Document:

Gilead Sciences, Inc. 2004 Equity Incentive Plan

 Exhibit 10.1 
 GILEAD SCIENCES, INC. 
 2004 EQUITY
INCENTIVE PLAN(1) 
 1. Purpose
of the Plan. The purpose of this Plan is to provide incentives to attract, retain and motivate eligible persons whose present and potential contributions are important to the success of the Company by offering them an opportunity to participate
in the Company’s future performance. This Plan was originally approved by stockholders at the 2004 Annual Stockholders Meeting and serves as the successor to the Gilead Sciences, Inc. 1991 Stock Option Plan and the Gilead Sciences, Inc. 1995
Non-Employee Directors’ Stock Option Plan. No further option grants will be made under those plans, and the remaining shares available for issuance under those plans have been transferred to this Plan ad are available for issuance under this
Plan. 
 The October 2007 restatement expanded the list of performance criteria to which the vesting of one or more Awards may
be tied, including Awards designed to provide Performance-Based Compensation, and effected a series of technical revisions to the Plan in order to facilitate the administration of the Plan and provide additional flexibility in structuring Awards.

 The January 30, 2008 restatement adopted by the Board effected the following changes to the Plan, subject to
stockholder approval at the 2008 Annual Meeting: (i) increased the authorized share reserve under the Plan by an additional 10,000,000 shares of Common Stock and (ii) increased the limit on the maximum number of shares of Common Stock for
which “full value” Awards may be made over the term of the Plan by an additional 5,000,000 shares. The Company’s stockholders approved such increases at the 2008 Annual Meeting held on May 8, 2008. 
 2. Definitions. As used herein, the following definitions shall apply: 
 (a) “Administrator” means the Board or any of the Committees appointed to administer the Plan. 
 (b) “Applicable Acceleration Period” means: (i) 24 months, in the case of the Company’s Chief Executive
Officer, (ii) 18 months, in the case of an Executive Vice President or Senior Vice President of the Company, and (iii) 12 months, in the case of all other Grantees. 
 (c) “Applicable Laws” means the legal requirements relating to the Plan and the Awards under applicable provisions of
federal securities laws, state corporate and securities laws, the Code, the rules of any applicable stock exchange, and the rules of any non-U.S. jurisdiction applicable to Awards granted to residents therein. 
 (d) “Award” means the grant of an Option, SAR, Dividend Equivalent Right, Restricted Stock, Restricted Stock Unit,
Performance Unit, Performance Share, Phantom Share, or other right or benefit under the Plan. 
 (e) “Award
Agreement” means the written agreement evidencing the grant of an Award executed by the Company and the Grantee, including any amendments thereto. 
 (f) “Board” means the Board of Directors of the Company. 
  

	 (1)
	 Includes amendments through May 8, 2008, including the amendments approved by the stockholders at the annual
stockholders meeting held on such date. All share numbers have been adjusted to reflect the two-for-one stock split of the Common Stock effective September 3, 2004 and the two-for-one stock split of the Common Stock effective June 22,
2007. 

 (g) “Cause” means, with respect to the termination by the Company or a
Related Entity of the Grantee’s Continuous Service, that such termination is for one or more of the reasons set forth in the definition of “Cause” as such term is expressly defined in a then-effective written agreement between the
Grantee and the Company or such Related Entity, or in the absence of such then-effective written agreement and definition, is based on, in the determination of the Administrator, the Grantee’s: (i) performance of any act, or failure to
perform any act, in bad faith and to the detriment of the Company or a Related Entity; (ii) dishonesty, intentional misconduct, material violation of any applicable Company or Related Entity policy, or material breach of any agreement with the
Company or a Related Entity; or (iii) commission of a crime involving dishonesty, breach of trust, or physical or emotional harm to any person. 
 (h) “Change in Control” means, for purposes of all Awards at the time outstanding under the Plan, a change in ownership or control of the Company effected through the consummation of any of the
following transactions: 
 (i) a merger, consolidation or other reorganization approved by the Company’s stockholders,
unless securities representing more than fifty percent (50%) of the total combined voting power of the voting securities of the successor corporation are immediately thereafter beneficially owned, directly or indirectly and in
substantially the same proportion, by the persons who beneficially owned the Company’s outstanding voting securities immediately prior to such transaction, 
 (ii) a sale, transfer or other disposition of all or substantially all of the Company’s assets, 
 (iii) the closing of any transaction or series of related transactions pursuant to which any person or any group of persons comprising a
“group” within the meaning of Rule 13d-5(b)(1) of the 1934 Act (other than the Company or a person that, prior to such transaction or series of related transactions, directly or indirectly controls, is controlled by or is under common
control with, the Company) becomes directly or indirectly (whether as a result of a single acquisition or by reason of one or more acquisitions within the twelve (12)-month period ending with the most recent acquisition) the beneficial owner (within
the meaning of Rule 13d-3 of the 1934 Act) of securities possessing (or convertible into or exercisable for securities possessing) more than fifty percent (50%) of the total combined voting power of the Company’s securities (as measured in
terms of the power to vote with respect to the election of Board members) outstanding immediately after the consummation of such transaction or series of related transactions, whether such transaction involves a direct issuance from the Company or
the acquisition of outstanding securities held by one or more of the Company’s existing stockholders, or 
 (iv) a change
in the composition of the Board over a period of twelve (12) consecutive months or less such that a majority of the Board members ceases, by reason of one or more contested elections for Board membership, to be comprised of individuals who
either (A) have been Board members continuously since the beginning of such period or (B) have been elected or nominated for election as Board members during such period by at least a majority of the Board members described in clause
(A) who were still in office at the time the Board approved such election or nomination. 
 In no event, however, shall a
Change in Control be deemed to occur upon a merger, consolidation or other reorganization effected primarily to change the State of the Company’s incorporation or to create a holding company structure pursuant to which the Company becomes a
wholly-owned subsidiary of an entity whose outstanding voting securities immediately after its formation are beneficially owned, directly or indirectly and in substantially the same proportion, by the persons who beneficially owned the
Company’s outstanding voting securities immediately prior to the formation of such entity. 
 (i) “Code”
means the Internal Revenue Code of 1986, as amended. 
 (j) “Committee” means any committee composed of
members of the Board appointed by the Board to administer the Plan. 

 (k) “Common Stock” means the common stock of the Company. 
 (l) “Company” means Gilead Sciences, Inc., a Delaware corporation. 
 (m) “Consultant” means any person, including an advisor, who is compensated by the Company or any Related Entity for
services performed as a non-employee consultant; provided, however, that the term “Consultant” shall not include non-employee Directors serving in their capacity as Board members. The term “Consultant” shall include
a member of the board of directors of a Related Entity. 
 (n) “Continuous Service” means the performance of
services for the Company or a Related Entity (whether now existing or subsequently established) by a person in the capacity of an Employee, a Director or a Consultant, except to the extent otherwise specifically provided in the documents evidencing
the Award. For purposes of the Plan, a Grantee shall be deemed to cease Continuous Service immediately upon the occurrence of either of the following events: (i) the Grantee no longer performs services in any of the foregoing capacities for the
Company or any Related Entity or (ii) the entity for which the Grantee is performing such services ceases to remain a Related Entity of the Company, even though the Grantee may subsequently continue to perform services for that entity.
Continuous Service shall not be deemed to cease during a period of military leave, sick leave or other personal leave approved by the Company; provided, however, that should such leave of absence exceed three (3) months, then for
purposes of determining the period within which an Incentive Option may be exercised as such under the federal tax laws, the Grantee shall be deemed to have terminated Employee status on the first day immediately following the expiration of such
three (3)-month period, unless such Grantee is provided with the right to return to Continuous Service following such leave either by statute or by written contract. The Grantee shall not receive any Continuous Service credit, for purposes of
vesting in any outstanding Award or Awards made to the Grantee, for any period such Grantee is on a leave of absence, except to the extent otherwise required by law or pursuant to the following procedure: 
  

	 	•	 	 A Grantee shall receive Continuous Service credit for such vesting purposes for (i) the first three months of an approved personal leave of absence and
(ii) the first seven months of any bona fide leave of absence (other than an approved personal leave), but in no event beyond the expiration date of such leave of absence; provided, however, that in the event the Grantee’s
Award is subject to Section 409A of the Code and payable upon his or her separation from service, then the maximum period for which such Continuous Service credit shall be given with respect to that Award shall be determined in accordance with
Treasury Regulations Section 1.409A-1(h) and accordingly shall not extend beyond the date the Grantee is deemed to have a separation from service for purposes of Section 409A. 

 In jurisdictions requiring notice in advance of an effective termination of a Grantee’s service as an Employee, Director or Consultant, Continuous
Active Service shall be deemed terminated upon the actual cessation of such service to the Company or a Related Entity notwithstanding any required notice period that must be fulfilled before such individual’s termination as an Employee,
Director or Consultant can be effective under Applicable Laws. 
 A Grantee on an approved leave of absence shall be deemed to terminate
Continuous Service for purposes of his or her outstanding Awards upon the earlier of (i) the expiration date of that leave of absence, unless such Grantee returns to active Continuous Service on or before that date, or (ii) the date the
Grantee’s Continuous Service actually terminates by reason of his or her voluntary or involuntary termination or by reason of his or her death or disability; provided, however, that in the event the Grantee’s Award is subject
to Section 409A of the Code and payable upon his or her separation from service, then his or her Continuous Service shall, with respect to that Award, be deemed to terminate when such Grantee is deemed to have a separation from service under
Treasury Regulations Section 1.409A-1(h). 
 (n) “Covered Employee” means an Employee who is a
“covered employee” under Section 162(m)(3) of the Code. 
 (o) “Director” means a member of
the Board. 

 (p) “Dividend Equivalent Right” means a right entitling the Grantee to
compensation measured by dividends paid with respect to the Common Stock underlying his or her Award (other than an Option or SAR Award). 
 (q) “Domestic Partner” means a person who meets and continues to meet all of the criteria detailed in the Gilead Sciences Affidavit of Domestic Partnership when the Domestic Partnership has been
internally registered with the Company by filing with the Company an original, properly completed, notarized Gilead Sciences Affidavit of Domestic Partnership. 
 (r) “Employee” means any person, including an Officer or Director, who is in the employ of the Company or any Related
Entity, subject to the control and direction of the Company or any Related Entity as to both the work to be performed and the manner and method of performance. Neither service as a Director nor payment of a director’s fee by the Company or a
Related Entity shall be sufficient to constitute “employment” by the Company. 
 (s) “Exchange Act”
means the Securities Exchange Act of 1934, as amended. 
 (t) “Fair Market Value” means, as of any date, the
value of Common Stock determined as follows: 
 (i) If the Common Stock is listed on any established stock exchange, including
without limitation the NASDAQ Global or Global Select Market, the American Stock Exchange or the New York Stock Exchange, its Fair Market Value shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted
on such exchange (or the exchange with the greatest volume of trading in the Common Stock) on the last market trading day prior to the date of determination (or, if no closing sales price or closing bid was reported on that date, as applicable, on
the last trading date such closing sales price or closing bid was reported), as reported in The Wall Street Journal or such other source as the Board deems reliable; or 
 (ii) If the Common Stock is regularly quoted on an automated quotation system (including the OTC Bulletin Board) or by a recognized
securities dealer, but selling prices are not reported, the Fair Market Value per share of Common Stock shall be the mean between the high bid and high asked prices for the Common Stock on the last market trading day prior to the date of
determination (or, if no such prices were reported on that date, on the last date such prices were reported), as reported in The Wall Street Journal or such other source as the Board deems reliable; or 
 (iii) In the absence of an established market for the Common Stock of the type described in (i) and (ii), above, the Fair Market
Value thereof shall, for purposes of any Award other than an Incentive Stock Option, be determined by the Board through the reasonable application of a reasonable valuation method that takes into account the applicable valuation factors set forth in
the Treasury Regulations issued under Section 409A of the Code and shall, for purposes of an Incentive Stock Option, be determined by the Board in good faith in accordance with the standards of Section 422 of the Code and the applicable
Treasury Regulations thereunder. 
 (u) “Grantee” means an Employee, Director or Consultant who receives an
Award under the Plan. 
 (v) “Immediate Family” means any child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships, Domestic Partner, a trust in which such persons (or the
Grantee) have more than 50% of the beneficial interest, a foundation in which such persons (or the Grantee) control the management of assets, and any other entity in which such persons (or the Grantee) own more than fifty percent (50%) of the
voting interests. 

 (w) “Incentive Stock Option” means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code and the regulations promulgated thereunder. 
 (x)
“Nonstatutory Stock Option” means an Option not intended to qualify as an Incentive Stock Option. 
 (y)
“Officer” means a person who is an officer of the Company or a Related Entity within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder. 
 (z) “Option” means an option to purchase Shares pursuant to an Award Agreement granted under the Plan. 
 (aa) “Parent” means a “parent corporation”, whether now or hereafter existing, as defined in
Section 424(e) of the Code. 
 (bb) “Performance-Based Compensation” means compensation qualifying as
“performance-based compensation” under Section 162(m) of the Code. 
 (cc) “Performance Share
Units” means an Award denominated in Shares which may be earned in whole or in part upon attainment of performance criteria established by the Administrator and settled in actual Shares, except to the extent the Administrator may determine
to settle such Award in whole or in part in cash. 
 (dd) “Performance Cash Units” means an Award denominated
in U.S. dollars which may be earned in whole or in part based upon attainment of performance criteria established by the Administrator and settled for cash, except to the Administrator may determine to settle such Award in whole or in part in
Shares. 
 (ee) “Phantom Share” means an Award denominated in Shares in which the Grantee has the right to
receive an amount equal to the value of a specified number of Shares at a designated time or over a designated period and which will be payable in cash or Shares as established by the Administrator. 
 (ff) “Plan” means this Gilead Sciences, Inc. 2004 Equity Incentive Plan, as amended from time to time. 
 (gg) “Related Entity” means (i) any Parent or Subsidiary of the Company and (ii) any corporation in an unbroken
chain of corporations beginning with the Company and ending with the corporation in the chain for which the Grantee provides services as an Employee, Director or Consultant, provided each corporation in such chain owns securities representing at
least twenty percent (20%) of the total outstanding voting power of the outstanding securities of another corporation or entity in such chain and there is a legitimate non-tax business purpose for making an Award to such Grantee. However, for
any Award not subject to Section 409A of the Code, a Related Entity shall also include any business, corporation, partnership, limited liability company or other entity in which the Company or any Parent or Subsidiary holds a substantial
ownership interest, directly or indirectly. 
 (hh) “Restricted Stock” means Shares issued under the Plan to
the Grantee for such consideration (including any cash consideration) and subject to such restrictions on transfer, rights of first refusal, repurchase provisions, forfeiture provisions, and other terms and conditions as established by the
Administrator. 

 (ii) “Restricted Stock Unit” means an Award in the form of a contractual
right to receive Shares in one or more installments over a defined period of Continuous Service or upon the attainment of one or more performance goals established by the Administrator or in one or more deferred installments following the completion
of such period of Continuous Service or the attainment of such performance goals. 
 (jj) “Rule 16b-3” means
Rule 16b-3 promulgated under the Exchange Act or any successor thereto, as in effect when discretion is being exercised with respect to the Plan. 
 (kk) “SAR” means a stock appreciation right entitling the Grantee to Shares or cash compensation, as established by the Administrator, measured by appreciation in the value of the Common Stock
underlying such Award. 
 (ll) “Share” means a share of the Common Stock. 
 (mm) “Subsidiary” means a “subsidiary corporation”, whether now or hereafter existing, as defined in
Section 424(f) of the Code. 
 (nn) “Withholding Taxes” mean the applicable federal and state income and
employment withholding taxes to which the holder of an Award under the Plan may become subject in connection with the issuance, exercise, vesting or settlement of that Award. 
 3. Stock Subject to the Plan. 
 (a) Subject to the provisions of Section 10 below, the maximum number of Shares which may be issued in the aggregate under the Plan pursuant to all Awards made hereunder (including, without limitation, Restricted Stock, Restricted
Stock Units, Performance Shares, Options, SARs, Dividend Equivalent Rights, and Phantom Shares) shall be limited to 70,400,000(2) Shares, plus 404,581 shares that have as of May 8, 2008 been transferred in the aggregate to the 2004 Plan from
the previously-authorized but unissued reserve under the Gilead Sciences, Inc. 1991 Stock Option Plan and the Gilead Sciences, Inc. 1995 Non-Employee Directors’ Stock Option Plan, including shares that were available for future award under such
plans on May 25, 2004, the date the stockholders approved the 2004 Plan, and shares subject to awards outstanding under those plans on that date that have subsequently terminated or expired without the issuance of vested shares thereunder.
Notwithstanding the foregoing, no more than 10,000,000 of such Shares may be issued pursuant to all Awards of Restricted Stock, Restricted Stock Units, Performance Shares, Performance Units (to the extent settled in Shares) and Phantom Shares, in
total.(3) The Shares to be issued pursuant to Awards may be authorized, but unissued, or reacquired 
  

	 (2)
	 Maximum number of Shares consists of 3,600,000 Shares authorized coincident with the adoption of the 2004 Equity
Incentive Plan at the 2004 annual stockholders meeting, another 3,600,000 Shares due to the share adjustment for the two-for-one stock split effective September 3, 2004, an additional 10,000,000 Shares authorized and approved at the 2005 annual
stockholders meeting, an additional 10,000,000 Shares authorized and approved at the 2006 annual stockholders meeting, an additional 3,000,000 Shares authorized and approved at the 2007 annual stockholders meeting, another 30,200,000 Shares due to
the share adjustment for the two-for-one stock split effective June 22, 2007 and an additional 10,000,000 Shares authorized and approved at the 2008 annual stockholders meeting. 

  

	 (3)
	 The increase to this limit from 5,000,000 Shares to 10,000,000 Shares was approved by the Board as part of the January
30, 2008 restatement and approved by the stockholders at the 2008 annual stockholders meeting. The 10,000,000 limit will also apply to Performance Units to the extent these Awards are settled in Shares. The Company has never declared nor paid a cash
dividend and does not intend to grant any dividend equivalent rights in the foreseeable future; however, if a dividend equivalent right were to be granted in the future, the Company would consider the number of Shares as to which such dividend
equivalent rights may be granted as subject to the 10,000,000 limit. 

 Common Stock. Performance Units that by their terms may only be settled in cash shall neither reduce the
maximum aggregate number of Shares that may be issued under the Plan nor be counted against the foregoing 10,000,000-Share limit imposed with respect to certain types of Awards. 
 (b) Any Shares covered by an Award (or portion of an Award) which is forfeited, canceled or expires (whether voluntarily or involuntarily)
shall be deemed not to have been issued for purposes of determining the maximum aggregate number of Shares which may be issued under the Plan. Shares that actually have been issued under the Plan pursuant to an Award shall not be returned to the
Plan and shall not become available for future issuance under the Plan, except that if unvested Shares are forfeited, or repurchased by the Company at the lower of their original purchase price or their Fair Market Value at the time of repurchase,
such Shares shall become available for future grant under the Plan. Should the exercise price of an option under the Plan be paid with shares of Common Stock, then the authorized reserve of Common Stock under the Plan shall be reduced by the gross
number of shares for which that option is exercised, and not by the net number of shares issued under the exercised stock option. Upon the exercise of any SAR under the Plan, the share reserve shall be reduced by the gross number of shares as to
which such right is exercised, and not by the net number of shares actually issued by the Company upon such exercise. If shares of Common Stock otherwise issuable under the Plan are withheld by the Company in satisfaction of the withholding taxes
incurred in connection with the issuance, exercise, vesting or settlement of an Award, then the number of shares of Common Stock available for issuance under the Plan shall be reduced by the gross number of Shares issuable at that time under such
Award, calculated in each instance prior to any such share withholding. 
 4. Administration of the Plan. 
 (a) Plan Administrator: 
 (i) Administration with Respect to Directors and Officers. With respect to grants of Awards to Directors or Employees who are also Officers or Directors of the Company, the Plan shall be administered by
(A) the Board or (B) a Committee designated by the Board, which Committee shall be constituted in such a manner as to satisfy the Applicable Laws and to permit such grants and related transactions under the Plan to be exempt from
Section 16(b) of the Exchange Act in accordance with Rule 16b-3. Once appointed, such Committee shall continue to serve in its designated capacity until otherwise directed by the Board. With respect to the grant of an Award to a Director who is
not an Employee and which is not a scheduled Award under predetermined rules established by the Board or Committee, such grant shall be made only by a Committee (or subcommittee of the Committee) which is comprised solely of two or more Non-Employee
Directors, as this term is defined in Rule 16b-3, none of whom are the recipient of the Award. 
 (ii) Administration With
Respect to Consultants and Other Employees. With respect to grants of Awards to Employees or Consultants who are neither Directors nor Officers of the Company, the Plan shall be administered by (A) the Board or (B) a Committee
designated by the Board, which Committee shall be constituted in such a manner as to satisfy the Applicable Laws. Once appointed, such Committee shall continue to serve in its designated capacity until otherwise directed by the Board. The Board may
authorize one or more Officers of the Company or any Parent to grant such Awards, subject to such terms and conditions as the Board may impose; provided, however, that any delegation of such authority shall in all events be subject to the
limitations and restrictions of Applicable Laws, including any required limitation on the maximum of Shares for which Awards may be made by such Officer or Officers. 
 (iii) Administration With Respect to Covered Employees. Notwithstanding the foregoing, grants of Awards to any Covered Employee
intended to qualify as Performance-Based Compensation shall be made only by a Committee (or subcommittee of a Committee) which is comprised solely of two or more Directors eligible to serve on a committee making Awards qualifying as
Performance-Based Compensation. In the case of such Awards granted to Covered Employees, references to the “Administrator” or to a “Committee” shall be deemed to be references to such Committee or subcommittee. 

 (b) Powers of the Administrator. Subject to Applicable Laws and the provisions of
the Plan (including any other powers given to the Administrator hereunder), and except as otherwise provided by the Board, the Administrator shall have the authority, in its discretion: 
 (i) to select the Employees, Directors and Consultants to whom Awards may be granted from time to time hereunder; 
 (ii) to determine when and to what extent Awards are to be granted hereunder; 
 (iii) to determine the number of Shares or the amount of other consideration to be covered by each Award granted hereunder; 
 (iv) to approve forms of Award Agreements for use under the Plan; 
 (v) to determine the terms and conditions of any Award granted hereunder; 
 (vi) to amend the terms of any outstanding Award granted under the Plan, provided that (A) any amendment that would adversely affect
the Grantee’s rights under an outstanding Award shall not be made without the Grantee’s written consent, (B) the reduction of the exercise price of any Option or SAR awarded under the Plan shall be subject to stockholder approval as
provided in Section 7(b), and (C) canceling an Option or SAR at a time when its exercise price exceeds the Fair Market Value of the underlying Shares, in exchange for another Option, SAR, Restricted Stock or other Award shall be subject to
stockholder approval as provided in Section 7(b), unless the cancellation and exchange occurs in connection with a Change in Control as provided in Section 11 or pursuant to an adjustment effected in accordance with Section 10;

 (vii) to construe and interpret the terms of the Plan and Awards, including without limitation, any notice of award or
Award Agreement, granted pursuant to the Plan; 
 (viii) to establish additional terms, conditions, rules or procedures to
accommodate the rules or laws of applicable non-U.S. jurisdictions and to afford Grantees favorable treatment under such rules or laws; provided, however, that no Award shall be granted under any such additional terms, conditions, rules or
procedures with terms or conditions which are inconsistent with the provisions of the Plan; and 
 (ix) to take such other
action, not inconsistent with the terms of the Plan, as the Administrator deems appropriate. 
 (c) Indemnification. In
addition to such other rights of indemnification as they may have as members of the Board or as Officers or Employees of the Company or a Related Entity, members of the Board and any Officers or Employees of the Company or a Related Entity to whom
authority to act for the Board, the Administrator or the Company is delegated shall be defended and indemnified by the Company to the extent permitted by law on an after-tax basis against all reasonable expenses (including attorneys’ fees),
actually and necessarily incurred in connection with the defense of any claim, investigation, action, suit or proceeding, or in connection with any appeal therein, to which they or any of them may be a party by reason of any action taken or failure
to act under or in connection with the Plan, or any Award granted hereunder, and against all amounts paid by them in settlement thereof (provided such settlement is approved by the Company) or paid by them in satisfaction of a judgment in any such
claim, investigation, action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such claim, investigation, action, suit or proceeding that such person is liable for gross negligence, bad faith or intentional
misconduct; provided, however, that within 30 days after the institution of such claim, investigation, action, suit or proceeding, such person shall offer to the Company, in writing, the opportunity at the Company’s expense to handle and defend
the same. 

 5. Eligibility. Awards other than Incentive Stock Options may be granted to Employees, Directors
and Consultants. Incentive Stock Options may be granted only to Employees of the Company or a Parent or a Subsidiary of the Company. An Employee, Director or Consultant who has been granted an Award may, if otherwise eligible, be granted additional
Awards. Awards may be granted to such Employees, Directors or Consultants who are residing in non-U.S. jurisdictions as the Administrator may determine. 
 6. Terms and Conditions of Awards. 
 (a) Type of Awards. The Administrator is
authorized under the Plan to award any type of arrangement to an Employee, Director or Consultant that is not inconsistent with the provisions of the Plan and that by its terms involves or might involve the issuance of (i) Shares,
(ii) cash or (iii) an Option, a SAR, or similar right with a fixed or variable price related to the Fair Market Value of the Shares and with an exercise or conversion privilege related to the passage of time, the occurrence of one or more
events, or the satisfaction of performance criteria or other conditions. Such awards include, without limitation, Options, SARs, Restricted Stock, Restricted Stock Units, Dividend Equivalent Rights, Performance Units, Performance Shares, or Phantom
Shares. An Award may consist of one such security or benefit, or two or more of them in any combination or alternative. However, in no event may Dividend Equivalent Rights be granted with respect to the Shares subject to any Option or SAR Award made
under the Plan. 
 (b) Designation of Award. Each Award shall be designated in the Award Agreement. In the case of an
Option, the Option shall be designated as either an Incentive Stock Option or a Nonstatutory Stock Option. However, notwithstanding such designation, to the extent that the aggregate Fair Market Value of the Shares for which one or more Options
designated as Incentive Stock Options become first exercisable by a Grantee during any calendar year (under all plans of the Company or any Parent or Subsidiary) exceeds $100,000, the excess number of Shares shall be treated as subject to
Nonstatutory Stock Options. For this purpose, Incentive Stock Options shall be taken into account in the order in which they were granted, except to extent otherwise provided by Applicable Law, and the Fair Market Value of the Shares shall be
determined as of the grant date of the relevant Option. 
 (c) Conditions of Award. Subject to the terms of the Plan,
the Administrator shall determine the provisions, terms, and conditions of each Award including, but not limited to, the Award vesting schedule, repurchase provisions, rights of first refusal, forfeiture provisions, form of payment (cash, Shares, or
other consideration) upon settlement of the Award, payment contingencies, and satisfaction of any performance criteria. The performance criteria established by the Administrator may be based on any one of, or combination of, the following:
(i) revenue or revenue growth, (ii) achievement of specified milestones in the discovery and development of one or more of the Company’s products, (iii) achievement of specified milestones in the commercialization of one or more
of the Company’s products, (iv) achievement of specified milestones in the manufacturing of one or more of the Company’s products, (v) expense targets, (vi) personal management objectives, (vii) stock price (including,
but not limited to, growth measures and total stockholder return), (viii) earnings per share, (ix) operating efficiency, (x) operating margin, (xi) gross margin, (xii) return measures (including, but not limited to, return
on assets, capital, equity, or sales), (xiii) net sales growth, (xiv) productivity ratios, (xv) operating income, (xvi) net operating profit, (xvii) net earnings or net income (before or after taxes), (xviii) cash flow
(including, but not limited to, operating cash flow, free cash flow, and cash flow return on capital), (xix) earnings before interest, taxes, depreciation, amortization and/or stock-based compensation expense, (xx) economic value added,
(xxi) market share, (xxii) customer satisfaction, (xxiii) working capital targets, and (xxiv) with respect to Awards not intended to be Performance-Based Compensation under Section 162(m) of the Code, other measures of
performance selected by the Administrator. In addition, such performance criteria may be based upon the attainment of specified levels of the Company’s performance under one or more of the measures described above relative to the performance of
other entities and may also be based on the performance of any of the Company’s business units or divisions or any Parent or Subsidiary. Each applicable performance criteria may include a minimum threshold level of performance below which no
Award will be earned, levels of performance at which specified portions of an Award will be earned and a maximum level of performance at which an Award will be fully earned. Each applicable performance 

 
criteria may be structured at the time of the Award to provide for appropriate adjustment for one or more of the following items: (A) asset impairments
or write-downs; (B) litigation judgments or claim settlements; (C) the effect of changes in tax law, accounting principles or other laws, regulations or provisions affecting reported results; (D) the effect of exchange rates for
non-US dollar denominated net sales or goals based on operating profit, earnings or income, (E) accruals for reorganization and restructuring programs; (E) any extraordinary nonrecurring items as described in Accounting Principles Board
Opinion No. 30 and/or in management’s discussion and analysis of financial condition and results of operations appearing in the Company’s annual report to stockholders for the applicable year, (F) the operations of any business
acquired by the Company or any Parent or Subsidiary or of any joint venture established by the Company or any Parent or Subsidiary; (G) the divestiture of one or more business operations or the assets thereof; or (I) the effect of any
change in the outstanding shares of Common Stock effected by reason of a stock split, stock dividend, stock repurchase, reorganization, recapitalization, merger, consolidation, spin-off, combination or exchange of shares or other similar corporate
change or any distributions to the Company’s stockholders other than regular cash dividends. 
 (d) Acquisitions and
Other Transactions. The Administrator may issue Awards under the Plan in settlement, assumption or substitution for, outstanding awards or obligations to grant future awards in connection with the acquisition by the Company or a Related Entity
of another entity, an interest in another entity or an additional interest in a Related Entity, whether by merger, stock purchase, asset purchase or other form of transaction. 
 (e) Deferral of Award Payment. The Administrator may establish one or more programs under the Plan to permit selected Grantees the
opportunity to elect to defer receipt of the Shares or other consideration due upon the settlement of an Award, satisfaction of performance criteria, or other event that absent the election would entitle the Grantee to payment or receipt of Shares
or other consideration under an Award. The Administrator may establish the election procedures, the timing of such elections, the mechanisms for payments of, and accrual of interest or other earnings, if any, on amounts, Shares or other
consideration so deferred, and such other terms, conditions, rules and procedures that the Administrator deems advisable for the administration of any such deferral program. Notwithstanding the foregoing, each such deferral opportunity shall be
structured by the Administrator so as to comply with all applicable requirements of Code Section 409A and the Treasury Regulations thereunder. 
 (f) Separate Programs. The Administrator may establish one or more separate programs under the Plan for the purpose of issuing particular forms of Awards to one or more classes of Grantees on such terms and
conditions as determined by the Administrator from time to time. 
 (g) Individual Limitations on Awards. The maximum
number of Shares with respect to which Options may be granted to any Grantee in any fiscal year of the Company shall be limited to 2,500,000 Shares. The maximum number of Shares as to which Restricted Stock, Restricted Stock Units, Performance
Shares, Performance Units, SARs, Phantom Shares or Dividend Equivalent Rights may in the aggregate be granted to any Grantee in any fiscal year of the Company shall be 400,000 Shares. For the fiscal year in which occurs an Employee’s or
Consultant’s (i) commencement of Continuous Service or (ii) promotion, an Employee or Consultant may be granted Options for up to an additional 1,000,000 Shares or Restricted Stock, Restricted Stock Units, Performance Shares,
Performance Units, SARs, Phantom Shares or Dividend Equivalent Rights for up to an additional 200,000 shares in the aggregate, which shall not count against the limits set forth in the preceding sentence. The foregoing limitations shall be adjusted
proportionately in connection with any change in the Company’s capitalization pursuant to Section 10, below. The value of all Awards denominated in U.S. dollars granted in any single calendar year to any Grantee shall not exceed
$7,000,000. For this purpose, the value of an Award denominated in U.S. dollars shall be determined on the date of grant without regard to any conditions imposed on the Award. To the extent required by Section 162(m) of the Code or the
regulations thereunder, in applying the foregoing limitations with respect to a Grantee, if any Awards are canceled, the canceled Awards shall continue to count against the maximum number of Shares with respect to which Awards may be granted to the
Grantee. 

 
For this purpose, the repricing of the exercise price of an Option or SAR if such repricing is approved by the stockholders of the Company, shall be treated
as the cancellation of the existing Option or SAR and the grant of a new Option or SAR. If the vesting or receipt of Shares under the Award is deferred to a later date, any amount (whether denominated in Shares or U.S. dollars) paid in addition to
the original number of Shares subject to the Award (or the original dollar amount for an Award denominated in U.S. dollars) will not be treated as an increase in the number of Shares (or dollar amount) subject to the Award if the additional amount
is based either on a reasonable rate of interest or on one or more predetermined actual investments such that the amount payable by the Company at the later date will be based on the actual rate of return of a specific investment (including any
decrease as well as any increase in the value of an investment). 
 (h) Early Exercise. The Award Agreement may, but
need not, include a provision whereby the Grantee may elect at any time while an Employee, Director or Consultant to exercise any part or all of the Award prior to full vesting of the Award. Any unvested Shares received pursuant to such exercise may
be subject to a repurchase right in favor of the Company or a Related Entity or to any other restriction the Administrator determines to be appropriate. 
 (i) Term of Award. The term of each Award shall be the term stated in the Award Agreement; provided, however, that the term of an Award shall be no more than ten years from the date of grant thereof. However,
in the case of an Incentive Stock Option granted to a Grantee who, at the time the Option is granted, owns stock representing more than 10% of the voting power of all classes of stock of the Company or any Parent or Subsidiary of the Company, the
term of the Incentive Stock Option shall be five years from the date of grant thereof or such shorter term as may be provided in the Award Agreement. 
 (j) Transferability of Awards. Incentive Stock Options may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution
and may be exercised, during the lifetime of the Grantee, only by the Grantee. Other Awards shall be transferable by will and by the laws of descent and distribution, and during the lifetime of the Grantee, such Awards shall be transferable, by gift
or pursuant to a domestic relations order, to members of the Grantee’s Immediate Family to the extent and in the manner determined by the Administrator. Notwithstanding the foregoing, the Grantee may designate a beneficiary of the
Grantee’s Award in the event of the Grantee’s death on a beneficiary designation form provided by the Administrator. 
 (k) Time of Granting Awards. The date of grant of an Award shall for all purposes be the date on which the Administrator makes the determination to grant such Award, or such later date as is determined by the Administrator.

 7. Award Exercise or Purchase Price; Consideration and Taxes. 
 (a) Exercise or Purchase Price. The exercise or purchase price, if any, for an Award shall be as follows: 
 (i) In the case of an Incentive Stock Option: 
 (A) granted to an Employee who, at the time of the grant of such Incentive Stock Option owns stock representing more than 10% of the
voting power of all classes of stock of the Company or any Parent or Subsidiary of the Company, the per Share exercise price shall be not less than 110% of the Fair Market Value per Share on the date of grant; or 
 (B) granted to any Employee other than an Employee described in the preceding paragraph, the per Share exercise price shall be not less
than 100% of the Fair Market Value per Share on the date of grant. 
 (ii) In the case of a Nonstatutory Stock Option, the per
Share exercise price shall be not less than 100% of the Fair Market Value per Share on the date of grant. 

 (iii) In the case of a SAR, the exercise price or the base amount on which the stock
appreciation is calculated shall be not less than 100% of the Fair Market Value per Share on the date of grant. 
 (iv) In the
case of other Awards, the cash consideration (if any) payable for such Award or the underlying Shares shall be determined by the Administrator. 
 (v) Notwithstanding the foregoing provisions of this Section 7(a), in the case of an Award issued pursuant to Section 6(d), above, the exercise or purchase price for the Award shall be determined in
accordance with the provisions of the relevant instrument evidencing the agreement to issue such Award. 
 (b) No Authority
to Reprice. Without the consent of stockholders of the Company, no Award may be repriced, replaced, regranted through cancellation, or modified (except as provided in Section 10) if the effect is to reduce the exercise or purchase price for
the Shares underlying such Award. In addition, the replacement or substitution of one Award for another Award is prohibited, absent stockholder consent, to the extent it has the effect of reducing the exercise or purchase price of the underlying
Shares. 
 (c) Consideration. Subject to Applicable Laws, the consideration to be paid for the Shares to be issued upon
the issuance, exercise, vesting or settlement of an Award, including the method of payment, shall be determined by the Administrator (and, in the case of an Incentive Stock Option, shall be determined at the time of grant). In addition to any other
types of consideration the Administrator may determine, the Administrator is authorized to accept as consideration for Shares issued under the Plan the following, provided that the portion of the consideration equal to the par value of the Shares
must be paid in cash or other legal consideration permitted by the Delaware General Corporation Law: 
 (i) cash; 

(ii) check; 
 (iii) services rendered; 
 (iv) surrender of Shares or delivery of a properly executed form of attestation of
ownership of Shares as the Administrator may require (including withholding of Shares otherwise deliverable upon exercise of the Award) which have a Fair Market Value on the date of surrender, attestation or withholding equal to the aggregate
exercise price of the Shares as to which said Award is exercised; 
 (v) with respect to Options, payment through a
broker-dealer sale and remittance procedure pursuant to which the Grantee (A) shall provide instructions (either in writing or electronically) to a Company designated brokerage firm (or, with respect to Grantees subject to Section 16 of
the Securities Exchange Act, a broker reasonably satisfactory to the Company for purposes of administering such procedure in accordance with the Company’s pre-clearance/pre-notification policies) to effect the immediate sale of some or all of
the purchased Shares and remit to the Company on the settlement date sufficient funds to cover the aggregate exercise price payable for the purchased Shares and any applicable withholding taxes and (B) shall provide directives (either in
writing or electronically) to the Company to deliver the certificates for the purchased Shares directly to such brokerage firm on the settlement date in order to complete the sale transaction; or 
 (vi) any combination of the foregoing methods of payment. 

 (d) Taxes. The Company’s obligation to deliver Shares upon the issuance,
exercise, vesting or settlement of an Award under the Plan shall be subject to the satisfaction of all applicable income and employment tax withholding requirements. The Administrator may, in its discretion, provide Grantees with the right to use
shares of Common Stock in satisfaction of all or part of the Withholding Taxes to which such Grantees may become subject in connection with the issuance, exercise, vesting or settlement of those Awards. Such right may be provided to any such holder
in one or more of the following formats: 
 (i) Stock Withholding: The election to have the Company withhold, from the
Shares otherwise issuable upon the issuance, exercise, vesting or settlement of such Award, a portion of those Shares with an aggregate Fair Market Value equal to the percentage of the Withholding Taxes (not to exceed one hundred percent
(100%)) designated by such individual. The Shares so withheld shall reduce the number of shares of Common Stock authorized for issuance under the Plan. 
 (ii) Stock Delivery: The election to deliver to the Company, at the time of the issuance, exercise, vesting or settlement of such
Award, shares of Common Stock previously acquired by such individual with an aggregate Fair Market Value equal to the percentage of the Withholding Taxes (not to exceed one hundred percent (100%)) designated by the individual. The shares of
Common Stock so delivered shall neither reduce the number of shares of Common Stock authorized for issuance under the Plan nor be added to the number of shares of Common Stock authorized for issuance under the Plan. 
 (iii) Stock Sale: The election to make an immediate open-market sale of all or a portion of the Shares actually issued in
connection with the issuance, exercise, vesting or settlement of such Award and to have a sufficient portion of the sale proceeds applied automatically on the settlement date to the satisfaction of the applicable Withholding Taxes. 
 In addition, the Administrator may structure one or more Awards so that a portion of the Shares otherwise issuable under those Awards
shall automatically be withheld by the Company in satisfaction of the Withholding Taxes which become applicable in connection with the issuance, exercise, vesting or settlement of those Awards. 
 8. Exercise of Award. 
 (a) Procedure for Exercise; Rights as a Stockholder. 
 (i) Any Award granted hereunder shall be exercisable
at such times and under such conditions as determined by the Administrator under the terms of the Plan and specified in the Award Agreement. Notwithstanding any other provision of the Plan to the contrary, except with respect to a maximum of 5% of
the Shares authorized for issuance under Section 3(a), any Awards of Restricted Stock or Restricted Stock Units which vest on the basis of the Grantee’s Continuous Service with the Company or a Related Entity shall not provide for vesting
which is any more rapid than annual pro rata vesting over a three-year period, and any Awards of Restricted Stock, Restricted Stock Units, Performance Shares or Performance Units which provide for vesting upon the attainment of performance goals
shall provide for a performance period of at least 12 months; provided, however, that such limitations shall not apply in the event of a Change in Control or to any Grantee whose Continuous Service terminates by reason of his or her death,
disability or an involuntary termination other than for Cause. 
 (ii) An Award shall be deemed to be exercised when notice of
such exercise (either in writing or electronically) has been given to the Company or its designee in accordance with the terms of the Award by the person entitled to exercise the Award. Except to the extent the broker-dealer sale and remittance
procedure is to be utilized under Section 7(c)(iv), full payment for the Shares with respect to which the Award is exercised shall accompany such exercise notice. 
 (b) Exercise of Award Following Termination of Continuous Active Service. 
 (i) An Award may not be exercised after the termination date of such Award set forth in the Award Agreement and may be exercised following
the termination of a Grantee’s Continuous Service only to the extent provided in the Award Agreement. 

 (ii) Where the Award Agreement permits a Grantee to exercise an Award following the
termination of the Grantee’s Continuous Service for a specified period, the Award shall terminate to the extent not exercised on the last day of the specified period or the last day of the original term of the Award, whichever occurs first.

 (iii) Any Award designated as an Incentive Stock Option to the extent not exercised within the time permitted by law for
the exercise of Incentive Stock Options following the termination of Employee status shall convert automatically to a Nonstatutory Stock Option and thereafter shall be exercisable as such to the extent exercisable by its terms for the period
specified in the Award Agreement. 
 9. Conditions Upon Issuance of Shares. 
 (a) Shares shall not be issued pursuant to the exercise, vesting or settlement of an Award unless the exercise, vesting or settlement of
such Award and the issuance and delivery of such Shares pursuant thereto shall comply with all Applicable Laws, and shall be further subject to the approval of counsel for the Company with respect to such compliance. 
 (b) As a condition to the issuance of any Shares in connection with the exercise, vesting or settlement of an Award, the Company may
require the person holding such Award to represent and warrant at the time of such issuance that the Shares are being acquired only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for
the Company, such a representation is required by any Applicable Laws. 
 10. Adjustments Upon Changes in Capitalization. Should any
change be made to the Common Stock by reason of any stock split, stock dividend, recapitalization, combination of shares, exchange of shares, spin-off transaction or other change affecting the outstanding Common Stock as a class without the
Company’s receipt of consideration, or should the value of the outstanding shares of Common Stock be substantially reduced as a result of a spin-off transaction or an extraordinary dividend or distribution, or should there occur any merger,
consolidation or other reorganization, then equitable and proportional adjustments shall be made by the Administrator to the maximum number and class(es) of securities issuance under the Plan pursuant to Section 3(a), the maximum number and
class(es) of securities as to which Awards of Restricted Stock, Restricted Stock Units, Performance Shares, Performance Units (settled in Shares) and Phantom Shares may be made in accordance with the limitation of Section 3(a) and the maximum
number and class(es) of securities for which Awards may be made to any person during any fiscal year pursuant to the limitations set forth in Section 6(g), and the outstanding Awards (other than an Award of Restricted Stock that is outstanding
at the time of the event described in this paragraph) will be equitably and proportionally adjusted as to the number and class(es)of securities and exercise price (or other cash consideration) payable per Share subject to such outstanding Awards,
including any price required to be paid for Restricted Stock not yet outstanding at the time of the event described in this paragraph; provided, however, that the aggregate exercise price (or other cash consideration) shall remain the same. The
adjustments shall be made in such manner as the Administrator deems appropriate in order to prevent the dilution or enlargement of benefits under the Plan and the outstanding Awards thereunder, and such adjustments shall be final, binding and
conclusive. In the event of a Change in Control, however, the adjustments (if any) shall be made solely in accordance with the applicable provisions of Section 11. 
 11. Change in Control. 
 (a) Effect of Change in Control on Awards. 

(i) In the event of a Change in Control, the Board at its sole discretion may, to the extent permitted by applicable law, provide for
the following treatment of outstanding Options and SARs: (i) any surviving corporation shall assume any Options or SARs outstanding under the Plan or shall substitute economically equivalent awards for the Options and SARs outstanding under the
Plan, (ii) the time during which such Options or SARs may be exercised shall be accelerated so that those Awards may be exercised for fully-vested Shares and those Awards shall terminate if not exercised prior to the Change in Control, or
(iii) such Options or SARs shall continue in full force and effect. 

 (ii) Any other Award outstanding under the Plan at the time of the Change in Control may
be assumed by the surviving corporation, replaced with an economically-equivalent substitute award or otherwise continued in full force in effect. To the extent any such Award is not assumed, replaced with an economically-equivalent substitute award
or otherwise continued in effect, that Award shall vest, and the shares of Common Stock subject to that Award shall be issued as fully-vested shares, immediately prior to the effective date of the Change in Control. 
 (iii) Any Award which is assumed in connection with a Change in Control or otherwise continued in effect shall be adjusted immediately
after the consummation of that Change in Control so as to apply to the number and class of securities into which the shares of Common Stock subject to that Award immediately prior to the Change in Control would have been converted in consummation of
such Change in Control had those shares actually been outstanding at that time, and appropriate adjustments shall also be made to the exercise price or any other consideration payable per share thereunder, provided the aggregate exercise price or
amount of such other consideration shall remain the same. To the extent the actual holders of the Company’s outstanding Common Stock receive cash consideration for their Common Stock in consummation of the Change in Control, the successor
corporation may, in connection with the assumption or continuation of the outstanding Awards and subject to the approval of the Administrator prior to the Change in Control, substitute one or more shares of its own common stock with a fair market
value equivalent to the cash consideration paid per share of Common Stock in such Change in Control transaction, provided such common stock is readily traded on an established U.S. securities exchange or market. 
 (iv) The Administrator may structure one or more Awards so that the Shares subject to those Awards shall vest (or shall vest and become
issuable) immediately prior to the effective date of a Change in Control, whether or not those Awards are assumed, replaced with an economically-equivalent substitute award or otherwise continued in full force and effect 
 (b) Acceleration of Award Upon Cessation of Continuous Service In Connection With a Change in Control. Notwithstanding any other
provisions of this Plan to the contrary, if within the period beginning with the execution of the definitive agreement for a Change in Control transaction and ending with the earlier of (i) the termination of that definitive agreement without
the consummation of such Change in Control or (ii) the expiration of the Applicable Acceleration Period following the consummation of such Change in Control, either (1) the Continuous Service of an Employee or a Consultant terminates due
to an involuntary termination (not including death or Disability) without Cause (as such term is defined below) or a voluntary termination by the Grantee due to Constructive Termination (as such term is defined below) or (2) the Continuous
Service of a Director terminates, then the vesting and exercisability of all Awards held by such Grantee shall be accelerated, or any reacquisition or repurchase rights held by the Company with respect to an Award shall lapse, as follows:

  

	 	•	 	 With respect to Options and SARs held by a Grantee at the time of such termination, such Options and SARs shall become immediately exercisable as to all the
underlying Shares and may be exercised for any or all of those Shares as fully-vested shares until the expiration or sooner termination date of those Awards. 

  

	 	•	 	 With respect to all other Awards held by the Grantee at the time of such termination, the underlying Shares shall vest and become immediately issuable, and any
reacquisition or repurchase rights held by the Company with respect to those Shares shall lapse, as of the date of such termination. 

 (c) Definition of “Cause”. For the purposes of Section 11(b) only, “Cause” means (i) conviction of, a guilty plea with respect to, or a plea of non contendere to a charge
that a Grantee has committed a felony under the laws of the United States or of any state or a crime involving moral turpitude, including, but not limited to, fraud, theft, embezzlement or any crime that results in or is intended to result 

 
in personal enrichment at the expense of the Company or a Related Entity; (ii) material breach of any agreement entered into between the Grantee and the
Company or a Related Entity that impairs the Company’s or the Related Entity’s interest therein; (iii) willful misconduct, significant failure of the Grantee to perform the Grantee’s duties, or gross neglect by the Grantee of the
Grantee’s duties; or (iv) engagement in any activity that constitutes a material conflict of interest with the Company or a Related Entity. 
 (d) Definition of “Constructive Termination”. For purposes of Section 11(b) only, “Constructive Termination” means the occurrence of any of the following events or conditions:
(i) (A) a change in the Grantee’s status, title, position or responsibilities (including reporting responsibilities) which represents an adverse change from the Grantee’s status, title, position or responsibilities as in effect
immediately prior to the execution of the definitive agreement for the Change in Control transaction or at any time within the Applicable Acceleration Period after the date of a Change in Control; (B) the assignment to the Grantee of any duties
or responsibilities which are inconsistent with the Grantee’s status, title, position or responsibilities as in effect immediately prior to the execution of the definitive agreement for the Change in Control transaction or at any time within
the Applicable Acceleration Period after the Change in Control; or (C) any removal of the Grantee from or failure to reappoint or reelect the Grantee to any of the offices or positions held by the Grantee immediately prior to the execution of
the definitive agreement for the Change in Control transaction or at any time within the Applicable Acceleration Period after the date of a Change in Control, except in connection with the termination of the Grantee’s Continuous Service for
Cause, as a result of the Grantee’s Disability or death or by the Grantee other than as a result of Constructive Termination; (ii) a reduction in the Grantee’s annual base compensation or any failure to pay the Grantee any
compensation or benefits to which the Grantee is entitled within five days of the date due; (iii) the Company’s requiring the Grantee to relocate to any place outside a 50 mile radius of the location serving as Grantee’s principal
work site immediately prior to the execution of the definitive agreement for the Change in Control transaction or during the Applicable Acceleration Period after the date of a Change in Control, except for reasonably required travel on the business
of the Company or a Related Entity which is not materially greater than such travel requirements in effect during the applicable measurement period determined above; (iv) the failure by the Company to (A) continue in effect (without
reduction in benefit level and/or reward opportunities) any material compensation or employee benefit plan in which the Grantee was participating at any time within the 90-day period immediately prior to the execution of the definitive agreement for
the Change in Control transaction or at any time within the Applicable Acceleration Period after the Change in Control, unless such plan is replaced with a plan that provides substantially equivalent compensation or benefits to the Grantee, or
(B) provide the Grantee with compensation and benefits, in the aggregate, at least equal (in terms of benefit levels and/or reward opportunities) to those provided the Grantee under each other employee benefit plan, program and practice in
which he or she was participating at any time within the 90-day period immediately prior to the execution of the definitive agreement for the Change in Control transaction or at any within the Applicable Acceleration Period after the Change in
Control; (v) any material breach by the Company of any provision of an agreement between the Company and the Grantee, whether pursuant to this Plan or otherwise, other than a breach which is cured by the Company within 15 days following notice
by the Grantee of such breach; or (vi) the failure of the Company to obtain an agreement, satisfactory to the Grantee, from any successors and assigns to assume and agree to perform the obligations created under this Plan. 
 (e) Effect of Acceleration on Incentive Stock Options. Any Incentive Stock Option accelerated under this Section 11 in
connection with a Change in Control shall remain exercisable as an Incentive Stock Option under the Code only to the extent the $100,000 dollar limitation of Section 422(d) of the Code is not exceeded. To the extent such dollar limitation is
exceeded, the excess Options shall be treated as Nonstatutory Stock Options. 
 12. Effective Date and Term of Plan. The Plan shall
become effective upon its approval by the stockholders of the Company. It shall continue in effect for a term of ten years unless sooner terminated. Subject to Applicable Laws, Awards may be granted under the Plan upon its becoming effective.

 13. Amendment, Suspension or Termination of the Plan. 
 (a) The Board may at any time amend, suspend or terminate the Plan; provided, however, that no such amendment shall be made without the
approval of the Company’s stockholders to the extent such approval is required by NASD Marketplace Rule 4350(i)(1)(A), Section 422 of the Code and regulations promulgated thereunder, or any other Applicable Laws, or if such amendment would
change any of the provisions of Section 4(b)(vi) or this Section 13(a). 
 (b) No Award may be granted during any
suspension of the Plan or after termination of the Plan. 
 (c) No suspension or termination of the Plan (including
termination of the Plan under Section 12, above) shall adversely affect any rights under Awards already granted to a Grantee. 
 14.
Reservation of Shares. 
 (a) The Company, during the term of the Plan, will at all times reserve and keep available
such number of Shares as shall be sufficient to satisfy the requirements of the Plan. 
 (b) The inability of the Company to
obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder shall relieve the Company of any liability in respect of
the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained. 
 15. No Effect on Terms of
Employment/Consulting Relationship. The Plan shall not confer upon any Grantee any right with respect to the Grantee’s Continuous Service, nor shall it interfere in any way with his or her right or the right of the Company or any Related
Entity to terminate the Grantee’s Continuous Service at any time, with or without Cause, and with or without notice. The ability of the Company or any Related Entity to terminate the employment of a Grantee who is employed at will is in no way
affected by its determination that the Grantee’s Continuous Service has been terminated for Cause for the purposes of this Plan. 
 16.
No Effect on Retirement and Other Benefit Plans. Except as specifically provided in a retirement or other benefit plan of the Company or a Related Entity, Awards shall not be deemed compensation for purposes of computing benefits or
contributions under any retirement plan of the Company or a Related Entity, and shall not affect any benefits under any other benefit plan of any kind or any benefit plan subsequently instituted under which the availability or amount of benefits is
related to level of compensation. The Plan is not a “Pension Plan” or “Welfare Plan” under the Employee Retirement Income Security Act of 1974, as amended. 
 17. Unfunded Obligation. Grantees shall have the status of general unsecured creditors of the Company. Any amounts payable to Grantees pursuant to
the Plan shall be unfunded and unsecured obligations for all purposes, including, without limitation, Title I of the Employee Retirement Income Security Act of 1974, as amended. Neither the Company nor any Related Entity shall be required to
segregate any monies from its general funds, or to create any trusts, or establish any special accounts with respect to such obligations. The Company shall retain at all times beneficial ownership of any investments, including trust investments,
which the Company may make to fulfill its payment obligations hereunder. Any investments or the creation or maintenance of any trust or any Grantee account shall not create or constitute a trust or fiduciary relationship between the Administrator,
the Company or any Related Entity and a Grantee, or otherwise create any vested or beneficial interest in any Grantee or the Grantee’s creditors in any assets of the Company or a Related Entity. The Grantees shall have no claim against the
Company or any Related Entity for any changes in the value of any assets that may be invested or reinvested by the Company with respect to the Plan. 

 18. Governing Law. The Plan and all agreements thereunder shall be governed by and construed in
accordance with the laws of the State of Delaware, without resort to that State’s conflict-of-law provisions. 
 19.
Section 409A Compliance. The Board reserves the right, to the extent it deems it necessary or advisable in its sole discretion, to alter or modify the Plan and any outstanding Awards under the Plan, without the consent of the Grantees,
so as to ensure that all Awards and Award Agreements provided to Grantees who are subject to U.S. income taxation either qualify for an exemption from the requirements of Section 409A of the Code or are structured in a manner that complies with
those requirements; provided, however, that neither the Company nor any Related Entity makes any representations that any Awards made under the Plan will in fact be exempt from the requirements of Section 409A of the Code or otherwise comply
with those requirements, and each Grantee shall accordingly be solely responsible for any taxes, penalties or other amounts which may become payable with respect to his or her Awards by reason of Section 409A of the Code.Agreement and Plan of Merger

 Exhibit 10.1 
 AGREEMENT AND PLAN OF MERGER 
 by and among 
 AMBERWAVE SYSTEMS CORPORATION, 
 as Parent, 
 AONEX ACQUISITION CORPORATION, 
 as Merger Sub,

 AONEX TECHNOLOGIES, INC. 
 as
the Company 
 and 
 THE
STOCKHOLDERS WHO EXECUTE THE SIGNATURE PAGES HERETO, 
 as the Stockholders 
 May 5, 2008 

 TABLE OF CONTENTS 
  

							
	 1.
	  	The Merger.	  	1
		  	 1.1
	  	The Merger.	  	1
		  	 1.2
	  	Effective Time.	  	1
		  	 1.3
	  	Effects of the Merger.	  	2
		  	 1.4
	  	Articles of Incorporation and By-Laws of the Surviving Corporation.	  	2
		  	 1.5
	  	Directors and Officers.	  	2
		  	 1.6
	  	Merger Consideration; Effects on Capital Stock of the Company and Merger Sub.	  	2
		  	 1.7
	  	Dissenting Shares.	  	5
		  	 1.8
	  	Approval of the Stockholders.	  	5
		  	 1.9
	  	Closing.	  	5
		  	 1.10
	  	Conditions to Closing; Deliveries at Closing.	  	6
		  	 1.11
	  	Transfer Taxes.	  	7
		  	 1.12
	  	Earnout Payment Provisions.	  	7
			
	 2.
	  	Representations and Warranties of the Company.	  	8
		  	 2.1
	  	Existence; Good Standing; Authority.	  	8
		  	2.2	  	Capitalization.	  	9
		  	 2.3
	  	Subsidiaries.	  	9
		  	 2.4
	  	No Conflict.	  	9
		  	 2.5
	  	Financial Statements.	  	10
		  	 2.6
	  	Absence of Certain Changes.	  	10
		  	 2.7
	  	Litigation.	  	12
		  	 2.8
	  	Taxes.	  	12
		  	 2.9
	  	Employee Benefit Plans.	  	14
		  	 2.10
	  	Real and Personal Property.	  	14
		  	 2.11
	  	Labor and Employment Matters.	  	15
		  	 2.12
	  	Contracts and Commitments.	  	15
		  	 2.13
	  	Intellectual Property Matters.	  	16
		  	 2.14
	  	Environmental Matters.	  	17
		  	 2.15
	  	Insurance Coverage.	  	18
		  	 2.16
	  	Brokers.	  	18
		  	 2.17
	  	Compliance with Laws.	  	18
		  	 2.18
	  	Transferability of Assets.	  	18
		  	 2.19
	  	Absence of Undisclosed Liabilities.	  	18
		  	 2.20
	  	Affiliate Transactions.	  	19
		  	 2.21
	  	Illegal Payments.	  	19
			
	 3.
	  	Representations and Warranties of Parent and Merger Sub.	  	19
		  	 3.1
	  	Existence; Good Standing; Authority.	  	19
		  	 3.2
	  	No Conflict.	  	19
		  	 3.3
	  	Consents and Approvals.	  	20
		  	 3.4
	  	Litigation.	  	20
		  	 3.5
	  	Brokers.	  	20

  

 i 

							
	4.	  	Certain Covenants of Parent, the Company and the Stockholders.	  	20
		  	4.1	  	Further Action.	  	20
		  	4.2	  	Press Releases.	  	20
		  	4.3	  	Responsibility for Filing Tax Returns.	  	20
		  	4.4	  	Cooperation on Tax Matters; Tax Claims.	  	21
		  	4.5	  	Company Derivative Securities.	  	22
			
	5.	  	Survival of Representations and Warranties; Indemnification.	  	22
		  	5.1	  	Survival; Risk Allocation.	  	22
		  	5.2	  	Indemnification by the Preferred Holder.	  	22
		  	5.3	  	Indemnification by Parent.	  	25
		  	5.4	  	Payments.	  	26
		  	5.5	  	Treatment of Indemnity Payments.	  	27
		  	5.6	  	Remedies Exclusive.	  	27
			
	6.	  	General Provisions.	  	27
		  	6.1	  	Notices.	  	27
		  	6.2	  	Fees and Expenses.	  	28
		  	6.3	  	Certain Definitions.	  	28
		  	6.4	  	Interpretation.	  	30
		  	6.5	  	Counterparts; Delivery by Facsimile or Electronic Mail.	  	31
		  	6.6	  	Amendments and Waivers.	  	31
		  	6.7	  	Entire Agreement; Severability.	  	31
		  	6.8	  	Captions.	  	32
		  	6.9	  	Third Party Beneficiaries.	  	32
		  	6.10	  	Governing Law.	  	32
		  	6.11	  	Assignment.	  	32
		  	6.12	  	Release.	  	32
		  	6.13	  	Confidentiality.	  	33
		  	6.14	  	Transitional Assistance.	  	33
		  	6.15	  	Remedies.	  	33
		  	6.16	  	Dispute Resolution.	  	33
		  	6.17	  	Consent to Jurisdiction.	  	34

  

 ii 

			
	 	  	                                       
 EXHIBITS
		
	 Exhibit A
	  	Articles of Incorporation of Merger Sub
	 Exhibit B
	  	By-Laws of Merger Sub
	 Exhibit C
	  	Certificate of Acknowledgement
	 Exhibit D
	  	Form of Olson Consulting Agreement
	 Exhibit E
	  	Form of Pinnington Offer Letter
	 Exhibit F
	  	Form of FIRPTA Certificate
	 Exhibit G-1
	  	Form of Parent Press Release
	 Exhibit G-2
	  	Form of Preferred Holder Press Release
		
		  	                                       
 SCHEDULES
		
	 Schedule 1.10(b)(ii)
	  	Consents
	 Schedule 2.1
	  	Jurisdictions
	 Schedule 2.2
	  	Capitalization
	 Schedule 2.4(b)
	  	Conflicts
	 Schedule 2.5
	  	Financial Statements
	 Schedule 2.7
	  	Litigation
	 Schedule 2.8
	  	Taxes
	 Schedule 2.8(l)
	  	Excess Parachute Payments
	 Schedule 2.10(a)
	  	Leases
	 Schedule 2.11(a)
	  	Compliance with Employment Laws
	 Schedule 2.12(a)
	  	Contracts and Commitments
	 Schedule 2.12(b)
	  	Contract Exceptions
	 Schedule 2.13
	  	Intellectual Property
	 Schedule 2.15
	  	Insurance
	 Schedule 2.19
	  	Undisclosed Liabilities
	 Schedule 3.2
	  	Parent Conflicts
	 Schedule 3.3(a)
	  	Parent Government Consents
	 Schedule 3.3(b)
	  	Parent Third-Party Consents

  

 iii 

 AGREEMENT AND PLAN OF MERGER 
 This Agreement and Plan of Merger (the “Agreement”) is made and entered as of May 5, 2008, by and among AmberWave Systems
Corporation, a Delaware corporation (“Parent”), Aonex Acquisition Corporation, a California corporation (the “Merger Sub”), Aonex Technologies, Inc., a California corporation (the “Company”) and
Arrowhead Research Corporation, a California corporation (the “Preferred Holder”). 
 WHEREAS, the Preferred Holder is the
holder of the Company’s Series A Preferred Stock, par value $0.001 per share (the “Series A Preferred Stock”) and the Company’s Series B Preferred Stock, par value $0.001 per share (the “Series B Preferred
Stock” and, collectively, with the Series A Preferred Stock, the “Preferred Stock”), and the other Stockholders (the “Common Holders,” and together with the Preferred Holder, the
“Stockholders”) are holders of the Company’s Common Stock, par value $0.001 per share (the “Common Stock”); 
 WHEREAS, Merger Sub is a newly formed wholly-owned subsidiary of Parent that was formed for the purpose of acquiring the Company’s business by means of the merger of Merger Sub with and into the Company (the “Merger”)
in accordance with the applicable provisions of the California General Corporation Law (the “CGCL”), and upon the terms and subject to the conditions set forth herein; 
 WHEREAS, the Board of Directors of Parent has determined that the Merger is desirable to, and in the best interests of, Parent and its stockholders, and
has approved this Agreement, the Merger and the other transactions contemplated by this Agreement; 
 WHEREAS, the Board of Directors of the
Company has determined that the Merger is desirable to, and in the best interests of, the Company and its shareholders, has approved this Agreement, the Merger and the other transactions contemplated by this Agreement and has approved and
recommended that the shareholders of the Company adopt this Agreement and approve the Merger; and 
 WHEREAS, the requisite Stockholders of
the Company have approved the Merger and have approved and adopted this Agreement. 
 NOW, THEREFORE, in consideration of the foregoing and
the mutual covenants and agreements hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows: 
 1. The Merger. 
 1.1 The Merger. Upon the
terms and subject to the conditions of this Agreement, and in accordance with the applicable provisions of the CGCL, at the Effective Time (as defined below), Merger Sub shall be merged with and into the Company. Following the Merger, the separate
corporate existence of Merger Sub shall cease, and the Company shall continue as the surviving corporation (sometimes hereinafter referred to as the “Surviving Corporation”), and shall continue to be governed by the laws of the
State of California. The parties hereby intend that the Merger be treated as a taxable transaction for state and federal income tax purposes and shall report the transaction in a manner consistent therewith. 
 1.2 Effective Time. As promptly as practicable after the satisfaction or waiver of the conditions set forth in Section 1.10 hereof, the
Company and Merger Sub shall cause to be filed an Agreement of Merger (the “Agreement of Merger”) with the Secretary of State of the State of California, in such form as required by, and executed in accordance with, the relevant
provisions of the CGCL, and the parties shall take such other and further actions and make all other filings or recordings as may be 

 
required by applicable law to make the Merger effective. The date and time the Merger becomes effective in accordance with applicable law is referred to
herein as the “Effective Time.” 
 1.3 Effects of the Merger. The Merger shall have the effects set forth herein, in
the Agreement of Merger and in the CGCL. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, all the properties, rights, privileges, powers and franchises of the Company and Merger Sub shall vest in the
Surviving Corporation, and all debts, liabilities and duties of the Company and Merger Sub shall become the debts, liabilities and duties of the Surviving Corporation. 
 1.4 Articles of Incorporation and By-Laws of the Surviving Corporation. At the Effective Time, the articles of incorporation of the Company shall be amended to be identical to the articles of incorporation of
Merger Sub attached hereto as Exhibit A (other than the name of the corporation, which shall be Aonex Technologies, Inc.), and such articles of incorporation, as so amended, shall be the articles of incorporation of the Surviving Corporation
until thereafter amended as provided therein or in accordance with applicable law. At the Effective Time, the by-laws of the Company shall be amended to be identical to the by-laws of Merger Sub attached hereto as Exhibit B, and such by-laws,
as so amended, shall be the by-laws of the Surviving Corporation until thereafter amended in accordance with the provisions thereof and applicable law. 
 1.5 Directors and Officers. The directors of Merger Sub immediately prior to the Effective Time shall be the initial directors of the Surviving Corporation and shall hold office until their respective
successors are duly elected and qualified, or their earlier death, resignation or removal in accordance with applicable law and the Surviving Corporation’s Articles of Incorporation and By-Laws. The officers of Merger Sub immediately prior to
the Effective Time shall be the initial officers of the Surviving Corporation and shall hold office until their respective successors are duly elected and qualified, or their earlier death, resignation or removal. 
 1.6 Merger Consideration; Effects on Capital Stock of the Company and Merger Sub. 
 (a) Consideration to Stockholders. In connection with the Merger, the Stockholders shall have the right to receive from Parent the amounts set
forth below (the “Merger Consideration”): 
 (i) At the Closing, Parent shall pay to (A) the
Stockholders an amount equal to $450,000, minus (1) the Company Transaction Expenses, and (2) $15,625.31 (which is the Trade Payable Deficit set forth on Section 2.5.1 of the Disclosure Schedule), and (B) the payees of the
Company Transaction Expenses, an amount equal to such payee’s portion of the Company Transaction Expenses; 
 (ii) Within
five (5) business days of Parent’s completion of a Successful Laminate Substrate Production at its facilities, Parent shall pay to the Stockholders an amount equal to $500,000; 
 (iii) For each agreement that Parent enters into with any customer during the twenty-four (24) month period following the Closing
Date (each a “Customer Agreement”), Parent shall pay to the Stockholders an amount equal to $500,000; provided, that (A) Parent’s aggregate payments under this Section 1.6(a)(iii) shall not exceed $2,000,000,
(B) the Customer Agreement includes provisions pursuant to which Parent provides to a customer (1) Layer Transfer Services of at least 1,000 two-inch equivalent wafers per month for at least six (6) consecutive months,
(2) Laminate Substrates at a volume of at least 500 two-inch substrate equivalents per month for at least six (6) consecutive months, or (3) a license to Parent’s intellectual property in order to perform or have performed Layer
Transfer Services, provided 

  

 Agreement and Plan of Merger – Page 2 

 
such license results in total payments to Parent of at least $1,000,000 during the first two years that such license is in effect, (C) Parent shall use
its good faith efforts to enter into the Customer Agreements described in this Section 1.6(a)(iii) as soon as reasonably practicable and consistent with the minimum levels described in this subsection; and (D) Parent will notify the
Stockholders in writing promptly upon execution of any Customer Agreement; 
 (iv) During the period beginning on the Closing
Date and ending forty-two (42) months following the payment pursuant to Section 1.6(a)(ii) associated with Successful Laminate Substrate Production, Parent shall pay to the Stockholders, on a quarterly basis, (A) twenty percent
(20%) of the Cash Gross Margin Contribution received by Parent or its subsidiaries from its customers during such period for the sale of Laminate Substrates, Layer Transfer Services or devices employing Company’s Intellectual Property
Assets and (B) thirty-five percent (35%) of the revenues (including, but not limited to, up front fees and royalties) from the licensing or sale of the Company’s Intellectual Property Assets received by Parent from its customers
during such period; provided, that (1) Parent’s aggregate payments under this Section 1.6(a)(iv) shall not exceed $7,000,000, (2) amounts due and payable pursuant to this Section 1.6(a)(iv) shall be determined within twenty
(20) business days of the end of each of Parent’s fiscal quarters and paid within ten (10) business days thereafter, (3) Parent shall have the right to adjust any payments made based upon the results of Parent’s annual
audit, and (4) the Preferred Holder shall be entitled to a reasonable audit right to assess the accuracy of Parent’s payments; provided that such audit shall take place following Parent’s annual audit and the Preferred Holder shall
only be entitled to conduct one audit in any twelve (12) month period (provided, however, that if such audit reveals an underpayment of (a) five percent (5%) or more, Parent shall pay the parties’ reasonable costs associated with
such audit, or (b) less than five percent (5%), the Preferred Holder shall pay the parties’ reasonable costs associated with such audit); and 
 (v) During the ten (10) year period beginning on the Closing Date, royalty payments (the “Royalty Payments”), payable on a quarterly basis, equal to one-half of one percent (0.5%) of the revenues
associated with the sale of any product incorporating the Company’s Intellectual Property Assets for solar applications or the license of Company’s Intellectual Property Assets for solar applications, provided that (1) amounts due and
payable pursuant to this Section 1.6(a)(v) shall be determined within twenty (20) business days of the end of each of Parent’s fiscal quarters and paid within ten (10) business days thereafter, (2) Parent shall have the
right to adjust any payments made based upon the results of Parent’s annual audit, and (3) the Stockholders shall be entitled to a reasonable audit right to assess the accuracy of Parent’s payments; provided that such audit shall take
place following Parent’s annual audit and the Stockholders shall only be entitled to conduct one audit in any twelve (12) month period (provided, however, that if such audit reveals an underpayment of (a) five percent (5%) or
more, Parent shall pay the parties’ reasonable costs associated with such audit, or (b) less than five percent (5%), the Preferred Holder shall pay the parties’ reasonable costs associated with such audit). 
 Any payments made pursuant to subsections (a)(ii)-(v) above may hereinafter be referred to as “Earnout Payments.” The Earnout
Payments shall be made in accordance with the liquidation preferences set forth in the articles of incorporation of the Company, including the Certificate of Determination with respect to the Series A Preferred Stock and the Certificate of
Determination with respect to the Series B Preferred Stock. Any payments made by Parent in accordance with this Section 1.6 shall be made as follows: (A) first, to the Preferred Holder with respect to the Preferred Holder’s shares of
Series B Preferred Stock as of immediately prior to the Effective Time until such time as the Preferred Holder has received an amount equal to $1,298,000; (B) second, to the Preferred Holder with 

  

 Agreement and Plan of Merger – Page 3 

 
respect to the Preferred Holder’s shares of Series A Preferred Stock as of immediately prior to the Effective Time until such time as the Preferred
Holder has received an amount equal to $5,000,000 and (C) third, to the Preferred Holder and the Common Stock Holders on a Pro Rata Basis; provided, however, that notwithstanding anything contained in this Agreement to the contrary, no payments
shall be made by Parent to any Stockholder unless and until Parent receives from such Stockholder an executed Certificate of Acknowledgement with respect to each such payment in substantially the form attached hereto as Exhibit C (the
“Certificate of Acknowledgement”). 
 Notwithstanding the foregoing, in no event shall the aggregate payments made by Parent
to the Stockholders pursuant to Sections 1.6(a)(i)-(iv) exceed $7,950,000. For the avoidance of doubt, any Royalty Payments made by Parent to the Stockholders shall not be subject to the $7,950,000 cap. 
 (b) Acceleration of Payment of Merger Consideration. 
 (i) Upon the occurrence of a Company Sale Event, any acquirer of, or successor to, Parent shall assume all remaining obligations of Parent to make payments to the Stockholders under Sections 1.6(a)(i)-(v) (for
the avoidance of doubt, an exclusive licensee shall not be considered an acquirer or successor and Parent shall continue to be obligated to make payments to the Stockholders under Sections 1.6(a)(i)-(v)); provided, however, that if
such Company Sale Event results in aggregate proceeds payable to Parent or its stockholders in excess of $10,000,000, Parent shall, upon the closing of such Company Sale Event, pay to the Stockholders an amount equal to the sum of (A) the
difference between (i) $7,950,000, less (ii) the aggregate amount of all payments made by Parent to the Stockholders or the payees of the Company Transaction Expenses pursuant to Sections 1.6(a)(i)-(v) plus (B) one percent
(1.0%) of the aggregate proceeds payable to Parent in excess of $10,000,000 (the “Accelerated Payment Amount”), and neither Parent nor an acquirer or successor or assign of Parent shall thereafter have any further obligations
to make any payments to the Stockholders pursuant to this Agreement. 
 (ii) At any time after the Closing Date, Parent may,
in its sole discretion, pay to the Stockholders the Accelerated Payment Amount, and Parent shall thereafter have no further obligations to make any payments to the Stockholders pursuant to Sections 1.6(a)(i)-(iv). 
 (c) Imputed Interest. Parent and the Preferred Holder acknowledge that a portion of the payments made under Section 1.6(a) and 1.6(b) shall
be reportable as imputed interest under Section 483 or 1274 of the Code. 
 (d) Conversion of Shares. At the Effective Time, by
virtue of the Merger and without any action on the part of the Company, Merger Sub, or any security holder of the Company or Merger Sub: 
 (i) Each share of Common Stock and Preferred Stock that is issued and outstanding immediately prior to the Effective Time shall no longer be outstanding and shall automatically be canceled and shall cease to exist,
and each holder of a certificate or certificates representing any such shares shall cease to have any rights with respect thereto, except that the Stockholders shall have the right to receive the Merger Consideration upon surrender of such
certificate or certificates in accordance with Section 1.10 hereof, without interest; and 
 (ii) Each share of common
stock, $0.01 par value per share, of Merger Sub (the “Merger Sub Common Stock”) issued and outstanding immediately prior to the Effective Time shall be converted into one (1) validly issued, fully paid and non-assessable share
of 

  

 Agreement and Plan of Merger – Page 4 

 
common stock, $0.01 par value per share, of the Surviving Corporation (the “Surviving Corporation Common Stock”), and shall constitute the
only outstanding shares of capital stock of the Surviving Corporation. Each certificate that, immediately prior to the Effective Time, represented issued and outstanding shares of Merger Sub Common Stock shall, from and after the Effective Time,
automatically and without the necessity of presenting the same for exchange, represent the shares of the Surviving Corporation capital stock into which such shares have been converted pursuant to the terms hereof; provided, however, that the record
holder thereof shall receive, upon surrender of any such certificate, a certificate representing the shares of Surviving Corporation Common Stock into which the shares of Merger Sub Common Stock formerly represented thereby shall have been converted
pursuant to the terms hereof. 
 1.7 Dissenting Shares. 
 (a) Notwithstanding any provision of this Agreement to the contrary, any shares of capital stock of the Company held by a holder who has demanded and perfected appraisal rights for such shares in accordance with the
CGCL and who, as of the Effective Time, has not effectively withdrawn or lost such appraisal rights (“Dissenting Shares”) shall not be converted into or represent a right to receive the Merger Consideration pursuant to
Section 1.6, but the holder thereof shall only be entitled to such rights as are granted by the CGCL. 
 (b) Notwithstanding the
provisions of subsection (a) above, if any holder of shares of the capital stock of the Company who demands appraisal rights for such shares under the CGCL shall effectively withdraw or lose (through failure to perfect or otherwise) the right
to appraisal rights, then, as of the later of (i) the Effective Time or (ii) the occurrence of such event, such holder’s shares shall automatically be converted into and represent only the right to receive the Merger Consideration as
provided in Section 1.6, without interest thereon, upon surrender of the certificate representing such shares. 
 (c) The Company shall
give Parent (i) prompt notice of its receipt of any written demands for dissenters’ rights for any shares of capital stock of the Company, withdrawals of such demands, and any other instruments relating to the Merger served pursuant to the
CGCL and received by the Company and (ii) the opportunity to participate in all negotiations and proceedings with respect to demands for appraisal rights under the CGCL. The Company shall not, except with the prior written consent of Parent or
as may be required under applicable law, voluntarily make any payment with respect to any demands for appraisal rights for the capital stock of the Company or offer to settle or settle any such demands. 
 1.8 Approval of the Stockholders. On or prior to the execution of this Agreement, all of the Company’s stockholders shall have approved and
adopted this Agreement and the transactions contemplated hereby by written consent (the “Written Consent”) as provided by the CGCL, the Company’s articles of incorporation and its by-laws. 
 1.9 Closing. The closing of the Merger (the “Closing”) shall be held at the offices of Goodwin Procter LLP, Exchange Place,
Boston, Massachusetts, within one (1) Business Day after all conditions to closing contained in Section 1.10 have been satisfied or waived. The date on which the Closing actually occurs is sometimes referred to herein as the
“Closing Date.” At the Closing, Parent, Merger Sub and the Company shall cause the Agreement of Merger to be filed with the Secretary of State of the State of California, in accordance with the relevant provisions of the CGCL (the
time of filing with the Secretary of State of the State of California of such filing or such later time as may be agreed to by Parent and the Company in writing (and set forth in the Agreement of Merger) being referred to herein as the
“Effective Time”). 
  

 Agreement and Plan of Merger – Page 5 

 1.10 Conditions to Closing; Deliveries at Closing. 
 (a) The obligations of Parent and Merger Sub to consummate the Merger and the transactions contemplated hereby shall be subject to the following
conditions: 
 (i) Sean Olson shall have entered into a consulting services agreement with Parent in substantially the form
attached hereto as Exhibit D (the “Olson Consulting Agreement”); 
 (ii) Tom Pinnington shall have
accepted the Company’s offer of continued employment pursuant to the terms of the offer letter attached hereto as Exhibit E (the “Pinnington Offer Letter”); 
 (iii) Harry Atwater shall have joined the advisory board of Parent; 
 (iv) the Written Consent shall have been obtained; 
 (v) the Company shall have terminated any Tax allocation or Tax sharing agreements to which the Company is a party, and the Company shall
have no liability under such agreements following the Closing; and 
 (vi) the Company shall have no outstanding debt other
than the Trade Payable Deficit set forth on Section 2.5.1 of the Disclosure Schedule. 
 (b) At the Closing, the Preferred Holder
or the Company, as applicable, will deliver or cause to be delivered to Parent each of the following: 
 (i) copies of this
Agreement and each other Transaction Document to which such Stockholder or the Company, as applicable, is a party, executed by such Stockholder or the Company, as applicable; 
 (ii) copies of the authorizations, orders, approvals, releases, filings and consents of the third-parties set forth on
Section 1.10(b)(ii) of the Disclosure Schedules, all on terms and conditions reasonably satisfactory to Parent; 
 (iii) a certificate dated as of the Closing Date affirming that shares of the Company’s stock do not constitute United States real property interests within the meaning of Section 897(c) of the Code. Such certificate is intended
to comply with the withholding exemption provided in Treasury Regulations Section 1.1445-2(c) and shall be substantially in the form provided in Exhibit F hereto; 
 (iv) a certificate of the Secretary of the Company certifying (i) the Articles of Incorporation of the Company, (ii) the bylaws
of the Company, (iii) resolutions of the Board of Directors of Company and the Stockholders approving this Agreement and the Merger and the transactions contemplated by this Agreement, and (iv) the names of the officers of the Company
authorized to sign this Agreement and the instruments or certificates to be delivered pursuant to this Agreement by the Company or any of its officers, together with the true signatures of such officers; 
  

 Agreement and Plan of Merger – Page 6 

 (v) a certificate from the Secretary of State of the State of California that the Company
is in good standing in the State of California; 
 (vi) a Certificate of Acknowledgement; 
 (vii) a certificate confirming all Company Transaction Expenses are being paid at Closing pursuant to Section 1.6(a)(ii) (the
“Company Transaction Expense Certificate”); and 
 (viii) such other documents reasonably requested by
Parent. 
 (c) At the Closing, Parent will deliver or cause to be delivered the following: 
 (i) to the Preferred Holder, the amount to be paid to the Preferred Holder at the Closing pursuant to the Section 1.6(a)(i);

 (ii) to each payee of Company Transaction Expenses, an amount equal to such payee’s portion of all such Company
Transaction Expenses, with the result that following the Closing the Company shall have no further obligations or continuing Liabilities with respect to such payee; 
 (iii) to the Company and the Preferred Holder, copies of this Agreement and each other Transaction Document to which Parent is a party,
executed by Parent; and 
 (iv) a certificate of the Secretary of Parent and Merger Sub certifying (i) the certificate of
incorporation of Parent and the articles of incorporation of Merger Sub, (ii) the bylaws of Parent and Merger Sub, (iii) resolutions of the Board of Directors of Parent and Merger Sub approving the Transaction Documents and the Merger and
the transactions contemplated by the Transaction Documents, and (iv) the names of the officers of Parent and Merger Sub authorized to sign the applicable Transaction Documents and the instruments or certificates to be delivered pursuant to the
applicable Transaction Documents by Parent or Merger Sub or any of its respective officers, together with the true signatures of such officers. 
 (d) The payments pursuant to Section 1.6 shall be made by wire transfer of immediately available funds to the accounts set forth in written instructions provided by the recipients. 
 1.11 Transfer Taxes. The Stockholders shall be liable for and shall hold the Company and the Parent harmless against one-half of any transfer,
value added, excise, stock transfer, stamp, recording, registration and any similar taxes that become payable in connection with the Merger and the transactions contemplated hereby, and the applicable parties shall file such applications and
documents as shall permit any such tax to be assessed and paid on or prior to the Closing Date in accordance with any available pre-sale filing procedure. 
 1.12 Earnout Payment Provisions. Parent hereby covenants and agrees that from the Effective Time through the date that is forty-two (42) months after the Closing Date: 
 (a) Parent shall act in good faith in the operation of the Company’s business and the commercialization of the Company Intellectual Property; and

 (b) Parent will use good faith reasonable efforts to enter into contracts and perform 

  

 Agreement and Plan of Merger – Page 7 

 
services in a timely manner. 
 2. Representations and
Warranties of the Company. As a material inducement to Parent to enter into and perform its obligations under this Agreement, the Company hereby represents and warrants to Parent that, except as otherwise set forth in the disclosure schedule
dated as of the date hereof and delivered to Parent herewith (the “Disclosure Schedule”) (which disclosure shall provide an exception to or otherwise qualify the representations and warranties of the Company contained in the section
of this Agreement corresponding by number to such disclosure and the other representations and warranties herein to the extent such disclosure is readily apparent on its face to be applicable to such other representations and warranties):

 2.1 Existence; Good Standing; Authority. 
 (a) The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of California. The Company has all requisite corporate power and authority to own, operate, lease
and encumber its properties and carry on its business as currently conducted. The Company is duly licensed or qualified to do business as a foreign corporation under the laws of each other jurisdiction in which the character of its properties or in
which the transaction of its business makes such qualification necessary, except where the failure to be so licensed or qualified has not had or is not reasonably likely to have a material adverse effect on the Company. The Company has delivered to
Parent correct and complete copies of the articles of incorporation and bylaws (or equivalent organizational or governing documents) of the Company, in each case as amended to date. The minute books (containing the records of meetings of the
shareholders, the board of directors, and any committees thereof (or equivalent governing bodies)), the stock certificate books (or their equivalent), and the stock record books (or their equivalent for non-corporate entities) for the Company are
correct in all material respects. The Company is not in default under or in violation of any provision of its articles of incorporation or bylaws (or similar governing or formation documents). 
 (b) The Company has the corporate power and authority to execute and deliver this Agreement and each of the other Transaction Documents to which it is a
party and to perform its obligations hereunder and thereunder. The execution and delivery of this Agreement and the other Transaction Documents to which the Company is a party, the performance by the Company of its obligations hereunder and
thereunder and the consummation of the Merger and the transactions contemplated hereby and thereby have been duly authorized by all requisite corporate action on the part of the Company. No other proceedings on the part of the Company are necessary
to approve and authorize the execution and delivery of this Agreement or the other Transaction Documents to which the Company is a party and the consummation of the Merger and the transactions contemplated hereby and thereby. This Agreement and all
other Transaction Documents to which the Company is a party have been duly executed and delivered by the Company and, assuming the due authorization, execution and delivery of this Agreement and all other Transaction Documents to which the Company
is a party by each party hereto and thereto other than the Company, constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and by general equitable principles. 
 (c) The affirmative vote or consent in writing of (a) the holders of a majority of the Preferred Stock, voting as a single class, (b) the holders of a majority of the shares of the Common Stock, voting as a single class, and
(c) the holders of a majority of the outstanding shares of the Company’s capital stock, voting as a single class (the “Requisite Stockholder Approval”), to approve this Agreement, the Merger and the other transactions
contemplated by this Agreement, is the only vote or written consent of the holders of any class or series of the Company’s capital stock necessary to approve this Agreement, 

  

 Agreement and Plan of Merger – Page 8 

 
the Merger, and the other transactions contemplated by this Agreement. By and through the execution and delivery to the Company of the Written Consent, the
Company has complied with all applicable provisions of the articles of incorporation and the by-laws of the Company as well as the CGCL in obtaining the stockholders’ approval of the Merger. 
 2.2 Capitalization. 
 (a) The total
authorized capital stock of the Company consists of 50,000,000 shares of Common Stock, of which 1,528,354 shares are issued and outstanding as of the date hereof, and 5,000,000 shares of Preferred Stock, of which 1,000,000 shares are designated
Series A Preferred Stock, 1,000,000 of which are issued and outstanding as of the date hereof, and of which 3,000,000 shares are designated Series B Preferred Stock, 2,966,805 shares of which are issued and outstanding as of the date hereof. All of
the issued and outstanding shares of Common Stock and Preferred Stock have been duly authorized and validly issued and are fully paid and nonassessable and were not issued in violation of the preemptive rights of any Person or any applicable law.
The name as well as the number and class of shares of capital stock of the Company held by each Stockholder and the portion of the Merger Consideration to be received by each Stockholder is set forth on Section 2.2 of the Disclosure
Schedule. 
 (b) Other than as set forth on Section 2.2 of the Disclosure Schedule, the Company has no outstanding
subscriptions, options, warrants, rights, calls, commitments, conversion rights, rights of exchange, agreements, arrangements or commitments of any kind, contingent or otherwise, for or relating to the issuance or sale of, any shares of the
Company’s capital stock or other equity interests of the Company (the “Company Derivative Securities”). The Company has no obligation to purchase, redeem, or otherwise acquire any of its shares of capital stock or other equity
interests of the Company and there are no outstanding or authorized stock appreciation, phantom stock, stock plans or similar rights with respect to the Company or the shares of the Company’s capital stock or other equity interests of the
Company. There are no preemptive rights, rights of first refusal, put or call rights or obligations or anti-dilution rights with respect to the issuance, sale or redemption of the shares of the Company’s capital stock or other equity interests
of the Company, and, there are no agreements to which the Company is a party relating to the voting or restricting the transfer of shares of the Company’s capital stock or other equity interests of the Company. 
 (c) Any payments made by Parent pursuant Section 1.6 shall be made pursuant to the provisions of the Company’s articles of incorporation, which
provide that payments be made as follows: (A) first, to the Preferred Holder with respect to the Preferred Holder’s shares of Series B Preferred Stock as of immediately prior to the Effective Time until such time as the Preferred Holder
has received an amount equal to $1,298,000; (B) second, to the Preferred Holder with respect to the Preferred Holder’s shares of Series A Preferred Stock as of immediately prior to the Effective Time until such time as the Preferred Holder
has received an amount equal to $5,000,000 and (C) third, to the Preferred Holder and the Common Stock Holders on a Pro Rata Basis. 
 2.3 Subsidiaries. The Company does not have and never has had any subsidiaries or any ownership or equity interest in or control of (direct or indirect) any other Person. 
 2.4 No Conflict. 
 (a) Neither the
execution and delivery by the Company of this Agreement and the other Transaction Documents to which the Company is a party, nor the consummation by the Company of the transactions in accordance with the terms hereof and thereof, (i) conflicts with
or results in a breach of any provisions of the Company’s articles of incorporation or bylaws or other organizational documents, 

  

 Agreement and Plan of Merger – Page 9 

 
or (ii) will result in the creation of any Encumbrance upon any of the assets or properties owned or used by the Company (including the Company’s
Intellectual Property Assets). 
 (b) Except as set forth on Section 2.4(b) of the Disclosure Schedule, the execution and
delivery by the Company of this Agreement and the other Transaction Documents to which the Company is a party and the consummation by the Company of the transactions in accordance with the terms hereof and thereof (i) will not violate, or
conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default), or give rise to any right of termination, cancellation or acceleration that
would have under (A) any of the terms, conditions or provisions of any Company Contract (as defined below), (B) any law, statute, rule or regulation to which the Company is subject, or (C) any judgment, order or decree to which the
Company is subject, or (ii) result in (A) the release, disclosure, or delivery of any of the Company’s Intellectual Property Assets by or to any escrow agent or other Person, or (B) the grant, assignment or transfer to any Person
of any license or other right or interest to any of the Company’s Intellectual Property Assets. 
 2.5 Financial Statements. The
following financial statements (the “Financial Statements”) are attached hereto as Section 2.5 of the Disclosure Schedule: 
 (a) Unaudited consolidated balance sheets of the Company as of December 31, 2006 and 2007 (the latter, the “2007 Balance Sheet”), and the related unaudited consolidated statements of income,
stockholders’ equity and cash flows for each of the respective years then ended; 
 (b) Unaudited consolidated balance sheet of the
Company as of February 29, 2008 (the “Base Balance Sheet”), and the related unaudited consolidated statements of income for the two (2) months then ended. 
 (c) The Company Transaction Expense Certificate reflects all Company Transaction Expenses. 
 Subject to the absence of footnotes and year-end audit adjustments with respect to any unaudited Financial Statements, to the Company’s knowledge, the Financial Statements (i) have been prepared in
accordance with GAAP and (ii) present fairly in all material respects the consolidated financial condition and results of operations of the Company as of the respective dates of, and for the respective periods presented in, such Financial
Statements; and 
 (d) As of the Closing, the Company shall have no outstanding indebtedness other than the Trade Payable Deficit set forth
on Section 2.5.1 of the Disclosure Schedule. 
 2.6 Absence of Certain Changes. Except as expressly contemplated by this
Agreement, since the date of the Base Balance Sheet, the Company has operated only in the Ordinary Course of Business and there has not been any: 
 (a) change in the Company’s authorized or issued shares of capital stock or membership interests, as applicable; grant of any option, right to purchase or similar right regarding the capital stock or membership interests of the
Company; purchase, redemption, retirement, or other acquisition by the Company of any such capital stock or membership interests; or declaration or payment of any dividend or other distribution or payment in respect of the capital stock or
membership interests of the Company; 
 (b) grant or promise of any bonus, or increase in salaries or other compensation, by the Company, to
any of their respective directors, officers, managers, employees, sales representatives, 

  

 Agreement and Plan of Merger – Page 10 

 
consultants, former employees or Insiders (as defined herein) except for bonus awards, increases in salaries or other compensation made in the Ordinary
Course of Business, or grant or promise of any material increase in any employee benefit plan or arrangement, or amendment or termination of any existing employee benefit plan or arrangement (other than an amendment required by law), or adoption of
any new material employee benefit plan or arrangement; 
 (c) theft of, damage to or destruction or loss in excess of $25,000 for any
occurrence or $50,000 in the aggregate of any tangible asset or tangible property of the Company, whether or not covered by insurance; 
 (d)
incurrence by the Company of indebtedness; 
 (e) material change in the accounting methods or principles used by the Company, other than
write-downs or write-offs in the value of assets as required by GAAP; 
 (f) sale, lease, assignment or transfer (including, without
limitation, transfers to any Insider or Stockholder) of any of its tangible or intangible material assets (including material Intellectual Property Assets) (except for sales of inventory in the Ordinary Course of Business to unaffiliated third
Persons on an arm’s length basis), or disclosure of any confidential information (other than pursuant to agreements requiring the Person to whom the disclosure was made to maintain the confidentiality of, and preserving all rights of the
Company in, such confidential information); 
 (g) waiver, cancellation, compromise or release of any individual rights or claims with a
value in excess of $25,000, whether or not in the Ordinary Course of Business; 
 (h) (i) entry into, amendment or termination of any
Company Contract other than in the Ordinary Course of Business, (ii) entry into any other transaction involving amounts in excess of $25,000, other than in the Ordinary Course of Business, or (iii) material change in any business practice;

 (i) change in the conduct of its cash management customs and practices (including, without limitation, with respect to maintenance of
working capital balances and inventory levels, collection of accounts receivable, payment of accounts payable, accrued Liabilities and other Liabilities and credit policies); 
 (j) capital expenditure of more than $25,000 or commitment therefor; 
 (k) loans or advances to, or guarantees for the benefit of, any Persons, other than (i) advances to employees for travel and business expenses in the Ordinary Course of Business which do not exceed $5,000 in the
aggregate or (ii) in connection with the purchase or sale of products, ingredients, packaging, raw materials and finished products in the Ordinary Course of Business; 
 (l) change or authorization of any change in its articles of incorporation or by-laws; 
 (m) institution or
settlement of any claim (excluding accounts payable) or lawsuit for an amount involving in excess of $25,000 or involving equitable or injunctive relief; 
 (n) acquisition of any other business or Person (or any significant portion or division thereof), whether by merger, consolidation or reorganization or by purchase of its assets or stock; 
  

 Agreement and Plan of Merger – Page 11 

 (o) sale, assignment, transfer, abandonment or permitted lapse of any of the Company’s Intellectual
Property Assets or other intangible assets, or grant of any license or sublicense to any Person of any rights under or with respect to any Company’s Intellectual Property Assets, other than in the Ordinary Course of Business; or 
 (p) commitment or agreement by the Company to any of the foregoing. 
 2.7 Litigation. There is no litigation or governmental or administrative proceeding or investigation pending or, to the Company’s knowledge, threatened in writing against the Company or affecting the
properties or assets of the Company, or, as to matters related to the Company, against any officer, director, stockholder or key employee of the Company in their respective capacities in such positions. Section 2.7 of the Disclosure
Schedule includes a description of all litigation, claims, proceedings or, to the Company’s knowledge, investigations involving the Company or any of its officers, directors, stockholders or key employees in connection with the business of
the Company occurring, arising or existing during the past three (3) years. The Company is not subject to any outstanding order, judgment or decree issued by any Governmental Authority or, to the Company’s knowledge, any arbitrator. This
Section 2.7 does not apply to any matters with respect to the Company’s Intellectual Property Assets. 
 2.8 Taxes. Except
as set forth on Section 2.8 of the Disclosure Schedule: 
 (a) The Company has timely filed all income and other Tax Returns
required to be filed by the Company, taking into account any extension of time to file, and all such Tax Returns are true, correct and complete in all respects; 
 (b) All Taxes due and payable before the date hereof by the Company have been paid, unless such Taxes are being contested in good faith and for which adequate reserves have been accounted for in accordance with GAAP;

 (c) Neither the Internal Revenue Service (the “IRS”) nor any other Governmental Authority has asserted or assessed in
writing any deficiency or claim for any material amount of additional Taxes; 
 (d) To the Company’s knowledge, no federal, state, local
or foreign audits or other administrative proceedings or court proceedings are pending as of the date of this Agreement with regard to any Taxes or Tax Returns of the Company and the Company has not received a written notice prior to the date of
this Agreement of any actual or threatened audits or proceedings or is otherwise aware of any such audits or proceedings; 
 (e) The Company
has properly withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any shareholder, employee, creditor, independent contractor or other third party; 
 (f) The Company is not a party to or bound by any Tax allocation or Tax sharing agreement with any person other than the Company or the Preferred Holder;

 (g) The Company (i) has never been a member of an Affiliated Group filing a consolidated federal income Tax Return (other than a group the
common parent of which was the Preferred Holder) and (ii) has no Liability under Treasury Regulation Section 1.1502-6 for the Taxes of 

  

 Agreement and Plan of Merger – Page 12 

 
any other Person (or any similar provision of state, local, or foreign law), as a transferee or successor, by Contract, or otherwise; 
 (h) The Company has not received written notice of any claim by a taxing authority in a jurisdiction where the Company does not file Tax Returns that the
Company is or may be subject to taxation in such jurisdiction; 
 (i) The Company has not consented to extend the time, or is the beneficiary
of any extension of time, in which any Tax may be assessed or collected by any taxing authority; 
 (j) There are no liens for Taxes (other
than for Taxes not yet due and payable) upon the assets of the Company; 
 (k) The Company will not be required to include any item of income
in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any (i) change in method of accounting for a taxable period ending on or prior to the Closing
Date under Code § 481(c) (or any corresponding or similar provision of state, local or foreign income Tax law); (ii) “closing agreement” as described in Code § 7121 (or any corresponding or similar provision of state, local
or foreign income Tax law); (iii) deferred intercompany gain or any excess loss account described in Treasury Regulations under Code § 1502 (or any corresponding or similar provision of state, local or foreign income Tax law);
(iv) installment sale made prior to the Closing Date; or (v) prepaid amount received on or prior to the Closing Date; 
 (l) The
Company is not a party to any Contract, arrangement or plan that has resulted or would result, separately or in the aggregate, in the payment of any “excess parachute payment” within the meaning of Code § 280G (or any corresponding
provision of state, local or foreign income Tax law); 
 (m) The Company has not constituted either a “distributing corporation” or
a “controlled corporation” (within the meaning of Section 355(a)(1)(A) of the Code) in a distribution of stock to which Section 355 of the Code (or so much of Section 356 of the Code as relates to Section 355 of the
Code) applies and which occurred within two years of the date of this Agreement; 
 (n) The Company has made available to Parent correct and
complete copies of (i) all of its Tax Returns filed within the past five (5) years, (ii) all audit reports, letter rulings, technical advice memoranda and similar documents issued by the IRS or any other Governmental Authority within
the past five (5) years relating to the federal, state, local or foreign Taxes due from or with respect to the Company, and (iii) any closing letters or agreements entered into by the Company with the IRS or any other Governmental
Authority within the past three (3) years with respect to Taxes; and 
 (o) The Company is not and has not been a party to a
“reportable transaction” as defined in Treasury Regulations Section 1.6011-4(b). 
 (p) For the purposes of this Agreement:

 (i) “Affiliated Group” means an affiliated group as defined in Section 1504 of the Code (or any
similar combined, consolidated or unitary group defined under state, local or foreign income Tax law). 
  

 Agreement and Plan of Merger – Page 13 

 (ii) “Tax” or “Taxes” shall mean any and all federal,
state, local or foreign income, gross receipts, capital gains, franchise, alternative or add-on minimum, estimated, sales, use, goods and services, transfer, registration, value added, excise, natural resources, severance, stamp, occupation,
premium, windfall profit, environmental, customs, duties, real property, personal property, capital stock, social security, unemployment, employment, disability, payroll, license, employee or other withholding, contributions or other tax, charges,
fees, levies or other assessments, of any kind whatsoever, imposed by the IRS or any taxing authority, and such term shall include any interest whether paid or received, fines, penalties or additional amounts attributable to, or imposed upon, or
with respect to, any such taxes, charges, fees, levies or other assessments. 
 (iii) “Tax Returns” shall
mean any report, declaration, return, claim for refund, information return, document or other filing and amendments thereto (including any related or supporting schedules, statements or information) supplied or required to be supplied to any taxing
authority or jurisdiction (foreign or domestic) in connection with the determination, assessment or collection of Taxes of any party or the administration of any laws, regulations or administrative requirements relating to any Taxes. 
 2.9 Employee Benefit Plans. (a) Each Benefit Plan and any related trust intended to be qualified under Section 401(a) and 501(a) of the
Code, utilizes a prototype plan that has received a favorable opinion letter from the IRS on the form of such plan and, to the Company’s knowledge, no events have occurred that would adversely affect such qualified status; (b) each Benefit
Plan has been maintained and operated substantially in accordance with its terms and the requirements of applicable law, including, without limitation, ERISA and the Code; (c) none of the Benefit Plans is subject to Title IV of ERISA or is a
multiemployer plan within the meaning of Section 3(37) of ERISA; (d) none of the Benefit Plans provide post-employment health, life or other welfare benefits for former employees of the Company other than as required under
Section 4980B of the Code or any similar applicable law; and (e) there do not exist any pending or, to the Company’s knowledge, threatened claims, suits, actions, disputes, audits or investigations (other than routine claims for
benefits) with respect to any Benefit Plan. For purposes of this Agreement, “Benefit Plan” shall mean any employee benefit plan (within the meaning of Section 3(3) of ERISA) and all material bonus, stock option, incentive,
deferred compensation, supplemental retirement or other benefits plans or arrangements and all material employment, severance or termination agreements with respect to which the Company has any material obligation and which is maintained, or
sponsored by the Company for the benefit of any current or former employee of the Company. 
 2.10 Real and Personal Property.

 (a) The Company does not own any real property. All leases relating to the real properties leased by the Company (the “Leased Real
Property”) are identified on Section 2.10(a) of the Disclosure Schedule (the “Leases”) and true and complete copies thereof have been provided to Parent. Each of said Leases is in full force and effect. The
Leased Real Property constitutes all of the real property used or occupied by the Company. Neither the Company nor, to the Company’s knowledge, any other party to a Lease is in default in complying with any material provisions of any Lease, and
no condition or event or fact exists which, with notice, lapse of time or both, would reasonably be expected to constitute a default thereunder on the part of the Company nor, to the Company’s knowledge, any other party to a Lease. As of the
Closing, all payments due and payable by the Company as of the Closing under any Lease have been paid in full by the Company. 
  

 Agreement and Plan of Merger – Page 14 

 (b) The Company has good, valid and marketable title to, or a valid leasehold interest in, all of the
tangible personal property and assets used by the Company in connection with the operation of its business, free and clear of any Encumbrances, except for (i) Encumbrances reflected in the Financial Statements, (ii) landlord’s,
mechanic’s, carrier’s, workmen’s, repairmen’s or other similar statutory liens arising or incurred in the Ordinary Course of Business, (iii) Encumbrances for current Taxes or other governmental charges, assessments or levies
not yet due and payable and (iv) other Encumbrances arising in the Ordinary Course of Business and not incurred in connection with the borrowing of money (collectively, “Permitted Encumbrances”). 
 2.11 Labor and Employment Matters. 
 (a) Except as set forth on Section 2.11(a) of the Disclosure Schedule, the Company is in compliance in all material respects with all applicable federal and state laws respecting employment and employment practices, terms and
conditions of employment, and wages and hours, including, but not limited to Title VII of the Civil Rights Act of 1964, as amended, the Equal Pay Act of 1967, as amended, the Age Discrimination in Employment Act of 1967, as amended, the Americans
with Disabilities Act, as amended, the Immigration Reform Control Act of 1986, as amended, and the related rules and regulations adopted by those federal agencies responsible for the administration of such laws, and there are no arrearages in the
payment of wages. The Company has never implemented any plant closing or mass layoff of employees as those terms are defined in the Worker Adjustment Retraining and Notification Act of 1988, as amended, or any similar state or local law or
regulation, and no layoffs that could implicate such laws or regulations are currently contemplated. 
 (b) The Company has not recognized or
is a party to or otherwise bound by any collective bargaining agreement, Contract or other agreement or understanding with a labor union or labor organization. 
 (c) The Company is not a party to any employment, severance or consulting agreements with any director, officer, manager, consultant or employee pursuant to which there are any outstanding obligations as of the date
of this Agreement. 
 (d) To the Company’s knowledge, no employee of the Company is subject to any noncompete, nondisclosure,
confidentiality, employment, consulting or similar Contract in conflict with the current business activities of the Company. The Company has paid or made adequate provision to pay all wages and other compensation and all other amounts due and
payable to each of their respective employees or former employees. 
 (e) The Company is not party to any agreement which would reasonably be
expected to require the Company to pay any additional compensation, bonuses (including, without limitation, any retention bonuses) or other amounts as a result, in whole or in part, of the execution and delivery of this Agreement or the other
Transaction Documents to which the Company is a party or the consummation of the Merger and the transactions contemplated hereby or thereby, to any employee or former employee of the Company. 
 2.12 Contracts and Commitments. 
 (a)
Section 2.12(a) of the Disclosure Schedule or Section 2.13 of the Disclosure Schedule, lists all material Contracts or related agreements to which the Company is party. 
  

 Agreement and Plan of Merger – Page 15 

 (b) The Contracts required to be disclosed on Section 2.12(a) of the Disclosure Schedule and
Section 2.13 of the Disclosure Schedule attached hereto are referred to herein as the “Company Contracts”. The Company has provided to Parent true and correct copies of each written Company Contract, together with all
amendments, waivers and other changes thereto. (i) No Company Contract has been canceled or, to the Company’s knowledge, breached by the other party thereto, (ii) the Company is not in default under or in material breach of any
Company Contract, nor, to the Company’s knowledge, is any other party in default under or material breach of a Company Contract, and no event or condition has occurred or arisen which with the passage of time or the giving of notice or both
would result in a default or breach thereunder by the Company and (iii) each Company Contract is valid and binding on the Company, and to the Company’s knowledge, the other parties thereto, subject to applicable bankruptcy, insolvency,
reorganization, or moratorium or other similar laws relating to creditors’ rights generally and to general principles of equity. The Company has not received any notice or threat from any other party to breach or terminate a Company Contract
within the past five (5) years. 
 2.13 Intellectual Property Matters 
 (a) Section 2.13 of the Disclosure Schedule contains a complete and accurate list of all Patents owned by or licensed to the Company
(“Company Patents”), Marks owned by or licensed to the Company (“Company Marks”) and Copyrights owned by the Company (“Company Copyrights”), including each jurisdiction in which Company Patents,
Company Marks and Company Copyrights have been filed or registered and all applicable serial or registration numbers. Except as set forth on Section 2.13 of the Disclosure Schedule: 
 (i) The Company is not now nor has it ever been a member or promoter of, or a contributor to, any industry standards body or similar
organization that could require or obligate it to grant or offer to any other Person any license or right to any of the Company’s Intellectual Property Assets; 
 (ii) With regard to any patents or pending patents existing as of the date of this Agreement, the Company has not knowingly submitted to
the U.S. Patent Office false material information; 
 (iii) To the Company’s knowledge, there are no pending or
threatened claims in writing against the Company or any of its employees alleging that any of the operations of the Company’s business, any activity by the Company, or any Company product infringes on or violates (or in the past infringed or
violated) the rights of others in or to any Intellectual Property Assets (“Third Party Rights”) or constitutes a misappropriation of (or in the past constituted a misappropriation of) any Intellectual Property Assets of any Person
or that any of the Company’s Intellectual Property Assets is invalid or unenforceable, nor, to the Company’s knowledge, is there any interference, opposition, reissue, reexamination or other proceeding of any nature pending or threatened,
in which the scope, validity and/or enforceability of any of the Company’s Intellectual Property Assets is being, has been or could reasonably be expected to be contested or challenged; 
 (iv) No current activity by the Company constitutes a misappropriation of (or in the past constituted a misappropriation of) any trade
secrets of any Person; 
 (v) The Company is not bound by any Contract to indemnify, defend, hold harmless or reimburse any
other Person with respect to any intellectual property infringement, misappropriation or similar claim; 
  

 Agreement and Plan of Merger – Page 16 

 (vi) All former and current employees, consultants and contractors of the Company with
technical responsibilities or involved in the creation of the Company’s Intellectual Property Assets have executed written instruments with the Company that irrevocably assign to the Company all rights, title and interest to any inventions,
improvements, discoveries, writings or other works of authorship, or information relating to the Company’s business of the Company or any of the products or services being researched, developed, manufactured or sold by the Company or which may
be used with any such products or services; 
 (1) no employee, consultant or contractor of the Company has any claim, right
(whether or not currently exercisable) or interest to or in any of the Company’s Intellectual Property Assets; 
 (2) no
employee or independent contractor of the Company is: (A) bound by or otherwise subject to any contract restricting him or her from performing his or her duties for the Company; or (B) in breach of any contract with any former employer or
other Person concerning intellectual property rights or confidentiality; 
 (3) no funding, facilities or personnel of any
governmental body were used, directly or indirectly, to develop or create, in whole or in part, any of the Company’s Intellectual Property Assets; and 
 (vii) The Company has not assigned, sold, exclusively licensed or otherwise transferred, or agreed to assign, sell, exclusively license or otherwise transfer, ownership of any of the Intellectual Property Assets
currently owned by the Company as of the date of this Agreement to any entity or person. 
 2.14 Environmental Matters. 
 (a) To the Company’s knowledge, the Company is in compliance in all material respects with Environmental Laws. 
 (b) The Company has not received any written claim, demand, complaint, notice of potential responsibility, or other written notice regarding any
violation of Environmental Laws or any Liabilities, relating to the Company or their respective facilities arising under Environmental Laws, and, to the Company’s knowledge, there is no civil, administrative, or criminal enforcement proceeding
pending or threatened against the Company under any Environmental Laws. 
 (c) To the Company’s knowledge, no Hazardous Materials have
been released or disposed of by the Company on any of their respective leased properties as a result of their respective operations in violation of Environmental Laws. 
 (d) For purposes of this Agreement: 
 (i) “Environmental Laws” means all
applicable federal, state and local statutes, regulations, rules, bylaws and ordinances relating to pollution or protection of the environment, including, but not limited to, the Federal Water Pollution Control Act (33 U.S.C. §1251 et seq.),
Resources Conservation and Recovery Act (42 U.S.C. §6901 et. seq.), Safe Drinking Water Act (42 U.S.C. §3000(f) et. seq.), Toxic Substances Control Act (15 U.S.C. §2601 et seq.), Clean Air Act (42 U.S.C. §7401 et. seq.),
Comprehensive Environmental 

  

 Agreement and Plan of Merger – Page 17 

 
Response, Compensation and Liability Act (42 U.S.C. §9601 et seq.), and similar state and local enactments. 
 (ii) “Hazardous Materials” means and includes any hazardous waste, hazardous material, hazardous substance, petroleum
product, toxic substance, pollutant or contaminant, as defined or regulated under any Environmental Law. 
 (e) The representations and
warranties set forth in this Section 2.14 shall constitute the only representations and warranties by the Company with respect to environmental matters. 
 2.15 Insurance Coverage. Section 2.15 of the Disclosure Schedule contains an accurate summary of the insurance policies currently maintained by the Company. There are currently no claims pending
against the Company under any insurance policies currently in effect and covering the property, business or employees of the Company, and all premiums due and payable with respect to the policies maintained by the Company have been paid to date. To
the Company’s knowledge, there is no threatened termination of any such policies or arrangements. 
 2.16 Brokers. The Company
has not incurred or become liable for any broker’s commission or finder’s fee relating to or in connection with the Merger and the transactions contemplated by this Agreement. 
 2.17 Compliance with Laws. To the Company’s knowledge, the Company has all franchises, authorizations, approvals, orders, consents, licenses,
certificates, permits, registrations, qualifications or other rights and privileges (collectively “Permits”) necessary to conduct its business as it is presently conducted or proposed to be conducted and all such Permits are valid
and in full force and effect. No Permit is subject to termination as a result of the execution of this Agreement or consummation of the transactions contemplated hereby. To the Company’s knowledge, the Company is in compliance with all
applicable statutes, ordinances, orders, rules and regulations promulgated by any U.S. federal, state, municipal, non-U.S. or other governmental authority, which apply to the conduct of its business. The Company has never entered into or been
subject to any judgment, consent decree, compliance order or administrative order with respect to any aspect of the business, affairs, properties or assets of the Company or received any request for information, notice, demand letter, administrative
inquiry or formal or informal complaint or claim from any regulatory agency with respect to any aspect of the business, affairs, properties or assets of the Company. 
 2.18 Transferability of Assets. Immediately following the consummation of the Merger and the transactions contemplated by this Agreement, the Company will own, license or otherwise have a valid right to use all
the assets used by it in operating its business in substantially the same manner as such business was operated immediately prior to the consummation of the Merger and the transactions contemplated by this Agreement. This Section 2.18 does not
apply to any matters with respect to Intellectual Property Assets. 
 2.19 Absence of Undisclosed Liabilities. The Company does not
have any Liability arising out of transactions entered into prior to the Closing, or any action or inaction prior to the Closing, or any state of facts existing prior to the Closing, with respect to or based upon transactions or events occurring
before the Closing, except (a) Liabilities under Company Contracts (but not Liabilities for breaches thereof by the Company), (b) Liabilities reflected or reserved for in the Financial Statements or disclosed in the notes thereto,
(c) Liabilities which have been incurred since the date of the Base Balance Sheet in the Ordinary Course of Business (none of which is a Liability for breach of Contract by the Company, breach of warranty or tort) and (d) Liabilities
disclosed on Section 2.19 of the Disclosure Schedule. 
  

 Agreement and Plan of Merger – Page 18 

 2.20 Affiliate Transactions. No officer, director, shareholder or, to the Company’s
knowledge, other Affiliate of the Company or, to the Company’s knowledge, any individual related by blood, marriage or adoption to any such Person or, to the Company’s knowledge, any entity in which any such Person owns any beneficial
interest (collectively, the “Insiders”), is a party to any Company Contract or transaction with the Company or which pertains to the business of the Company or has any interest in any property, real or personal or mixed, tangible or
intangible, used in or pertaining to the business of the Company. 
 2.21 Illegal Payments. Neither the Company nor, to the
Company’s knowledge, any Person affiliated with the Company has ever offered, made or received on behalf of the Company any illegal payment or contribution of any kind, directly or indirectly, including, without limitation, payments, gifts or
gratuities, to any person, entity, or United States or foreign national, state or local government officials, employees or agents or candidates therefore or other persons. 
 3. Representations and Warranties of Parent and Merger Sub. As a material inducement to the Company to enter into and perform its obligations under this Agreement, Parent and Merger Sub, on a joint and
several basis, hereby represent and warrant to the Company that: 
 3.1 Existence; Good Standing; Authority. 
 (a) Parent is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware. Merger Sub is also a
corporation duly incorporated, validly existing and in good standing under the laws of the State of California. Parent and Merger Sub are duly licensed or qualified to do business as a foreign corporation under the laws of each other jurisdiction in
which the character of its properties or in which the transaction of its business makes such qualification necessary, except where the failure to be so licensed or qualified would has not had or is not reasonably likely to have a material adverse
effect on the ability of Parent or Merger Sub to perform its obligations under this Agreement. Parent and Merger Sub have all requisite corporate power and authority to own, operate, lease and encumber its properties and carry on its business as
currently conducted. 
 (b) Parent and Merger Sub have the corporate power and authority to execute and deliver this Agreement and each of
the other Transaction Documents to which they are parties and to perform their respective obligations hereunder and thereunder. The execution and delivery of this Agreement and the other Transaction Documents to which Parent and Merger Sub are
parties, the performance by Parent and Merger Sub of their respective obligations hereunder and thereunder and the consummation of the Merger and the transactions contemplated hereby and thereby have been duly authorized by all requisite corporate
action on the part of Parent and Merger Sub. No other proceedings on the part of the Parent or Merger Sub are necessary to approve and authorize the execution and delivery of this Agreement or the other Transaction Documents to which the Parent and
Merger Sub are parties and the consummation of the Merger the transactions contemplated hereby and thereby. This Agreement and all other Transaction Documents to which Parent and Merger Sub are parties have been duly executed and delivered by Parent
and Merger Sub and constitute valid and binding obligations of Parent and Merger Sub, respectively, enforceable against Parent and Merger Sub in accordance with their respective terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and by general equitable principles. 
 3.2
No Conflict. Neither the execution and delivery by Parent and Merger Sub of this Agreement and the other Transaction Documents to which Parent and Merger Sub are parties, nor the consummation by Parent and Merger Sub of the transactions in
accordance with the terms hereof and thereof, conflicts with or results in a breach of any provisions of Parent’s or Merger Sub’s certificate of 

  

 Agreement and Plan of Merger – Page 19 

 
incorporation or articles of incorporation, as applicable, or by-laws or other organizational documents. Except as set forth on Section 3.2 of the
Disclosure Schedule, the execution and delivery by Parent and Merger Sub of this Agreement and the other Transaction Documents to which Parent and Merger Sub are parties, and the consummation by Parent and Merger Sub of the transactions in
accordance with the terms hereof and thereof, will not violate, or conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under any of
the terms, conditions or provisions of (i) any Contract to which Parent or Merger Sub is a party or by which Parent, Merger Sub or any of their respective properties is bound, (ii) any law, statute, rule or regulation to which Parent or
Merger Sub is subject, or (iii) any judgment, order or decree to which Parent or Merger Sub is subject. 
 3.3 Consents and
Approvals. 
 (a) Except as set forth on Section 3.3(a) of the Disclosure Schedules, the execution, delivery and performance
of this Agreement and the other Transaction Documents to which Parent or Merger Sub is a party by Parent or Merger Sub will not require any consent, approval, authorization or other action by, or filing with or notification to, any Governmental
Authority. 
 (b) Except as set forth on Section 3.3(b) of the Disclosure Schedules, the execution, delivery and performance of
this Agreement and the other Transaction Documents to which Parent or Merger Sub is a party by Parent or Merger Sub will not require any third-party consents, approvals, authorizations or actions. 
 3.4 Litigation. There are no actions, suits, proceedings or orders pending or, to Parent’s or Merger Sub’s knowledge, threatened against
or affecting Parent or Merger Sub at law or in equity, or before or by any Governmental Authority which would adversely affect Parent’s or Merger Sub’s performance under this Agreement and the other Transaction Documents to which Parent
and Merger Sub are parties or the consummation of the Merger and the transactions contemplated hereby or thereby. 
 3.5 Brokers.
Parent and Merger Sub have not incurred or become liable for any broker’s commission or finder’s fee relating to or in connection with this Agreement, the Merger or the transactions contemplated hereby. 
 4. Certain Covenants of Parent, the Company and the Stockholders. 
 4.1 Further Action. The parties shall execute and deliver such other documents, certificates, agreements and other writings and to take such other actions as may be necessary or desirable in order to consummate
or implement expeditiously the Merger and the transactions contemplated by this Agreement. 
 4.2 Press Releases. After the Closing,
Parent and the Preferred Holder shall each issue their own press release regarding the Merger and the transactions contemplated by this Agreement in substantially the forms mutually agreed upon by the parties and attached hereto as Exhibit
G-1 (the “Parent Press Release”) and Exhibit G-2 (the “Preferred Holder Press Release”). 
 4.3
Responsibility for Filing Tax Returns. 
 (a) The Preferred Holder shall include the income of the Company (including, in the case of
the Preferred Holder’s consolidated federal income Tax Return, any deferred items triggered into income by Treasury Regulations Section 1.1502-13 and any excess loss account taken into income under 

  

 Agreement and Plan of Merger – Page 20 

 
Treasury Regulations Section 1.1502-19) on the consolidated, unitary or combined income Tax Returns of the Preferred Holder for all relevant taxable
periods through the end of the Closing Date. 
 (b) Parent shall prepare or cause to be prepared and file or cause to be filed all Tax
Returns for the Company that are filed after the Closing Date (other than any Tax Returns described in Section 4.3(a)). With respect to such Tax Returns for all taxable periods beginning before the Closing Date, Parent shall permit the
Preferred Holder to review and comment on each such Tax Return prior to filing and shall make such revisions to such Tax Returns as are reasonably requested by the Preferred Holder, and Parent shall not file any such Tax Returns without the written
consent of the Preferred Holder, which consent shall not be unreasonably withheld, conditioned or delayed. 
 4.4 Cooperation on Tax
Matters; Tax Claims. 
 (a) Parent, the Company and the Preferred Holder 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 records and information that 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. The Company and the Preferred Holder 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 or the Preferred Holder, any extensions thereof) of the respective taxable periods, and to abide by all record retention agreements entered into with any taxing authority, and (B) 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, the Company or the Preferred Holder, as the case may be, shall allow the other party to
take possession of such books and records. Parent and the Preferred Holder further agree, upon request, to use their commercially reasonable efforts to obtain any certificate or other document from any Governmental Authority 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). 
 (b) If, subsequent to the Closing, any of Parent, the Company or the Preferred Holder receives notice of a claim by any Governmental Authority that, if successful, might result in an indemnity payment pursuant to
Article 5 with respect to Taxes (a “Tax Claim”), then within fifteen (15) days after receipt of such notice, Parent, the Company or the Preferred Holder, as the case may be, shall give written notice of such Tax Claim to the
other parties. The Preferred Holder shall have the right to control the conduct and resolution of any Tax Claim relating to a Pre-Closing Tax Period; provided that the Preferred Holder and Parent shall jointly control the conduct and resolution of
any Tax Claim relating to a Straddle Period; and provided further that the Preferred Holder shall not resolve any Tax Claim in a manner that would reasonably be expected to have an adverse impact on Parent or the Company without Parent’s
consent, which shall not be unreasonably withheld, conditioned or delayed. If the Preferred Holder has the right to control the conduct and resolution of any Tax Claim but elects in writing not to do so, Parent shall have the right to control the
conduct and resolution of such Tax Claim; provided, however, that Parent shall keep the Preferred Holder informed of all developments on a timely basis and Parent shall not resolve such Tax Claim in a manner that could reasonably be expected to have
an adverse impact on the Preferred Holder’s indemnification obligations under this Agreement without the Preferred Holder’s written consent, which consent shall not be unreasonably withheld, conditioned or delayed. Each party shall bear
its own costs for participating in any proceeding relating to any Tax Claim. 
  

 Agreement and Plan of Merger – Page 21 

 4.5 Company Derivative Securities. The Preferred Holder shall have fourteen (14) days after
the Closing to retire, extinguish and otherwise terminate any Company Derivative Security that is not retired, extinguished or otherwise terminated as of the Closing Date. Thereafter, Parent shall have the sole and exclusive right to retire,
extinguish and otherwise terminate each such Company Derivative Security and the Preferred Holder shall cooperate in good faith as Parent pursues the retirement, extinguishment and termination of the Company Derivative Securities. The costs of the
retirement, extinguishment and termination of the Company Derivative Securities shall be borne by the Preferred Holder in accordance with Article 5. 
 5. Survival of Representations and Warranties; Indemnification 
 5.1 Survival; Risk Allocation. 
 (a) Survival of Representations, Warranties, Covenants and Agreements. All representations, warranties, covenants and agreements set forth in this
Agreement, the Transaction Documents or in any certificate delivered at the Closing shall survive the Closing Date. Notwithstanding the foregoing, no party shall be entitled to recover for any Loss pursuant to this Article 5 unless written
notice of a claim thereof is delivered to the other Parties prior to the Applicable Limitation Date (if any). The “Applicable Limitation Date” for the representations and warranties set forth in Article 2 and Article 3 shall be the
date forty-two (42) months from the Closing Date. 
 (b) Special Rule For Fraud. Notwithstanding anything in this Article 5 to
the contrary, in the event of fraud, any party hereto which suffers any Loss by reason thereof shall be entitled to seek recovery therefore from the Person or Persons who perpetrated such fraud without regard to any limitation set forth in this
Agreement (whether a temporal limitation, a dollar limitation or otherwise). 
 (c) Risk Allocation. The representations, warranties,
covenants and agreements made herein, as modified by the Disclosure Schedules, together with the indemnification provisions herein, are intended among other things to allocate the economic cost and the risks inherent in the Merger and the
transactions contemplated hereby between the parties hereto and, accordingly, a party hereto shall be entitled to the indemnification or other remedies provided in this Agreement by reason of any breach of any such representation, warranty, covenant
or agreement, as modified by the Disclosure Schedules, by another party hereto, subject to the limitations set forth in this Agreement, notwithstanding whether any employee, representative or agent of the party hereto seeking to enforce a remedy
knew or had reason to know of such breach and regardless of any investigation by such party hereto. 
 5.2 Indemnification by the
Preferred Holder. 
 (a) Subject to the other terms and conditions of this Agreement, the Preferred Holder shall indemnify the Parent
Parties against and hold the Parent Parties harmless from all Losses which any such Parent Party may suffer, sustain or become subject to, as a result of, in connection with or by virtue of (i) any misrepresentation or the breach of any
representation or warranty of the Company contained in this Agreement or any exhibit or schedule hereto or any certificate delivered at the Closing by the Company to Parent in connection with the Merger and the transactions contemplated hereby
(which breach shall be determined for purposes of this Article 5 without regard to any qualification by terms such as “material” or “material adverse effect” contained in such representation or warranty); (ii) (A) any
Tax of the Company for any taxable period ending on or before the Closing Date and, with respect to any Straddle Period, for the portion through the end of the Closing Date (each such period, a “Pre-Closing Tax Period”),
(B) any Tax of any member of an Affiliated Group of which the Company (or any of its respective predecessors) is or was a member on or prior to the Closing Date, including pursuant to Treasury Regulations Section 1.1502-6 or any similar
state, local, or foreign law or regulation, and (C)

  

 Agreement and Plan of Merger – Page 22 

 
any Tax of any Person (other than the Company) imposed on the Company as a transferee or successor, by Contract or pursuant to any law, rule, or regulation,
which Taxes relate to an event or transaction occurring before the Closing; (iii) any indebtedness of the Company existing before the Closing which is not fully discharged at Closing; (iv) any material breach of any covenant or agreement
of the Company contained in this Agreement or any exhibit or schedule hereto or any certificate delivered at the Closing by or on behalf of the Company to Parent in connection with the Merger and the transactions contemplated hereby; (v) any
appraisal or similar actions with respect to the Common Stock; and (vi) the retirement, extinguishment, purchase or other cancellation of any Company Derivative Securities or any claims related thereto by holders of Company Derivative
Securities. For purposes of clause (ii) above, in the case of any taxable period that includes (but does not end on) the Closing Date (a “Straddle Period”), the amount of any Taxes based on or measured by income or receipts of
the Company for a Straddle Period which relate to the Pre-Closing Tax Period shall be determined based on an interim closing of the books as of the close of business on the Closing Date (and for such purpose, the taxable period of any partnership or
other pass-through entity in which the Company holds a beneficial interest shall be deemed to terminate at such time) and the amount of other Taxes of the Company for a Straddle Period which relate to the Pre-Closing Tax Period shall be deemed to be
the amount of such Tax for the entire taxable period multiplied by a fraction the numerator of which is the number of days in the taxable period ending on the Closing Date and the denominator of which is the number of days in such Straddle Period.

 (b) The indemnification obligations of the Preferred Holder pursuant to this Article 5 shall be limited as follows: 
 (i) The Preferred Holder shall not have any Liability to the Parent Parties under Section 5.2(a)(i) unless the aggregate amount of
all Losses incurred by the Parent Parties under such Sections for which the Preferred Holder would, but for this Section 5.2(b)(i), be liable exceeds on a cumulative basis $25,000 (the “Basket”), and then only to the extent of
the amount of Losses in excess of the Basket; provided, however, that the Basket shall not apply to a breach of any Fundamental Representation. 
 (ii) The Preferred Holder shall not have any Liability to the Parent Parties under Section 5.2(a)(i) to the extent the aggregate amount of all Losses indemnified by the Preferred Holder under those Sections
exceeds the sum of the Merger Consideration (A) paid to the Preferred Holder and the payees of Company Transaction Expenses pursuant to Sections 1.6(a)(i)-(v) and (B) otherwise payable to the Preferred Holder as Earnout Payments
pursuant to achievement of the terms contained in Section 1.6(a) of this Agreement but for Parent’s utilization of the Set Off Right (the “Cap”). 
 (iii) The Preferred Holder shall not have any Liability to the Parent Parties under Section 5.2(a) unless a Parent Party gives
written notice demanding indemnification with respect thereto to the Preferred Holder on or before the Applicable Limitation Date (if any), it being agreed that if such demand for indemnification is timely made, the relevant representations,
warranties, covenants and agreements shall survive with respect to the claims for indemnification set forth in such notice until such matter is resolved. 
 (iv) No Liability under this Article 5 shall attach to the Preferred Holder under this Agreement in respect of any claim: 
 (A) to the extent that such claim relates to any Loss for which any of any Indemnified Person collects a recovery from any third party, but only to the extent of collections actually received (net of any costs of
collection); provided, however, that Parent shall have no obligation to seek recovery from any third party; or 
  

 Agreement and Plan of Merger – Page 23 

 (B) to the extent that such claim is in respect of a Liability (including any Tax
Liability) that was paid or satisfied at or prior to the Closing. 
 (v) If a Parent Party has a claim for indemnification
under Section 5.2(a)(i) and Section 5.2(a)(ii) for a similar Tax Loss such Parent Party may only recover once for such Loss. 
 (c)
Payments by the Preferred Holder pursuant to Section 5.2(a) shall be further limited to the amount of any Liability or damage that remains after deducting therefrom any insurance proceeds and any indemnity, contribution or other similar payment
actually received by the Parent Parties from any third party with respect thereto (net of deductibles and costs of collection and enforcement); provided, however, that Parent shall have no obligation to seek to recover any insurance, indemnity,
contribution or other similar payment from any third party. If any Parent Party actually receives any amounts under applicable insurance policies, or from any other Person alleged to be responsible for any Losses, subsequent to an indemnification
payment by the Preferred Holder, then the Parent Party shall promptly reimburse the Preferred Holder for any payment actually made or expense incurred by the Preferred Holder in connection with providing such indemnification payment up to the actual
amount received by the applicable Parent Party, net of any unindemnified expenses incurred by such Parent Party in collecting such amount. If the Preferred Holder recovers any amounts under insurance policies or from indemnitors or contributors
pursuant to the assignment of the rights of a Parent Party hereunder, then the Preferred Holder shall first use such amounts to pay any expenses incurred by the Preferred Holder in connection with pursuing such amounts and to reimburse itself for
any indemnification payment actually made by the Preferred Holder to Parent Parties and shall provide any amounts remaining to Parent. 
 (d)
Parent shall give the Preferred Holder written notice of any claim, assertion, event or proceeding by or in respect of a third party as to which any Parent Party may request indemnification hereunder or as to which the Basket may be applied as soon
as is practicable and in any event within thirty (30) days of the time that a Parent Party actually learns of such claim, assertion, event or proceeding, describing in reasonable detail the claim, the amount thereof (if known) and the basis
thereof; provided, however, that the failure to so notify the Preferred Holder shall not affect the rights of the Parent Parties to indemnification hereunder except to the extent that the Preferred Holder is actually prejudiced by such
failure. The Preferred Holder may participate in and control the defense of any third party claim at its own expense, so long as the Preferred Holder gives written notice to the Parent Parties accepting full responsibility for indemnification with
respect to such claim or proceeding within fifteen (15) days of the receipt of notice from Parent. If the Preferred Holder elects to assume the defense of any such claim or proceeding, the Preferred Holder shall consult with Parent for the
purpose of allowing Parent to participate in such defense, but in such case the expenses of Parent shall be paid by Parent, unless (i) the employment thereof has been specifically authorized by the Preferred Holder in writing or (ii) the
Preferred Holder has been advised in writing by counsel that a reasonable likelihood exists of a conflict of interest between the Preferred Holder, on the one hand, and Parent, on the other hand. Parent shall provide and shall cause the Company to
provide, as applicable, the Preferred Holder and its counsel with reasonable access to its records and personnel relating to any such claim, assertion, event or proceeding during normal business hours and upon advance written notice and shall
otherwise cooperate with the Preferred Holder in the defense or settlement thereof, and the Preferred Holder shall reimburse Parent for all its reasonable out-of-pocket expenses in connection therewith. Parent shall not pay, or permit to be paid,
any part of any claim or demand arising from such asserted liability unless the Preferred Holder consents in writing in advance to such payment. The Preferred Holder shall obtain the prior written consent of Parent before entering into any
settlement of any third party claim, if the settlement does not expressly release the applicable Parent Parties from all Liabilities and obligations with respect to such third party claim or the settlement imposes injunctive or other equitable
relief against such Parent Parties. If the Preferred Holder does not elect or fails to defend or if, after commencing or 

  

 Agreement and Plan of Merger – Page 24 

 
undertaking any such defense, the Preferred Holder fails to prosecute or withdraws from such defense, Parent shall have the right to undertake the defense or
settlement thereof, at the Preferred Holder’s expense. In such case, Parent shall keep the Preferred Holder reasonably apprised of the status of the claim, liability or expense and any resulting suit, proceeding or enforcement action, shall
furnish the Preferred Holder with all documents and information that the Preferred Holder may reasonably request and Parent shall consult with the Preferred Holder prior to acting on major matters, including settlement discussions. In the event of
any conflict between the provisions of this Section 5.2(d) and the provisions of Section 4.4(b) with respect to any Tax Claim, the provisions of Section 4.4(b) shall be controlling. 
 (e) Anything herein to the contrary notwithstanding, no breach of any representation, warranty, covenant or agreement contained herein shall give rise to
any right on the part of Parent, after the consummation of the Merger and the transactions contemplated hereby, to rescind this Agreement or any of the Merger and the transactions contemplated hereby. 
 (f) Any Liability for indemnification under Section 5.2(a) shall be determined without duplication of recovery by reason of the state of facts
giving rise to such Liability constituting a breach of more than one representation, warranty, covenant or agreement. 
 (g) Any claim by a
Parent Party seeking indemnification from the Preferred Holder pursuant to this Section 5.2 shall be made by Parent on behalf of such Parent Party and no Parent Party (other than Parent) shall be entitled to enforce any rights or claims
pursuant to this Section 5.2. 
 5.3 Indemnification by Parent. 
 (a) Subject to the other terms and conditions of this Agreement, Parent shall indemnify the Preferred Holder Parties against and hold them harmless from
all Losses which any the Preferred Holder Party may suffer, sustain or become subject to, as a result of, in connection with or by virtue of (i) any misrepresentation or the breach of any representation or warranty of Parent contained in this
Agreement or any exhibit or schedule hereto or any certificate delivered at the Closing by or on behalf of Parent to the Preferred Holder in connection with the Merger and the transactions contemplated hereby (which breach shall be determined for
purposes of this Article 5 without regard to any qualification by terms such as “material” or “material adverse effect” contained in such representation or warranty), and (ii) any breach of any covenant or agreement of
Parent contained in this Agreement or any exhibit or schedule hereto or any certificate delivered at the Closing by or on behalf of it to the Preferred Holder in connection with the Merger and the transactions contemplated hereby. 
 (b) Parent shall not have any Liability to the Preferred Holder Parties under Section 5.3(a)(i) unless the aggregate amount of all such Losses
incurred by the Preferred Holder Parties for which Parent would, but for this Section 5.3(b), be liable exceeds, on a cumulative basis, the Basket, and then only to the extent of the amount of Losses in excess of the Basket; provided, however,
that the Basket shall not apply to a breach of any Fundamental Representation. Parent shall not have any Liability to the Preferred Holder Parties under Section 5.3(a)(i) to the extent the aggregate amount of indemnifiable Losses under that
Section exceeds the Cap. 
 (c) Parent shall not have any Liability to the Preferred Holder Parties under Section 5.3(a) unless the
Preferred Holder gives written notice demanding indemnification with respect thereto to Parent on or prior to the Applicable Limitation Date (if any), it being agreed that if such demand for indemnification is timely made, the relevant
representations and warranties, covenants and agreements shall survive with respect to the claims for indemnification set forth in such notice until such matter is resolved. 
  

 Agreement and Plan of Merger – Page 25 

 (d) The Preferred Holder shall give Parent written notice of any claim, assertion, event or proceeding by
or in respect of a third party as to which any Preferred Holder Party may request indemnification hereunder or as to which the Basket may be applied as soon as is practicable and in any event within thirty (30) days of the time that the
Preferred Holder actually learns of such claim, assertion, event or proceeding, describing in reasonable detail the claim, the amount thereof (if known) and the basis thereof; provided, however, that the failure to so notify Parent
shall not affect the rights of the Preferred Holder Parties to indemnification hereunder except to the extent that Parent is actually prejudiced by such failure. Parent shall have the right to direct, through counsel of its own choosing, the defense
or settlement of any such claim or proceeding brought by a third party at Parent’s own expense, so long as Parent gives written notice to the Preferred Holder Parties accepting full responsibility for indemnification with respect to such claim
or proceeding within fifteen (15) days of the receipt of notice from the Preferred Holder. If Parent elects to assume the defense of any such claim or proceeding, Parent shall consult with the Preferred Holder for the purpose of allowing the
Preferred Holder to participate in such defense, but in such case the expenses of the Preferred Holder shall be paid by the Preferred Holder, unless (i) the employment thereof has been specifically authorized by Parent in writing or
(ii) Parent has been advised by counsel that a reasonable likelihood exists of a conflict of interest between the Preferred Holder, on the one hand, and Parent, on the other hand. The Preferred Holder shall reasonably cooperate with Parent in
the defense or settlement thereof, and Parent shall reimburse the Preferred Holder for all the reasonable out-of-pocket expenses of the Preferred Holder in connection therewith. The Preferred Holder shall not pay, or permit to be paid, any part of
any claim or demand arising from such asserted liability unless Parent consents in writing in advance to such payment. Parent shall obtain the prior written consent of the Preferred Holder before entering into any settlement of any third party claim
if the settlement does not expressly release the applicable Preferred Holder Parties from all Liabilities and obligations with respect to such third party claim or the settlement imposes injunctive or other equitable relief against the Preferred
Holder Parties. If Parent does not elect or fails to defend or if, after commencing or undertaking any such defense, Parent fails to prosecute or withdraws from such defense, the Preferred Holder shall have the right to undertake the defense or
settlement thereof, at Parent’s expense. In such case, the Preferred Holder shall keep Parent reasonably apprised of the status of the claim, liability or expense and any resulting suit, proceeding or enforcement action, shall furnish Parent
with all documents and information that Parent may reasonably request and the Preferred Holder shall consult with Parent prior to acting on major matters, including settlement discussions. In addition, Parent shall at all times have the right to
participate in such defense at its own expense directly or through counsel. 
 5.4 Payments. Subject to the other provisions of this
Article 5, the indemnifying party shall pay the indemnified party in immediately available funds promptly after the indemnified party provides the indemnifying party with written notice of a claim hereunder and the parties finally resolve any
disputes relating to such claim. With respect to any claim, assertion, event or proceeding as to which an indemnified party may request indemnification hereunder, the indemnified party shall give the indemnifying party written notice of such claim,
which notice shall be accompanied by such back up or supporting documentation as is reasonably available to the indemnified party in connection with such claim, including the amount thereof (if known) and the basis thereof. If requested by the
indemnifying party, the indemnified party shall make its employees, directors, officers and representatives reasonably available, during normal business hours and on advance written notice and at the sole cost and expense of the indemnifying party,
to the indemnifying party to discuss, and to engage in good faith negotiations of, such claim, assertion for a period not to exceed thirty (30) days, during which thirty (30) day period the indemnified party agrees not to commence any
proceeding or otherwise enforce its rights (except for such equitable remedies to which the indemnified party may be otherwise entitled) under this Article 5. A Parent Party’s claims for indemnification pursuant to Section 5.2 may be
satisfied, in such Parent Party’s sole discretion, (a) by reducing and setting off against any amounts owed by Parent to the Preferred Holder under Section 1.6 (the “Set Off Right”), (b) by proceeding directly
against the Preferred Holder, 

  

 Agreement and Plan of Merger – Page 26 

 
or (c) any combination of the foregoing. Notwithstanding the foregoing, a Parent Party may only pursue payment for indemnification under
Section 5.2(a)(vi) pursuant to the Set Off Right. 
 5.5 Treatment of Indemnity Payments. All payments made by the Preferred
Holder or Parent, as the case may be, to or for the benefit of the other parties pursuant to this Article 5 shall be treated as adjustments to the Merger Consideration for tax purposes, and such agreed treatment shall govern for purposes of this
Agreement. 
 5.6 Remedies Exclusive. From and after the Closing, other than in the case of fraud, the rights of the parties to
indemnification relating to this Agreement or the Merger and the transactions contemplated hereby shall be strictly limited to those contained in this Article 5, and such indemnification rights shall be the exclusive remedies of the parties hereto
subsequent to the Closing with respect to any matter in any way relating to this Agreement or arising in connection herewith, except for such equitable remedies to which such other parties may be otherwise entitled, including the ability to apply to
any court of competent jurisdiction for specific performance or injunctive relief. Except as provided in this Article 5, to the maximum extent permitted by law, the parties hereby waive all other rights and remedies with respect to any matter in any
way relating to this Agreement or arising in connection herewith, whether under any laws, at common law or otherwise. Except as provided in this Article 5, no claim, action or remedy shall be brought or maintained by any party hereto against any
other party, and no recourse shall be brought or granted against any of them, by virtue of or based upon any alleged misstatement or omission respecting an inaccuracy in or breach of any of the representations, warranties or covenants of any of the
parties hereto set forth or contained in this Agreement, except to the extent that the same shall have been the result of fraud by such party, in which case the other parties hereto shall have, in addition to the remedies set forth in this Article
5, such equitable remedies to which such other parties may be otherwise entitled, including the ability to apply to any court of competent jurisdiction for specific performance or injunctive relief. 
 6. General Provisions 
 6.1 Notices. All
notices, requests, claims, demands and other communications under this Agreement will be in writing and will be deemed given if properly addressed (i) if delivered personally, on the day of delivery; (ii) if delivered by facsimile (with
acknowledgment of a complete transmission), on the day of delivery if sent during normal business hours, or on the day after delivery if sent after normal business hours, or (iii) if delivered by registered or certified mail (return receipt
requested) or by first class mail, five (5) business days after mailing. Notices shall be deemed to be properly addressed to any Party hereto if addressed to the following addresses (or at such other address for a Party as shall be specified by
like notice): 
 If to the Preferred Holder, to: 
 Arrowhead Research Corporation 
 201 South Lake Avenue, Suite 703 
 Pasadena, CA 91101 
 Facsimile: (626) 304-3401 
 Attn: John C. Miller 
 If to Parent or to the Company following the Effective Time, to:

 AmberWave Systems Corporation 
 13 Garabedian Dr. 
 Salem, NH 03079 
  

 Agreement and Plan of Merger – Page 27 

 Fax: (603) 870-8607 
 Attn: Richard Faubert and Bryan Lord 
 with copies (which shall not constitute notice) to: 
 Goodwin Procter LLP 
 53 State Street 
 Boston, Massachusetts 02109 
 Telecopy: (617) 523-1231 
 Attn: Kenneth J. Gordon, Esq. 
 6.2 Fees and Expenses. Except as provided otherwise herein, each of Parent, on the one hand, and the Stockholders (on behalf of the Company and the Stockholders), on the other hand, shall bear its own expenses in connection with the
negotiation and the consummation of the Merger and the transactions contemplated by this Agreement. 
 6.3 Certain Definitions. For
purposes of this Agreement: 
 (a) An “Affiliate” of any Person means another Person that directly or indirectly, through one
or more intermediaries, controls, is controlled by, or is under common control with, such first Person. 
 (b) “Business
Day” means any day of the year, other than a Saturday, Sunday or any day on which major banks are closed for business in Boston, Massachusetts 
 (c) “Cash Gross Margin Contribution” means the gross margin contribution, excluding depreciation or amortization. 
 (d) “Code” means the Internal Revenue Code of 1986, as amended from time to time. 
 (e)
“Company’s knowledge”, “knowledge of the Company” or words of similar import means the actual knowledge of Sean Olson, John Miller, Bruce Stewart, Chris Anzalone, Jane Davidson and Paul McDonnell. 

(f) “Company Sale Event” means in one or a series of related transactions, (i) the sale, exclusive license (where such term of
exclusivity is for a term of thirty-two (32) months or more) or other disposition of all or substantially all of the assets of the Surviving Corporation, (ii) the sale or other disposition of all of the issued and outstanding stock of the
Surviving Corporation, (iii) the merger or consolidation of the Surviving Corporation with or into another entity in which all of the issued and outstanding stock of the Surviving Corporation is converted into or exchanged for cash, securities
of another entity, or other property; provided, that, in each case, the Company’s Intellectual Property Assets, as in existence on the date hereof, constitute all or substantially all of the assets sold or licensed exclusively, as the case may
be, by Parent in such Company Sale Event. For the avoidance of doubt, none of the following shall be a Company Sale Event: 
 (A) the sale or
other disposition of all or substantially all of the assets of the Parent, so long as the buyer in such sale agrees to assume the rights and obligations of the Parent under this Agreement; 
 (B) the sale or other disposition of all of the issued and outstanding stock of the Parent; 
  

 Agreement and Plan of Merger – Page 28 

 (C) the merger or consolidation of the Parent with or into another entity in which all of the issued and
outstanding stock of the Parent is converted into or exchanged for cash, securities of another entity, or other property; or 
 (D) any merger
of the Surviving Corporation with and into the Parent or any subsidiary of Parent, or the reincorporation of the Surviving Corporation to be domiciled in another jurisdiction. 
 (g) “Company Transaction Expenses” means all fees, costs and expenses, including fees, costs and disbursements payable to legal counsel
or other representatives or consultants, of the Company (but only to the extent incurred on or prior to the Closing Date) and the Stockholders in connection with the negotiation and consummation of the Merger and the transactions contemplated by
this Agreement and any other Transaction Document; provided, however, that any such items that have been paid before the Closing shall not constitute Company Transaction Expenses. 
 (h) “Contract” means any contract, license, sublicense, mortgage, purchase order, indenture, loan agreement, lease, sublease, agreement
or instrument or any binding commitment to enter into any of the foregoing (in each case, whether written or oral) to which a Person is a party or by which any of its assets are bound. 
 (i) “Fundamental Representations” mean, with respect to the Company, the representations and warranties set forth in Section 2.1
(Existence; Good Standing; Authority), Section 2.2 (Capitalization), Section 2.3 (Subsidiaries), Sections 2.5(c) and 2.5(d) (Financial Statements), Section 2.16 (Brokers), and, with respect to Parent and Merger Sub, the
representations and warranties set forth in Section 3.1 (Existence; Good Standing; Authority) or Section 3.5 (Brokers). 
 (j)
“GAAP” means U.S. generally accepted accounting principles, consistently applied. 
 (k) “Intellectual Property
Assets” means: (A) patents, patent applications, patent rights, and inventions and discoveries and invention disclosures (whether or not patented) (collectively, “Patents”); (B) trade names, trade dress, logos,
packaging design, slogans, Internet domain names, registered and unregistered trademarks and service marks and related registrations and applications for registration (collectively, “Marks”); (C) copyrights in both published
and unpublished works, including without limitation all compilations, databases and computer programs, manuals and other documentation and all copyright registrations and applications, and all derivatives, translations, localizations, adaptations
and combinations of the above, whether or not registered or sought to be registered (collectively, “Copyrights”); (D) know-how, trade secrets, confidential or proprietary information, research in progress, algorithms, data,
designs, processes, formulae, drawings, schematics, blueprints, flow charts, models, strategies, prototypes, techniques, testing procedures and testing results (collectively, “Trade Secrets”); (E) other intellectual property
rights and/or proprietary rights relating to any of the foregoing; and (F) goodwill, franchises, licenses, permits, consents, approvals, immunities, covenants not to sue and claims of infringement against third parties. 
 (l) “Laminate Substrate” means a laminate substrate produced using the Company’s Patents. 
 (m) “Layer Transfer Services” means layer transfer services covered by the Company’s Patents or using the Company’s
Intellectual Property Assets. 
 (n) “Liability” means any liability, debt, obligation, deficiency, Tax, penalty,
assessment, fine, claim, cause of action or other liability of any kind or nature whatsoever, whether 

  

 Agreement and Plan of Merger – Page 29 

 
asserted or unasserted, absolute or contingent, known or unknown, accrued or unaccrued, liquidated or unliquidated, and whether due or to become due and
regardless of when asserted. 
 (o) “Loss(es)” of a Person means any loss, Liability, demand, claim, action, cause of
action, cost, damage, deficiency, Tax, penalty, fine or expense, whether or not arising out of third party claims (including, without limitation, interest, penalties, reasonable attorneys’, accountants’ and other professionals’ fees
and expenses, court costs and all reasonable amounts paid in investigation, defense or settlement of any of the foregoing) actually suffered or incurred by such Person; provided, however, that Losses shall be determined for purposes of
Article 5 without regard for any qualification by terms such as “material” or “Material Adverse Effect” contained in any representation or warranty. 
 (p) “Ordinary Course of Business” means the ordinary course of business consistent with past custom and practice. 
 (q) “Parent Parties” means Parent, the Surviving Corporation and each of their respective officers, directors, managers, members, employees, agents and permitted successors and permitted assigns.

 (r) “Person” means an individual, corporation, partnership, limited liability company, joint venture, association, trust,
unincorporated organization or other entity. 
 (s) “Preferred Holder Parties” means the Preferred Holder and its respective
officers, directors, managers, members, employees, agents and permitted successors and assigns. 
 (t) “Pro Rata Basis,”
with respect to each Stockholder, means the quotient obtained by dividing (x) the number of shares of Series B Preferred Stock or Common Stock held by such Stockholder, as applicable, by (y) the aggregate number of shares of Series B
Preferred Stock and Common Stock held by all Stockholders as of immediately prior to the Effective Time. 
 (u) A “Successful
Laminate Substrate Production” occurs when, for a minimum of three bulk GaN 2” donor wafers, Parent is able to demonstrate at least five (5) consecutive transfers from each to 2” poly AlN wafers, followed by GaN epi, where in
the aggregate at least ninety-five percent (95%) of the film area after epi is of quality comparable to the donor wafers’ quality. 
 (v) “Trade Payable Deficit” means the excess of (i) the Company’s trade payables as of the Closing Date, over (ii) the sum of (x) the Company’s trade receivables as of the Closing Date, plus
(y) the Company’s pre-paid expenses as of the Closing Date. 
 (w) “Transaction Documents” means this Agreement,
the Olson Consulting Agreement, the Pinnington Offer Letter and any other agreement contemplated hereby or thereby to which the Company is a party. 
 6.4 Interpretation. When a reference is made in this Agreement to an Article, Section, Schedule or Exhibit, such reference will be to an Article or Section of, or a Schedule or Exhibit to, this Agreement unless otherwise indicated.
The table of contents and headings contained in this Agreement are for reference purposes only and will 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 will be deemed to be followed by the words “without limitation.” The words “hereof,” “herein” and “hereunder” and words of similar import when used in
this Agreement will refer to this Agreement as a whole and not to any particular provision of this Agreement. All terms used herein with initial capital letters have the meanings ascribed to them herein and all terms defined in this Agreement will
have such 

  

 Agreement and Plan of Merger – Page 30 

 
defined meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein. The definitions contained
in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such term. Any agreement, instrument or statute defined or referred to herein or in any
agreement or instrument that is referred to herein means such agreement, instrument or statute as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of
statutes) by succession of comparable successor statutes and references to all attachments thereto and instruments incorporated therein. References to a Person are also to its permitted successors and assigns. The parties have participated jointly
in the negotiation and drafting of this Agreement and the other agreements, documents and instruments executed and delivered in connection herewith with counsel sophisticated in investment transactions. In the event an ambiguity or question of
intent or interpretation arises, this Agreement and the agreements, documents and instruments executed and delivered in connection herewith shall be construed as if drafted jointly by the parties and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any provisions of this Agreement and the agreements, documents and instruments executed and delivered in connection herewith 
 6.5 Counterparts; Delivery by Facsimile or Electronic Mail. This Agreement and any Transaction Documents, and any amendments hereto or thereto,
may be executed in one or more counterparts, all of which will be considered one and the same agreement and will become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties. This
Agreement and any Transaction Document, and any amendments hereto or thereto, to the extent signed and delivered by means of a facsimile machine or digital imaging and electronic mail, shall be treated in all manner and respects as an original
contract and shall be considered to have the same binding legal effects as if it were the original signed version thereof delivered in person. At the request of any party hereto or to any such Transaction Document, each other party hereto or thereto
shall re-execute original forms thereof and deliver them to all other parties. No party hereto or to any such Transaction Document shall raise the use of a facsimile machine or digital imaging and electronic mail to deliver a signature or the fact
that any signature or contract was transmitted or communicated through the use of a facsimile machine or digital imaging and electronic mail as a defense to the formation of a contract and each such party forever waives any such defense. 

6.6 Amendments and Waivers. This Agreement may not be amended or modified, nor may compliance with any condition or covenant set forth herein
be waived, except by a writing duly and validly executed by Parent, the Company and the Preferred Holder, or in the case of a waiver, the party waiving compliance. No failure or delay by any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies provided by law. Waiver of any term or condition of this Agreement by a party shall not be construed as a waiver of any subsequent breach or waiver of the same term or condition by such party,
or a waiver of any other term or condition of this Agreement by such party. 
 6.7 Entire Agreement; Severability. This Agreement
(including the exhibits, schedules, documents and instruments referred to herein) and the other Transaction Documents constitute the entire agreement, and supersede all prior agreements and understandings, both written and oral, among the parties
with respect to the subject matter of this Agreement, including the letter agreement between Parent and the Company dated as of February 6, 2008. If any term, condition or other provision of this Agreement is found to be invalid, illegal or
incapable of being enforced by virtue of any rule of law, public policy or court determination, all other terms, conditions and provisions of this Agreement shall nevertheless remain in full force and effect. 
  

 Agreement and Plan of Merger – Page 31 

 6.8 Captions. The captions herein are included for convenience of reference only and shall be
ignored in the construction or interpretation hereof. 
 6.9 Third Party Beneficiaries. Except as expressly provided in this
Agreement, each party hereto intends that this Agreement shall not benefit or create any right or cause of action in or on behalf of any Person other than the parties hereto. 
 6.10 Governing Law. All question concerning the construction, validity and interpretation of this Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without giving effect to the conflict of law principles thereof. 
 6.11
Assignment. Neither this Agreement nor any of the rights, interests or obligations under this Agreement may be assigned, in whole or in part, by operation of law or otherwise by the parties hereto without the prior written consent of the
Company, the Preferred Holder and Parent. Any assignment in violation of the preceding sentence will be 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. Notwithstanding the foregoing, without the prior written consent of any party hereto, (a) each of the Company and Parent and their permitted assigns may at any time, in their sole discretion, assign, in
whole or in part, their rights under this Agreement and the other Transaction Documents for collateral security purposes to any lender providing financing to any of them or any of their Affiliates, and (b) Parent may assign, in whole or in
part, its rights and obligations under this Agreement and the other Transaction Documents to any acquirer of Parent and/or in connection with a Company Sale Event; provided however, that if Parent seeks such assignment in connection with an
acquisition or a Company Sale Event, such acquirer agrees to assume the rights and obligations of the Parent under this Agreement and the other Transaction Documents, as the case may be. 
 6.12 Release. Effective upon the Closing, except with respect to a claim arising out of this Agreement or the other Transaction Documents, the
Stockholders on behalf of themselves and their assigns and heirs hereby unconditionally and irrevocably waive, release and forever discharge each of the Company and each of its respective past and present directors, officers, employees, agents,
predecessors, successors, assigns, equityholders, partners, insurers, and Affiliates from any and all Liabilities of any kind or nature whatsoever, in each case whether absolute or contingent, liquidated or unliquidated, known or unknown, and the
Stockholders shall not seek to recover any amounts in connection therewith or thereunder from the Company. Without limiting the generality of the foregoing, the Stockholders waive all rights under California Civil Code Section 1542, which
provides: 
  

	
	A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE WHICH, IF KNOWN BY HIM, MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

 Such released Liabilities shall include, without limitation, any right to recover against the Company for any
indemnification claims made against or paid by any Stockholder pursuant to Section 5. The Stockholders understand that this is a full and final release of all claims, demands, causes of action and Liabilities of any nature whatsoever, whether
or not known, suspected or claimed, that could have been asserted in any legal or equitable proceeding against the Company, except as expressly set forth in this Section 6.12. Each Stockholder represents that such Stockholder is not aware of
any claim by such Stockholder other than the claims that are waived, released and forever discharged by this Section 6.12. 
  

 Agreement and Plan of Merger – Page 32 

 6.13 Confidentiality. The Stockholders shall treat and hold as confidential any information
concerning the business and affairs of the Company that is not already generally available to the public, including any notes, analyses, compilations, studies, forecasts, interpretations or other documents that are derived from, contain, reflect or
are based upon any such information (the “Confidential Information”), refrain from using any of the Confidential Information, and deliver promptly to the Company, at the request and option of the Company, all tangible embodiments
(and all copies) of the Confidential Information which are in such Person’s possession or under such Person’s control. Notwithstanding the foregoing, Confidential Information shall not include information that is (a) generally
available to the public other than as a result of a breach of this Section 6.13 or other act or omission of the Stockholders or (b) rightfully received after the Closing Date from a third party not under any obligation of confidentiality
with respect to such information. If any Stockholder is requested or required (by oral question or request for information or documents in any legal proceeding, interrogatory, subpoena, civil investigative demand, or similar process) to disclose any
Confidential Information, such Person shall notify the Company promptly of the request or requirement so that the Company may seek an appropriate protective order or waive compliance with the provisions of this Section 6.13. If, in the absence
of a protective order or the receipt of a waiver hereunder, a Stockholder is, on the advice of counsel, compelled to disclose any Confidential Information to any tribunal or else stand liable for contempt, it may disclose the Confidential
Information to the tribunal, provided that such disclosing Person shall use its commercially reasonable efforts to obtain, at the request and expense of the Company, an order or other assurance that confidential treatment shall be accorded to such
portion of the Confidential Information required to be disclosed as the Company shall designate. Parent acknowledges that the Preferred Holder will make such announcements and disclosures regarding the transactions contemplated by this Agreement
that it deems reasonably necessary or advisable, including, for the avoidance of doubt but not limited to, those disclosures required by applicable law or any national securities exchange. 
 6.14 Transitional Assistance. The Stockholders shall not in any manner take any action which is designed, intended or might reasonably be
anticipated to have the effect of discouraging customers, suppliers, vendors, service providers, employees, lessors, licensors and other business relations of the Company from maintaining the same business relationships with the Company following
the Closing as were maintained by such Persons prior to the Closing. 
 6.15 Remedies. Notwithstanding Section 6.16 and
Section 6.17, it is specifically understood and agreed that any breach of the provisions of this Agreement or any other Transaction Document by any party hereto will result in irreparable injury to the other parties hereto, that the remedy at
law alone will be an inadequate remedy for such breach, and that, in addition to any other remedies which they may have, such other parties may enforce their respective rights by actions for specific performance (to the extent permitted by law).

 6.16 Dispute Resolution. 
 (a) All disputes, claims, or controversies arising out of or relating to this Agreement, the Transaction Documents or any other agreement executed and delivered pursuant to this Agreement or the negotiation, breach, validity or performance
hereof and thereof or the Merger and the transactions contemplated hereby and thereby that are not resolved by mutual agreement shall be resolved solely and exclusively by binding arbitration to be conducted before J.A.M.S./Endispute, Inc. in
Chicago, Illinois before a single arbitrator (the “Arbitrator”). The parties understand and agree that this arbitration shall apply equally to claims of fraud or fraud in the inducement. 
  

 Agreement and Plan of Merger – Page 33 

 (b) The parties covenant and agree that the arbitration shall commence within one hundred and eighty
(180) days of the date on which a written demand for arbitration is filed by any party hereto (the “Filing Date”). In connection with the arbitration proceeding, the Arbitrator shall have the power to order the production of
documents by each party and any third-party witnesses. In addition, each party may take up to three depositions as of right, and the Arbitrator may in his or her discretion allow additional depositions upon good cause shown by the moving party.
However, the Arbitrator shall not have the power to order the answering of interrogatories or the response to requests for admission. In connection with any arbitration, each party shall provide to the other, no later than seven (7) business
days before the date of the arbitration, the identity of all persons that may testify at the arbitration and a copy of all documents that may be introduced at the arbitration or considered or used by a party’s witnesses or experts. The
Arbitrator’s decision and award shall be made and delivered within one hundred and eighty (180) days of the Filing Date. The Arbitrator’s decision shall set forth a reasoned basis for any award of damages or finding of liability. The
Arbitrator shall not have power to award damages in excess of actual compensatory damages and shall not multiply actual damages or award punitive damages or any other damages that are specifically excluded under this Agreement, and each party hereby
irrevocably waives any claim to such damages. 
 (c) The parties covenant and agree that they will participate in the arbitration in good
faith and that they will, except as provided in Article 5 of this Agreement, (i) bear their own attorneys’ fees, costs and expenses in connection with the arbitration, and (ii) share equally in the fees and expenses charged by the
Arbitrator. Any party unsuccessfully refusing to comply with an order of the Arbitrators shall be liable for costs and expenses, including attorneys’ fees, incurred by the other party in enforcing the award. This Section 6.16 applies
equally to requests for temporary, preliminary or permanent injunctive relief, except that in the case of temporary or preliminary injunctive relief any party may proceed in court without prior arbitration for the purpose of avoiding immediate and
irreparable harm or to enforce its rights under any non-competition covenants. 
 6.17 Consent to Jurisdiction. Except as provided in
Sections 6.15 and 6.16(c), each of the parties hereto irrevocably and unconditionally consents to the jurisdiction of J.A.M.S./Endispute, Inc. to resolve all disputes, claims or controversies arising out of or relating to this Agreement, the
Transaction Documents or any other agreement executed and delivered pursuant to this Agreement or the negotiation, breach, validity or performance hereof and thereof or the Merger and the transactions contemplated hereby and thereby, and further
consents to the sole and exclusive jurisdiction of the courts of Chicago, Illinois for the purposes of enforcing the arbitration provisions of Section 6.16 of this Agreement. Each party further irrevocably waives any objection to proceeding
before the Arbitrator based upon lack of personal jurisdiction or to the laying of venue and further irrevocably and unconditionally waives and agrees not to make a claim in any court that arbitration before the Arbitrator has been brought in an
inconvenient forum. Each of the parties hereto hereby consents to service of process by registered mail at the address to which notices are to be given. Each of the parties hereto agrees that its or his submission to jurisdiction and its or his
consent to service of process by mail is made for the express benefit of the other parties hereto. 
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LEFT BLANK] 
  

 Agreement and Plan of Merger – Page 34 

 IN WITNESS WHEREOF, the parties hereto have caused this Agreement and Plan of Merger to be signed by
their respective officers thereunto duly authorized, all as of the date first written above. 
  

			
	COMPANY:
	
	AONEX TECHNOLOGIES, INC.
		
	By:	 	 /S/ Sean Olson

	Name:	 	Sean Olson
	Title:	 	President
		
	PARENT:	 	
	
	AMBERWAVE SYSTEMS CORPORATION
		
	By:	 	 /S/ Richard Faubert

	Name:	 	Richard Faubert
	Title:	 	President and CEO
	
	MERGER SUB:
	
	AONEX ACQUISITION CORPORATION
		
	By:	 	 /S/ Richard Faubert

	Name:	 	Richard Faubert
	Title:	 	President and CEO
	
	PREFERRED HOLDER:
	
	ARROWHEAD RESEARCH CORPORATION
		
	By:	 	 /S/ Christopher Anzalone

	Name:	 	Christopher Anzalone
	Title:	 	President and CEO

			
	COMMON HOLDERS:
	
	 /S/ Harry Atwater

	Harry Atwater
	
	 /S/ James Zahler

	James Zahler
	
	 /S/ Anna Fontcuberta

	Anna Fontcuberta
	
	 /S/ Sean Olson

	Sean Olson
	
	 /S/ Charles Tsai

	Charles Tsai
	
	 /S/ Art Ackerman

	Art Ackerman
	
	 /S/ Corinne Ladous

	Corinne Ladous
	
	 /S/ Tom Pinnington

	Tom Pinnington

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