relating to an Acquisition Proposal, or (iii) make or
authorize any statement, recommendation, solicitation or endorsement in support of any Acquisition Proposal. Upon execution of this Agreement, the Company shall, and shall cause its Representatives to, cease immediately and cause to be terminated
any and all existing discussions or negotiations with any parties conducted heretofore with respect to an Acquisition Proposal and promptly request that all confidential information with respect thereto furnished on behalf of the Company be
returned, destroyed or retained in confidence as provided in the respective confidentiality agreement with such party. 
 (b)
    The Company shall promptly (and, in any event, within twenty-four (24) hours) (i) notify Parent (orally and in writing) if any offer is made to it, any discussions or negotiations are sought to be initiated with it,
any inquiry, proposal or contact is made or any information is requested from it with respect to any Acquisition Proposal, (ii) notify Parent of the terms of any proposal that it may receive in respect of any Acquisition Proposal, and the
identity of the Person making such proposal, (iii) provide Parent with a copy of any such proposal or inquiry, if written, or a written summary of such proposal or inquiry, if not in writing and (iv) inform Parent of any material changes
to the terms of any Acquisition Proposal of which it is aware. Notwithstanding the foregoing provisions of this Section 6.2, the Company may, in general terms only, in response to an unsolicited inquiry from a third party concerning a
Acquisition Proposal, inform such third party that the Company is under a contractual obligation not to discuss such matter. 
 6.3     Advice of Changes. The Company shall report (to the extent permitted by Law, regulation and any applicable confidentiality agreement) to Parent on operational matters from the date hereof until the
Effective Time. Each party shall (i) confer on a regular and frequent basis with the other, and (ii) promptly advise the other orally and in writing of (A) any 

  

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representation or warranty made by it contained in this Agreement that is qualified as to materiality becoming untrue or inaccurate, or any such
representation or warranty that is not so qualified becoming untrue or inaccurate in any material respect as though made then and as though the date of such occurrence were substituted for the date of this Agreement, (B) the failure by it to:
(x) comply with or satisfy in any respect any covenant, condition or agreement required to be complied with or satisfied by it under this Agreement that is qualified as to materiality or (y) comply with or satisfy in any material respect
any covenant, condition or agreement required to be complied with or satisfied by it under this Agreement that is not so qualified as to materiality, or (C) any change, event or circumstance that has had or could reasonably be expected to have
a material adverse effect on such Party, as applicable, on such party or materially adversely effect its ability to consummate the Merger in a timely manner; provided, however, that no such notification shall affect the representations,
warranties, covenants or agreements of the parties or the conditions to the obligations of the parties under this Agreement. 
 6.4     Tax Matters. 
 (a)     Tax Periods Ending on or before the Closing Date
– Tax Returns. Parent shall prepare or cause to be prepared and file or cause to be filed, consistent with the Company’s past practice unless otherwise required by Law, all Tax Returns for the Company for all periods ending on or prior
to the Closing Date which are filed after the Closing Date. Except to the extent that such Taxes were taken into account in calculating Company Net Cash, the Company Stockholders shall reimburse Parent for Taxes with respect to such periods within
fifteen (15) days after the date on which Taxes are paid with respect to such periods. 
 (b)     Tax Periods
Beginning Before and Ending After the Closing Date. Parent shall prepare or cause to be prepared and file or cause to be filed any Tax Returns of the Company for Tax periods which begin before the Closing Date and end after the Closing Date (a
“Straddle Period”). Except to the extent that such Taxes were taken into account in calculating Company Net Cash, the Company Stockholders shall pay to Parent within fifteen (15) days after the date on which Taxes are paid with
respect to such periods an amount equal to the portion of such Taxes which relates to the portion of such Taxable period ending on the Closing Date. For purposes of the preceding sentence, in the case of any Taxes that are imposed on a periodic
basis and are payable for a Straddle Period, the portion of such Tax that relates to the portion of such Tax period ending on the Closing Date shall (i) in the case of any Taxes other than Taxes based upon or related to income or receipts, be
deemed to be the amount of such Tax for the entire Tax period multiplied by a fraction the numerator of which is the number of days in the Tax period ending on the Closing Date and the denominator of which is the number of days in the entire Tax
period, and (ii) in the case of any Tax based upon or related to income or receipts, be deemed equal to the amount which would be payable if the relevant Tax period ended on the Closing Date. 
 (c)     Cooperation on Tax Matters. Parent, the Company, the Company Stockholders and the Company Stockholder Representative
shall cooperate fully, as and to the extent reasonably requested by the other party, in connection with the filing of Tax Returns pursuant to this Agreement and any audit, litigation or other proceeding with respect to Taxes. Such cooperation shall
include the retention and (upon the other party’s request) the provision of 

  

 46 

 
records and information which are reasonably relevant to any such audit, litigation or other proceeding and making employees available on a mutually
convenient basis to provide additional information and explanation of any material provided hereunder. Parent, the Company, the Company Stockholders and the Company Stockholder Representative agree (A) to retain all books and records with
respect to Tax matters pertinent to the Company relating to any Taxable period beginning before the Closing Date until the expiration of the statute of limitations (and, to the extent notified by Parent, any extensions thereof) of the respective
Taxable periods, and to abide by all record retention agreements entered into with any Taxing authority, (B) to deliver or make available to Parent within sixty (60) days after the Closing Date, copies of all such books and records, and
(C) to give the other party reasonable written notice prior to transferring, destroying or discarding any such books and records and, if the other party so requests, Parent, the Company or the Company Stockholders or the Company Stockholder
Representative, as the case may be, shall allow the other party to take possession of such books and records at such other party’s expense. Parent and the Company Stockholder Representative further agree, upon request, to use their best efforts
to obtain any certificate or other document from any Governmental Entity or any other Person as may be necessary to mitigate, reduce or eliminate any Tax that could be imposed (including, but not limited to, with respect to the transactions
contemplated hereby). 
 (d)     Contest Provisions. If, subsequent to the Closing, Parent or the Company receives
notice of a Tax Contest with respect to any Tax Return for a Tax period or portion thereof ending on or before the Closing Date (a “Pre-Closing Return”), then within fifteen (15) days after receipt of such notice, Parent shall
notify the Company Stockholder Representative of such notice. The Company Stockholder Representative shall have the right to control the conduct and resolution of such Tax Contest, provided, however, that if any of the issues raised in such
Tax Contest could have an impact on Taxes of the Company for a Tax period or portion thereof beginning on or after the Closing Date (a “Post-Closing Tax Period”), then the Company Stockholder Representative shall afford Parent the
opportunity to control jointly the conduct and resolution of the portion of such Tax Contest which could have an impact on Taxes of the Company in any Post-Closing Tax Period provided, further, that if the Company Stockholders are not
reasonably expected to fully indemnify Parent Indemnified Parties pursuant to this Agreement for any Damages arising from such Tax Contest, then Parent shall control the conduct and resolution of such Tax Contest. If the Company Stockholder
Representative shall have the right to control the conduct and resolution of such Tax Contest but elect in writing not to do so, then Parent shall have the right to control the conduct and resolution of such Tax Contest, provided that Parent shall
keep the Company Stockholder Representative informed of all developments on a timely basis and Parent shall not resolve such Tax Contest in a manner that could reasonably be expected to have an adverse impact on the indemnifying parties’
indemnification obligations under this Agreement without Company Stockholder Representative written consent, which shall not be unreasonably withheld. Each party shall bear its own costs for participating in such Tax Contest. “Tax
Contest” means any audit, other administrative proceeding or inquiry or judicial proceeding involving Taxes. 
 (e)     Certain Taxes. All transfer, documentary, sales, use, stamp, registration and other substantially similar Taxes and fees (including any penalties and interest) incurred in connection with this Agreement
(collectively, “Transfer Taxes”) shall be paid by the Company Stockholders when due, and the Company Stockholders will, at their own expense, file all 

  

 47 

 
necessary Tax Returns and other documentation with respect to all such Transfer Taxes, and, if required by applicable law, Parent will, and will cause its
affiliates to, join in the execution of any such Tax Returns and other documentation. 
 (f)     Characterization of
Payments. Any payments made to the Company Stockholders, the Company or Parent pursuant to Sections 6.4(a), 6.4(b) or Article IX shall constitute an adjustment of the consideration paid for the Company Capital Stock for Tax
purposes and shall be treated as such by Parent, the Company and the Company Stockholders on their Tax Returns to the extent permitted by law. 
 (g)     Forms W-9. Prior to a Company Stockholder’s receipt of payment of the amounts to which such holder has a right to receive pursuant to the provisions of Article III, each Company
Stockholder shall have delivered to Parent a properly completed and duly executed IRS Form W-9 or Form W-8 (or suitable substitute form) establishing an exemption from backup withholding. 
 6.5     Reorganization Matters. 
 (a)     Parent, Merger Sub and the Company intend that, for federal income tax purposes, (i) the Merger shall constitute a “reorganization” within the meaning of Section 368(a)
of Code, (ii) this Agreement shall constitute a “plan of reorganization” within the meaning of Treasury Regulation Section 1.368-2(g) and (iii) Parent and the Company shall each be a party to such reorganization within the
meaning of Section 368(b) of the Code. However, neither Parent nor the Company makes any representation or warranty to the other or to any Company Stockholder regarding the Tax treatment of the Merger or whether the Merger will qualify as a
reorganization under the Code. Each of the Company and Parent acknowledges that it is relying on its own advisors in connection with the Tax treatment of the Merger and the other transactions contemplated by this Agreement. The Company and Parent
each agree to use their respective reasonable best efforts to cause the Merger to qualify, and will not take any actions which to their knowledge could reasonably be expected to prevent the Merger from qualifying, as a reorganization under
Section 368(a) of the Code. 
 (b)     Each of the Company and Parent shall report the Merger as a reorganization
within the meaning of Section 368 of the Code, unless otherwise required pursuant to a “determination” within the meaning of Section 1313(a) of the Code. 
 6.6     Terminations. Prior to the Closing, the Company shall terminate all of its officers, directors and employees, and
shall use commercially reasonable efforts to obtain from each such terminated person, a release of liability, in the form previously delivered to Parent’s counsel, releasing the Company, its successors and assigns, from all liability related to
such persons employment and termination by the Company (each an “Employee Release”). 
 6.7    
Stockholder Consents. Prior to the Closing, the Company shall use commercially reasonable efforts to obtain a release (each, a “Shareholder Release”), from the Company Stockholders representing holders of at least 90% of the
outstanding shares of the Company Capital Stock, releasing the Company, its successors and assigns, from any liability relating to, or arising from, the transactions contemplated by this Agreement or the Related Agreements. 
  

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 6.8     Termination of 401(k) Plan. Unless Parent requests otherwise in
writing, the board of directors of the Company shall adopt resolutions terminating, effective as of at least three (3) Business Days prior to the Closing Date, the Neosil, Inc. 401(k) Plan (the “Company 401(k) Plan”). At least
three (3) Business Days prior to the Closing Date, the Company shall deliver to or cause to be delivered to Parent (i) executed resolutions of the board of directors of the Company authorizing the termination of the Company 401(k) Plan,
and (ii) an executed copy of the amendment made to the Company 401(k) Plan in connection with the termination of the Company 401(k) Plan. 
 ARTICLE VII. 
 ADDITIONAL AGREEMENTS 
 7.1     Private Placement and Registration Rights. 
 (a)       The Company acknowledges that the issuance of the shares of Parent Common Stock pursuant to Section 3.1 is intended to be exempt from registration under the Securities Act, by virtue of
Regulation D of the Securities Act and/or Section 4(2) of the Securities Act and that the Company Stockholders, upon receipt of such shares of Parent Common Stock, may not sell such shares, unless such shares of Parent Common Stock subsequently
are registered under the Securities Act or an exemption from such registration is available. The Company understands that such shares must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from
such registration is available. The Company understands and agrees that, in order to ensure compliance with the restrictions referred to herein, Parent may issue appropriate “stop transfer” instructions to its transfer agent. The Company
understands that the following legend (and such other legends as Parent deems appropriate) shall be placed on such shares: 
 “THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR
DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNLESS
SOLD PURSUANT TO RULE 144 OF SUCH ACT.” 
 (b)       Following the Closing, Parent shall use commercially
reasonable efforts to prepare and file with the SEC a registration statement with the SEC (the “Parent Registration Statement”) registering the resale of the shares of Parent Common Stock to be issued to the Company Stockholders
pursuant to Article III on or prior to December 31, 2008 (it being understood that such registration statement may also register the resale of other securities of Parent). Parent shall use commercially reasonable efforts to have the
Parent Registration Statement declared effective under the Securities Act as promptly as practicable after such filing. Parent shall also take any reasonable action (other than qualifying to do business in any jurisdiction in which it is not now so
qualified or to file a general consent to service of process) 

  

 49 

 
required to be taken under any applicable state securities laws in connection with the resale of Parent Common Stock issued in the Merger and the Company
Stockholders shall furnish all information concerning the Company Stockholders as may be reasonably requested in connection with any such action. If the Company Stockholders fail to furnish such information, Parent’s obligation to file the
Parent Registration Statement shall be suspended until a reasonable amount of time following the date such information is ultimately furnished to Parent. Parent will advise the Company Stockholder Representative, promptly after it receives notice
thereof, of the time when the Parent Registration Statement has become effective or any supplement or amendment has been filed, the issuance of any stop order, the suspension of the qualification of the Parent Common Stock registered thereon, or any
request by the SEC for amendment of the Parent Registration Statement or comments thereon and responses thereto or requests by the SEC for additional information. Parent shall furnish the Company Stockholder Representative (who shall furnish to the
Company Stockholders) with such number of copies of the prospectus contained in the Parent Registration Statement, as declared effective by the SEC, as may be reasonably requested in order to dispose of the Parent Common Stock pursuant to the Parent
Registration Statement. All registration expenses incurred in by Parent connection with the registration of the shares of Parent Common Stock shall be borne by Parent. Parent will indemnify each Company Stockholder and each controlling person (as
defined in the Securities Act) against all Damages arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in the Parent Registration Statement, or any amendment or supplement thereto;
provided that Parent will not be liable in any such case to the extent that any Damages arise out of or are based on any untrue statement or omission or alleged untrue statement or omission, made in reliance upon and in conformity with
written information furnished to Parent for use in the Parent Registration Statement by the Company Stockholder Representative or any Company Stockholder. Notwithstanding anything to the contrary herein, the Company Stockholders shall indemnify
Parent and each controlling person (as defined in the Securities Act) against all Damages arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in the Parent Registration Statement, or any
amendment or supplement thereto to the extent that any Damages arise out of or are based on any untrue statement or omission or alleged untrue statement or omission, made in reliance upon and in conformity with written information furnished to
Parent for use in the Parent Registration Statement by such Company Stockholders. Subject to customary black-out periods in which case Parent shall provide notice of such black-out periods to the Company Stockholders through the Company Stockholder
Representative, at which time the Company Stockholders shall not sell Parent Common Stock registered pursuant to the Parent Registration Statement, Parent agrees to use commercially reasonable efforts to keep current and effective the Parent
Registration Statement until such time as it may be withdrawn pursuant to the last sentence of this Section 7.1(b). Upon the expiration of a black-out period, Parent shall provide notice to the Company Stockholders, at which time the
Company Stockholders may dispose of shares of Parent Common Stock. Parent may withdraw the Parent Registration Statement when the shares of Parent Common Stock to be issued in the Merger have been sold by the Company Stockholders or may be sold
under Rule 144 under the Securities Act. 
 (c)       The Company acknowledges and agrees that (i) as
a condition precedent to effecting such the issuance of the Parent Common Stock, Parent shall be entitled to obtain from each holder of Series A Preferred Stock an executed Shareholder Certificate in the form set forth in Exhibit C hereto (or
such other form as may be reasonably acceptable to Parent) (the 

  

 50 

 
“Shareholder Certificate”) and to rely on the representations of each shareholder therein in connection with the issuance of the Parent
Common Stock to such shareholder, (ii) the shares of Parent Common Stock so issued will not be registered under the Securities Act and will constitute “restricted securities” within the meaning of the Securities Act and (iii) the
certificates representing the shares of Parent Common Stock shall bear appropriate legends to identify such privately placed shares as being restricted under the Securities Act, to comply with applicable state securities Laws and, if applicable, to
notice the restrictions on transfer of such shares; 
 (d)       The Company shall use all requisite efforts to
cause each holder of Series A Preferred Stock to execute and deliver a Shareholder Certificate to Parent and to furnish Parent with such further information as may be necessary, in Parent’s reasonable judgment, to effect the registration of the
resale of the Parent Common Stock issued pursuant to this Agreement. 
 7.2     Company Stockholder Approval. As
soon as reasonably practicable following the execution and delivery of this Agreement by all parties hereto and following consultation with Parent, the Company shall (i) set a record date for the determination of Company Stockholders eligible
to vote on the Company Stockholder Action, (ii) distribute the Information Statement to the Company Stockholders and (iii) take all other commercially reasonable action necessary in accordance with applicable Law and its Organizational
Documents to convene a meeting of the Company Stockholders or to secure the written consent of the Company Stockholders to approve the Merger and this Agreement (“Company Stockholder Action”) as soon as practicable following the
date that is thirty (30) days after June 9, 2008 (or, such earlier date that is mutually acceptable to the Company and Parent). Parent shall prepare the Information Statement, at its sole cost and expense, and deliver the
Information Statement to the Company in a time and manner sufficient to allow the Company to satisfy its obligation hereunder; provided, however, the Company shall promptly provide Parent with all reasonable information requested by Parent
that is necessary for the preparation of the Information Statement. The Company shall consult with Parent regarding the date of the Company Stockholder Action and shall not postpone or adjourn (other than for the absence of a quorum) any meeting of
the Company Stockholders without the consent of Parent, which consent shall not be unreasonably withheld. The Company shall use all commercially reasonable efforts required to solicit and obtain from the Company Stockholders proxies or written
consents in favor of this Agreement and the Merger, and shall take all other actions necessary or advisable to secure the vote or written consent of such Company Stockholders required to approve and adopt this Agreement and the Merger and to effect
the Merger. The Company agrees that its obligations pursuant to the first sentence of this Section 7.2 shall not be affected by the commencement, public proposal, public disclosure or communication to the Company of any Acquisition
Proposal. 
 7.3     Parent Stockholder Approval. Parent shall use its reasonable best efforts to obtain the
Required Parent Stockholder Approval, in accordance with the applicable requirements of the DGCL and ASX. Without limiting the foregoing, the Parent shall (i) set a record date for the determination of Parent Stockholders eligible to vote on
the resolutions the subject of the Required Parent Stockholder Approval, (ii) prepare and deliver to Parent Stockholders the Notice of Meeting, (iii) prepare and deliver to Parent Stockholders the Independent Expert’s Report and
(iv) take all other commercially reasonable action necessary in accordance with applicable Law (including the listing rules of the ASX) and its Organizational Documents to convene a meeting of the Parent Stockholders. The Parent shall use all
commercially reasonable efforts required to 

  

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solicit and obtain from the Parent Stockholders proxies or written consents in favor of the resolutions in the Notice of Meeting, and shall take all other
actions necessary or advisable to secure the vote or written consent of such Parent Stockholders required to obtain the Required Parent Stockholder Approval. 
 7.4     Access to Information. Upon reasonable notice, the Company and Parent shall afford to one another, and their respective Representatives, reasonable access during normal business
hours, during the period prior to the Effective Time of the Merger, to the each party’s: (i) properties, books, contracts, commitments and records, (ii) suppliers, manufacturers and other third parties with whom the party conducts
business, (iii) officers, employees and Representatives and all other information concerning its business, properties and personnel as may be reasonably requested by the other party; provided, however, each party may restrict the
foregoing access to the extent that (i) a Governmental Entity requires such party to restrict access to any properties or information reasonably related to any such contract on the basis of applicable Laws and regulations or (ii) any Law,
treaty, rule or regulation of any Governmental Entity applicable to such party requires such party to restrict access to any properties or information; provided, further; that, the Company shall provide Parent with monthly financial
statements in a form reasonably acceptable to Parent, as soon as practicable following the conclusion of each month. Such information shall be held in confidence to the extent required by, and in accordance with, the provisions of the
confidentiality letter (the “Confidentiality Agreement”) dated March 31, 2008, between the Company and Parent, which Confidentiality Agreement shall remain in full force and effect. 
 7.5     Assistance with Financial Statements; Accountant Letter. 
 (a)       In addition to its obligations under Section 7.4, prior to the Effective Time, the Company shall
(i) provide Parent with all financial information regarding the Company, in such form as reasonably requested by Parent, in connection with Parent’s disclosure obligations under the Securities Act and Exchange Act, as applicable,
including, (A) audited financial statements for each of the two years ending December 31, 2007 and (B) financial statements for any interim period since December 31, 2007 and (ii) assist Parent with the preparation of any
pro forma financial statements required by Regulation S-X of the Exchange Act. The costs and expense of the Company in the preparation and production of such financial statements shall not constitute “Company Expenses” hereunder for
purposes of determining the Company Net Cash at Closing. 
 (b)       The Company shall use commercially
reasonable efforts to cause to be delivered to Parent a letter of Ernst & Young LLP, dated no more than two (2) Business Days before the date on which the Parent becomes subject to the Exchange Act (and reasonably satisfactory in form
and substance to Parent), that is customary in scope and substance for letters delivered by independent public accountants in connection with a reporting company’s obligations under the Exchange Act. 
 7.6     Approvals and Consents; Cooperation. 
 (a)       Each of the Company and Parent shall cooperate with each other and use its reasonable efforts to take or cause to be taken all actions, and do or cause to be done all 

  

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things, necessary, proper or advisable on their part under this Agreement and applicable Laws to consummate and make effective the Merger and the other
transactions contemplated by this Agreement as soon as practicable, including: (i) preparing and filing as promptly as practicable all documentation to effect all necessary applications, notices, petitions, filings, Tax ruling requests and
other documents and to obtain as promptly as practicable all consents, waivers, licenses, orders, registrations, approvals, Permits, Tax rulings and authorizations necessary or advisable to be obtained from any third party and/or any Governmental
Entity in order to consummate the Merger or any of the other transactions contemplated by this Agreement, (ii) taking all reasonable steps as may be necessary to obtain all such consents, waivers, licenses, registrations, Permits,
authorizations, Tax rulings, Orders and approvals and (iii) the defending of any lawsuits or other legal proceedings, whether judicial or administrative, challenging this Agreement or the consummation of the transactions contemplated by this
Agreement, including seeking to have any stay or temporary restraining order entered by any court or other Governmental Entity vacated or reversed. Without limiting the generality of the foregoing, each of the Company and Parent agrees to make all
necessary filings in connection with any consents, licenses, permits, waivers, approvals, authorizations or Orders of any Governmental Entity required to be obtained or made by Parent or the Company or any of their Subsidiaries (the
“Required Regulatory Approvals”), as promptly as practicable after the date of this Agreement, and to use its reasonable efforts to furnish or cause to be furnished, as promptly as practicable, all information and documents
requested with respect to such Required Regulatory Approvals and shall otherwise cooperate with the applicable Governmental Entity in order to obtain any Required Regulatory Approvals in as expeditious a manner as possible. Each of the Company and
Parent shall use its reasonable efforts to resolve such objections, if any, as any Governmental Entity may assert with respect to this Agreement and the transactions contemplated hereby in connection with the Required Regulatory Approvals. In the
event that a suit is instituted by a Person or Governmental Entity challenging this Agreement and the transactions contemplated hereby as violative of applicable antitrust or competition laws, each of the Company and Parent shall use its reasonable
efforts to resist or resolve such suit. 
 (b)       Notwithstanding anything to the contrary contained in this
Agreement, Parent shall not have any obligation under this Agreement: (i) to dispose or transfer or cause its Subsidiaries to dispose of or transfer any assets, or to commit to cause the Surviving Entity to dispose of any assets, (ii) to
discontinue or cause its Subsidiaries to discontinue offering any product or service, or to commit to cause the Surviving Entity to discontinue offering any product or service, (iii) to license or otherwise make available, or cause its
Subsidiaries to license or otherwise make available, to any Person, any technology, software or other Intellectual Property, or to commit to cause the Surviving Entity to license or otherwise make available to any Person any technology, software or
other Intellectual Property, (iv) to hold separate or cause its Subsidiaries to hold separate any assets or operations (either before or after the Closing), or to commit to cause the Surviving Entity to hold separate any assets or operations or
(v) to make or cause its Subsidiaries to make any commitment (to any Governmental Entity or otherwise) regarding its future operations or the future operations of the Surviving Entity. 
 7.7     Fees and Expenses. Whether or not the Merger is consummated, all fees and expenses incurred in connection with the
Merger, including all legal, accounting, financial advisory, consulting and all other fees and expenses of third parties (“Third-Party Expenses”) incurred by a party in connection with the negotiation and effectuation of the terms
and 

  

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conditions of this Agreement and the transactions contemplated hereby, shall be the obligation of the respective party incurring such fees and expenses.

 7.8     Public Announcements. Parent and the Company shall consult with the other and obtain the prior written
consent of the other before issuing any press release or otherwise making any public statement with respect to this Agreement or the transactions contemplated hereby, provided that any party may make any public disclosure it believes in good faith
is required by applicable Law, regulation or stock market rule, except that the parties may make statements that are not inconsistent with previous press releases, public disclosures or public statements made by Parent and the Company in compliance
with this Section 7.8. Notwithstanding the foregoing, Parent shall have the sole and exclusive right to issue a press release and otherwise announce the execution of the Agreement and the transactions contemplated hereby. This
Section 7.8 shall not apply to Parent to the extent that prior notice or prior consent is not permitted or practicable in the circumstances because of the effect of a legal obligation (including any obligation under the listing rules of
the ASX). 
 7.9     ASX Filings. As soon as practicable following the Effective Time: (i) Parent will notify
the ASX of the issue of Parent Common Stock under Section 3.1 of this Agreement in the form of an Appendix 3B of the listing rules of the ASX and (ii) Parent will provide the ASX with a notice that complies with section 708A(6) of
the Australian Corporations Act in respect of the issue of Parent Common Stock under Section 3.1 of this Agreement. 
 7.10   Indemnification. 
 (a)       From and after the Closing, Parent agrees that
it will, and will cause the Company to, indemnify and hold harmless each present and former director and officer of the Company (the “D&O Indemnified Parties”), against any costs or expenses (including attorneys’ fees),
judgments, fines, losses, claims or damages incurred in connection with any claim, action, suit, proceeding or investigation, whether civil or criminal, arising out of or pertaining to matters existing or occurring at or prior to the Closing,
whether asserted or claimed prior to, at or after the Closing, to the fullest extent that the Company would have been permitted under its Organizational Documents or under the terms and conditions of applicable policies in effect at such time. The
Organization Documents of the Surviving Entity shall, with respect to matters occurring prior to the Effective Time, contain provisions no less favorable in the aggregate with respect to exculpation, indemnification and advancement of expenses of
the D&O Indemnified Parties than are set forth in the Company’s Organization Documents, and such provisions shall not be amended, repealed or otherwise modified in any manner that would materially and adversely affect the rights thereunder,
as of the Effective Time, of any D&O Indemnified Parties with respect to matters occurring prior to the Effective Time. 
 (b)       In the event that the Company, its Subsidiaries or Parent or any of its respective, successors or assigns (i) consolidates with or merges into any other person and is not the continuing or
surviving corporation or entity of such consolidation or merger or (ii) transfers or conveys all or substantially all of its properties and assets to any person, then, and in each such case, proper provision will be made so that the successors
and assigns of the Company or Parent will assume the obligations thereof set forth in this Section 7.10. 
  

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 7.11   Tax Audit. 
 (a)       As promptly as practicable following the Signing, the Company will engage PriceWaterhouseCoopers, LLC
(“PWC”) to conduct a forensic audit of the Company’s Tax records. Parent shall initially pay any costs PWC in connection with the audit that exceed $25,000, provided that Parent shall be reimbursed for all such costs through a
claim against the Tax Escrow Fund in an amount equal to such costs, and such reimbursement shall be made by the Escrow Agent within five (5) Business Days of a claim by Parent upon submission of an invoice from PWC (for avoidance of doubt, the
Escrow Agent shall disburse funds for such reimbursement without the consent of, or any instruction from, the Stockholder Representative). PWC shall prepare and deliver to Parent and the Company (or the Company Stockholder Representative if the
audit is completed post-Closing) a report (the “Tax Audit Report”) detailing the amount of any potential Tax liability relating to the Company’s failure to pay any sales or use Tax with respect to any Tax year or portion
thereof ending on or before the date of this Agreement (or for any Tax year beginning before and ending after the date of this Agreement, to the extent allocable (as determined in the last sentence in Section 6.4(b)) to the portion of
such period beginning before and ending on the date of this Agreement (the “Tax Liability”). The Company (and Parent if the audit does not conclude by the Closing) shall provide PWC with reasonable access to review the computations,
work papers (including access to accountants’ work papers, subject to such confidentiality restrictions as such accountants may reasonably request) and underlying books and records reasonably related to PWC’s preparation of the Tax Audit
Report. Following receipt of the Tax Audit Report, the Company or the Company Stockholder Representative, as applicable, shall have ten (10) business days in which to approve or object to the Tax Audit Report in writing. Any notice of objection
shall include in reasonable detail the basis for such objection. If the Tax Audit Report is approved, or if the aforementioned ten (10) business days shall have lapsed without the delivery of a written objection, then the Tax Audit Report shall
be deemed final (a “Final Tax Audit Report”). If an objection is made pursuant to this Section 7.11(a), Parent and PWC shall in good faith negotiate and attempt to agree with the Company or Company Stockholder
Representative, as applicable, and the Company Accountant (as defined below) upon the objectionable items in the Tax Audit Report. For such purpose, the Company or Company Stockholder Representative may, at its sole cost and expense, retain the
services of independent public accounts of nationally recognized standing as determined by the Company (“Company Accountant”). Also for such purpose, PWC shall provide the Company or Company Stockholder Representative, as
applicable, and Company Accountant, if any, with reasonable access to review the computations, work papers (including access to PWC’s work papers, subject to such confidentiality restrictions as PWC may reasonably request) and underlying books
and records reasonably related to PWC’s preparation of the Tax Audit Report. If the Company or Company Stockholder Representative, as applicable, Company Accountants, if any, Parent and PWC shall so agree, then the Tax Audit Report shall be so
revised and deemed final (such Tax Audit Report also deemed a “Final Tax Audit Report”). If no such agreement is reached after good faith negotiation, the Tax Audit Report originally delivered by PWC shall be deemed final and
binding (such Tax Audit Report then deemed a “Final Tax Audit Report”). 
 (b)      
Immediately following the later of (i) the Closing or (ii) the delivery of the Tax Audit Report, Parent and the Stockholder Representative shall give joint instructions to the Escrow Agent to release such number of Escrow Shares with a
value (as determine pursuant to 

  

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Section 9.7(c)) equal to the Tax Liability to Parent and any fees incurred by Parent in relation to PWC’s engagement, as set forth in
Section 7.11(a). Parent shall be first paid in Tax Escrow Shares for any amount owed under Section 7.11; provided, however, if the value of the Tax Escrow Shares is less than the amount of Tax Liability to which the
Parent is entitled to pursuant to this Section 7.11, then Parent shall be entitled to payment from the General Escrow Shares; provided, further, that in no event will Parent’s recovery pursuant to this
Section 7.11 exceed the aggregate number of Escrow Shares. 
 7.12   Further Assurances. 
 (a)       Subject to the terms and conditions herein, each of the parties hereto agrees to use its reasonable best efforts
to take, or cause to be taken, all appropriate action, and to do, or cause to be done, all things reasonably necessary, proper or advisable under applicable Laws to consummate and make effective the transactions contemplated by this Agreement,
including, without limitation, to fulfill all conditions precedent applicable to such party pursuant to this Agreement and to execute, acknowledge and deliver in proper form any further documents, certificates, agreements and other writings, and
take such other action as such other party may reasonably require, in order to effectively carry out the intent of this Agreement. 
 (b)       In case at any time after the Closing any further action is necessary to carry out the purposes of this Agreement or to vest Parent with full title to all properties, assets, rights, approvals,
immunities, franchises of any of the parties to the Closing, the proper officers and/or directors of Parent and the Company shall take all such necessary action. 
 7.13   Company Affiliates. Schedule 7.13 lists those persons who, in the Company’s reasonable judgment following consultation with legal counsel and accounting advisors, are or may be
“affiliates” of the Company within the meaning of Rule 145 under the Securities Act (the “Company Affiliates”). The Company shall furnish Parent with such information and documents as Parent shall reasonably request
for purposes of reviewing such list. The Company shall use its commercially reasonable efforts to deliver or cause to be delivered to Parent on or prior to the Closing an executed Company Affiliate Agreement, in the form attached hereto as
Exhibit D (each, an “Affiliate Agreement”) from each of the Company Affiliates who has not theretofore executed and delivered a Company Affiliate Agreement. The Company agrees that if any Person would have been a Company
Affiliate had such Person been an officer, director or shareholder of the Company as of the date of this Agreement, the Company shall cause such person to execute and deliver to the Company a Company Affiliate Agreement promptly upon such Person
attaining such status. 
 ARTICLE VIII. 
 CONDITIONS PRECEDENT 
 8.1     Conditions to Each Party’s
Obligation to Effect the Merger. The obligations of the Company, Parent and Merger Sub to effect the Merger are subject to the satisfaction or waiver on or prior to the Closing Date of the following conditions: 
  

 56 

 (a)       No Injunctions or Restraints, Illegality. No temporary
restraining order, preliminary or permanent injunction or other order issued by a court or other Governmental Entity of competent jurisdiction shall be in effect and have the effect of making the Merger illegal or otherwise prohibiting consummation
of the Merger; provided, however, that the provisions of this Section 8.1(a) shall not be available to any party whose failure to fulfill its obligations pursuant to Section 7.6 shall have been the cause of, or
shall have resulted in, such order or injunction. 
 (b)       Required Regulatory Approvals. All
required authorizations, consents, orders and approvals of, and declarations and filings with, and all expirations of waiting periods imposed by, any Governmental Entity (if any) shall have been obtained, have been declared or filed or have
occurred, as the case may be, and all such Required Regulatory Approvals shall be in full force and effect. 
 (c)       Required Stockholder Vote. The Required Stockholder Vote shall have been obtained. 
 (d)       Parent Stockholder Approval. The Required Parent Stockholder Approval shall have been obtained. 
 8.2     Additional Conditions to Obligations of Parent and Merger Subs. The obligations of Parent and Merger Sub to effect the Merger are subject to the satisfaction of, or waiver by Parent,
on or prior to the Closing Date, of the following additional conditions: 
 (a)       Representations and
Warranties. Each of the representations and warranties of the Company set forth in this Agreement (other than the representations and warranties of the Company made with reference to a specified date, which shall be true and correct as of such
date) that are qualified by materiality shall be true and correct in all respects and, to the extent not so qualified, shall be true and correct in all material respects, at and as of the Closing Date as if made at and as of such time, in each case,
except where the failure to be so true and correct, individually or in the aggregate, does not have as of the Closing a Company Material Adverse Effect. 
 (b)       Performance of Obligations of the Company. The Company shall have performed or complied, in all material respects, with all agreements and covenants required to be
performed by it under this Agreement at or prior to the Closing Date (determined without regard to any materiality qualifiers). 
 (c)       Absence of Company Material Adverse Effect. There shall not exist any Company Material Adverse Effect as of the Closing Date. 
 (d)       Consulting and Non-Competition Agreements. The individuals listed on Schedule 8.2(d) shall each
have entered into a Consulting and Non-Competition Agreements with Parent, effective on the Closing Date. 
 (e)       Report of Independent Expert. The Independent Expert shall have prepared a report on the Merger in accordance with principles set out in ASIC Regulatory Guide 111 (content of expert reports),
which concludes that the Merger is fair and reasonable to the 

  

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Parent Stockholders and there is no subsequent change to this conclusion prior to the meeting of Parent Stockholders to obtain the Required Parent
Stockholder Approval. 
 (f)       Minimum Cash Value. The Company Net Cash at the Determination Date
shall be greater than or equal to the Minimum Cash Value. 
 (g)       Dissenting Shares. The Dissenting
Shares shall represent less than 10% of the outstanding shares of capital stock of the Company as of the Closing Date. 
 (h)       Resignation. The Company shall have delivered to Parent written resignations, in a form reasonably acceptable to Parent, of each of the officers and directors of the Company listed on
Schedule 8.2(h), with each such resignation to be effective as of the Effective Time of the Merger. 
 (i)       Consents. Any consents of third person set forth on Section 4.4(c) of the Company Disclosure Letter and Section 5.6(c) of the Parent Disclosure Letter shall have been
obtained in form and substance reasonably acceptable to Parent. 
 (j)       Warrants. Notice of the
pending Merger shall have been delivered to the holder of the Warrant within the notice periods provided in the Warrant, and the Warrant shall have been fully exercised or else terminated in accordance with its terms. 
 (k)       Stockholder Releases. The Company shall have received Stockholder Releases from the Company Stockholders
representing holders of at least 90% of the outstanding shares of Company Capital Stock. 
 (l)         Employee Releases. The Company shall have received an Employee Release from each of the employees listed on Schedule 8.2(l). 
 (m)       Stockholder Certificate. Parent shall have received a Stockholder Certificate executed by each holder of
the Series A Preferred Stock. 
 (n)       Private Placement. An exemption from registration of the
shares (pursuant to the Securities Act) of Parent Common Stock to be issued to the Company Stockholders in the Merger shall be available to Parent, in Parent’s sole judgment, and Parent shall have received a certificate, in the form attached
hereto as Exhibit E (a “Registration Exemption Certificate”), from each Company Stockholder. 
 (o)       FIRPTA Certificate. The Company shall deliver, or cause to be delivered, to Parent a form of notice to the Internal Revenue Service in accordance with the requirements of Treasury Regulation
Section 1.897-2(h)(2) and in form and substance reasonably acceptable to Parent along with written authorization for Parent to deliver such notice form to the Internal Revenue Service on behalf of the Company upon the Closing of the Merger.

 (p)       Repayment. Parent shall have received written evidence, in a form reasonably acceptable to
Parent, that (i) the indebtedness of the Company set forth on Schedule 8.2(p) hereof shall have been repaid in full, and (ii) all UCC-3 Termination Statements necessary to terminate all Liens related to the indebtedness listed on
Schedule 8.2(p) have been filed. 
  

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 (q)       No Litigation. There shall not be pending any claim, suit,
action or proceeding brought or threatened in writing by any third party or by any Governmental Entity, (i) challenging or seeking to restrain or prohibit the consummation of the Merger or the other transactions contemplated by this Agreement
or seeking to obtain from Parent or any of its Subsidiaries any damages that are material, individually or in the aggregate, in relation to the value of the Company and its Subsidiaries, taken as a whole, (ii) seeking to impose limitations on
the ability of Parent or any of its affiliates to acquire or hold, or exercise full rights of ownership of, any shares of Company Common Stock or any shares of common stock of the Surviving Entity, including the right to vote the Company Common
Stock or the shares of common stock of the Surviving Entity on all matters properly presented to the stockholders of the Company or the Surviving Entity, respectively, or (iii) seeking to (A) prohibit Parent or any of its affiliates from
effectively controlling in any respect any of the business or operations of the Company or its Subsidiaries or (B) prevent the Company or its Subsidiaries from operating any of their business in substantially the same manner as operated by the
Company and its Subsidiaries prior to the date of this Agreement. 
 (r)       Termination of
Agreements. The Company shall have delivered written evidence, in a form reasonably acceptable to Parent, evidencing the termination of the agreements set forth on Schedule 8.2(r). 
 (s)       Certificate. The Chief Executive Officer or a Vice President of the Company shall have delivered to Parent
a certificate to the effect that each of the conditions specified above in this Section 8.2 is satisfied in all respects. 
 8.3     Additional Conditions to Obligations of the Company. The obligations of the Company to effect the Merger are subject to the satisfaction of, or waiver by the Company on or prior to the Closing Date, of the
following additional conditions: 
 (a)       Representations and Warranties. Each of the
representations and warranties of Parent and Merger Sub set forth in this Agreement (other than the representations and warranties of Parent and Merger Sub made with reference to a specified date, which shall be true and correct as of such date)
that are qualified by materiality shall be true and correct in all respects and, to the extent not so qualified, shall be true and correct in all material respects, at and as of the Closing Date as if made at and as of such time, in each case,
except where the failure to be so true and correct, individually or in the aggregate, does not have as of the Closing a Parent Material Adverse Effect. 
 (b)       Performance of Obligations of Parent. Parent shall have performed or complied, in all material respects, with all agreements and covenants required to be performed by it
under this Agreement at or prior to the Closing Date (determined without regard to any materiality qualifiers, including, without limitation, Parent Material Adverse Effect). 
 (c)       Absence of Parent Material Adverse Effect. There shall exist any Parent Material Adverse Effect as of the
Closing Date. 
  

 59 

 (d)       Certificate. The Chief Executive Officer or a Vice
President of Parent shall have delivered to the Company a certificate to the effect that each of the conditions specified above in Section 8.1, as applicable, and this Section 8.3 is satisfied in all respects. 
 ARTICLE IX. 
 RECOURSE TO ESCROW
AND INDEMNIFICATION 
 9.1     Survival of Representations and Warranties. The representations and
warranties in Article IV and in any Related Agreement, exhibit, schedule or certificate delivered by the Company pursuant hereto shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of
Parent or Merger Sub any Person controlling Parent or Merger Sub or any of their Representatives whether prior to or after the execution of this Agreement, until twelve (12) months following the Closing (the “Survival Period”).
The covenants and agreements of the parties hereto contained herein shall survive in accordance with their respective terms. So long as a Parent Indemnified Party gives a Notice for such claim on or before the expiration of the applicable Survival
Period, such Parent Indemnified Party shall be entitled to pursue its rights to indemnification under Section 9.2(a) hereof. In the event notice of any claim for indemnification under Section 9.2(a) hereof shall have been
given within the applicable Survival Period and such claim has not been finally resolved by the expiration of such Survival Period, the representations and warranties that are the subject of such claim shall survive the end of the Survival Period of
such representations or warranties until such claim is finally resolved, but such representations and warranties shall only survive with respect to such asserted claim. 
 9.2     Indemnification. 
 (a)       From and after
the Closing, each Company Stockholder (each an “Indemnifying Party” and collectively, the “Indemnifying Parties”) shall jointly and severally indemnify, save and hold harmless Parent and its Affiliates and their
respective Representatives (each, a “Parent Indemnified Party” and collectively, the “Parent Indemnified Parties”) from and against any and all costs, losses, Liabilities, obligations, damages, claims, demands and
expenses (whether or not arising out of third-party claims), including interest, penalties, costs of mitigation, reasonable attorneys’ fees and all amounts paid in investigation, defense or settlement of any of the foregoing
(“Damages”), incurred in connection with, arising out of, resulting from or incident to: 
 (i)       any breach of any representation or warranty made by the Company in this Agreement, any Related Agreement or any exhibit, schedule, the Company Disclosure Letter or certificate delivered by the
Company pursuant hereto; provided that for purposes of this Section 9.2(a)(i), whether there has occurred a breach by the Company of any representation or warranty, which is qualified by materiality (i.e.,
“material,” “material adverse effect,” “Company Material Adverse Effect” or similar phrases), shall be determined as if such representation or warranty were made without such qualification; 
 (ii)     any breach of any covenant or agreement made, or to be performed, by the Company in this Agreement, or any exhibit,
schedule, the Company Disclosure Letter or certificate delivered by the Company pursuant hereto; provided that for purposes of this Section  

  

 60 

 
9.2(a)(ii), whether there has occurred a breach by the Company of any covenant or agreement, which is qualified by materiality (i.e.,
“material,” “material adverse effect,” “Company Material Adverse Effect” or similar phrases), shall be determined as if such covenant or agreement were made without such qualification; 
 (iii)     any claim arising from the Company Stockholder Representative’s performance of his or her obligations under this
Agreement; and 
 (iv)     any claim by any employee of the Company for any payments or benefits as a result of the
termination of his or her employment with the Company or its successors under any contract to which the Company and such participant are parties or under any severance policy, practice or plan of the Company. 
 (b)       Interpretation. 
 (i)       The term “Damages” as used in this Section 9.2 is not limited to matters asserted by third parties against a Parent Indemnified Party, but includes
Damages incurred or sustained by the Parent Indemnified Party in the absence of Third-Party Claims. Notwithstanding anything in this Agreement to the contrary, the term “Damages” shall not include any consequential damages, claims
for lost profits or punitive damages, except (i) where such Damages are incurred due to fraud or willful misconduct of a party or (ii) to the extent recovered by a Person in connection with a Third-Party Claim. 
 (ii)     For purposes of this Article IX, Damages incurred or suffered by a Parent Indemnified Party arising out of any
breach of any representation, warranty, covenant or agreement shall be determined without deduction on account of any materiality (i.e., “material,” “material adverse effect,” “Company Material Adverse Effect” or
similar phrases) qualification contained in any representation, warranty, covenant or agreement giving rise to the claim for indemnification hereunder. 
 9.3     Procedure for Claims between Parties. If a claim for Damages (a “Parent Indemnity Claim”), other than Third-Party Claims under Section 9.4 below, is to
be made by a Parent Indemnified Party entitled to indemnification hereunder, such party shall give written notice briefly describing the claim and the total monetary damages (estimated, if necessary) sought (each, a “Notice”) to the
Company Stockholder Representative and the Escrow Agent as soon as practicable after such Parent Indemnified Party becomes aware of any fact, condition or event which gives rise to Damages for which indemnification may be sought under this
Article IX. The Notice may be amended on one or more occasions with respect to the amount of the total monetary Damages sought at any time prior to final resolution of the obligation to indemnify. Any failure to submit any such notice of
claim to the Company Stockholder Representative shall not relieve any Indemnifying Party of any liability hereunder, except to the extent that the Company Stockholder Representative demonstrates that an Indemnifying Party was actually and materially
prejudiced by such failure. The Company Stockholder Representative shall be deemed to have accepted the Notice and the Company Stockholders shall be deemed to have agreed to pay the Damages at issue, and the parties shall promptly instruct the
Escrow Agent to disburse funds from the General Escrow Fund, in an amount sufficient to pay the Damages, if the Company Stockholder Representative does not send a notice of disagreement 

  

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to the Parent Indemnified Party within thirty (30) calendar days after receiving the Notice pursuant to this Section 9.3. 
 9.4     Defense of Procedure for Third-Party Claims. 
 (a)       Except as otherwise provided in Section 6.4(d) with respect to Tax Contests, if a Parent Indemnity
claim is to be made by a Parent Indemnified Party entitled to indemnification hereunder in respect of, arising out of or involving a claim made by any third party (each, a “Third-Party Claim”) against the Parent Indemnified Party,
the Parent Indemnified Party shall give a Notice to the Company Stockholder Representative and the Escrow Agent as soon as practicable of after becoming aware of such Third-Party Claim. The failure of any Parent Indemnified Party to give timely
Notice hereunder shall not affect rights to indemnification hereunder, except to the extent that the Company Stockholder Representative demonstrates that an Indemnifying Party was actually and materially prejudiced by such failure. After such Notice
and subject to Section 9.4(b), if the Company Stockholder Representative acknowledges in writing to an Parent Indemnified Party that the Indemnifying Parties are liable and have indemnity obligations for any Damages resulting from any
such Third-Party Claim, then the Company Stockholder Representative shall be entitled, if it so elects at the Company Stockholders’ cost, risk and expense, (i) to take control of the defense and investigation of such Third-Party Claim,
(ii) to employ and engage attorneys of its own choice (provided that such attorneys are reasonably acceptable to Parent) to handle and defend the same, unless the named parties to such action or proceeding include both one or more Indemnifying
Parties and any such Parent Indemnified Party has been advised in writing by counsel that there may be one or more legal defenses available to such Parent Indemnified Party that are different from or additional to those available to an applicable
Indemnifying Party, in which event such Parent Indemnified Party shall be entitled, at the Indemnifying Parties’ cost, risk and expense, to separate counsel of its own choosing, and (iii) to compromise or settle such claim, which
compromise or settlement shall be made only with the written consent of the Parent Indemnified Party, such consent not to be unreasonably withheld, provided that any such compromise or settlement shall provide for the absolute and unconditional
release of the Parent Indemnified Parties from any liability with respect to such Third-Party Claim. If the Company Stockholder Representative elects to assume the defense of a Third-Party Claim (to the extend permitted above), it shall, within
thirty (30) days (or sooner, if the nature of the Third-Party Claim so requires), notify the Parent Indemnified Party of its intent to do so by sending a written notice to the Parent Indemnified Party (the “Defense Notice”),
which notice shall contain the acknowledgment set forth in the third sentence of this Section 9.4. Upon receipt of the Defense Notice (if applicable), the Parent Indemnified Party consents to such Defense Notice, the Parent Indemnified
Party shall cooperate, at the expense of the Indemnifying Parties, in the compromise or contest of such Third-Party Claim; provided, however, that the Parent Indemnified Party may, at its own cost, participate in the investigation, trial and
defense of such lawsuit or action and any appeal arising therefrom. If the Company Stockholder Representative fails to assume the defense of such claim within thirty (30) calendar days after receipt of the Notice (whether as a result of its
election not to assume such defense or the refusal of Parent to grant a request of the Company Stockholder Representative to assume such defense), the Parent Indemnified Party against which such claim has been asserted will have the right to
undertake, at the Indemnifying Parties’ cost, risk and expense, the defense, compromise or settlement of such Third-Party Claim on behalf of and for the account and risk of the Indemnifying Parties; provided, however, that such claim
shall not be compromised or settled 

  

 62 

 
without the written consent of the Company Stockholder Representative, which consent shall not be unreasonably withheld. If the Parent Indemnified Party
assumes the defense of the claim, the Parent Indemnified Party will keep the Company Stockholder Representative reasonably informed of the progress of any such defense, compromise or settlement. The Indemnifying Parties shall be liable for any
settlement of any Third-Party Claim effected pursuant to and in accordance with this Section 9.4 and for any final judgment (subject to any right of appeal), and each Company Stockholder agrees to indemnify and hold harmless the Parent
Indemnified Party from and against any Damages by reason of such settlement or judgment. 
 (b)       With
respect to any Damages relating solely to the payment of money damages in connection with a Third-Party Claim and that will not result in the Parent Indemnified Parties’ becoming subject to injunctive or other relief for other than money
damages, and as to which the Indemnifying Party shall have acknowledged in writing the obligation to indemnify the indemnitee hereunder, the Indemnifying Party shall have the sole right to consent to the entry of any judgment, enter into any
settlement or otherwise dispose of such Damages, on such terms as the Indemnifying Party, in its sole discretion, shall deem appropriate, provided that, as a result of or in connection with any such settlement each Parent Indemnified Party
shall receive a full and unconditional release with respect to such claim. If the Indemnifying Party chooses to defend or prosecute any Third-Party Claim pursuant to Section 9.4(a), no Parent Indemnified Party shall admit any liability
with respect to, or settle, compromise or discharge, any Third-Party Claim without the prior written consent of the indemnifying party, which consent shall not be unreasonably withheld. 
 (c)       Notwithstanding the foregoing, the Indemnifying Party shall not be entitled to assume the defense of any
Third-Party Claim (and shall be liable for the reasonable fees and expenses of counsel incurred by the Indemnified Party in defending such Third Party Claim) if the Third-Party Claim seeks an order, injunction or other equitable relief or relief for
other than money damages against the Indemnified Party that the Indemnified Party reasonably determines cannot be separated from any related claim for money damages. If such equitable relief or other relief portion of the Third-Party Claim can be so
separated from that for money damages, the Indemnifying Party shall be entitled to assume the defense of the portion relating to money damages, subject to Sections 9.4(a) and 9.4(b). 
 9.5     Effect of Investigation or Knowledge. Any claim by Parent or its Affiliates or any of their respective Representatives
for indemnification shall not be adversely affected by any investigation by or opportunity to investigate afforded to Parent, nor shall such a claim be adversely affected by the Parent or its Affiliates’ knowledge on or before the Closing Date
of any breach of the type specified in this Section 9.5 or of any state of facts that may give rise to such a breach. The waiver of any condition based on the accuracy of any representation or warranty, or on the performance of or
compliance with any covenant or obligation, will not adversely affect the right to indemnification, payment of Damages or other remedy based on such representations, warranties, covenants or obligations. 
 9.6     Resolution of Conflicts and Claims. 
 (a)       If the Company Stockholder Representative objects in writing to any claim for indemnification made by a Parent Indemnified Party in any Notice of a claim (an “Objection
 

  

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Notice”), the Company Stockholder Representative and Parent shall attempt in good faith to agree upon the rights of the respective parties with
respect to each of such claims, and the Company Stockholder Representative and Parent shall provide information to the other party (as reasonably requested) related to the issues set forth in the Objection Notice. If the Company Stockholder
Representative and Parent should so agree, a memorandum setting forth such agreement shall be prepared and signed by both parties and shall be furnished to the Escrow Agent. The Escrow Agent shall be entitled to rely on any such memorandum and
distribute funds from the General Escrow Fund in accordance with the terms thereof. 
 (b)       If no such
agreement is reached after good faith negotiation, either the Parent Indemnified Party or Company Stockholder Representative may require the other party to mediate the dispute, unless the amount of the Damages is at issue in a pending action or
proceeding involving a Third-Party Claim, in which event mediation shall not be commenced until such amount is ascertained or both parties agree to mediation. In any such mediation, the parties shall mutually agree upon the rules for such mediation.
The mediator shall be mutually agreed upon by the parties. The fees and expenses of the mediator shall be shared equally by the Parent Indemnified Party and Company Stockholder Representative. 
 (c)       If no such agreement is reached with good faith discussions or the parties do not reach agreement through
mediation, the parties may pursue such other remedies as available at Law subject to the terms of this Agreement. 
 9.7     Limitations on Indemnification; Payment of Damages. 
 (a)       In
no event shall the holders of Company Capital Stock be liable for any Damages pursuant to Sections 9.2(a)(i)-(a)(iv), (i) unless and until the aggregate amount of all such Damages exceeds $50,000 (the “Liability
Basket”), in which case the liability of Indemnifying Parties shall be the full amount of all such Damages and shall not be restricted to merely the excess over such threshold amount, and (ii) for any Damages, in the aggregate, in
excess of the total value (as calculated pursuant to Section 9.7(c)) represented by the General Escrow Shares (the “Liability Cap”); provided, however, the Liability Basket and Liability Cap shall not apply to, or
otherwise reduce or limit a Parent Indemnified Party’s recovery for, any Damages caused by fraud or willful misconduct of the Company, the Company Stockholder Representative or any Company Stockholder. 
 (b)       For claims brought under Sections 9.2(a)(i)-(a)(iv), the Parent Indemnified Party shall be paid in
General Escrow Shares, by the Indemnifying Parties, the amount to which the Parent Indemnified Party may become entitled by reason of the provisions of this Article IX, within five (5) calendar days after such amount is determined either
by mutual agreement of the parties or pursuant to the mediation proceeding described in Section 9.6 of this Agreement or on the date on which both such amount and the Indemnifying Party’s obligation to pay such amount have been
determined by a final judgment of a court or administrative body having jurisdiction over such proceeding. 
 (c)       Any claims for Damages asserted by Parent or any Parent Indemnified Party shall be satisfied by the return to Parent of the General Escrow Fund. For the purpose of determining the number of General
Escrow Shares to be delivered to Parent in fulfillment of a 

  

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claim for indemnification hereunder, each Escrow Share shall be valued at an amount equal to the Parent Common Stock Per Share Value. 
 (d)       Except as otherwise expressly provided in this Agreement, each party hereto acknowledges and agrees that its sole
and exclusive remedy with respect to any and all claims pursuant to Sections 9.2(a) (other than claims of, or causes of action arising from fraud or willful misconduct) shall be the rights set forth in Article IX. With respect to
claims related to fraud or willful misconduct (i) the liability of each Company Stockholder shall be several, not joint, based on the number of shares of Company Capital Stock held by such Company Stockholder as of immediately prior to the
Effective Time, compared to the total Company Capital Stock outstanding, and (iii) the maximum liability of each Company Stockholder shall be capped at the total amount of consideration pursuant to this Agreement actually received by such
Company Stockholder. 
 ARTICLE X. 
 TERMINATION AND AMENDMENT 
 10.1   Termination. This Agreement may be terminated at any time prior
to the Effective Time of the Merger: 
 (a)       by mutual written consent of Parent and the Company, by
action of their respective Boards of Directors; 
 (b)       by either Parent or the Company, if the Effective
Time of the Merger shall not have occurred by November 30, 2008 (the “Expiration Date”); provided that the right to terminate this Agreement under this Section 10.1(b) shall not be available to any party
whose failure to fulfill any obligation under this Agreement has been the cause of, or resulted in, the failure of the Effective Time of the Merger to occur on or before such date; 
 (c)       by either the Company or Parent, if any Governmental Entity shall have issued an order, decree or ruling or taken
any other action permanently restraining, enjoining or otherwise prohibiting the transactions contemplated by this Agreement, and such order, decree, ruling or other action shall have become final and non-appealable; 
 (d)       by Parent, (i) if a Company Material Adverse Effect shall have occurred and is not cured within fifteen
(15) days of its occurrence or (ii) upon a material breach of any covenant or agreement on the part of the Company set forth in this Agreement, or if any representation or warranty of the Company in this Agreement shall have become untrue
in any material respect, in each case such that the conditions set forth in Section 8.2(a) or Section 8.2(b) would not be satisfied, unless such breach is cured within fifteen (15) days’ notice by Parent or Merger
Sub and such breach is incapable of being cured by the Expiration Date; 
 (e)       by the Company,
(i) if a Parent Material Adverse Effect shall have occurred and is not cured within fifteen (15) days of its occurrence or (ii) upon a material breach of any covenant or agreement on the part of Parent set forth in this Agreement, or
if any representation or warranty of Parent in this Agreement shall have become untrue in any material respect, in each case such that the conditions set forth in Section 8.3(a) or Section 8.3(b) would 

  

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not be satisfied, unless such breach is cured within fifteen (15) days’ notice by the Company and such breach is capable of being cured by the
Expiration Date. 
 (f)       by Parent, if the Independent Expert concludes that the Merger is not fair and
reasonable to the Parent Stockholders or subsequently changes such conclusion prior to the meeting of the Parent Stockholders to obtain the Required Parent Stockholder Approval; 
 (g)       by Parent, if the Company or any of its directors or officers shall participate in discussions or negotiations or
furnish information in breach of Section 6.2; or 
 (h)       by Parent, if, as of the
Determination Date, the Company Net Cash is less than the Minimum Cash Value. 
 10.2   Effect of Termination. In the event
of termination of this Agreement by either the Company or Parent as provided in Section 10.1, this Agreement shall forthwith become void and there shall be no liability or obligation on the part of Parent or the Company or their
respective officers or directors; provided, however, that each party shall remain liable for any breaches of this Agreement; and provided, further, that the provisions of this Section 10.2 and Article XI of this
Agreement shall remain in full force and effect and survive any termination of this Agreement. 
 ARTICLE XI. 
 GENERAL PROVISIONS 
 11.1   Amendment. This Agreement may not be amended except by an instrument in writing signed on behalf of the Company, Parent and Merger Sub (or their respective successors or assigns), and, to the extent such amendment
effects the powers, privileges, duties, rights or obligations hereunder of the Company Stockholder Representative, the written consent of the Company Stockholder Representative. 
 11.2   Extension; Waiver. At any time prior to the Effective Time of the Merger, the parties hereto, by action taken or authorized by
their respective Boards of Directors, may, to the extent legally allowed, (i) extend the time for the performance of any of the obligations or other acts of the other parties hereto, (ii) waive any inaccuracies in the representations and
warranties contained herein or in any document delivered pursuant hereto, and (iii) waive compliance with any of the agreements or conditions contained herein. Any agreement on the part of a party hereto to any such extension or waiver shall be
valid only if set forth in a written instrument signed on behalf of such party. No delay on the part of any party hereto in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of any
party hereto of any right, power or privilege hereunder operate as a waiver of any other right, power or privilege hereunder, nor shall any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege hereunder. Unless otherwise provided, the rights and remedies herein provided are cumulative and are not exclusive of any rights or remedies which the parties hereto may otherwise have
at law or in equity. The failure of any party to this Agreement to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of those rights. 
  

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 11.3   Notices. All notices and
other communications hereunder shall be in writing and shall be deemed duly given (a) on the date of delivery if delivered personally, (b) on the first Business Day following the date of dispatch if delivered by a nationally recognized
next-day courier service, (c) on the tenth (10th) Business Day following the date of mailing if delivered by registered or certified mail,
return receipt requested and postage prepaid or (d) if sent by facsimile transmission, with a copy mailed on the same day in the manner provided in (b) or (c) above, when transmitted and receipt is confirmed by telephone. All notices
hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice: 
 (a)     if to Parent or Merger Sub: 
 Peplin, Inc. 
 475 Christie Avenue 
 Emeryville, California
94608 
 Attention: Chief Executive Officer 
 Telecopy No.: (510) 653-9704 
 with a copy to: 
 Latham & Watkins LLP 
 650 Town
Center Drive, Suite 2000 
 Costa Mesa, CA 92626 
 Attention: Kevin B. Espinola 
                  B. Shayne Kennedy 
 Telecopy
No.: (714) 755-8129 
 (b)     if to the Company: 
 Neosil, Inc. 
 5980 Horton St., Suite 525

 Emeryville, California 94608 
 Attention: Chief Executive Officer 
 Telecopy No.: (510) 547-3604 
  

 67 

 with a copy to: 
 Gunderson Dettmer Stough 
 Villeneuve Franklin & Hachigian, LLP 
 11682 El Camino Real, Suite 100 
 San Diego,
California 92130 
 Attention: Jeffrey P. Higgins 
 Telecopy No. (877) 881-9077 
 the Company Stockholder Representative: 
 c/o Clarus Ventures 
 801 Gateway
Boulevard; Suite 410 
 South San Francisco, CA 94080 
 Attention: Nicolas J. Simon, III 
 Telecopy: (650) 238-5001 
 11.4   Interpretation. When a reference is made in this Agreement to Sections, Exhibits or Schedules, such reference shall be to a
Section of or Exhibit or Schedule to this Agreement unless otherwise indicated. The table of contents, glossary of defined terms and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” The parties have
participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties and no presumption or burden or
proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement. Any reference to any federal, state, local or foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the content requires otherwise. 
 11.5   Counterparts. This Agreement may be
executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other party, it being understood
that both parties need not sign the same counterpart. 
 11.6   Entire Agreement; No Third Party Beneficiaries. 

(a)         This Agreement (including the Schedules and Exhibits) constitutes the entire agreement and
supersedes all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof, which shall survive the execution and delivery of this Agreement. 
 (b)         This Agreement shall be binding upon and inure solely to the benefit of each party hereto, and
nothing in this Agreement, express or implied, is intended to or shall 

  

 68 

 
confer upon any other Person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement. 
 (c)         After the Closing, the Company Stockholder Representative shall be entitled to enforce the rights of
the Company Stockholders and all other rights granted to the Company Stockholder Representative under this Agreement. 
 11.7     Governing Law. This Agreement shall be governed and construed in accordance with the laws of the State of Delaware, without regard to the laws that might be applicable under conflicts of laws principles.

 11.8     Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of
being enforced by any law or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any
manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible. Any provision of this Agreement held invalid
or unenforceable only in part, degree or certain jurisdictions will remain in full force and effect to the extent not held invalid or unenforceable. To the extent permitted by applicable law, each party waives any provision of law which renders any
provision of this Agreement invalid, illegal or unenforceable in any respect. 
 11.9     Assignment. Neither this
Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto, in whole or in part (whether by operation of law or otherwise), without the prior written consent of the other parties, and any
attempt to make any such assignment without such consent shall be null and void. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and
assigns. 
 11.10   Mediation. Except as set forth in Section 9.6, in the event there is any controversy,
dispute or claim between the parties to this Agreement, including any claim arising out of, in connection with, or in relation to the interpretation, performance or breach of this Agreement which cannot be resolved by the parties, the parties agree
to employ a mediator from the AAA to assist them in reaching resolution of such controversy, dispute or claim according to the Commercial Mediation Rules of the AAA. The mediator shall be a corporate attorney practicing in Los Angeles or Orange
County, California, with at least fifteen (15) years experience in mergers and acquisitions. The fees and expenses of the mediator shall be shared equally by the parties to such mediation. If after reasonable efforts, and over a period of sixty
(60) days, the parties are unable to reach agreement on such dispute utilizing the mediator, the parties shall be permitted to proceed exclusively in binding arbitration under the Commercial Arbitration Rules of the AAA in Los Angeles,
California. In connection with any AAA arbitration conducted under this Section 11.10, the arbitrator(s) shall have jurisdiction to permit the use of any discovery procedures available under the California Code of Civil Procedure upon a
showing that good cause exists for such discovery. In the event the amount in controversy 

  

 69 

 
exceeds $1,000,000, the claim shall be decided by a three-arbitrator panel selected in accordance with AAA rules. The award of such arbitrator may be
confirmed as a judgment in any court of competent jurisdiction. 
 11.11   Waiver of Trial by Jury. IN ANY ACTION OR
PROCEEDING ARISING OUT OF THIS AGREEMENT, THE PARTIES HERETO CONSENT TO TRIAL WITHOUT A JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY HERETO AGAINST THE OTHER OR THEIR SUCCESSORS IN RESPECT OF ANY MATTER ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT, REGARDLESS OF THE FORM OF ACTION OR PROCEEDING. 
 11.12   Enforcement. The parties agree
that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms. It is accordingly agreed that the parties shall be entitled to specific performance of the
terms hereof, this being in addition to any other remedy to which they are entitled at law or in equity. 
 [SIGNATURE PAGE FOLLOWS] 

  

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 IN WITNESS WHEREOF, Parent, Merger Sub, the Company, and the Company Stockholder Representative have
caused this Agreement to be executed as of the date first above written. 
  

			
	 PEPLIN, INC.
 a Delaware
corporation

		
	By:	 	/s/ Michael Aldridge
	Name:	 	Michael Aldridge
	Title:	 	Chief Executive Officer
	
	 WEST ACQUISITIONS CORP.,
 a Delaware
corporation

		
	By:	 	/s/ Philip Moody
	Name:	 	Philip Moody
	Title:	 	Director
	
	 NEOSIL, INC.
 a Delaware
corporation

		
	By:	 	/s/ Eugene Bauer MD
	Name:	 	Eugene Bauer MD
	Title:	 	Chief Executive Officer
	
	For purposes of Articles III and IX only:
	
	/s/ Nicholas J. Simon, III
	Nicholas J. Simon, III, as Company Stockholder Representative

  

 71

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