M&A Boot Camp Training Sessions

Summer 2020
M&A Boot Camp training sessions
Acquiring privately held businesses
Hogan Lovells faculty:
Rick Climan, Keith Flaum, Jane Ross, and Chris Moore

Table of Contents
1. Program outline 3
2. Introductory materials 5
3. Balance sheet of hypothetical target company 13
4. Deal structures for acquiring a privately held business 15
5. Illustrative comparison of income tax consequences: stock sale vs. asset sale 21
6. Chart comparing alternative deal structures for acquiring privately held businesses 23
7. Private company acquisition timeline 25
8. Negotiating the Acquisition of a Privately Held Business:
Some Basic Issues and Principles 27
9. Pricing formulations in stock-for-stock mergers 44
10. The three basic building blocks of the acquisition agreement:
Representations & warranties; pre-closing covenants; and closing conditions 52
11. Indemnification provisions in agreements for the acquisition of
privately held companies 71
12a. Sample merger agreement for the acquisition of a privately held company
(Riverbed/Mazu Networks) 83
12b. Sample merger agreement for the acquisition of a publicly traded company
(Marvell Technology/Antigua) 161
13. Drafting and negotiating pointers for junior M&A lawyers 244
14. M&A jargon 270
15. ABA Private Target M&A Deal Points Study (Released 2019) 274
16. “Buyer Power Ratio” Deal Points Study (Released 2017) 339
17. Caveats 365
TAB 1
Program outline

3
M&A Boot Camp training sessions:
Acquiring privately held businesses
Hogan Lovells faculty:
Rick Climan, Keith Flaum, Jane Ross, and Chris Moore

Program Outline
Session 1: Introduction to M&A
Distinguishing among M&A deals
Introduction to deal structuring

Session 2: Structuring the acquisition of a privately held business

Session 3: Introduction to the definitive acquisition agreement

Negotiating and drafting representations & warranties

Session 4: Negotiating and drafting pre-closing covenants and walk rights

Session 5: Negotiating and drafting indemnification provisions

TAB 2
Introductory
materials

5
M&A Boot Camp Faculty

Rick Climan
Partner, Silicon Valley

Keith Flaum
Partner, Silicon Valley

Jane Ross
Partner, Silicon Valley

Chris Moore
Partner, Silicon Valley
How Do We Distinguish Among M&A Deals?
• Characteristics of the target company
— Type of entity; jurisdiction of organization
— Privately held vs. publicly traded
— Target’s value: equity value vs. enterprise value
• Characteristics of buyer
— Strategic vs. financial
• Structure of transaction
— Private targets: purchase of stock, purchase of assets or merger
— Public targets: tender offer (followed by “second-step” merger) or “one-step” merger
— Debt financing needed vs. not needed by buyer to complete transaction
• Acquisition Currency
— Cash vs. buyer’s stock
How Do We Distinguish Among M&A Deals?
1. Is the target company publicly traded or privately held?
2. How big is the target company?
3. Is the buyer buying the entire business of the target company or
just part of the business?
4. Is the buyer a strategic buyer or a financial buyer?
5. Is the transaction friendly or hostile?
6. What type of acquisition currency is the buyer using to pay the
purchase price?
— Cash?
— Shares of the buyer’s stock?
— Other consideration?
7. Does the buyer have to borrow money to effect the transaction?
8. How is the transaction going to be structured?
— Merger?
— Asset purchase?
— Stock purchase or tender offer?
Differences Between Acquisitions of Private and Public Companies
Private Public
Co. Co.
Is there publicly available information about the target? Limited Considerable

Are holders of most outstanding target shares typically directly involved in deal
Yes No
negotiations?

Do the SEC proxy rules, the Williams Act and other related SEC regulations apply? No Yes

Is a simultaneous signing and closing possible? Yes No

Is a “hostile” acquisition of the target a realistic possibility? No Yes

Should the target be expected to request a “standstill” provision in the

No Yes
confidentiality agreement?

Can an “interloper” (that makes a higher competing bid for the target after
No Yes
execution of the definitive acquisition agreement) succeed in acquiring the target?

Are stockholder lawsuits challenging target directors’ exercise of their fiduciary

No Yes
duties common?

Does the buyer have a post-closing indemnification remedy for inaccurate

Yes No
representations of the target?

Hogan Lovells US LLP 3

Equity Value vs. Enterprise Value

— Assume Target has 100 million outstanding shares

(and no other equity securities)
— Assume Target’s share price is $50
• Target’s equity value (value of outstanding equity securities)
= $5 billion
— Assume Target has $3 billion of outstanding debt
— Assume Target has $500 million of cash and cash equivalents
• Target’s enterprise value (equity val. + debt - cash) = $7.5 billion
Strategic vs. Financial Buyers

Strategic Financial
Buying entity: Operating company “Shell” corporation controlled by
(e.g., GE, eBay) a limited partnership “fund”
managed by a private equity
“sponsor” (e.g., KKR, Blackstone)

Acquisition currency: Cash or buyer's stock Cash

(or combination)

Leveraged? Sometimes Typically

Will target's senior Sometimes Typically

management continue with
buyer after closing?

Will target's senior No Typically

management have equity
interests in buying entity?

Hogan Lovells US LLP 5

Cash vs. Buyer’s Stock as Acquisition Currency

Cash Buyer’s Stock

Typical pricing Exchange ratio
$X per share
formulation (fixed, floating, collared)

Vote of buyer’s Yes, if sufficient number of

No
stockholders required? buyer shares issuable

Need to comply with

registration requirements of No Yes
federal securities laws?
Two-way, if sufficient number
One-way of buyer shares issuable
Due diligence (buyer performs due diligence (each company performs due diligence
investigation with respect to target) investigation with respect to the other)

Is a “tax-free
No Yes
reorganization” possible?

Will target’s directors typically No

Yes
be subject to Revlon duties?

Generally more accretive/less Generally less accretive/more

Accretive/dilutive
dilutive than using buyer’s stock as dilutive than using cash as
to buyer’s EPS?
acquisition currency acquisition currency
TAB 3
Balance sheet
of hypothetical
target company

13
Balance sheet of hypothetical target company (“T”)

Assets Liabilities & Stockholders’ Equity

Factory – cost basis $80 mill. Mortgage debt $70 mill.
(fmv = $100 mill.)

Stockholders’ equity - cost basis $10 mill.

(fmv = $30 mill.)

Total assets $80 mill. Total liabilities & $80 mill.

stockholders’ equity
TAB 4
Deal structures for
acquiring a privately
held business

15
Example #1
Purchase of Stock for Cash

$$$
Purchaser Stockholders of
100% of
stock of T T
100%

After the closing:

Purchaser Former
Stockholders of
100% T
($$$)
T
Example #2
Purchase of Assets for Cash

Purchaser Stockholders of
T
$$$ 100%
assets and
assumed
liabilites T
of T

After the closing:

Purchaser
Stockholders of
(assets and T
assumed
liabilities
of T)

T
($$$)
Example #3A
Forward Cash Merger

Purchaser $$$ Stockholders of

T
100%
T merges
into
Purchaser T

After the merger:

Purchaser Former
(assets and Stockholders of
liabilities T
of T) ($$$)
Example #3B
“Forward Subsidiary” Cash Merger

Purchaser $$$ Stockholders of

T
100% 100%

T merges
Sub into Sub T

After the merger:

Purchaser Former
Stockholders of
100%
T
($$$)
Sub
(assets and
liabilities of T)
Example #3C
“Reverse Subsidiary” Cash Merger

Purchaser $$$ Stockholders of

T
100% 100%

Sub
Sub merges T
into T

After the merger:

Purchaser Former
Stockholders of
100%
T
($$$)

T
TAB 5
Illustrative comparison of
income tax consequences:
stock sale vs. asset sale

21
Illustrative comparison of the federal
income tax consequences of a stock sale
with the federal income tax consequences
of an asset sale ($20,000,000 Gain)
Assumptions | Target Balance Sheet
Assets
Factory (at cost basis) $80,000,000
Value of Factory $100,000,000
Liabilities and Equity Value of Target Stock $30,000,000
Mortgage $70,000,000
Capital Stock $10,000,000 Corporate Tax Rate 21.00%
Total $80,000,000 Individual Capital Gain Tax Rate 23.80%

Stock Sale:
Gross Amount Realized by Stockholders $30,000,000
Basis of Stock $10,000,000
Gain Recognized by Stockholders $20,000,000
Capital Gains Tax 23.80% $4,760,000
Net Amount Realized by Stockholders $25,240,000

Asset Sale:
Gross Amount Realized by Target $100,000,000
Basis of Factory $80,000,000
Gain Recognized by Target $20,000,000
Corporate Tax 21.00% $4,200,000
Net Amount Realized by Target $95,800,000
Mortgage $70,000,000
Net Amount Available for Distribution $25,800,000
Basis of Stock $10,000,000
Gain Recognized by Stockholders $15,800,000
Capital Gains Tax 23.80% $3,760,400
Net Amount Realized by Stockholders $22,039,600

Summary: Stock Sale Asset Sale

Net Amount Realized by Stockholders $25,240,000 $22,039,600
Total Tax $4,760,000 $7,960,400
As a Percentage of Gain 23.80% 36.12%
Basis of Factory for Depreciation $80,000,000 $100,000,000
TAB 6
Chart comparing
alternative deal
structures for
acquiring privately
held businesses

23
 Structuring the Acquisition of a Privately Held Delaware Target
Corporation (“T”) or its Business – Selected Considerations1
What approval of Are statutory Will transaction To what extent is Will buyer (or a Will transaction Will
T’s stockholders appraisal trigger transaction sub) become generally transaction
is required for rights “standard” anti- structure subject to T trigger payment generally
the purchase of available to assignment suitable for liabilities that are of state sales result in two
100% of T’s stock dissenting T clauses2 in T’s acquisition of not contractually taxes and other levels of U.S.
or assets? stockholders? contracts? part (but not all) assumed? transfer taxes? income tax?5
of T’s business?

Purchase Unanimous Not applicable No Less suitable Yes No No

of Stock
for Cash
Purchase Majority of No Yes More suitable No (with Yes (with Yes (if followed
of Assets outstanding exceptions) exceptions) by distribution
T shares of cash to T
for Cash
stockholders)

Straight Majority of Yes Maybe Less suitable Yes No Yes

Forward outstanding
T shares
Cash
Merger
Forward Majority of Yes Maybe Less suitable Yes No Yes
Subsidiary outstanding
T shares
Cash
Merger
Reverse Majority of Yes No (but see SQL Less suitable Yes No No
Subsidiary outstanding decision3 and
T shares compare
Cash
Meso Scale
Merger decisions4)
1 Thischart is not intended to provide a complete analysis of the matters covered, but rather is intended to be used and referred to in conjunction with a more comprehensive
oral presentation regarding those matters. Accordingly, there are potentially important exceptions and qualifications that are not reflected in this chart.
2 i.e., clauses that prohibit actual assignments of contracts but that do not refer to broader changes of control of the target corporation.
3 SQL Solutions, Inc. v. Oracle Corp., 1991 WL 626458 (N.D. Cal. Dec. 1991)
4 Meso Scale Diagnostics, LLC v. Roche Diagnostics GmbH, 2011 WL 1348438 (Del. Ch. Apr. 2011); Meso Scale Diagnostics, LLC v. Roche Diagnostics GmbH, 62 A.3d 62 (Del. Ch.
Mar. 2013)
5 i.e., a tax at the corporate level and a tax at the stockholder level.
TAB 7
Private company
acquisition timeline

25
 Sample acquisition chronology
Private target

Definitive Acquisition Agreement;

Letter of Intent Disclosure Schedule; Escrow
or Term Sheet Stockholder Consents Release

Confidentiality Exclusivity Closing; Escrow

Agreement Agreement Agreement;
Noncompetition
Agreements

Due Diligence HSR Act filings, Post-closing

Investigation antitrust clearance, etc. indemnification claims
TAB 8
Negotiating the
acquisition of a
privately held
business:
Some basic issues
and principles

27
 NEGOTIATING THE ACQUISITION OF
A PRIVATELY HELD BUSINESS: SOME
BASIC ISSUES AND PRINCIPLES

Richard E. Climan
Hogan Lovells US LLP
Silicon Valley, California

and

Joel I. Greenberg
Kaye Scholer LLP
New York, New York

and

Nathaniel L. Doliner
Carlton Fields, P.A.
Tampa, Florida

© 1996, 2003, 2008, 2009 Richard E. Climan, Joel I. Greenberg and Nathaniel L. Doliner

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 NEGOTIATING THE ACQUISITION OF
A PRIVATELY HELD BUSINESS: SOME
BASIC ISSUES AND PRINCIPLES

Richard E. Climan
Hogan Lovells US LLP
Silicon Valley, California

and

Joel I. Greenberg
Kaye Scholer LLP
New York, New York

and

Nathaniel L. Doliner
Carlton Fields
Tampa, Florida

I. CHOOSING THE APPROPRIATE LEGAL STRUCTURE FOR THE

ACQUISITION

A. Stock Purchase – the acquirer purchases 100% of the target company’s

outstanding stock directly from the target company’s stockholders

1. Requires unanimous “approval” of the target company’s stockholders; all

target company stockholders must sign the acquisition agreement

2. The target company becomes a wholly-owned subsidiary of the acquirer

3. Because the target company becomes a subsidiary of the acquirer, the

acquirer indirectly assumes responsibility for all of the target company’s
liabilities to third parties, including unknown liabilities

4. There is no direct assignment of the target company’s contracts or

governmental permits; this may reduce the likelihood that third-party
consents will have to be obtained (although some contracts and permits
may require third-party consents with respect to a change of control of the
target company)

5. For federal income tax purposes, the target company’s stockholders

generally have capital gains with respect to the sale of their stock; and,

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 generally speaking, the adjusted basis of the assets held by the target
company is not “stepped up”

B. Purchase of Assets – the acquirer purchases some or all of the target company’s
assets from the target company, and may assume certain specified liabilities of the
target company –

1. Requires approval of the holders of at least a majority of the outstanding

target company shares (assuming the transaction involves the sale of all or
“substantially all” of the target company’s assets); under the corporation
laws of some states, target company stockholders who do not vote in favor
of the transaction may have statutory “appraisal” or “dissenters,” rights,
allowing them to demand and receive the appraised value of their target
company shares in cash

2. The acquirer does not assume responsibility for the target company’s
known or unknown liabilities, except to the extent they are expressly
assumed by the acquirer (or are imposed upon the acquirer by law); the
acquirer may “leave behind” unwanted liabilities

3. “Bulk transfer” laws may apply where a major part of the target
company’s inventory or equipment is being transferred (which may
require advance notification of the target company’s creditors and, under
the laws of some states, payment of proceeds from the transaction to the
target company’s creditors)

4. If the target company is financially distressed, transfers for less than

reasonably equivalent value may present fraudulent transfer issues under
federal bankruptcy or state laws

5. An assignment of the target company’s contracts and governmental

permits may require third-party and governmental consents; certain
governmental permits may be non-assignable

6. Sales or other transfer taxes may be payable with respect to the assets
transferred to the acquirer (although some states have sales tax exemptions
for “casual and isolated sales” or sales made for resale)

7. For federal income tax purposes, the acquirer gets a “step up” in the basis
of the assets acquired; however, the target company’s stockholders may be
subject to “double level” income tax liability if the proceeds of the sale of
the assets are distributed by the target company to its stockholders

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 C. Merger

1. Types of mergers

a. “Straight” forward merger – the target company merges directly

into the acquirer

b. “Forward subsidiary” merger – the target company merges into a

newly-formed subsidiary of the acquirer

c. “Reverse subsidiary” merger – a newly-formed subsidiary of the

acquirer merges into the target company; the target company
becomes a wholly-owned subsidiary of the acquirer

d. Other types of mergers

2. Requires approval of the holders of at least a majority of the outstanding

target company shares (and, in certain cases involving a “straight” forward
merger or the issuance of stock by the acquirer, approval of the holders of
at least a majority of the outstanding shares of the acquirer); the target
company’s stockholders (and in certain cases, the stockholders of the
acquirer) who do not vote in favor of the merger may have statutory
“appraisal” or “dissenters’“ rights, allowing them to demand and receive
the appraised value of their shares in cash

3. The acquirer assumes responsibility (directly in a “straight” forward

merger and indirectly in a “forward subsidiary” or “reverse subsidiary”
merger) for all of the target company’s liabilities to third parties, including
unknown liabilities

4. There is a direct assignment of the target company’s contracts and

governmental permits to the acquirer in a “straight” forward merger and to
the acquirer’s newly-formed subsidiary in a “forward subsidiary” merger
(which may increase the likelihood that third-party or governmental
consents will have to be obtained); there is no such direct assignment in a
“reverse subsidiary” merger (which may reduce the likelihood that third-
party or governmental consents will have to be obtained)

5. As a general matter, the federal income tax consequences of a “straight”

forward or a “forward subsidiary” merger are similar to those of a
purchase of assets; and the federal income tax consequences of a “reverse
subsidiary” merger are similar to those of a stock purchase

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 II. BASIC CHRONOLOGY OF AN ACQUISITION TRANSACTION

A. Confidentiality agreement

B. Letter of intent

C. Pre-acquisition (“due diligence”) review

D. Preparation by the acquirer of draft of definitive acquisition agreement, and

negotiation between the sellers (or the target company) and the acquirer;
preparation by the sellers (or the target company) of disclosure schedules

E. Signing of definitive acquisition agreement

F. Satisfaction of closing conditions (e.g., governmental permits and third party

consents, “bring-down” of representations and warranties)

G. Closing

H. Post-closing period – payments under promissory notes, “earn out” provisions,

employment or consulting agreements and non-competition agreements; claims
for indemnification

III. CONFIDENTIALITY AGREEMENTS

A. Generally, the first agreement signed in an acquisition transaction

B. The acquirer wishes to obtain certain information about the target company to
evaluate whether or not to make offer to acquire assets or stock of the target
company (and, perhaps, to allow the acquirer’s lenders to determine whether to
finance the acquisition)

C. The target company wishes to protect confidentiality of trade secrets and other
confidential information disclosed to the acquirer; the acquirer may want
protection as well if it discloses its trade secrets or confidential information to the
target company (or to stockholders of the target company), where, for example,
acquirer will be issuing stock or a promissory note in the acquisition; the parties
(and especially the target company) may also want to maintain confidentiality of
the potential transaction

1. Uniform Trade Secrets Act – requires reasonable measures to protect trade

secrets

a. Confidentiality agreements help to demonstrate these reasonable

efforts

b. Information furnished should be stamped “Confidential”

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 2. Confidentiality agreement may also be needed to protect non-trade secret
confidential information

D. Definition of “confidential information” is very important – should cover “trade

secrets,” “know-how” and “other confidential information” concerning the
business and affairs of disclosing party and should set forth a detailed (but not
exclusive) list of trade secrets, know-how and other confidential information
being protected

E. Restrictions on use and disclosure of confidential information

1. Use by recipient only to evaluate a negotiated acquisition transaction

2. Disclosure by recipient to only those representatives of recipient (such as

directors, officers, employees, consultants, legal counsel, accountants and
financial advisors) and potential lenders who:

a. have a need to know such information in evaluating the acquisition

transaction; and

b. are informed by recipient of confidential nature of information (or,

better yet, who actually sign confidentiality agreement)

3. Obligation of recipient to ensure (or at least use best efforts to ensure)

confidential treatment by representatives of recipient

4. Some agreements will further restrict disclosure of particularly sensitive

materials (e.g., permit disclosure only to those representatives of recipient
who do not have operational responsibilities)

F. Exceptions to recipient’s confidential treatment obligations – confidential

information of disclosing party that:

1. becomes generally available to the public other than as a result of

disclosure by recipient or its representatives

2. becomes available to recipient on non-confidential basis prior to its

disclosure by disclosing party

3. recipient receives from third party not bound by any confidentiality

obligation

4. is independently developed by recipient (this exception entails difficult

proof problems for disclosing party)

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 G. Confidential information that recipient is legally compelled to disclose

1. Recipient should be required to give prompt notice to disclosing party so

that disclosing party may seek protective order or other remedy

2. Recipient should be permitted to disclose only that portion of the

confidential information that it is legally compelled to disclose

H. Covenant by recipient not to solicit for employment (or employ) any (or certain)
of the disclosing party’s employees for a stated period of time

I. Non-competition covenants – recipient generally resists giving such covenants;

also present unlawful restraint of trade issues

J. Acquisitions in which the acquirer and the target company are competitors

1. Particularly sensitive to the target company, as a business matter

2. May present issues for both parties under antitrust laws if acquisition is
not consummated (or, in some cases, prior to closing)

3. May necessitate “phased” disclosure, with the most competitively

sensitive information being disclosed only upon or shortly before closing
(and not to sales, marketing or production personnel)

K. Special considerations in acquisitions of public companies

1. Standstill agreements

2. Failed negotiated transactions that turn into tender offers – tension

between confidentiality covenants and duty under securities laws to
publicly disclose material non-public information

L. Return (or destruction) of confidential information if acquisition not

consummated

IV. USING LETTERS OF INTENT IN BUSINESS ACQUISITIONS

A. Basic characteristics of a letter of intent (also referred to as an “agreement in

principle,” “memorandum of understanding” or “heads of agreement”)

1. The provisions setting forth the terms of the acquisition are generally non-
binding

2. Expectation that letter of intent will ultimately be replaced by a definitive

acquisition agreement

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 B. Hazards of using a fully binding letter of intent – if the parties are unable to
negotiate a definitive acquisition agreement on their own, a court could be called
upon to fill in the missing terms

C. Why use a letter of intent (instead of proceeding directly to a definitive

acquisition agreement)?

1. Provides the acquirer with an opportunity to get certain binding provisions

into place at an early stage (such as a “no-shop” provision and a provision
regarding control of publicity)

2. May facilitate compliance with regulatory requirements (such as the Hart-

Scott-Rodino Antitrust Improvements Act)

3. May facilitate dealings with third parties (such as potential lenders)

4. Provides a useful framework for subsequent negotiations; makes

subsequent negotiations more focused

5. May be treated by the parties as creating a “moral” obligation, even if not

legally binding

D. Potential disadvantages of using a letter of intent

1. Securities law disclosure issues

2. Practical difficulty of keeping a signed letter of intent confidential

3. Risk that a court may find that a letter of intent creates a duty to negotiate
in good faith or other binding obligations, even where the parties did not
intend to be bound

4. Possibility that the preparation and negotiation of a letter of intent may

delay the ultimate execution of a definitive acquisition agreement and may
result in extra expense

5. May place one of the parties at a disadvantage in negotiating the

acquisition agreement

E. Use of term sheets – a term sheet offers some of the advantages of a letter of
intent (such as providing a useful framework for future negotiations); however,
because a term sheet is typically not signed by the parties, it does not provide the
acquirer with the opportunity to put binding provisions (such as a “no-shop”
provision) into place, and it does not enable the parties to make Hart-Scott-
Rodino Act filings

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 V. ARCHITECTURE OF THE DEFINITIVE ACQUISITION AGREEMENT

A. Introductory provisions – names of parties, recitals, definitions

B. Description of what is being sold (especially important in asset acquisitions); and,

in asset acquisitions, description of what liabilities are being assumed

C. Purchase price; payment of purchase price; and, in asset acquisitions, allocation of

purchase price

D. Sellers’ (or target company’s) representations and warranties

E. Acquirer’s representations and warranties

F. Sellers’ (or target company’s) pre-closing covenants

G. Acquirer’s pre-closing covenants

H. Closing

1. When and where

2. Conditions precedent to sellers’ (or target company’s) obligation to close

3. Conditions precedent to acquirer’s obligation to close

4. Deliveries at closing

a. by sellers (or target company)

b. by acquirer I.

Termination of agreement

J. Indemnification provisions

1. In favor of acquirer

2. In favor of sellers (or target company)

3. Time limitations on asserting claims for indemnification

4. Monetary thresholds and limitations on indemnification claims

5. Procedural issues with respect to indemnification claims (including

provisions relating to defense of third-party claims)

K. Other post-closing covenants of the parties

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 L. General or “miscellaneous” provisions

VI. PRICING ISSUES IN BUSINESS ACQUISITIONS

A. Dollar amount of purchase price – various possible formulations

1. Fixed dollar amount

2. Fixed dollar amount, subject to adjustment after the closing based on a

post-closing audit of the target company’s closing date financial
statements – e.g., “$50,000,000 plus or minus the amount by which the
stockholders’ equity of the target company as of the closing date is greater
or less than $35,000,000”; sometimes, working capital-based adjustments
or other adjustments are used

3. “Earn out” formula – e.g., $20,000,000 plus an “earn out” equal to 20% of
the amount by which the pre-tax income of the acquired business exceeds
$4,000,000 during the 12-month period following the closing; “earn outs”
involve difficult drafting issues and often result in disputes

4. Other possible formulations

B. Form of consideration

1. Cash payment at closing

2. Deferred cash payments or promissory notes

a. Timing of payments

b. Interest rate

c. “Set off” rights – ability of the acquirer to deduct indemnification

payments or other amounts owing to the acquirer from amounts
payable by the acquirer

d. Security for future payments; escrow of future payments

e. Possible availability of installment tax treatment to recipients of

payments

f. Deferred payment rights and promissory notes (as well as interests

in an escrow fund) may constitute “securities” under federal and
state securities laws

g. Subordination of the acquirer’s deferred payment obligations to

obligations to other creditors of the acquirer

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 3. Shares of the acquirer’s stock

a. Payment of the purchase price in the form of stock of the acquirer

may permit the acquisition to qualify for treatment as a “tax-free”
reorganization for federal income tax purposes

b. Possible pricing formulations

i) “Fixed exchange ratio” (or issuance of a fixed number of

shares of the acquirer’s stock) – e.g. “at the closing, the
acquirer will issue and exchange 2.6 shares of its common
stock for each outstanding target company share” or “at the
closing, the acquirer will issue a total of 2,000,000 shares
of its common stock to the target company’s stockholders”

ii) “Fixed market value formula” (or “floating exchange

ratio”) pricing, which may be used if the acquirer’s stock is
publicly traded – e.g., “at the closing, the acquirer will
issue $50,000,000 of its common stock to the target
company’s stockholders, with the acquirer’s common stock
to be valued at its average market price over the period of
ten trading days preceding the closing date”

iii) Caps, floors and collars; “walk rights” tied to the level of
the acquirer’s stock price

c. Because the acquirer is issuing stock, the acquirer must comply

with the federal securities laws, either by registering the stock with
the SEC (which may increase the time needed to close the
transaction) or by relying on an exemption from registration

i) a publicly-held acquirer that contemplates using its stock to

make a series of acquisitions may find it useful to file a
“shelf’ registration statement with the SEC

ii) among the exemptions from registration that are sometimes

used in this context are the exemption provided by §4(2) of
the Securities Act of 1933 (and the “safe harbor” provided
by Regulation D under the Securities Act of 1933), and the
exemption provided by §3(a)(10) of the Securities Act of
1933

d. State securities law issues

e. Restrictions on subsequent transfers of the shares issued by the

acquirer in the acquisition

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 i) Restrictions imposed under federal securities laws if the
shares are issued in reliance on the §4(2) or Regulation D
exemption from registration (including a possible holding
period)

ii) Negotiated contractual restrictions

f. A vote of the acquirer’s stockholders may be required under some

circumstances

4. Other forms of consideration

C. Allocation of purchase price in asset acquisitions

VII. SIGNIFICANT NON-PRICE PROVISIONS OF THE ACQUISITION

AGREEMENT

A. Representations and warranties regarding the target company and its business;
indemnification provisions

1. Purposes of representations and warranties –

a. Allow the acquirer to call off the acquisition if significant

inaccuracies in representations and warranties are discovered
before closing

b. Provide a basis for obtaining comprehensive information (included

in disclosure schedules) regarding the target company and its
business

c. Provide a remedy to the acquirer after the closing of the acquisition

in the event the target company and its business were not
accurately portrayed to the acquirer; allocation of risks between the
parties

2. Post-closing consequences of inaccurate representations and warranties –

the acquirer is “indemnified” against the damages arising from the
inaccuracies

3. Scope of representations and warranties

a. “As is” acquisitions vs. acquisitions with comprehensive

representations and warranties

b. Certain representations may be particularly controversial – e.g.,

“no undisclosed liabilities” representation; representation covering
“contingent” liabilities; “full disclosure” (“10b-5”) representation

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 4. Parties standing behind the representations and warranties

a. All stockholders of the target company vs. less than all

stockholders of the target company

b. “Joint and several” liability vs. “proportionate” liability

5. Disclosure schedules

a. Contain extensive information on the target company’s business;

identify exceptions to the representations and warranties

b. Must he prepared, thoroughly reviewed by the acquirer and

finalized before the acquisition agreement is signed

6. Negotiated limitations on representations and warranties and related

indemnification obligations

a. Materiality qualifications

b. “Knowledge” qualifications

– actual vs. “constructive” knowledge

– individuals whose knowledge is to be imputed to

the target company

c. Limitation on period of survival of representations and warranties

d. “Basket” (deductible) or threshold

e. Ceiling on liability

f. Certain categories of damages not subject to indemnification (such

as “consequential” damages)

g. Other limitations

7. Security for performance of indemnification obligations – “hold back” or

escrow of a portion of the purchase price; “set off” rights

8. Control of defense of third-party claims with respect to which the acquirer

may seek indemnification

9. Subrogation rights of indemnifying parties

B. Acquirer’s representations and warranties – very limited in scope, if the entire

purchase price is to be paid in cash at the closing; however, may be extensive if

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 the acquirer is to issue a promissory note or stock as consideration in the
transaction

C. Timing of the closing of the acquisition

1. Deferred closing – In many cases, the closing of an acquisition (i.e., the

actual transfer of the target company’s stock or assets to the acquirer) does
not take place until several weeks or months after the signing of the
acquisition agreement. The parties use the period between signing and
closing to make required governmental filings and obtain needed
governmental approvals, to obtain needed contractual consents, to make
arrangements for any needed stockholder meeting, to obtain any needed
financing and to make preparations for the closing.

2. Simultaneous signing and closing – Sometimes, the parties opt to have a

“simultaneous signing and closing” (i.e., to delay signing the acquisition
agreement until they are ready to close the acquisition). In this situation,
neither party is contractually committed (until the actual closing) to
proceed with the transaction, and either party accordingly may elect to
abandon the transaction for any reason prior to the closing. A number of
provisions may be eliminated from the acquisition agreement if there is a
“simultaneous signing and closing” – e.g., pre-closing covenants, closing
conditions and termination provisions.

D. Pre-closing covenants of the target company – rules relating to the conduct of the
target company’s business between signing and closing

E. Conditions to the acquirer’s obligation to consummate the acquisition (which, if

not satisfied, will give the acquirer a “walk right”)

1. “Bring down” of representations and warranties regarding the target

company and its business – representations and warranties must be
accurate (at least in all material respects) on the closing date as if made on
the closing date

2. Obtaining required contractual and governmental consents and approvals;

expiration of the waiting period under the Hart-Scott-Rodino Act;
obtaining “estoppel certificates” from parties to key contracts

3. Litigation “out” – can be broad (e.g., giving the acquirer a “walk right” if
any litigation challenging the acquisition is commenced or threatened by
any governmental body or private party) or narrow

4. Material adverse change “out”

5. Continued availability of key employees of the target company; execution

by key employees of employment or consulting agreements and
noncompetition agreements
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 6. Delivery of legal opinion by counsel for the target company

7. No exercise (or limited exercise) of statutory “appraisal” or “dissenters”

rights (if available) by target company stockholders

8. “Due diligence out” – inclusion of such an “out” will typically be resisted

by the target company because of its broad scope; an acquirer with a “due
diligence out” may be viewed as having received a free “option” to decide
whether or not to proceed with the acquisition

9. Financing “out” – also typically resisted by the target company

10. Other conditions

F. Conditions to the obligation of the target company (or its stockholders) to close –
will not necessarily mirror the conditions to the acquirer’s obligation to close

G. Payment of transaction-related expenses – e.g., sales taxes (if required to be paid)

in a transaction structured as a purchase of assets; legal and accounting fees
incurred by the target company and its stockholders; Hart-Scott-Rodino Act filing
fee; investment banking fees

H. Other provisions – e.g., provisions relating to employees; provision contemplating

payment of a termination or “break-up” fee

VIII. SPECIAL PROBLEMS POSED BY ACQUISITIONS OF DIVISIONS AND

SUBSIDIARIES

A. Identification of business or assets being acquired; difficulties in dealing with

“shared” intellectual property rights and other “shared” assets

B. Identification of liabilities being assumed

C. Financial statement issues (including issues arising from inter-company

transactions and issues arising from unavailability of separate financial statements
for the division or subsidiary being acquired)

D. Possible need for post-closing transition services agreements

E. Federal income tax issues – especially important in an acquisition of a subsidiary

from a consolidated group

F. Employee benefits issues

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 This outline is not intended to be exhaustive. It provides only a general (and highly simplified)
overview of the topics addressed, and is intended to he used in conjunction with a more
comprehensive oral presentation on these topics. Accordingly, many of the principles and
statements set forth in this outline are subject to exceptions and qualifications that are not
specifically described in the outline. Every business acquisition is unique, and the parties to a
business acquisition should always seek independent legal advice reflecting the particular
circumstances of their transaction.

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TAB 9
Pricing formulations
in stock-for-stock
mergers

44
Pricing formulations in “stock-for-stock” mergers

• Assumed Facts Page 1

• Fixed Exchange Ratio (Without “Collar”) Page 2

• Fixed Dollar Value (Without “Collar”) Page 3

• Fixed Exchange Ratio, With “Collar” Page 4

• Fixed Dollar Value, With “Collar” Page 5

• Summary Comparison of Pricing Formulations Page 6

 Assumed Facts
– Assumed Facts:
– Acquirer Corporation ("ACo"), a publicly held company, is to acquire the business of Target
Corporation ("TCo") by means of a "stock-for-stock" merger in which TCo will be merged into
ACo. ACo will be the surviving corporation in the merger, and all of the outstanding TCo stock will
be converted into shares of ACo stock pursuant to the merger.
– TCo has 10,000,000 shares of common stock (and no other equity securities) outstanding.
– Consider the following hypothetical scenario:
– Shortly before the execution of the definitive merger agreement:
– ACo shares are trading at a price of $15 per share; and
– The parties have determined that the (equity) value of TCo is $300,000,000, or $30 per share
of TCo stock (i.e., 2 times the trading price of a share of ACo stock).
– What are some of the pricing formulations the parties might consider?

As used in the accompanying materials, the term "Closing ACo Stock Price" refers to the market price of a share of ACo stock at the
time the merger is consummated. (Note that, in some transactions, this is expressed as an average price over a specified period—e.g.,
"the average closing price of a share of ACo stock as reported on the New York Stock Exchange over the 20 trading days immediately
preceding the date on which the merger becomes effective.")

Note: Some figures in the accompanying materials have been rounded.

Pricing Formulations in “Stock-For-Stock” Mergers — Page 1
Fixed Exchange Ratio (2:1) Without “Collar”

Pricing Formulations in “Stock-For-Stock” Mergers — Page 2

Fixed Dollar Value ($300 Million) Without “Collar”

Pricing Formulations in “Stock-For-Stock” Mergers — Page 3

Fixed Exchange Ratio (2:1) With “Collar” (at $10/$20 Per ACo Share)

Pricing Formulations in “Stock-For-Stock” Mergers — Page 4

Fixed Dollar Value ($300 Million) With “Collar” (at $10/$20 Per ACo Share)

Pricing Formulations in “Stock-For-Stock” Mergers — Page 5

Summary Comparison of Pricing Formulations

Pricing Formulations in “Stock-For-Stock” Mergers — Page 6

TAB 10
The three basic
building blocks of the
acquisition agreement:
Representations &
warranties; pre-closing
covenants; and
closing conditions

52
The three basic building blocks
of the acquisition agreement:
• Representations & warranties
• Pre-closing covenants
• Closing conditions
Introduction to Representations & Warranties

 What’s a representation? What’s a warranty? What’s the difference?

 Purposes of representations and warranties

– Indemnification
– Walk rights
– Facilitating the provision of information

 Who makes the representations to the buyer?

– The target company?
– The target company’s stockholders?
– Both?

 Why are the representations made by the buyer less extensive than the
ones it gets?

Hogan Lovells US LLP 1

Parties’ Mindsets in Negotiating Representations &
Warranties

Buyer’s mindset:
– “We’re paying a full price; we insist on receiving comprehensive
assurances that the target’s business conforms fully to our
expectations. Target’s stockholders should bear the risk of the
unknown.”

Target’s mindset:
– “We can only give assurances as to things we actually know about;
we’re not going to give the buyer an insurance policy. Buyer should
bear the risk of the unknown.”

Hogan Lovells US LLP 2

Types of Representations & Warranties
“Catch-all” Representations
No undisclosed liabilities representation
“Target has no accrued, contingent or other Liabilities of any nature, either matured or
unmatured (whether or not required to be reflected in financial statements in
accordance with generally accepted accounting principles, and whether due or to
become due), except for: (a) liabilities identified as such in the “liabilities” column of the
Most Recent Balance Sheet; (b) accounts payable that have been incurred by Target
since the date of the Most Recent Balance Sheet in the ordinary course of business and
consistent with Target’s past practices; (c) liabilities under the contracts identified in
Part 2.6 of the Disclosure Schedule, to the extent the nature and magnitude of such
liabilities can be specifically ascertained by reference to the text of such contracts; and
(d) the liabilities specifically identified in Part 2.6 of the Disclosure Schedule.”

Full disclosure representation

“None of the Transactional Agreements contains or will contain any untrue statement of
fact; and none of the Transactional Agreements omits or will omit to state any fact
necessary to make any of the representations, warranties or other statements or
information contained therein not misleading.”
Hogan Lovells US LLP 3
Types of Representations & Warranties

Listing representations

“Part ‎2.9(a) of the Disclosure Schedule lists each jurisdiction in which Target
is required to file a Tax Return.”

Risk allocation representations

“The Company has never infringed (directly, contributorily, by inducement or

otherwise), misappropriated or otherwise violated or made unlawful use of
any Intellectual Property of any other Person.”

Hogan Lovells US LLP 4

Typical Qualifications in Representations & Warranties
Materiality Qualifiers

“Target is, and has at all times been, in compliance in all material
respects with each Legal Requirement that is applicable to it or to the
conduct of its business or the ownership of its assets.”

“Target is not involved in any material dispute with any Major

Customer.”

“Target is in good standing under the laws of all jurisdictions where the
nature of its business requires such qualification, except for
jurisdictions in which the failure to be so qualified, individually or in
the aggregate, would not reasonably be expected to have, and will not
have, a Material Adverse Effect.”

Hogan Lovells US LLP 5

Typical Qualifications in Representations & Warranties
Knowledge Qualifiers

“To the Knowledge of the Company, Target has never infringed

(directly, contributorily, by inducement or otherwise), misappropriated
or otherwise violated or made unlawful use of any Intellectual Property
of any other Person.”

“An individual shall be deemed to have ‘Knowledge’ of a particular fact

or other matter if: (a) such individual is actually aware of such fact or
other matter; or (b) such individual would have become aware of such
fact or other matter had such individual made reasonable inquiry of the
Persons who would reasonably be expected to have actual knowledge of
such fact or other matter. Target shall be deemed to have “Knowledge”
of a particular fact or other matter if any executive officer of Target or
any other individual identified on Annex 1 has Knowledge of such fact
or other matter.”

Hogan Lovells US LLP 6

Typical Qualifications in Representations & Warranties
Dated Representations

“As of the date of this Agreement, Target is not infringing (directly,

contributorily, by inducement or otherwise), misappropriating or
otherwise violating or making unlawful use of any Intellectual
Property of any other Person.”

Hogan Lovells US LLP 7

Disclosure Schedule

 What is the function of the “disclosure schedule”?

 Who prepares it? Who reviews it? When is a first draft typically provided
to the buyer?

 Can the target use the disclosure schedule to “renegotiate” its

representations and warranties?

 Can the target correct or update the disclosure schedule between signing
and closing? What effect will a correction or update have?

Hogan Lovells US LLP 8

Effect of References to the Disclosure Schedule in
Representations & Warranties

“Except as set forth in Part 2.5(a) of the Disclosure Schedule,

Target is, and has at all times been, in compliance with each
Legal Requirement that is applicable to it or to the conduct of
its business or the ownership of its assets.”

Hogan Lovells US LLP 9

Pre-Closing Covenants

 What’s the difference between a pre-closing covenant and a post-closing

covenant?

 Are there any post-closing covenants in the acquisition of a public

company?

 What are the consequences of a breach by the target company of a pre-

closing covenant?
– Pre-closing walk right for buyer?
– Pre-closing suit for damages by buyer?
– Pre-closing specific performance remedy for buyer?
– Post-closing indemnification remedy for buyer?
– Post-closing rescission remedy for buyer?

Hogan Lovells US LLP 10

Pre-Closing Covenants of Target

Sample pre-closing covenant of the target – excerpt from the target’s

operational covenants:

“During the Pre-Closing Period, Target shall conduct its business in the
ordinary course and in accordance with its past practices, and shall
use commercially reasonable efforts to preserve intact its current
business organization and keep available the services of its key officers
and other key employees….”

Hogan Lovells US LLP 11

Pre-Closing Covenants of Buyer

Sample pre-closing covenant of the buyer – excerpt from the buyer’s

covenants regarding regulatory approvals:

“Buyer shall use commercially reasonable efforts to cause to be taken

all actions necessary or advisable to consummate the Merger.

“Buyer shall use commercially reasonable efforts to obtain each

Governmental Approval (if any) required to be obtained by Buyer in
connection with the Merger, including commercially reasonable efforts
to take any action necessary to resolve any objection that any
Governmental Body may assert under any antitrust law with respect
to the Merger.”

12
Hogan Lovells US LLP
Pre-Closing Covenants

What special provisions might the target attempt to negotiate in an

antitrust-sensitive deal?
– “reasonable best efforts” or “best efforts” standard instead of “commercially
reasonable efforts”

– “hell-or-high-water” obligation of the buyer (= effectively a guarantee by the

buyer that antitrust clearance will be obtained)

– specific covenant of the buyer to agree to divest certain assets, if required by

antitrust authorities

– specific covenant of the buyer to litigate against antitrust authorities

– reverse break-up fee payable by the buyer to the target if the deal falls apart as
a result of an antitrust challenge

13
Hogan Lovells US LLP
Closing Conditions

 What’s a closing condition?

 How do closing conditions differ from covenants? Can a party “breach” a

closing condition?

 Why might the conditions to the buyer’s obligation to complete the

acquisition be more extensive than the conditions to the target’s
obligation to complete the acquisition?

 What are the consequences of failing to satisfy a closing condition?

 What is the typical length of time between the signing of the definitive
acquisition agreement and the closing…
– In an acquisition of a private company?
– In an acquisition of a public company?

 What is the relationship between closing conditions and termination

rights?
14
Hogan Lovells US LLP
Closing Conditions

Parties’ mindsets in negotiating buyer’s “walk rights”

Buyer’s mindset:
– “We should have the right to walk away if the target’s business deviates
from our expectations in any material respect.”

Target’s mindset:
– “Once the acquisition agreement is signed and publicly announced, our
position vis-à-vis our employees, customers and others changes
dramatically; if the buyer walks away, we will be seen as ‘damaged
goods’; accordingly, the buyer should be permitted to walk only in the
event of something truly catastrophic.”

15
Hogan Lovells US LLP
Closing Conditions

Sample closing condition – “bring down” condition:

“The obligation of Buyer to effect the Merger is subject to the satisfaction of

each of the following conditions:
(a) Each of the representations and warranties of Target, other than the
Fundamental Representations, shall be accurate in all respects as of the
Closing Date as if made on and as of the Closing Date, except that any
inaccuracies in such representations and warranties will be disregarded if the
circumstances giving rise to all such inaccuracies (considered collectively)
would not reasonably be expected to have or result in a Material Adverse
Effect.
(b) Each of the Fundamental Representations shall be accurate in all
material respects as of the Closing Date as if made on and as of the Closing
Date.”

16
Hogan Lovells US LLP
Closing Conditions

“Bring down” condition (cont’d)

– How wrong do the target’s representations have to be before the buyer can
walk away?
– What’s the difference between an “in all material respects” standard and a
“Material Adverse Effect” standard?

Other conditions to the buyer’s obligation to close:

– “Compliance with covenants” condition
– Stand-alone “no material adverse effect” (MAE) condition
– “No injunction” condition
– “No litigation” condition
– Appraisal rights condition
– Regulatory conditions
– Employee-related condition
17
Hogan Lovells US LLP
TAB 11
Indemnification
provisions in
agreements for
the acquisition
of privately
held companies

71
Indemnification provisions
in agreements for the
acquisition of privately
held companies
Introduction to Indemnification
 What is indemnification? What does the word “indemnify”
mean in this context?
 Buyer’s mindset:
– “We have agreed to pay the negotiated purchase price on the basis that: (a)
the target’s business and operations are as represented to us; and (b) the
target does the things it promised to do prior to closing. If either of those
expectations is not met, then we want to be made whole after the closing for
any and all resulting damages.”

 Sellers’ mindset:
– “We no longer get the benefit of any upside of the business after closing, so
we want to limit our downside exposure as well. There are always risks
inherent in doing business, and because the buyer is reaping all of the
benefits of running the business after the closing, it should also bear these
risks. We need certainty that we can move on and use the proceeds of sale
without the constant possibility that the money will be subject to claw back
by the buyer.”
Hogan Lovells US LLP 1
Introduction to Indemnification

 Interplay between indemnification provisions and other provisions

in the acquisition agreement
– Representations and covenants
– Walk rights (closing conditions and termination rights)

 Why an indemnification remedy rather a breach of contract or

other remedy?
– Expansion of remedies
– Greater certainty for both parties
– Flexibility

Hogan Lovells US LLP 2

Introduction to Indemnification

 Is indemnification the exclusive remedy?

– Common carve-outs: specific performance, injunction and other equitable
remedies, fraud, breach of ancillary agreements

 Who provides the indemnity?

– Target stockholders
– Holders of target stock options that are being cashed out?
– Why is there no indemnification in acquisitions of public companies?
– Does the buyer ever indemnify the sellers?

 Who gets indemnified?

 Is there always indemnification when the target company is

privately held? Hogan Lovells US LLP 3
Indemnification Obligations
Sample Indemnification Provision:

“From and after the Effective Time (but subject to Section 9.1), each
Indemnitor shall hold harmless and indemnify each of the Indemnitees
from and against, and shall compensate and reimburse each of the
Indemnitees for, such Indemnitor’s Pro Rata Share of any Damages
which are directly or indirectly suffered or incurred by any of the
Indemnitees or to which any of the Indemnitees may otherwise
directly or indirectly become subject (regardless of whether or not
such Damages relate to any third party claim) and which arise
directly or indirectly from or as a result of, or directly or indirectly
relate to:
(i) any inaccuracy in or breach of any representation or warranty
made by Target in this Agreement […]”

Hogan Lovells US LLP 4

Indemnification Obligations
 When does the obligation to indemnify begin?

 Joint and several liability vs. pro rata liability

 What types of damages are recoverable?

– Sample definition:
“ ‘Damages’ shall include any loss, damage (including consequential
damages), injury, decline or diminution in value, lost opportunity, Liability,
claim, demand, settlement, judgment, award, fine, penalty, Tax, fee
(including attorneys’ fees), charge, cost (including costs of investigation) or
expense of any nature.”

– Possible exclusions of certain types of damages – consequential damages,

damages based on multiples of revenues or cash flows, punitive damages, etc.

– Recovery of damages arising from third party claims vs. first party claims

Hogan Lovells US LLP 5

Indemnity Matters
 What are typical matters that are subject to indemnification?
– Breaches of representations at signing and closing

– Breaches of pre-closing covenants

– “Special” or “line-item” indemnities

– Known exposures of the target company (e.g, pending litigation)
– Pre-closing tax liabilities
– Inaccuracies in the calculation and/or allocation of the purchase price
– Seller claims against target, including appraisal rights claims
– Fraud
– Non-meritorious third-party claims

Hogan Lovells US LLP 6

Common Limitations on Indemnification
 Time limitations
– What does it mean for a representation and warranty to “survive” the closing?
– What is the “survival period” for claims?
– What has to occur during the “survival period” to permit a valid
indemnification claim?
– What does the indemnification claim notice have to say?

 Materiality Thresholds/Baskets
– Nature
– “true deductible” vs. “tipping basket”
– per-claim threshold or “mini-basket”
– What claims are typically subject to the materiality threshold?
– “Materiality scrape” vs. “double materiality”

Hogan Lovells US LLP 7

Common Limitations on Indemnification
 Liability Caps
– Aggregate caps
– Vary depending on the type of claim
– Often tied to the indemnification escrow amount
– Individual caps

Hogan Lovells US LLP 8

Other Limitations on Indemnification

 Effect of buyer’s knowledge on indemnification rights –

“Sandbagging”/“Anti-Sandbagging”

Sellers’ mindset:
– “If the buyer becomes aware before closing of significant inaccuracies
in our representations, its remedy is to (1) ask the target to cure the
inaccuracies, (2) negotiate a reduction to the purchase price, or (3)
walk away from the transaction. If the buyer elects to waive its closing
condition related to the inaccuracies and closes the deal, then it is
unfair to then allow the buyer to use the indemnification provision as
a “back-door” way of obtaining a purchase price reduction that the
target might never have agreed to. If the buyer knows a
representation is inaccurate, the buyer should not be able to ‘sandbag’
us by closing and then suing us.”

Hogan Lovells US LLP 9

Other Limitations on Indemnification (cont’d)

Buyer’s Mindset:
– “The bargain we’ve struck is that we would pay a full purchase price in
exchange for the target as it is represented to be in the acquisition
agreement. If the representations in the acquisition agreement turn
out to be inaccurate, we will not have gotten what we bargained for.
We want the benefit of our bargain, which is that we would get the
target as represented. We should be made whole if there are
inaccuracies that need to be remedied, and our pre-existing knowledge
of the inaccuracies is irrelevant in this context. If the agreement
makes our pre-existing knowledge relevant, then any indemnification
claim we make, no matter how clear the breach and no matter how
clear the resulting damages, will inevitably be met by an assertion that
we knew about the breach or the facts giving rise to it.”

 Mitigation
 Subrogation
Hogan Lovells US LLP 10
TAB 12a
Sample merger agreement
for the acquisition of a
privately held company
(Riverbed/Mazu Networks)

83
 Exhibit 2.1

AGREEMENT OF MERGER

among:

RIVERBED TECHNOLOGY, INC.,

a Delaware corporation;

MAPLE ACQUISITION S UB, INC.,

a Delaware corporation;

MAZU NETWORKS, INC.,

a Delaware corporation;

and

DONALD A. SULLIVAN,
as the Stockholders’ Agent

Dated as of January 20, 2009

 TABLE OF CONTENTS

PAGE
1. DESCRIPTION OF TRANSACTION 1
1.1 Merger of Merger Sub into the Company 1
1.2 Effect of the Merger 1
1.3 Closing; Effective Time 1
1.4 Certificate of Incorporation and Bylaws; Directors and Officers 2
1.5 Conversion of Shares 2
1.6 Treatment of Stock Options 6
1.7 Post-Closing Payments 6
1.8 Dissenting Shares 9
1.9 Exchange of Certificates 10
1.10 Further Action 12
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY 12
2.1 Due Organization; No Subsidiaries; Etc. 12
2.2 Charter Documents; Records 13
2.3 Capitalization 13
2.4 Financial Statements and Related Information 15
2.5 Liabilities 16
2.6 Absence of Changes 16
2.7 Title to Assets 18
2.8 Bank Accounts 18
2.9 Equipment; Real Property 18
2.10 Intellectual Property 18
2.11 Contracts 23
2.12 Compliance with Legal Requirements 25
2.13 Governmental Authorizations; No Subsidies 25
2.14 Tax Matters 26
2.15 Employee and Labor Matters; Benefit Plans 28
2.16 Environmental Matters 31
2.17 Insurance 32
2.18 Related Party Transactions 32
2.19 Legal Proceedings; Orders 32
2.20 Authority; Binding Nature of Agreement; Inapplicability of Anti-takeover Statutes 33

i.
 TABLE OF CONTENTS
(CONTINUED)

PAGE
2.21 Non-Contravention; Consents 33
2.22 Vote Required 34
2.23 Brokers 34
2.24 Full Disclosure 34
3. REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB 35
3.1 Due Organization 35
3.2 Non-Contravention; Consents 35
3.3 Authority; Binding Nature of Agreement 35
3.4 Legal Proceedings 36
4. CERTAIN COVENANTS OF THE COMPANY 36
4.1 Access and Investigation 36
4.2 Operation of the Business of the Company 36
4.3 Notification; Updates to Disclosure Schedule 38
4.4 No Negotiation 38
4.5 Termination of Certain Employee Benefit Plans 39
4.6 Termination of Agreements 39
4.7 FIRPTA Matters 39
5. CERTAIN COVENANTS OF THE PARTIES 39
5.1 Filings and Consents 39
5.2 Stockholder Consent 40
5.3 Public Announcements 41
5.4 Commercially Reasonable Efforts 41
5.5 Employee Benefits 41
5.6 Communications with Employees 41
5.7 Amendment to Certificate of Incorporation 42
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF PARENT AND MERGER SUB 42
6.1 Accuracy of Representations 42
6.2 Performance of Covenants 42
6.3 Governmental and Other Consents 42
6.4 No Material Adverse Effect 43
6.5 Stockholder Approval 43
6.6 Certificate Amendment 43
6.7 Agreements and Documents 43

ii.
 TABLE OF CONTENTS
(CONTINUED)

PAGE
6.8 FIRPTA Compliance 45
6.9 No Restraints 45
6.10 No Legal Proceedings 45
6.11 No Options/Warrants 45
6.12 Termination of Employee Plans 45
6.13 Employees 45
6.14 Section 280G Stockholder Approval 45
6.15 Release of Lighthouse Liens 45
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY 46
7.1 Accuracy of Representations 46
7.2 Performance of Covenants 46
7.3 Stockholder Approval 46
7.4 Documents 46
7.5 No Restraints 46
8. TERMINATION 46
8.1 Termination Events 46
8.2 Termination Procedures 48
8.3 Effect of Termination 48
9. INDEMNIFICATION, ETC. 48
9.1 Survival of Representations, Etc. 48
9.2 Indemnification 49
9.3 Limitations 50
9.4 No Contribution 51
9.5 Defense of Third Party Claims 51
9.6 Setoff 51
10. MISCELLANEOUS PROVISIONS 52
10.1 Stockholders’ Agent 52
10.2 Further Assurances 53
10.3 Fees and Expenses 53
10.4 Attorneys’ Fees 53
10.5 Notices 53
10.6 Headings 54
10.7 Counterparts and Exchanges by Electronic Transmission or Facsimile 54

iii.
 TABLE OF CONTENTS
(CONTINUED)

PAGE
10.8 Governing Law; Dispute Resolution 55
10.9 Successors and Assigns 55
10.10 Remedies Cumulative; Specific Performance 55
10.11 Waiver 56
10.12 Waiver of Jury Trial 56
10.13 Amendments 56
10.14 Severability 56
10.15 Parties in Interest 56
10.16 Entire Agreement 56
10.17 Disclosure Schedule 56
10.18 Construction 57

iv.
 LIST OF EXHIBITS AND SCHEDULES

EXHIBITS

Exhibit A Certain Definitions

Annex 1 Persons Whose Knowledge Is Imputed to the Company
Exhibit B Dispute Resolution Procedures
Exhibit C Form of Certificate Amendment

SCHEDULES

Schedule 1.7(a)(ii) Specified Company Products

Schedule 1.7(a)(iv) Percentage Interest of Eligible Stockholders
Schedule 1.7(b) Contingent Consideration
Schedule 4.6 Agreements/Employee Benefit Plan to be Terminated
Schedule 5.5(b) Summary of Key Terms of Maple Incentive Bonus Plan
Schedule 6.7(b) Persons to Execute Non-Competition and Non-Solicitation Agreements
Schedule 6.13 Key Employees
 AGREEMENT OF MERGER

THIS AGREEMENT OF MERGER (the “Agreement”) is made and entered into as of January 20, 2009, by and among: RIVERBED TECHNOLOGY, INC., a
Delaware corporation (“Parent”); MAPLE ACQUISITION S UB, INC., a Delaware corporation and a wholly-owned subsidiary of Parent (“Merger
Sub”); MAZU NETWORKS, INC., a Delaware corporation (the “Company”); and DONALD A. S ULLIVAN, as the Stockholders’ Agent (as defined in
Section 10.1). Certain other capitalized terms used in this Agreement are defined in Exhibit A.

RECITALS

A. Parent, Merger Sub and the Company intend to effect a merger of Merger Sub into the Company (the “Merger”) in accordance with this
Agreement and the Delaware General Corporation Law (the “DGCL”). Upon consummation of the Merger, Merger Sub will cease to exist, and the
Company will become a wholly-owned subsidiary of Parent.

B. The respective boards of directors of Parent, Merger Sub and the Company have approved this Agreement and the Merger.

AGREEMENT

The parties to this Agreement agree as follows:

1. DESCRIPTION OF TRANSACTION
1.1 Merger of Merger Sub into the Company. Upon the terms and subject to the conditions set forth in this Agreement, at the Effective
Time (as defined in Section 1.3), Merger Sub shall be merged with and into the Company, and the separate existence of Merger Sub shall cease.
The Company will continue as the surviving corporation in the Merger (the “Surviving Corporation”).

1.2 Effect of the Merger. The Merger shall have the effects set forth in this Agreement and in the applicable provisions of the DGCL.

1.3 Closing; Effective Time. The consummation of the transactions contemplated by this Agreement (the “Closing”) shall take place at the
offices of Cooley Godward Kronish LLP, 3175 Hanover Street, Palo Alto, California 94304 at 10:00 a.m. on a date to be designated by Parent, which
shall be no later than the fifth business day after the satisfaction or waiver of the last to be satisfied or waived of the conditions set forth in
Sections 6 and 7 (other than those conditions set forth in Sections 6.7(d), 6.7(e), 6.7(f), 6.7(j) and 7.4(b), but subject to the satisfaction or waiver of
such conditions) or at such time and date as the parties may designate. The date on which the Closing actually takes place is referred to in this
Agreement as the “Closing Date.” Contemporaneously with or as promptly as practicable after the Closing, a properly executed certificate of
merger (the “Certificate of Merger”) conforming to the requirements of the DGCL shall be filed with the Secretary of State of the State of Delaware.
The Merger shall become effective as of the time that the Certificate of Merger is filed and accepted by the Secretary of State of the State of
Delaware (the “Effective Time”).

1.
1.4 Certificate of Incorporation and Bylaws; Directors and Officers. Unless otherwise determined by Parent prior to the Effective Time:
(a) the certificate of incorporation of the Surviving Corporation shall be amended and restated as of the Effective Time in a form
acceptable to Parent;
(b) the bylaws of the Surviving Corporation shall be amended and restated as of the Effective Time to conform to the bylaws of Merger
Sub as in effect immediately prior to the Effective Time; and
(c) the directors and officers of the Surviving Corporation immediately after the Effective Time shall be those Persons designated by
Parent in its sole discretion.

1.5 Conversion of Shares.

(a) Conversion. Subject to Sections 1.8 and 1.9, at the Effective Time, by virtue of the Merger and without any further action on the
part of Parent, Merger Sub, the Company or any stockholder of the Company, each share of Company Capital Stock outstanding immediately
prior to the Effective Time shall be converted into the right to receive from Parent, following the surrender of the certificate representing such
share of Company Capital Stock in accordance with Section 1.9, the following consideration:
(i) each share of Company Capital Stock owned by Parent, Merger Sub, the Company or any direct or indirect wholly-owned
subsidiary of Parent, Merger Sub or the Company immediately prior to the Effective Time, if any, shall, by virtue of the Merger, be
canceled without payment of any consideration with respect thereto;
(ii) each share of Series A Preferred Stock outstanding immediately prior to the Effective Time shall be converted into the right to
receive: (A) an amount in cash equal to: (1) the Series A Per Share Amount (as defined in Section 1.5(b)); minus (2) the Escrow
Contribution Amount (as defined in Section 1.5(b)) per share of Series A Preferred Stock; minus (3) the Series A Per Share Shortfall
Amount (as defined in Section 1.5(b)); minus (4) the Stockholders’ Agent Escrow Contribution Amount (as defined in Section 1.5
(b)) per share of Series A Preferred Stock; plus (B) any cash disbursements required to be made from the Escrow Fund with respect to
such share to the former holder thereof in accordance with the terms of the Escrow Agreement, as and when such disbursements are
required to be made; plus (C) any cash disbursements required to be made from the Stockholders’ Agent Escrow Fund with respect to
such share to the former holder thereof in accordance with the terms of the Stockholders’ Agent Escrow Agreement, as and when such
disbursements are required to be made; plus (D) the right to receive payments, if any, pursuant to Section 1.7;
(iii) each share of Series B Preferred Stock outstanding immediately prior to the Effective Time shall be converted into the right to
receive: (A) an amount in cash equal to: (1) the Series B Per Share Amount (as defined in Section 1.5(b)); minus (2) the Escrow
Contribution Amount per share of Series B Preferred Stock; minus (3) the Series B Per Share Shortfall Amount (as defined in Section 1.5
(b)); minus (4) the Stockholders’ Agent Escrow Contribution Amount per share of Series B Preferred Stock; plus (B) any cash
disbursements required to be made from the Escrow Fund with respect to such share to the former holder thereof in accordance with
the terms of the Escrow Agreement, as and when such disbursements are required to be made; plus (C) any cash disbursements
required to be made from the Stockholders’ Agent Escrow Fund with respect to such share to the former holder thereof in accordance
with the terms of the Stockholders’ Agent Escrow Agreement, as and when such disbursements are required to be made; plus (D) the
right to receive payments, if any, pursuant to Section 1.7;

2.
 (iv) each share of Series C Preferred Stock outstanding immediately prior to the Effective Time shall be converted into the right to
receive: (A) an amount in cash equal to: (1) the Series C Per Share Amount (as defined in Section 1.5(b)); minus (2) the Escrow
Contribution Amount per share of Series C Preferred Stock; minus (3) the Series C Per Share Shortfall Amount (as defined in Section 1.5
(b)); minus (4) the Stockholders’ Agent Escrow Contribution Amount per share of Series C Preferred Stock; plus (B) any cash
disbursements required to be made from the Escrow Fund with respect to such share to the former holder thereof in accordance with
the terms of the Escrow Agreement, as and when such disbursements are required to be made; plus (C) any cash disbursements
required to be made from the Stockholders’ Agent Escrow Fund with respect to such share to the former holder thereof in accordance
with the terms of the Stockholders’ Agent Escrow Agreement, as and when such disbursements are required to be made; plus (D) the
right to receive payments, if any, pursuant to Section 1.7;
(v) each share of Series D Preferred Stock outstanding immediately prior to the Effective Time shall be converted into the right to
receive: (A) an amount in cash equal to: (1) the Series D Per Share Amount (as defined in Section 1.5(b)); minus (2) the Escrow
Contribution Amount per share of Series D Preferred Stock; minus (3) the Series D Per Share Shortfall Amount (as defined in
Section 1.5(b)); minus (4) the Stockholders’ Agent Escrow Contribution Amount per share of Series D Preferred Stock; plus (B) any
cash disbursements required to be made from the Escrow Fund with respect to such share to the former holder thereof in accordance
with the terms of the Escrow Agreement, as and when such disbursements are required to be made; plus (C) any cash disbursements
required to be made from the Stockholders’ Agent Escrow Fund with respect to such share to the former holder thereof in accordance
with the terms of the Stockholders’ Agent Escrow Agreement, as and when such disbursements are required to be made; plus (D) the
right to receive payments, if any, pursuant to Section 1.7;
(vi) each share of Company Common Stock issued and outstanding immediately prior to the Effective Time will be cancelled and
extinguished and no payment or distribution shall be made with respect thereto; and
(vii) each share of the common stock, par value $0.001 per share, of Merger Sub outstanding immediately prior to the Effective
Time shall be converted into one share of common stock of the Surviving Corporation.
(viii) The amount of cash, if any, that each stockholder of the Company is entitled to receive for the shares of Company Capital
Stock held by such stockholder shall be rounded to the nearest cent (with $0.005 being rounded upward) and computed after
aggregating the cash amounts payable for all shares of each class and series of Company Capital Stock held by such stockholder.
(b) Definitions. For purposes of this Agreement:
(i) The “Aggregate Transaction Value” shall be: (A) $25,000,000; minus (B) the Balance Sheet Shortfall Amount, if any.
(ii) The “Balance Sheet Shortfall Amount” shall be the amount, if any, by which the amount calculated pursuant to the following
formula is less than zero: (A) the unrestricted cash, accounts receivable (including accounts receivable recorded in connection with
customer invoices generated upon shipment of product pursuant to valid enforceable Contracts with customers) (after taking into
account an allowance for doubtful accounts determined in accordance with GAAP) and inventory (not including excess and obsolete
inventory determined in accordance with GAAP and not including

3.
deferred inventory costs associated with deferred revenue) of the Company as of the Closing, all determined in a manner satisfactory
to Parent acting in good faith; minus (B) the current and long-term liabilities of the Company as of the Closing (including, for the
avoidance of doubt, any Company Transaction Expenses not paid prior to the Closing, any indebtedness of the Company and any
deferred interest, forbearance payments, penalties or similar amounts due with respect to such indebtedness, and excluding deferred
revenue and non-cash liabilities associated with warrants exercisable for Company Preferred Stock) and the amount of any change of
control or severance obligations to: (1) Larry Christofori pursuant to any Company Contract (or any Contract with Parent that is
entered into in replacement of such Company Contract, it being understood, however, that for purposes of calculating the “Balance
Sheet Shortfall Amount,” the change of control or severance obligation under any such replacement Contract shall not exceed the
change of control or severance obligation of the Company under the Company Contract with Mr. Christofori identified on Schedule
4.6); and (2) any other executives of the Company pursuant to any Company Contracts that are not otherwise terminated prior to or as
of the Closing, all determined in a manner satisfactory to Parent acting in good faith (it being understood that if, after the Closing, any
accounts receivable included in the calculation of the Balance Sheet Shortfall Amount become uncollectible, then Parent shall only be
entitled to recover under Section 9 with respect to such accounts receivable to the extent that the uncollectible portion thereof in the
aggregate exceeds the allowance for doubtful accounts used in calculating the Balance Sheet Shortfall Amount). For the purposes of
determining the current and long-term liabilities of the Company associated with Taxes, the following conventions shall be applied:
(x) Tax liabilities for periods ended on or before the Closing Date shall be determined based on applicable Legal Requirements and, to
the extent consistent with applicable Legal Requirements, in accordance with the past custom and practice of the Company in
preparing its Tax Returns; (y) Taxes based on income, receipts or sales for a Straddle Period shall be determined based on a closing of
the books method (i.e., a hypothetical calculation that assumes the applicable period ended on the Closing Date but otherwise in
accordance with applicable Legal Requirements and, to the extent consistent with applicable Legal Requirements, in accordance with
the past custom and practice of the Company in preparing its Tax Returns); and (z) all other Taxes for a Straddle Period shall be
reasonably estimated on the Closing Date for the entire relevant period with the Tax liability as of the Closing Date being equal to the
estimated Tax for the entire period multiplied by a fraction, the numerator of which is the number of days in the Straddle Period
occurring on or before the Closing Date and the denominator being the total number of days in the Straddle Period. “Straddle Period”
means any Tax Period beginning before the Closing Date and ending after the Closing Date.
(iii) The “Escrow Amount” shall mean 15% of the Aggregate Transaction Value.
(iv) The “Escrow Contribution Amount” shall mean, with respect to each share of Company Capital Stock outstanding
immediately prior to the Effective Time and held by Non-Dissenting Stockholders, an amount determined by multiplying: (A) the
Escrow Amount; by (B) the fraction having a numerator equal to the Merger Consideration payable pursuant to Section 1.5(a) in
respect to such share of Company Capital Stock outstanding immediately prior to the Effective Time (including any amount contributed
to the Escrow Fund or Stockholders’ Agent Escrow Fund with respect thereto, but excluding any amounts that may become payable
pursuant to Section 1.7), and having a denominator equal to the aggregate amount of Merger Consideration payable pursuant to
Section 1.5(a) in respect of all shares of Company Capital Stock held by Non-Dissenting Stockholders immediately prior to the Effective
Time (including any amount contributed to the Escrow Fund or Stockholders’ Agent Escrow Fund with respect thereto, but excluding
any amounts that may become payable pursuant to Section 1.7).
(v) The “Series A Per Share Amount” shall be equal to $0.540960116.

4.
 (vi) The “Series A Per Share Shortfall Amount” shall be determined by dividing: (A) the Balance Sheet Shortfall Amount, if any,
multiplied by the Series A Percentage; by (B) the number of shares of Series A Preferred Stock outstanding immediately prior to the
Closing (including, for the avoidance of doubt, any shares of Series A Preferred Stock issued or issuable upon the exercise of any
Company Warrants that are not being canceled in connection with the transactions contemplated by this Agreement) held by Non-
Dissenting Stockholders.
(vii) The “Series A Percentage” means 16.742715602%.
(viii) The “Series B Per Share Amount” shall be equal to $0.568008122.
(ix) The “Series B Per Share Shortfall Amount” shall be determined by dividing: (A) the Balance Sheet Shortfall Amount, if any,
multiplied by the Series B Percentage; by (B) the number of shares of Series B Preferred Stock outstanding immediately prior to the
Closing (including, for the avoidance of doubt, any shares of Series B Preferred Stock issued or issuable upon the exercise of any
Company Warrants that are not being canceled in connection with the transactions contemplated by this Agreement) held by Non-
Dissenting Stockholders.
(x) The “Series B Percentage” means 33.299028573%.
(xi) The “Series C Per Share Amount” shall be equal to $0.119714474.
(xii) The “Series C Per Share Shortfall Amount” shall be determined by dividing: (A) the Balance Sheet Shortfall Amount, if any,
multiplied by the Series C Percentage; by (B) the number of shares of Series C Preferred Stock outstanding immediately prior to the
Closing (including, for the avoidance of doubt, any shares of Series C Preferred Stock issued or issuable upon the exercise of any
Company Warrants that are not being canceled in connection with the transactions contemplated by this Agreement) held by Non-
Dissenting Stockholders.
(xiii) The “Series C Percentage” means 24.346825751%.
(xiv) The “Series D Per Share Amount” shall be equal to $0.119714474.
(xv) The “Series D Per Share Shortfall Amount” shall be determined by dividing: (A) the Balance Sheet Shortfall Amount, if any,
multiplied by the Series D Percentage; by (B) the number of shares of Series D Preferred Stock outstanding immediately prior to the
Closing (including, for the avoidance of doubt, any shares of Series D Preferred Stock issued or issuable upon the exercise of any
Company Warrants that are not being canceled in connection with the transactions contemplated by this Agreement) held by Non-
Dissenting Stockholders.
(xvi) The “Series D Percentage” means 25.611430073%.
(xvii) The “Stockholders’ Agent Escrow Amount” shall mean $250,000.
(xviii) The “Stockholders’ Agent Escrow Contribution Amount” shall mean, with respect to each share of Company Capital Stock
outstanding immediately prior to the Effective Time and held by Non-Dissenting Stockholders, an amount determined by multiplying:
(A) the Stockholders’ Agent Escrow Amount; by (B) the fraction having a numerator equal to the Merger Consideration payable
pursuant to Section 1.5(a) in respect to such share of Company Capital Stock outstanding immediately prior to the Effective Time
(including any amount contributed to the Escrow Fund or

5.
 Stockholders’ Agent Escrow Fund with respect thereto, but excluding any amounts that may become payable pursuant to Section 1.7),
and having a denominator equal to the aggregate amount of Merger Consideration payable pursuant to Section 1.5(a) in respect of all
shares of Company Capital Stock held by Non-Dissenting Stockholders immediately prior to the Effective Time (including any amount
contributed to the Escrow Fund or Stockholders’ Agent Escrow Fund with respect thereto, but excluding any amounts that may
become payable pursuant to Section 1.7).
(c) Escrow Contributions. At the Effective Time, Parent shall cause to be delivered to the Escrow Agent in cash with respect to each
share of Company Capital Stock held by the Non-Dissenting Stockholders immediately prior to the Effective Time: (i) an amount equal to the
Escrow Contribution Amount applicable to such share of Company Capital Stock as a contribution to the Escrow Fund; and (ii) an amount
equal to the Stockholders’ Agent Escrow Contribution Amount applicable to such share of Company Capital Stock as a contribution to the
Stockholders’ Agent Escrow Fund. Each of the Escrow Fund and the Stockholders’ Agent Escrow Fund: (A) shall be held by the Escrow
Agent in accordance with the terms of this Agreement and the terms of the Escrow Agreement or the Stockholders’ Agent Escrow
Agreement, as applicable; (B) shall be held as a trust fund and shall not be subject to any lien, attachment, trustee process or other judicial
process of any creditor of any Person; and (C) shall be held and disbursed solely for the purposes and in accordance with the terms of this
Agreement and the Escrow Agreement or the Stockholders’ Agent Escrow Agreement, as applicable.
(d) Adjustments. In the event that the Company, at any time or from time to time between the date of this Agreement and the Effective
Time, declares or pays any dividend on Company Capital Stock payable in Company Capital Stock or in any right to acquire Company Capital
Stock, or effects a subdivision of the outstanding shares of Company Capital Stock into a greater number of shares of Company Capital
Stock, or in the event the outstanding shares of Company Capital Stock shall be combined or consolidated, by reclassification or otherwise,
into a lesser number of shares of Company Capital Stock, then the amounts payable in respect of shares of Company Capital Stock pursuant
to Section 1.5(a) shall be appropriately adjusted.

1.6 Treatment of Stock Options. Parent shall not assume any Company Options in connection with the transactions contemplated by this
Agreement. At the Effective Time, each Company Option, whether vested or unvested, shall, by virtue of the Merger and without any action on
the part of the holder thereof, be cancelled and extinguished without any conversion thereof, and no payment or distribution shall be made with
respect thereto.

1.7 Post-Closing Payments.

(a) For purposes of Section 1.7, the following terms shall have the following meanings:
(i) “Eligible Stockholder” shall mean a holder of shares of Company Preferred Stock immediately prior to the Effective Time that
does not perfect its dissenters’ rights;
(ii) “One Year Bookings” shall mean: (A) the bookings (net of applicable discounts and as the term “bookings” is commonly
understood and only to the extent that a purchase order and related executed customer contract exists in respect thereof) derived by
Parent or the Company solely from: (1) the sale of any of the Company’s products identified on Schedule 1.7(a)(ii) (collectively, the
“Specified Company Products”) during the One-Year Period; and (2) the sale of initial or renewal maintenance contracts during the
One-Year Period to the extent related to the sale of Specified Company Products (it being understood that with respect to multi-year
maintenance arrangements, the bookings

6.
 that shall be included in “One Year Bookings” shall be calculated by: (x) determining the aggregate maintenance bookings for the entire
term of the applicable maintenance arrangement; (y) allocating the bookings determined pursuant to clause “x” of this sentence over
the term of the maintenance arrangement on a pro-rata basis; and (z) including in “One Year Bookings” the amount allocated under
clause “(y)” of this sentence for a one year period); less (B) the sum of: (1) actual sales returns with respect to the bookings referred to
in clause “(A)” of this sentence for the period beginning on the first day of the One-Year Period and ending at 5:00 p.m. Pacific time on
the 90th day following the last day of the One-Year Period (the “Specified Period”); (2) actual write-offs of accounts receivable with
respect to the bookings referred to in clause “(A)” of this sentence for the Specified Period; (3) any accounts receivable with respect to
the bookings referred to in clause “(A)” of this sentence that are more than 90 days past due as of the end of the Specified Period; and
(4) any bookings with respect to which product revenue is not recognizable (whether during or after the One-Year Period) in
accordance with GAAP;
(iii) “One-Year Period” shall mean the period commencing at 9:00 a.m. Pacific time on April 1, 2009 and ending at 5:00 p.m. Pacific
time on March 31, 2010;
(iv) “Percentage Interest” shall mean, with respect to any particular Eligible Stockholder, the percent set forth next to such
Eligible Stockholder’s name on Schedule 1.7(a)(iv); and
(v) “Post-Closing Payment” shall mean any payment that Parent is required to make pursuant to Section 1.7.
(b) Subject to any right of setoff that Parent may be entitled to exercise (pursuant to Section 9.6 or otherwise), and subject to the other
provisions of Section 1.7:
(i) if the One Year Bookings are equal to or greater than the amount set forth in clause “(i)(1)” of Schedule 1.7(b), then Parent
shall pay to each Eligible Stockholder, on a date selected by Parent within 120 days following the end of the One-Year Period, cash
equal to such Eligible Stockholder’s Percentage Interest in the amount set forth in clause “(i)(2)” of Schedule 1.7(b);
(ii) if the One Year Bookings are at least equal to the amount set forth in clause “(ii)(1)” of Schedule 1.7(b), then Parent shall pay
to each Eligible Stockholder, on a date selected by Parent within 120 days following the end of the One-Year Period, cash equal to:
(A) the amount due under clause “(i)” of this Section 1.7(b); and (B) such Eligible Stockholder’s Percentage Interest in the amount set
forth in clause “(ii)(2)” of Schedule 1.7(b); and
(iii) if the One Year Bookings are greater than the amount set forth in clause “(iii)(1)” of Schedule 1.7(b), then Parent shall pay to
each Eligible Stockholder, on a date selected by Parent within 120 days following the end of the One-Year Period, cash equal to: (A) the
amount due under clause “(i)” of this Section 1.7(b); (B) the amount due under clause “(ii)” of this Section 1.7(b); and (C) such Eligible
Stockholder’s Percentage Interest in the amount determined by multiplying: (1) the amount set forth in clause “(iii)(2)” of Schedule 1.7
(b); by (2) the quotient of: (x) the amount by which the One Year Bookings exceed the amount set forth in clause “(iii)(1)” of Schedule
1.7(b); and (y) the amount set forth in clause “(iii)(3)” of Schedule 1.7(b).

Notwithstanding anything to the contrary contained in this Agreement: (A) in no event shall the aggregate amounts payable by Parent to the
Eligible Stockholders pursuant to this Section 1.7 exceed the amount set forth in clause “(iii)(4)” of Schedule 1.7(b); and (B) if the Stockholders’
Agent delivers an Initial Objection Notice or a Final Objection Notice to Parent in accordance with Section 1.7(e), then Parent shall make any
payments required under this Section 1.7(b) to the Eligible Stockholders within 30 days after the dispute identified in such Initial Objection Notice
or a Final Objection Notice, as the case may be, is resolved.

7.
 (c) Notwithstanding anything to the contrary contained in this Section 1.7 or elsewhere in this Agreement (and without limiting any
other rights or remedies available to Parent), Parent shall, subsequent to the rendering of a final determination pursuant to Section 1.7(e)
below, be entitled, in its sole discretion, to deduct from either the Escrow Fund or any Post-Closing Payment cash equal to the Eligible
Stockholders’ portion of the Post-Closing Payment Fees and Expenses (as defined below).
(d) Promptly following the end of each fiscal quarter during the One-Year Period, but in no event more than 30 days thereafter, Parent
shall in good faith: (i) prepare or cause to be prepared a non-binding estimate of the amount of the One Year Bookings as of the end of such
fiscal quarter (the “Quarterly Statement”); and (ii) for informational purposes only, deliver or cause to be delivered such Quarterly Statement
to the Stockholders’ Agent for and on behalf of the Eligible Stockholders.
(e) On or before the 60th day following the end of the One-Year Period, Parent shall: (i) prepare or cause to be prepared a statement (the
“Bookings Statement”) setting forth the One Year Bookings, together with the dollar amounts of any Post-Closing Payment that Parent
believes is due in accordance with Section 1.7; and (ii) deliver or cause to be delivered such Bookings Statement to the Stockholders’ Agent
for and on behalf of the Eligible Stockholders.
(f) In the event that the Stockholders’ Agent objects to Parent’s calculation of the Bookings Statement or the dollar amount of any
Post-Closing Payment set forth in any Bookings Statement or requires further information in order to perform such calculations or determine
such amounts, then within 20 days after the delivery to the Stockholders’ Agent of such Bookings Statement (the “Initial Response Period”),
the Stockholders’ Agent shall deliver to Parent a written notice (an “Initial Objection Notice”): (i) describing in reasonable detail the
Stockholders’ Agent’s objections to Parent’s calculation of the amounts set forth in such statement and containing a statement setting forth
the One Year Bookings or the amount of any such Post-Closing Payment determined by the Stockholders’ Agent to be correct; or
(ii) requesting additional information from Parent that the Stockholders’ Agent deems reasonably necessary in order to perform such
calculations or determine such amounts (which information, to the extent reasonably necessary in order to perform such calculations, shall
be provided by Parent within 15 days after Parent’s receipt of such request). If the Stockholders’ Agent does not deliver an Initial Objection
Notice to Parent during the Initial Response Period, then Parent’s calculation of the amounts set forth in the Bookings Statement shall be
binding and conclusive on Parent, the Eligible Stockholders and the Stockholders’ Agent. If the Stockholders’ Agent delivers an Initial
Objection Notice to Parent accompanied by a request for additional information from Parent as described above during the Initial Response
Period, then the Stockholders’ Agent shall have an additional 20 days after receiving from Parent either: (x) all of the information requested
by the Stockholders’ Agent; or (y) written notice from Parent that no further requested information is to be provided (such 20 day period, the
“Final Response Period”) to deliver to Parent a written notice (a “Final Objection Notice”) describing in reasonable detail the Stockholders’
Agent’s objections to Parent’s calculations of the amounts set forth in such Bookings Statement accompanied by a statement setting forth
the One Year Bookings or the dollar amount of any such Post-Closing Payment determined by the Stockholders’ Agent to be correct. If the
Stockholders’ Agent has requested additional information in an Initial Objection Notice delivered during the Initial Response Period and
does not deliver a Final Objection Notice to Parent during the Final Response Period, then Parent’s calculation of the amounts set forth in
the Bookings Statement shall be binding and conclusive on Parent, the Eligible Stockholders and the

8.
Stockholders’ Agent. If the Stockholders’ Agent delivers an Initial Objection Notice or Final Objection Notice, as the case may be,
accompanied by a statement setting forth the One Year Bookings or the amount of any such Post-Closing Payment determined by the
Stockholders’ Agent to be correct to Parent during either the Initial Response Period or the Final Response Period in accordance with this
Section 1.7(f), and if the Stockholders’ Agent and Parent are unable to agree upon the calculation of the amounts set forth in the Bookings
Statement within 30 days after such Initial Objection Notice or Final Objection Notice, as the case may be, is delivered to Parent, the dispute
shall be finally settled by a “Big Four” accounting firm selected by Parent and reasonably acceptable to the Stockholders’ Agent (other than
Parent’s auditing firm at the time). The determination by the independent accounting firm of the disputed amounts and the Post-Closing
Payments, if any, shall be conclusive and binding on Parent, the Eligible Stockholders and the Stockholders’ Agent. Parent and the
Stockholders’ Agent (on behalf of the Eligible Stockholders) shall each bear and pay 50% of the fees and other expenses of such
independent accounting firm (the “Post-Closing Payment Fees and Expenses”).
(g) No rights or interest of any Eligible Stockholder under this Section 1.7 may be assigned, transferred or otherwise disposed of, in
whole or in part, other than pursuant to the laws of descent and distribution or by will or, in the case of an Eligible Stockholder that is an
entity organized for the purpose of making venture capital investments, to any entity under common investment management with such
Eligible Stockholder.
(h) At reasonable times during normal business hours and upon reasonable notice provided to Parent, Parent shall permit the
Stockholders’ Agent, to examine the financial books and records of the Surviving Corporation and/or Parent, only to the extent necessary for
the exercise of the Stockholders’ Agent’s right to object to Parent’s calculation of the amounts set forth in the Bookings Statement. The
Stockholders’ Agent agrees that he shall hold all information acquired during such examination in strict confidence and shall use such
information only for purposes of making calculations under Section 1.7; provided, however, that such information may be provided to agents
and independent contractors of the Stockholders’ Agent that are subject to contractual (or, with respect to counsel, professional)
confidentiality obligations in favor of (and for the benefit of) Parent in respect of such information for use in furtherance of an engagement to
assist the Stockholders’ Agent in making such calculations as provided for herein.
(i) While Parent currently believes that it is in its best interest that it and the Company use commercially reasonable efforts to generate
One Year Bookings, it is understood and agreed that: (i) neither Parent nor the Company has any obligation to use any specified efforts to
generate One Year Bookings (or to sell or license Specified Company Products or enter into or renew related maintenance contracts); and
(ii) Parent (on behalf of itself and on behalf of any of its Subsidiaries, including the Surviving Corporation) may discontinue the sale or
license of Specified Company Products and the entering into or renewal of related maintenance contracts at any time without penalty (it
being understood, however, that Parent will act in good faith in connection with the foregoing).

1.8 Dissenting Shares.

(a) Effect on Dissenting Shares. Notwithstanding any provisions of this Agreement to the contrary, shares of Company Capital Stock
held by a holder who has demanded and perfected such demand for appraisal of such holder’s shares of Company Capital Stock in
accordance with Section 262 of the DGCL and as of the Closing has neither effectively withdrawn nor lost such holder’s right to such
appraisal (the “Dissenting Shares”) shall not be converted into the applicable Merger Consideration, but shall be entitled to only such rights
as are granted by the DGCL. Parent shall be entitled to retain any Merger Consideration not paid on account of such Dissenting Shares
pending resolution of the claims of such holders.

9.
 (b) Loss of Dissenting Share Status. Notwithstanding the provisions of Section 1.8(a), if any holder of shares of Company Capital
Stock who demands appraisal of such holder’s shares under the DGCL shall effectively withdraw or lose (through the failure to perfect or
otherwise) such holder’s right to appraisal, then as of the Closing or the occurrence of such event, whichever later occurs, such holder’s
shares of Company Capital Stock shall automatically be converted into the right to receive the applicable Merger Consideration, without
interest thereon, promptly following the surrender of the certificate or certificates representing such shares of Company Capital Stock.
(c) Notice of Dissenting Shares. The Company shall give Parent: (i) prompt notice of any demands for appraisal of shares of Company
Capital Stock received by the Company, withdrawals of any demands, and any other instruments served pursuant to the DGCL and received
by the Company; and (ii) the opportunity to direct all negotiations and proceedings with respect to any such demands for appraisal. The
Company shall not, except with the prior written consent of Parent, make any payment with respect to any demands for appraisal of shares of
Company Capital Stock or offer to settle any such demands other than by operation of law or pursuant to a final order of a court of
competent jurisdiction.

1.9 Exchange of Certificates.

(a) Payment Agent. On or prior to the Closing Date, Parent shall select a reputable bank or trust company to act as payment agent in
the Merger (the “Payment Agent”). At the Effective Time, Parent shall deposit with the Payment Agent cash sufficient to pay the cash
consideration payable pursuant to Section 1.5 (excluding the Escrow Amount and the Stockholders’ Agent Escrow Amount). The cash
amount so deposited with the Payment Agent is referred to as the “Payment Fund.” The Payment Agent will invest the funds included in the
Payment Fund in the manner directed by Parent. Any interest or other income resulting from the investment of such funds shall be the
property of, and will be paid to, Parent.
(b) Letter of Transmittal – Capital Stock. Promptly after the Effective Time, but in no event later than five days thereafter, Parent shall
cause the Payment Agent to mail to each record holder of Company Capital Stock immediately prior to the Effective Time: (i) a letter of
transmittal containing such provisions as Parent or the Payment Agent may, subject to reasonable approval of the Stockholders’ Agent,
specify (including a provision confirming that delivery of Company Stock Certificates (as defined in Section 1.9(d)) shall be effected, and risk
of loss and title to Company Stock Certificates shall pass, only upon delivery of such Company Stock Certificates to the Payment Agent, and
a provision whereby such holder agrees to be bound by the provisions of Sections 1.9, 9 and 10.1) (a “Letter of Transmittal”); and
(ii) instructions for use in effecting the exchange of Company Stock Certificates for the Merger Consideration, if any, payable with respect to
such Company Capital Stock. Upon the surrender to the Payment Agent of a Company Stock Certificate (or an affidavit of lost stock
certificate as described in Section 1.9(e)), together with a duly executed Letter of Transmittal and such other documents as Parent or the
Payment Agent may reasonably request, the holder of such Company Stock Certificate shall be entitled to receive in exchange therefor cash
in an amount equal to the Merger Consideration, if any, which such holder has the right to receive pursuant to Section 1.5, and the Company
Stock Certificate so surrendered shall forthwith be canceled. From and after the Effective Time, each Company Stock Certificate which prior
to the Effective Time represented shares of Company Capital Stock shall be deemed to represent only the right to receive the Merger
Consideration, if any, payable with respect to such shares, and the holder of each such Company Stock Certificate shall cease to have any
rights with respect to the shares of Company Capital Stock formerly represented thereby. The

10.
letter of transmittal shall include a request for each such stockholder of the Company to deliver to the Payment Agent a duly completed and
signed copy of United States Internal Revenue Service Form W-9 or Internal Revenue Service Form W-8BEN (or other appropriate United
States Internal Revenue Service Form W-8).
(c) Payments to Others. If payment of Merger Consideration in respect of shares of Company Capital Stock converted pursuant to
Section 1.5 is to be made to a Person other than the Person in whose name a surrendered Company Stock Certificate is registered, it shall be a
condition to such payment that the Company Stock Certificate so surrendered shall be properly endorsed or shall be otherwise in proper
form for transfer and that the Person requesting such payment shall have paid any transfer and other Taxes required by reason of such
payment in a name other than that of the registered holder of the Company Stock Certificate surrendered or shall have established to the
satisfaction of Parent that such Tax either has been paid or is not payable.
(d) Stock Transfer Books. As of the Effective Time, the stock transfer books of the Company shall be closed and there shall not be any
further registration of transfers of shares of Company Capital Stock thereafter on the records of the Company. If, after the Effective Time,
certificates for shares of Company Capital Stock (“Company Stock Certificates”) are presented to the Surviving Corporation, they shall be
canceled and exchanged for the Merger Consideration, if any, payable with respect to such shares as provided for in Section 1.5. No interest
shall accrue or be paid on any Merger Consideration payable upon the surrender of a Company Stock Certificate which immediately before
the Effective Time represented outstanding shares of Company Capital Stock.
(e) Lost Certificates. In the event any Company Stock Certificate representing shares of Company Capital Stock converted in
connection with the Merger pursuant to Section 1.5 shall have been lost, stolen or destroyed, Parent may, in its discretion and as a condition
precedent to the payment of any Merger Consideration with respect to the shares of Company Capital Stock previously represented by such
Company Stock Certificate, require the owner of such lost, stolen or destroyed Company Stock Certificate to provide an appropriate affidavit
and to deliver a bond (in such amount, form and with such surety as Parent may reasonably direct) as indemnity against any claim that may
be made against the Payment Agent, Parent, the Surviving Corporation or any affiliated party with respect to such Company Stock
Certificate.
(f) Undistributed Payment Funds. Any portion of the Payment Fund that remains undistributed to Effective Time Holders as of the date
that is 180 days after the Closing Date shall be delivered to Parent upon demand, and Effective Time Holders who have not theretofore
surrendered their Company Stock Certificates in accordance with this Section 1.9 shall thereafter look only to Parent for satisfaction of their
claims for the Merger Consideration payable with respect to the shares of Company Capital Stock previously represented by such Company
Stock Certificates, without any interest thereon.
(g) Escheat. Notwithstanding anything in this Agreement to the contrary, neither Parent nor any other Person shall be liable to any
holder of shares of Company Capital Stock or to any other Person for any amount paid to a public official pursuant to applicable abandoned
property law, escheat law or similar Legal Requirement. Any amounts remaining unclaimed by holders of shares of Company Capital Stock
three years after the Effective Time (or such earlier date immediately prior to such time as such amounts would otherwise escheat to or
become property of any Governmental Body) shall, to the extent permitted by applicable Legal Requirements, become the property of Parent
free and clear of any Encumbrance.

11.
 (h) Withholding. Each of the Payment Agent, Parent and the Surviving Corporation shall be entitled to deduct and withhold from any
consideration payable pursuant to this Agreement to any security holder or former security holder of the Company such amounts as Parent
determines in good faith are required to be deducted or withheld therefrom or in connection therewith under the Code or any provision of
state, local or foreign Tax law or under any other applicable Legal Requirement. To the extent such amounts are so deducted or withheld and
subsequently paid to the appropriate taxing authority by Parent, Surviving Corporation or the Payment Agent, such amounts shall be treated
for all purposes under this Agreement as having been paid to the Person to whom such amounts would otherwise have been paid.

1.10 Further Action. If, at any time after the Effective Time, any further action is reasonably determined by Parent to be necessary or
desirable to carry out the purposes of this Agreement or to vest the Surviving Corporation or Parent with full right, title and possession of and to
all rights and property of Merger Sub and the Company, the officers and directors of the Surviving Corporation and Parent shall be fully authorized
(in the name of Merger Sub, in the name of the Company and otherwise) to take such action.

2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants, to and for the benefit of the Indemnitees, as follows:

2.1 Due Organization; No Subsidiaries; Etc.

(a) Organization. The Company has been duly organized, and is validly existing and in good standing under the laws of the jurisdiction
of its formation. The Company has full power and authority: (i) to conduct its business in the manner in which its business is currently being
conducted; (ii) to own and use its assets in the manner in which its assets are currently owned and used; and (iii) to perform its obligations
under all Company Contracts.
(b) Qualification. The Company is qualified, licensed or admitted to do business as a foreign corporation, and is in good standing (to
the extent that the applicable jurisdiction recognizes the concept of good standing), under the laws of all jurisdictions where the property
owned, leased or operated by it or the nature of its business requires such qualification, license or admission and where the failure to be so
qualified, licensed or admitted would have a Material Adverse Effect. Part 2.1(b) of the Disclosure Schedule accurately sets forth each
jurisdiction where the Company is qualified, licensed and admitted to do business.
(c) Directors and Officers. Part 2.1(c) of the Disclosure Schedule accurately sets forth: (i) the names of the members of the board of
directors of the Company; (ii) the names of the members of each committee of the board of directors of the Company; and (iii) the names and
titles of the officers of each of the Company.
(d) No Subsidiaries. Except for the equity interests identified in Part 2.1(d) of the Disclosure Schedule, the Company has never owned,
beneficially or otherwise, any shares or other securities of, or any direct or indirect equity interest in, any Entity. The Company has not
agreed nor is it obligated to make any future investment in or capital contribution to any Entity. The Company has not guaranteed nor is
responsible nor liable for any obligation of any Entity in which it owns or has owned any equity interest.

12.
 2.2 Charter Documents; Records. The Company has delivered to Parent accurate and complete copies of: (a) the certificate of incorporation
and bylaws, including all amendments thereto, of the Company (the “Charter Documents”); and (b) the minutes and other records of the meetings
and other proceedings (including any actions taken by written consent or otherwise without a meeting) of the stockholders or members, the board
of directors and all committees of the board of directors of the Company since January 1, 2006, which minutes or other records contain a complete
summary of all meetings of directors, stockholders and members, and all actions taken thereat or by written consent, since January 1, 2006. All
actions taken and all transactions entered into by the Company requiring approval under applicable Legal Requirements, Contracts or Charter
Documents have been duly approved by all necessary action of the board of directors and stockholders of the Company. There has been no
violation of any of the provisions of the Charter Documents of the Company, and the Company has not taken any action that is inconsistent in
any material respect with any resolution adopted by the Company’s stockholders, board of directors or any committee of the board of directors.
The books of account, stock records, minute books and other records of the Company are accurate, up-to-date and complete in all material
respects.

2.3 Capitalization.
(a) Outstanding Securities. The authorized capital stock of the Company consists of: (i) 326,678,465 shares of Company Common Stock,
of which 20,325,088 shares are issued and outstanding as of the date of this Agreement; and (ii) 224,614,638 shares of Company Preferred
Stock, of which: (A) 6,837,500 shares are designated as “Series A Convertible Preferred Stock,” 6,777,500 shares of which are issued and
outstanding as of the date of this Agreement; (B) 960,000 shares are designated as “Series A-1 Convertible Preferred Stock,” 960,000 shares
of which are issued and outstanding as of the date of this Agreement; (C) 13,862,191 shares are designated as “Series B Convertible
Preferred Stock,” 13,787,923 of which are issued and outstanding as of the date of this Agreement; (D) 868,130 shares are designated as
“Series B-1 Convertible Preferred Stock,” 868,130 of which are issued and outstanding as of the date of this Agreement; (E) 68,681,027 shares
are designated as “Series C Convertible Preferred Stock,” 50,843,530 of which are issued and outstanding as of the date of this Agreement;
(F) 68,681,027 shares are designated as “Series C-1 Convertible Preferred Stock,” none of which are issued and outstanding as of the date of
this Agreement; and (G) 64,724,763 shares are designated as “Series D Convertible Preferred Stock,” 53,484,406 of which are issued and
outstanding as of the date of this Agreement. There are no shares of capital stock held in the Company’s treasury. The Company has never
declared or paid any dividends on any shares of Company Capital Stock. Part 2.3(a) of the Disclosure Schedule sets forth the names of the
Company’s stockholders, the addresses of the Company’s stockholders and the class, series and number of shares of Company Capital
Stock owned of record by each of such stockholders. All of the outstanding shares of Company Capital Stock have been duly authorized
and validly issued, and are fully paid and nonassessable, and, except as set forth in Part 2.3(a) of the Disclosure Schedule, none of such
shares is subject to any repurchase option, forfeiture provision or restriction on transfer (other than restrictions on transfer imposed by
virtue of applicable federal and state securities laws). Each share of Company Preferred Stock is convertible into the number of shares of
Company Common Stock set forth in Part 2.3(a) of the Disclosure Schedule.
(b) Stock Options. The Company has reserved 42,794,807 shares of Company Common Stock for issuance under the Company Option
Plan, of which options with respect to 30,822,135 shares are outstanding as of the date of this Agreement. Part 2.3(b) of the Disclosure
Schedule accurately sets forth, with respect to each Company Option that is outstanding as of the date of this Agreement: (i) the name of the
holder of such Company Option; (ii) the total number of shares of Company Common Stock that are subject to such Company Option and
the number of shares of Company Common Stock with respect to which such Company Option is immediately exercisable; (iii)

13.
the date on which such Company Option was granted and the term of such Company Option; (iv) the vesting schedule for such Company
Option and whether the vesting of such Company Option shall be subject to any acceleration in connection with the Merger or any of the
other transactions contemplated by this Agreement; (v) the exercise price per share of Company Common Stock purchasable under such
Company Option; and (vi) whether such Company Option is an “incentive stock option” as defined in Section 422 of the Code or subject to
Section 409A of the Code. Each grant of a Company Option was duly authorized no later than the date on which the grant of such Company
Option was by its terms to be effective (the “Grant Date”) by all necessary corporate action, including, as applicable, approval by the board
of directors of the Company (or a duly constituted and authorized committee thereof) and any required stockholder approval by the
necessary number of votes or written consents, and the award agreement governing such grant (if any) was duly executed and delivered by
each party thereto, each such grant was made in accordance with the terms of the applicable compensation plan or arrangement of the
Company and all other applicable Legal Requirements, the per share exercise price of each Company Option was equal to the fair market
value of a share of Company Common Stock on the applicable Grant Date as determined in accordance with the Company Option Plan and
each such grant was properly accounted for in accordance with GAAP in the financial statements (including the related notes) of the
Company. All options with respect to shares of Company Common Stock that were ever issued by the Company ceased to vest on the date
on which the holder thereof ceased to be an employee of or a consultant to the Company. The exercise of the Company Options and the
payment of cash in respect thereof complied and will comply with the terms of the Company Option Plan, all Contracts applicable to such
Company Options and all Legal Requirements and, as of the Closing, no former holder of a Company Option will have any rights with respect
to such Company Option.
(c) Warrants. Part 2.3(c) of the Disclosure Schedule accurately sets forth, with respect to each Company Warrant that is outstanding as
of the date of this Agreement: (i) the name of the holder of such Company Warrant; (ii) the class, series and total number of shares of
Company Capital Stock that are subject to such Company Warrant and the class, series and number of shares of Company Capital Stock with
respect to which such Company Warrant is immediately exercisable; (iii) the date on which such Company Warrant was issued and the term
of such Company Warrant; (iv) the vesting schedule for such Company Warrant; and (v) the exercise price per share of Company Capital
Stock purchasable under such Company Warrant. The Company has delivered to Parent accurate and complete copies of each Contract
pursuant to which any Company Warrant is outstanding. As of the Closing, no former holder of a Company Warrant will have any rights
with respect to such Company Warrant other than the right to receive cash in respect thereof as contemplated by this Agreement.
(d) No Other Securities. Except for the Company Options and as set forth in Part 2.3(b) or 2.3(c) of the Disclosure Schedule, there is no:
(i) outstanding subscription, option, call, convertible note, warrant or right (whether or not currently exercisable) to acquire any shares of
Company Capital Stock or other securities of the Company; (ii) outstanding security, instrument or obligation that is or may become
convertible into or exchangeable for any shares of Company Capital Stock (or cash based on the value of such shares) or other securities of
the Company; (iii) Contract under which the Company is or may become obligated to sell or otherwise issue any shares of Company Capital
Stock or any other securities, including any promise or commitment to grant Company Options or other securities of the Company to an
employee of or other service provider to the Company; or (iv) condition or circumstance that may give rise to or provide a basis for the
assertion of a claim by any Person to the effect that such Person is entitled to acquire or receive any shares of Company Capital Stock or
other securities of the Company. As of the Effective Time, there will be no outstanding options, warrants or other rights to purchase shares
of Company Capital Stock.

14.
 (e) Legal Issuance. All outstanding shares of Company Capital Stock, all outstanding Company Options and Company Warrants and
all other securities that have ever been issued or granted by the Company have been issued and granted in compliance in all material
respects with: (i) all applicable Legal Requirements; and (ii) all requirements set forth in all applicable Contracts. None of the outstanding
shares of Company Capital Stock were issued in violation of any preemptive rights or other rights to subscribe for or purchase securities of
the Company. Part 2.3(e) of the Disclosure Schedule accurately identifies each Company Contract relating to any securities of the Company
that contains any information rights, registration rights, financial statement requirements or other terms that would survive the Closing
unless terminated or amended prior to the Closing.
(f) Repurchased Shares. Part 2.3(f) of the Disclosure Schedule accurately sets forth with respect to any shares of capital stock
repurchased or redeemed by the Company since January 1, 2006: (i) the name of the seller of such shares; (ii) the number, class and series of
shares repurchased or redeemed; (iii) the date of such repurchase or redemption; and (iv) the price paid by the Company for such shares. All
shares of capital stock of the Company ever repurchased or redeemed by the Company were repurchased or redeemed in material compliance
with: (A) all applicable Legal Requirements; and (B) all requirements set forth in all applicable Contracts.

2.4 Financial Statements and Related Information.

(a) Delivery of Financial Statements. The Company has delivered to Parent the following financial statements and notes (collectively,
the “Company Financial Statements”): the audited balance sheets of the Company as of December 31, 2006 and December 31, 2007, and the
related audited statements of income, statements of stockholders’ equity and statements of cash flows for the years ended December 31,
2006 and December 31, 2007, together with the notes thereto and the unqualified report and opinion of Ernst & Young relating thereto.
(b) Fair Presentation. The Company Financial Statements present fairly the financial position of the Company as of the respective dates
thereof and the results of operations and cash flows of the Company for the periods covered thereby. The Company Financial Statements
have been prepared in accordance with GAAP applied on a consistent basis throughout the periods covered.
(c) Internal Controls. The books, records and accounts of the Company accurately and fairly reflect, in reasonable detail, the
transactions in and dispositions of the assets of the Company. Except as set forth in Part 2.4(c) of the Disclosure Schedule, the systems of
internal accounting controls maintained by the Company are sufficient to provide reasonable assurance that: (i) transactions are executed in
accordance with management’s general or specific authorization; (ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with
management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any differences. Part 2.4(c) of the Disclosure Schedule lists, and the
Company has delivered to Parent copies of, all written descriptions of, and all policies, manuals and other documents promulgating, such
internal accounting controls.
(d) Receivables. Part 2.4(d) of the Disclosure Schedule provides an accurate and complete breakdown and aging of all accounts
receivable, notes receivable and other receivables of the Company as of the date of this Agreement. Except as set forth in Part 2.4(d) of the
Disclosure Schedule, all existing accounts receivable of the Company (including those accounts receivable reflected on the balance sheet
included in the Company Financial Statements that have not yet been collected and those

15.
accounts receivable that have arisen since December 31, 2007 and have not yet been collected): (i) represent valid obligations of customers
of the Company arising from bona fide transactions entered into in the ordinary course of business; and (ii) are current and will be collected
in full, without any counterclaim or set off, when due, net of an allowance for doubtful accounts not to exceed $5,000 in the aggregate.

2.5 Liabilities.
(a) No Liabilities. The Company has no accrued, contingent or other Liabilities of any nature, either matured or unmatured (whether or
not required to be reflected in financial statements in accordance with GAAP, and whether due or to become due), except for: (i) Liabilities
identified as such in the “liabilities” column of the balance sheet included in the Company Financial Statements to the extent that they have
not been paid or otherwise discharged; (ii) accounts payable or accrued salaries that have been incurred by the Company since the balance
sheet included in the Company Financial Statements in the ordinary course of business and consistent with the Company’s past practices;
(iii) Liabilities under the Company Contracts that are expressly set forth in the text of such Company Contracts; and (iv) the Liabilities
identified in Part 2.5(a) of the Disclosure Schedule.
(b) Accounts Payable. Part 2.5(b) of the Disclosure Schedule provides an accurate and complete breakdown and aging of: (i) all
accounts payable of the Company as of the date of this Agreement; and (ii) all notes payable of the Company and all other indebtedness of
the Company for borrowed money as of the date of this Agreement.
(c) No “Off-Balance Sheet” Arrangements. The Company has never effected or otherwise been a party to any “off-balance sheet
arrangements” (as defined in Item 303(a)(4)(ii) of Regulation S-K under the Securities Exchange Act of 1934, as amended). Without limiting
the generality of the foregoing, the Company has never guaranteed any debt nor other obligation of any other Person.

2.6 Absence of Changes. Except as set forth in Part 2.6 of the Disclosure Schedule, since December 31, 2007:
(a) there has not been any Material Adverse Effect, and no event has occurred or circumstance has arisen that, in combination with
any other events or circumstances, will or could reasonably be expected to have or result in a Material Adverse Effect;
(b) there has not been any material loss, damage or destruction to, or any material interruption in the use of, any of the Company’s
material assets (whether or not covered by insurance);
(c) the Company has not declared, accrued, set aside or paid any dividend or made any other distribution in respect of any shares of its
capital stock or other securities, and the Company has not repurchased, redeemed or otherwise reacquired any of its shares of capital stock
or other securities, other than from former employees, directors and consultants pursuant to restricted stock purchase agreements or stock
option agreements providing for the repurchase of such securities in connection with their termination of service to the Company;
(d) the Company has not sold, issued, granted or authorized the sale, issuance or grant of: (i) any capital stock or other security (except
for Company Common Stock issued upon the exercise of outstanding Company Options); (ii) any option, call, warrant or right to acquire any
capital stock or other security (except for Company Options); or (iii) any instrument convertible into or exchangeable for any capital stock (or
cash based on the value of such capital stock) or other security;

16.
 (e) the Company has not amended or waived any of its rights under, or permitted the acceleration of vesting under: (i) any provision of
the Company Option Plan; (ii) any provision of any agreement evidencing any outstanding Company Option; or (iii) any restricted stock
agreement;
(f) there has been no amendment to any of the Charter Documents of the Company (other than the Certificate Amendment), and the
Company has not effected or been a party to any Acquisition Transaction, recapitalization, reclassification of shares, stock split, reverse
stock split or similar transaction;
(g) the Company has not made any capital expenditure which, when added to all other capital expenditures made on behalf of the
Company, exceeds $50,000;
(h) the Company has not amended or prematurely terminated or waived any material right or remedy under, any Contract that is or
would constitute a Material Contract (as defined in Section 2.11(a));
(i) the Company has not: (i) acquired, leased or licensed any right or other asset from any other Person: (ii) sold or otherwise disposed
of, or leased or licensed, any right or other asset to any other Person; or (iii) waived or relinquished any right, except for rights or assets
acquired, leased, licensed or disposed of in the ordinary course of business and consistent with past practices of the Company;
(j) the Company has not written off as uncollectible, or established any extraordinary reserve with respect to, any account receivable or
other indebtedness in excess of $5,000 with respect to a single matter, or in excess of $25,000 in the aggregate;
(k) the Company has not made any pledge of any of its assets or otherwise permitted any of its assets to become subject to any
Encumbrance, except for pledges made in the ordinary course of business and consistent with the Company’s past practices;
(l) the Company has not: (i) lent money to any Person (other than pursuant to routine and reasonable travel advances made to current
employees of the Company in the ordinary course of business); or (ii) incurred or guaranteed any indebtedness for borrowed money;
(m) the Company has not: (i) established, adopted or amended any Company Employee Plan; (ii) made any bonus, profit-sharing or
similar payment to, or increased the amount of wages, salary, commissions, fringe benefits or other compensation (including equity-based
compensation, whether payable in cash or otherwise) or remuneration payable to, any of its directors, officers or employees; or (iii) other
than with respect to non-officer employees and in the ordinary course of business and consistent with past practices, hired any new
employee;
(n) the Company has not changed any of its methods of accounting or accounting practices in any respect (except as required by
GAAP);
(o) the Company has not made or changed any Tax election, adopted or changed a material accounting method in respect of Taxes,
entered into a Tax allocation agreement, Tax sharing agreement, Tax indemnity agreement or closing agreement, settled or comprised a claim,
notice, audit report or assessment in respect of Taxes, or consented to an extension or waiver of the statutory limitation period applicable to
a claim or assessment in respect of Taxes;

17.
 (p) the Company has not commenced or settled any Legal Proceeding;
(q) the Company has not entered into any material transaction or taken any other material action outside the ordinary course of
business or inconsistent with its past practices; and
(r) the Company has not agreed or legally committed to take any of the actions referred to in clauses “(c)“ through “(q)“ above.

2.7 Title to Assets.

(a) Good Title. The Company owns, and has good and valid title to, all assets purported to be owned by it, including: (i) all assets
reflected on the balance sheet included in the Company Financial Statements; (ii) all assets referred to in Part 2.10(a) of the Disclosure
Schedule and all of the rights of the Company under the Contracts identified in Part 2.11(a) of the Disclosure Schedule; and (iii) all other
assets reflected in the books and records of the Company as being owned by the Company. All of said assets are owned by the Company
free and clear of any liens or other Encumbrances, except for: (A) any lien for current Taxes not yet due and payable; and (B) minor liens that
have arisen in the ordinary course of business and that do not (in any case or in the aggregate) materially detract from the value of the assets
subject thereto or materially impair the operations of the Company.
(b) Leased Assets. Part 2.7(b) of the Disclosure Schedule identifies all tangible assets that are material to the business of the Company
and that are being leased to the Company for which the annual rental payment for each such asset exceeds $25,000.

2.8 Bank Accounts. Part 2.8 of the Disclosure Schedule provides the following information with respect to each account maintained by or for
the benefit of the Company at any bank or other financial institution: (a) the name of the bank or other financial institution at which such account
is maintained; (b) the account number; (c) the type of account; and (d) the names of all Persons who are authorized to sign checks or other
documents with respect to such account.

2.9 Equipment; Real Property.

(a) Equipment. All material equipment, fixtures and other tangible assets owned by or leased to the Company are reasonably adequate
for the uses to which they are being put, are in good condition and repair (ordinary wear and tear excepted) and are adequate for the conduct
of the Company’s business in the manner in which the business is currently being conducted.
(b) Real Property. The Company does not own any real property or any interest in real property, except for the leasehold created under
the real property leases identified in Part 2.9(b) of the Disclosure Schedule.

2.10 Intellectual Property.

(a) Registered IP. Part 2.10(a) of the Disclosure Schedule accurately identifies: (i) each item of Registered IP in which the Company has
or purports to have an ownership interest of any nature (whether exclusively, jointly with another Person or otherwise); (ii) the jurisdiction in
which such item of Registered IP has been registered or filed and the applicable registration or serial number; and (iii) any other Person that
has an ownership interest in such item of Registered IP and the nature of such ownership interest. The Company has delivered to Parent
complete and accurate copies of all applications, material correspondence with any Governmental Body and other material documents related
to each such item of Registered IP.

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 (b) Inbound Licenses. Part 2.10(b) of the Disclosure Schedule accurately identifies: (i) each Contract pursuant to which any Intellectual
Property Right is or has been licensed, sold, assigned or otherwise conveyed or provided to the Company (other than: (A) agreements
between the Company and its employees in the Company’s standard form(s) thereof; and (B) non-exclusive licenses to third party software
that is not incorporated into, or used directly in the development, testing, distribution, maintenance or support of, the Company Software (as
defined below) and that is not otherwise material to the Company’s business); and (ii) whether the licenses or rights granted to the Company
in each such Contract are exclusive or non-exclusive.
(c) Outbound Licenses. Part 2.10(c) of the Disclosure Schedule accurately identifies each Contract pursuant to which any Person has
been granted any license under, or otherwise has received or acquired any right (whether or not currently exercisable and including a right to
receive a license) or interest in, any Company IP, other than object code licenses entered into in the ordinary course of business consistent
with past practices as part of any sale of products by the Company or nondisclosure agreements entered into in the ordinary course of
business consistent with past practices by the Company. The Company is not bound by, nor subject to, any Contract containing any
covenant or other provision that in any way limits or restricts the ability of the Company to use, exploit, assert or enforce any Company IP
owned by or exclusively licensed to the Company anywhere in the world.
(d) Royalty Obligations. Part 2.10(d) of the Disclosure Schedule contains a complete and accurate list of Contracts containing
provisions related to royalties, fees, commissions and other amounts payable by the Company to any other Person (other than sales
commissions paid to employees according to the Company’s standard commissions plan) upon or for the use of any Company IP.
(e) Standard Form IP Agreements. The Company has delivered to Parent a complete and accurate copy of each standard form of
Company IP Contract used by the Company, including each standard form of the following, as applicable: (i) end user license agreement;
(ii) development agreement; (iii) employee agreement containing any assignment or license of Intellectual Property or Intellectual Property
Rights or any confidentiality provision; (iv) consulting or independent contractor agreement containing any assignment or license of
Intellectual Property or Intellectual Property Rights or any confidentiality provision; or (v) confidentiality or nondisclosure agreement. Part
2.10(e) of the Disclosure Schedule accurately identifies each Company IP Contract that deviates in any material respect from the
corresponding standard form agreement (other than confidentiality or nondisclosure agreements) delivered to Parent, including any
agreement with an employee, consultant or independent contractor in which the employee, consultant or independent contractor expressly
reserved or retained any Intellectual Property Rights related to the Company’s business, research or development. Except as set forth in Part
2.10(e) of the Disclosure Schedule, every product that has ever been sold by or on behalf of the Company has included in the package in
which it was shipped a copy of the Company’s standard form of end user license agreement.
(f) Ownership Free and Clear. The Company exclusively owns all right, title and interest to and in the Company IP (other than
Intellectual Property Rights exclusively licensed to the Company, as identified in Part 2.10(b) of the Disclosure Schedule) free and clear of
any Encumbrances (other than nonexclusive licenses granted pursuant to the Contracts listed in Part 2.10(c) of the Disclosure Schedule,
object code licenses entered into in the ordinary course of business consistent with past practices as part of any sale of products by the
Company or nondisclosure agreements entered into in the ordinary course of business consistent with past practices by the Company).
Without limiting the generality of the foregoing:
(i) all documents and instruments necessary to establish, perfect and maintain the rights of the Company in the Company IP
(other than Intellectual Property Rights exclusively licensed to the Company, as identified in Part 2.10(b) of the Disclosure Schedule
and Company IP abandoned by the Company in the ordinary course of business) have been validly executed, delivered and filed in a
timely manner with the appropriate Governmental Body;

19.
 (ii) each Company Employee who is or was involved in the creation or development of any Company IP has signed a valid and
enforceable agreement containing an irrevocable assignment of Intellectual Property Rights pertaining to such Company IP to the
Company and confidentiality provisions protecting the Company IP;
(iii) the Company owns, without restrictions on its use, all Intellectual Property and Intellectual Property Rights developed by
each of Frans Kaashoek and Robert Morris, whether jointly with the Company or individually, that was or is intended for use in
connection with the business of the Company or arose in connection with consultations with the Company, including any derivative
works of any Company Software;
(iv) no funding, facilities or personnel of any Governmental Body or any public or private university, college or other educational
or research institution were used, directly or indirectly, to develop or create, in whole or in part, any Company IP (other than any
Intellectual Property and Intellectual Property Rights exclusively licensed to the Company) and no Governmental Body has any interest
in any Company IP (other than any Intellectual Property and Intellectual Property Rights exclusively licensed to the Company);
(v) the Company has taken all reasonable steps to maintain the confidentiality of and otherwise protect and enforce its rights in
all proprietary information pertaining to the Company; and
(vi) the Company owns or otherwise has, and after the Closing the Surviving Corporation will continue to have, all Intellectual
Property Rights needed to conduct the business of the Company as currently conducted and currently planned by the Company to be
conducted, except such Intellectual Property Rights as have yet to be developed or which are expected to be available via license on
commercially reasonable terms.
(g) Valid and Enforceable. All Company IP is valid, subsisting and enforceable. Without limiting the generality of the foregoing:
(i) no trademark or trade name owned by the Company, or to the Knowledge of the Company, licensed by the Company, conflicts
or interferes with any trademark or trade name owned, used or applied for by any other Person, and the Company has taken reasonable
steps to police the use of the trademarks owned by or exclusively licensed to it;
(ii) Part 2.10(g)(ii) of the Disclosure Schedule accurately identifies each action, filing, and payment that must be taken or made on
or before the date that is 120 days after the date of this Agreement in order to maintain such item of Company IP that is owned by or
exclusively licensed to the Company in full force and effect; and

20.
 (iii) no interference, opposition, reissue, reexamination or other Legal Proceeding or, to the Knowledge of the Company, inquiry,
examination or investigation is or has been pending or, to the Knowledge of the Company, threatened, in which the scope, validity or
enforceability of any Company IP that is owned by the Company or, to the Knowledge of the Company, that is exclusively licensed to
the Company, is being, has been, or could reasonably be expected to be contested or challenged. To the Knowledge of the Company,
there is no basis for a claim that any Company IP is invalid or unenforceable.
(h) No Third Party Infringement of Company IP. To the Knowledge of the Company: (i) no Person has infringed, misappropriated or
otherwise violated; and (ii) no Person is currently infringing, misappropriating or otherwise violating, any Company IP. Part 2.10(h) of the
Disclosure Schedule accurately identifies (and the Company has delivered to Parent a complete and accurate copy of) each letter or other
written or electronic communication or correspondence that has been sent by or to the Company or any representative of the Company
regarding any actual, alleged or suspected infringement or misappropriation of any Company IP, and provides a brief description of the
current status of the matter referred to in such letter, communication or correspondence.
(i) Effects of This Transaction. Neither the execution, delivery or performance of this Agreement nor the consummation of any of the
transactions contemplated by this Agreement will, with or without notice or lapse of time, result in, or give any other Person the right or
option to cause or declare: (i) a loss of, or Encumbrance on, any Company IP; (ii) a breach of or default under any Company IP Contract;
(iii) the release, disclosure or delivery of any Company IP by or to any escrow agent or other Person; or (iv) the grant, assignment or transfer
to any other Person of any license or other right or interest under, to or in any of the Company IP.
(j) No Infringement of Third Party IP Rights. The Company has never infringed (directly, contributorily, by inducement or otherwise),
misappropriated or otherwise violated or made unlawful use of any Intellectual Property Right of any other Person. No Company Software
infringes, violates or makes unlawful use of any Intellectual Property Right of, or contains any Intellectual Property misappropriated from,
any other Person. Without limiting the generality of the foregoing:
(i) no infringement, misappropriation or similar claim or Legal Proceeding is pending or, to the Knowledge of the Company,
threatened against the Company or against any other Person who is entitled to be indemnified, defended, held harmless or reimbursed
by the Company with respect to such claim or Legal Proceeding;
(ii) the Company has never received any written notice (or, to the Knowledge of the Company, other communication) relating to
any actual, alleged or suspected infringement, misappropriation or violation by the Company, any Company Employee or agents of the
Company of any Intellectual Property Rights of another Person, including any letter suggesting or offering that the Company obtain a
license to any Intellectual Property Right of another Person because of such actual, alleged or suspected infringement,
misappropriation or violation; and
(iii) the Company is not bound by any Contract to indemnify, defend, hold harmless or reimburse any other Person with respect
to, or otherwise assumed or agreed to discharge or otherwise take responsibility for, any existing or potential intellectual property
infringement, misappropriation or similar claim (other than indemnification provisions in the Company’s standard forms of Company IP
Contracts).

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 (k) No Harmful Code. None of the software (including firmware and other software embedded in hardware devices) owned, developed
(or currently being developed), used, marketed, distributed, licensed or sold by the Company (excluding any third party software that is
generally available on standard commercial terms and is licensed to the Company solely for internal use on a non-exclusive basis)
(collectively, the “Company Software”) contains any “back door,” “drop dead device,” “time bomb,” “Trojan horse,” “virus,” or “worm” (as
such terms are commonly understood in the software industry) or any other code designed or intended to have, or capable of performing,
any of the following functions: (i) disrupting, disabling, harming or otherwise impeding in any manner the operation of, or providing
unauthorized access to, a computer system or network or other device on which such code is stored or installed; or (ii) damaging or
destroying any data or file without the user’s consent.
(l) Source Code. The source code for all Company Software developed by the Company contains reasonably clear and accurate
annotations and programmer’s comments, and otherwise has been documented in a professional manner that is both: (i) consistent with
customary code annotation conventions and practices in the software industry; and (ii) sufficient to independently enable a programmer of
reasonable skill and competence to understand, analyze, and interpret program logic, correct errors and improve, enhance, modify and
support such Company Software. No source code for any Company Software has been delivered, licensed or made available by the Company
to any escrow agent or other Person who is not, as of the date of this Agreement, an employee or independent contractor of the Company.
The Company has no duty or obligation (whether present, contingent or otherwise) to deliver, license or make available the source code for
any Company Software to any escrow agent or other Person. No event has occurred, and no circumstance or condition currently exists, that
(with or without notice or lapse of time) will, or could reasonably be expected to, result in the delivery, license or disclosure of the source
code for any Company Software to any other Person.
(m) Use of Open Source Code. Part 2.10(m) of the Disclosure Schedule accurately identifies and describes: (i) each item of Open Source
Code that is contained in or distributed with the Company Software or from which any part of any Company Software is derived; (ii) the
applicable license for each such item of Open Source Code; and (iii) the Company Software to which each such item of Open Source Code
relates. No Company Software contains, is derived from, or is distributed with Open Source Code that is licensed under any terms that:
(i) impose or could impose a requirement or condition that any Company Software or part thereof: (A) be disclosed or distributed in source
code form; (B) be licensed for the purpose of making modifications or derivative works; or (C) be redistributable at no charge; or
(ii) otherwise impose or could impose any other material limitation, restriction, or condition on the right or ability of the Company to use or
distribute any Company Software.
(n) Privacy Policies. Part 2.10(n) of the Disclosure Schedule contains each Company Privacy Policy in effect at any time and identifies,
with respect to each Company Privacy Policy: (i) the period of time during which such privacy policy was or has been in effect; (ii) whether
the terms of a later Company Privacy Policy apply to the data or information collected under such privacy policy; and (iii) if applicable, the
mechanism (such as opt-in, opt-out or notice only) used to apply a later Company Privacy Policy to data or information previously collected
under such privacy policy. The Company has complied at all times and in all material respects with all of the Company Privacy Policies and
with all applicable Legal Requirements pertaining to privacy, User Data or Personal Data. Neither the execution, delivery or performance of
this Agreement or any of the other agreements referred to in this Agreement nor the consummation of any of the transactions contemplated
by this Agreement or any such other agreements, nor Parent’s possession or use of the User Data or any data or information in the Company
Databases as permitted by or in accordance with the applicable Company Privacy Policy, will result in any violation of any Company Privacy
Policy or any Legal Requirement pertaining to privacy, User Data or Personal Data in effect as of the Closing.

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 (o) Personal Data. Part 2.10(o) of the Disclosure Schedule identifies and describes each distinct electronic or other database containing
(in whole or in part) Personal Data maintained by or for the Company at any time (the “Company Databases”), the types of Personal Data in
each such database, and the security policies that have been adopted and maintained with respect to each such database. There has been no
unauthorized or illegal use of or access to any of the data or information in any of the Company Databases.
(p) Products Subject to Evaluation. Part 2.10(p) of the Disclosure Schedule identifies each Person that, as of the date of this
Agreement, is in possession of any product of the Company for evaluation or similar purposes, together with the product that is being so
evaluated.

2.11 Contracts.
(a) List of Contracts. Part 2.11(a) of the Disclosure Schedule accurately identifies:
(i) (A) each Company Contract relating to the employment of, or the performance of services by, any Company Employee;
(B) any Company Contract pursuant to which the Company is or may become obligated to make any severance, termination or similar
payment to any Company Employee; and (C) any Company Contract pursuant to which the Company is or may become obligated to
make any bonus or similar payment (other than payment in respect of salary) to any Company Employee;
(ii) each Company Contract which provides for indemnification of any officer, director, employee or agent;
(iii) each Company Contract relating to the voting and any other rights or obligations of a stockholder of the Company;
(iv) each Company Contract relating to the merger, consolidation, reorganization or any similar transaction with respect to the
Company;
(v) each Company Contract relating to the acquisition, transfer, development or licensing of any technology, Intellectual Property
or Intellectual Property Right (including any joint development agreement, technical collaboration agreement or similar agreement
entered into by the Company);
(vi) each Company Contract relating to the license of any patent, copyright, trade secret or other Intellectual Property or
Intellectual Property Right: (A) to the Company; or (B) other than object code licenses entered into in the ordinary course of business
consistent with past practices as part of any sale of products by the Company, from the Company;
(vii) each Company Contract relating to the hosting of any website of the Company;
(viii) each Company Contract relating to the advertising or promotion of the business of the Company or pursuant to which any
third parties advertise on any websites operated by the Company;

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 (ix) each Company Contract relating to the acquisition, sale, spin-off or outsourcing of any Subsidiary or business unit or
operation of the Company;
(x) each Company Contract creating or relating to any partnership or joint venture or any sharing of revenues, profits, losses,
costs or liabilities;
(xi) each Company Contract imposing any restriction on the Company: (A) to compete with any other Person; (B) to acquire any
product or other asset or any services from any other Person, to sell any product or other asset to or perform any services for any
other Person or to transact business or deal in any other manner with any other Person; or (C) to develop or distribute any technology;
(xii) each Company Contract: (A) granting exclusive rights to license, market, sell or deliver any of the products or services of the
Company; or (B) otherwise contemplating an exclusive relationship between the Company and any other Person;
(xiii) each Company Contract creating or involving any agency relationship, distribution or reseller arrangement or franchise
relationship;
(xiv) each Company Contract regarding the acquisition, issuance or transfer of any securities and each Company Contract
affecting or dealing with any securities of the Company including any restricted share agreements or escrow agreements;
(xv) each Company Contract involving any loan, guaranty, pledge, performance or completion bond or indemnity or surety
arrangement;
(xvi) each Company Contract relating to the purchase or sale of any asset by or to, or the performance of any services by or for,
any Related Party;
(xvii) any Company Contract that contemplates or involves the payment or delivery of cash or other consideration by the
Company in an amount or having a value in excess of $25,000;
(xviii) any Company Contract: (A) with any customer of the Company who has purchased or licensed any products from the
Company pursuant to a Contract other than: (1) the Company’s standard form of customer Contract (with no material deviations); or
(2) except as contemplated by clause “(B)” of this sentence or another clause of this Section 2.11(a), a purchase order; or (B) that
contemplates or involves the payment or delivery of cash or other consideration to the Company in an amount or having a value in
excess of $10,000; and
(xix) any other Company Contract that was entered into outside the ordinary course of business or was inconsistent with the
past practices of the Company.
(Contracts in the respective categories described in clauses “(i)“ through “(xix)“ above and all Contracts identified, or required to
be identified, in Part 2.11(a) of the Disclosure Schedule are referred to in this Agreement as “Material Contracts.”)
(b) Delivery of Contracts. The Company has delivered or Made Available to Parent accurate and complete copies of all written Material
Contracts identified in Part 2.11(a) of the Disclosure Schedule, including all amendments thereto. Part 2.11(b) of the Disclosure Schedule
provides an

24.
 accurate and complete: (i) description of the material terms of each Material Contract that is not in written form; and (ii) list of each purchase
order pursuant to which the Company has ever sold or licensed any products to the extent that such purchase order was not issued
pursuant to a master purchase agreement with the Company. Each Contract identified in Part 2.11(a) of the Disclosure Schedule is valid and
in full force and effect, and is enforceable by the Company in accordance with its terms, subject to: (i) laws of general application relating to
bankruptcy, insolvency and the relief of debtors; and (ii) rules of law governing specific performance, injunctive relief and other equitable
remedies.
(c) No Breach. Except as set forth in Part 2.11(c) of the Disclosure Schedule: (i) the Company has not violated or breached in any
material respect, and the Company has not committed any material default under, any Company Contract, which remains uncured, and, to the
Knowledge of the Company, no other Person has violated or breached in any material respect, or committed any material default under, any
Company Contract which remains uncured; (ii) to the Knowledge of the Company, no event has occurred, and no circumstance or condition
exists, that (with or without notice or lapse of time) will, or could reasonably be expected to: (A) result in a material violation or material
breach of any of the provisions of any Company Contract; (B) give any Person the right to declare a default or exercise any remedy under
any Company Contract; (C) give any Person the right to accelerate the maturity or performance of any Company Contract; or (D) give any
Person the right to cancel, terminate or modify any Company Contract; (iii) since January 1, 2006, the Company has not received any written
notice (or, to the Knowledge of the Company, other communication) regarding any actual or possible material violation or material breach of,
or material default under, any Company Contract; and (iv) the Company has not waived any of its respective material rights under any
Company Contract.
(d) No Renegotiation. No Person has a contractual right pursuant to the terms of any Company Contract to renegotiate any material
amount paid or payable to the Company under any Material Contract or any other material term or provision of any Material Contract.
(e) Proposed Contracts. Part 2.11(e) of the Disclosure Schedule identifies and provides a brief description of each proposed Contract
as to which any offer, award, written proposal, term sheet or similar document, in each case that would contain binding obligations of the
Company if accepted by the recipient, has been submitted by the Company.

2.12 Compliance with Legal Requirements. The Company is, and has at all times been, in compliance in all material respects with each Legal
Requirement that is applicable to it or to the conduct of its business or the ownership of its assets. No event has occurred, and no condition or
circumstance exists, that will (with or without notice or lapse of time) constitute or result in a violation by the Company of, or a failure on the part
of the Company to comply with, any Legal Requirement. Except as set forth in Part 2.12 of the Disclosure Schedule, since January 1, 2006, the
Company has not received any written notice (or, to the Knowledge of the Company, other communication) from any Person regarding any actual
or possible violation of, or failure to comply with, any Legal Requirement.

2.13 Governmental Authorizations; No Subsidies.

(a) Governmental Authorizations. Part 2.13(a) of the Disclosure Schedule identifies each Governmental Authorization held by the
Company, and the Company has delivered to Parent accurate and complete copies of all Governmental Authorizations identified in Part 2.13
(a) of the Disclosure Schedule. The Governmental Authorizations identified in Part 2.13(a) of the Disclosure Schedule are valid and in full
force and effect, and collectively constitute all Governmental Authorizations necessary to enable the Company to conduct its business in the
manner in which its business is currently being conducted. The Company is, and has at all times been, in compliance with the

25.
terms and requirements of the respective Governmental Authorizations identified in Part 2.13(a) of the Disclosure Schedule. Since January 1,
2006, the Company has not received any written notice (or, to the Knowledge of the Company, other communication) from any Governmental
Body regarding: (i) any actual or possible violation of or failure to comply with any term or requirement of any Governmental Authorization;
or (ii) any actual or possible revocation, withdrawal, suspension, cancellation, termination or modification of any Governmental
Authorization.
(b) No Subsidies. The Company does not possess (and the Company has never possessed) or have any rights or interests with respect
to (and the Company has never had any rights or interests with respect to) any grants, incentives or subsidies from any Governmental Body.

2.14 Tax Matters.

(a) Tax Returns and Payments. All Tax Returns required to be filed by or on behalf of the Company (the “Company Returns”) have
been timely and properly filed and are true, accurate and complete in all material respects. All Taxes of the Company that are due and payable
have been timely and properly paid. All Taxes required to be withheld by the Company have been properly and timely withheld and remitted.
The Company has delivered to Parent accurate and complete copies of all Tax Returns filed by the Company since December 31, 2004. Part
2.14(a) of the Disclosure Schedule lists each jurisdiction in which the Company is required to file a Tax Return. No claim has ever been made
by an authority in a jurisdiction where the Company does not file Tax Returns that it is or may be subject to taxation by that jurisdiction. The
Company Financial Statements properly and adequately accrue or reserve for Tax liabilities in accordance with GAAP.
(b) Audits; Claims. Except as set forth in Part 2.14(b) of the Disclosure Schedule, no Company Tax Return has ever been examined or
audited by any Governmental Body. The Company has not received from any Governmental Body any: (i) notice indicating an intent to open
an audit or other review; (ii) request for information related to Tax matters; or (iii) notice of deficiency or proposed Tax adjustment. No
extension or waiver of the limitation period applicable to any Tax Returns has been granted by or requested from the Company. No claim or
Legal Proceeding is pending or threatened against the Company in respect of any Tax. There are no liens for Taxes upon any of the assets of
the Company except liens for current Taxes not yet due and payable (and for which there are adequate accruals, in accordance with GAAP).
(c) Parachute Payments. As a result of the Merger, the Company will not be obligated to make any payment that could a “parachute
payment” to a “disqualified individual” within the meaning of Section 280G of the Code.
(d) Closing Agreements; Etc. 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 there) ending after the Closing Date as a result of any change in method of accounting,
closing agreement, intercompany transaction, installment sale or prepaid amount received for a taxable period ending on or prior to the
Closing Date. The Company is not a party to or bound by any Tax allocation or sharing agreement. The Company has: (A) never been a
member of an Affiliated Group; or (B) no Liability for the Taxes of any Person (other than the Company).
(e) Distributed Stock. The Company has not distributed stock of another Person, and the Company has not had its stock distributed by
another Person, in a transaction that was purported or intended to be governed in whole or in part by Section 355 or Section 361 of the Code.

26.
 (f) Tax Holidays. There are no (and there have never been any) Tax exemptions, Tax holidays or other Tax reduction agreements or
arrangements applicable to the Company.
(g) Net Operating Losses. Part 2.14(g) of the Disclosure Schedule sets forth each “testing date” as defined by Treas. Reg.
Section 1.382-2(a)(4) and the name and stock ownership of each “5-percent shareholder” as defined by Treas. Reg. Section 1.382-2T(g). For
the avoidance of doubt, for the purposes of determining the identity and stock ownership of a 5-percent shareholder to the Knowledge of
the Company, the constructive ownership rules of Treas. Reg. Section 1.382-2T(h) have been applied, and the operating rules of Treas. Reg.
Section 1.382-2T(k) have been observed.
(h) Adjustment in Taxable Income. The Company is not currently, and the Company will not for any period for which a Tax Return has
not been filed be, required to include any adjustment in Taxable income for any Tax period (or portion thereof) pursuant to Section 481 or
263A of the Code (or any comparable provision under state, local or foreign Tax laws) as a result of transactions, events or accounting
methods employed prior to the Merger.
(i) Penalties. The Company has disclosed on its Tax Returns any Tax reporting position taken in any Tax Return which could result in
the imposition of penalties under Section 6662 of the Code (or any comparable provisions of state, local or foreign law).
(j) Tax Shelter and Listed Transactions. The Company has not consummated or participated in, and the Company is not currently
participating in, any transaction which was or is a “Tax shelter” transaction as defined in Sections 6662 or 6111 of the Code or the Treasury
Regulations promulgated thereunder. The Company has not participated in, and is not currently participating in, a “Listed Transaction” or a
“Reportable Transaction” within the meaning of Section 6707A(c) of the Code or Treasury Regulation Section 1.6011-4(b), or any transaction
requiring disclosure under a corresponding or similar provision of state, local, or foreign law.
(k) Transferee or Successor Tax Liability. The Company does not have any Liability for the Taxes of any Person under Section 1.1502-6
of the Treasury Regulations (or any similar provision of state, local or foreign law) as a transferee or successor, by Contract or otherwise.
(l) Dual Consolidated Loss. The Company has not incurred a dual consolidated loss within the meaning of Section 1503 of the Code.
(m) Foreign Tax. The Company has in its possession official foreign government receipts for any Taxes paid by it to any foreign Tax
Authorities.
(n) FIRPTA. The Company is not (and the Company has never been) a “United States real property holding corporation” within the
meaning of Section 897 of the Code, and the Company has filed with the Internal Revenue Service all statements, if any, which are required
under Section 1.897-2(h) of the Treasury Regulations.
(o) Withholdings. The Company has complied with all applicable Legal Requirements relating to the payment, reporting and
withholding of Taxes (including withholding of Taxes pursuant to Sections 1441, 1442, 1445 and 1446 of the Code or similar provisions under
any foreign law), has, within the time and in the manner prescribed by law, withheld from employee wages or consulting compensation and
timely paid over to the proper governmental authorities (or is properly holding for such timely payment) all amounts required to be so
withheld and paid over under all applicable Legal Requirements, including federal and state income Taxes, Federal Insurance Contribution
Act, Medicare, Federal Unemployment Tax Act, relevant state income and employment Tax withholding laws, and has timely filed all
withholding Tax Returns, for all periods.

27.
2.15 Employee and Labor Matters; Benefit Plans.
(a) Employee List. Part 2.15(a) of the Disclosure Schedule contains a list of all current Company Employees as of the date of this
Agreement, and correctly reflects: (i) their dates of employment; (ii) their positions; (iii) their salaries; (iv) any other compensation payable to
them (including housing allowances, compensation payable pursuant to bonus, deferred compensation or commission arrangements or other
compensation); (v) each Company Employee Plan in which they participate or are eligible to participate; and (vi) any promises made to them
with respect to changes or additions to their compensation or benefits. The Company is not, and the Company has never been, bound by or
a party to, and the Company does not have a duty to bargain for, any collective bargaining agreement or other Contract with a labor
organization representing any Company Employees and there are no labor organizations representing, purporting to represent or, to the
Knowledge of the Company, seeking to represent any current Company Employees. The Company is not engaged, and the Company has
never been engaged, in any unfair labor practice of any nature. The Company has not had any strike, slowdown, work stoppage, lockout, job
action or threat thereof, or question concerning representation, by or with respect to any of the Company Employees. No event has
occurred, and no condition or circumstance exists, that might directly or indirectly give rise to or provide a basis for the commencement of
any such strike, slowdown, work stoppage, lockout, job action, labor dispute or union organizing activity or any similar activity or dispute.
(b) Leave of Absence. There is no current Company Employee who is not fully available to perform work because of disability or other
leave.
(c) At Will Employment. Except as set forth in Part 2.15(c) of the Disclosure Schedule, the employment of each of the current Company
Employees is terminable by the Company at will. The Company has delivered to Parent accurate and complete copies of all employee manuals
and handbooks, disclosure materials, policy statements and other materials relating to the employment of the Company Employees.
(d) Employee Departures/Restrictions. To the Knowledge of the Company, no employee of the Company at the level of senior manager
or above: (i) intends to terminate his employment with the Company; (ii) has received an offer to join a business that may be competitive with
the Company’s business; or (iii) is a party to or is bound by any confidentiality agreement, noncompetition agreement or other Contract
(with any Person) that may have an adverse effect on: (A) the performance by such employee of any of his duties or responsibilities as an
employee of the Company; or (B) the Company’s business or operations. Except as set forth in Part 2.15(d) of the Disclosure Schedule, every
employee whose employment with the Company has ever been terminated by the Company has signed a valid and enforceable release
agreement.
(e) Employee Plans and Agreements. Part 2.15(e) of the Disclosure Schedule contains an accurate and complete list of each Company
Employee Plan and each Company Employee Agreement. The Company does not intend (and the Company has not committed) to establish
or enter into any new Company Employee Plan or Company Employee Agreement, or to modify any Company Employee Plan or Company
Employee Agreement (except to conform any such Company Employee Plan or Company Employee Agreement to the requirements of any
applicable Legal Requirements, in each case as previously disclosed to Parent in writing or as required by this Agreement).

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 (f) Delivery of Documents. As applicable with respect to the Company Employee Plan, the Company has Made Available to Parent:
(i) correct and complete copies of all documents setting forth the terms of each Company Employee Plan and each Company Employee
Agreement, including all amendments thereto and all related trust documents; (ii) the most recent summary plan description together with the
summaries of material modifications thereto, if any, with respect to each Company Employee Plan; (iii) all material written Contracts relating to
each Company Employee Plan, including administrative service agreements and group insurance contracts; (iv) the annual reports (Form
5500 series) for the last three complete plan year; (v) the most recent opinion or letter of determination from the U.S. Internal Revenue Service
relating to the tax-qualified status of the Plan; (vi) all written materials provided to any Company Employee relating to any Company
Employee Plan and any proposed Company Employee Plans, in each case, relating to any amendments, terminations, establishments,
increases or decreases in benefits, acceleration of payments or vesting schedules or other events that would result in any liability to the
Company; (vii) all correspondence to or from any Governmental Body relating to any Company Employee Plan; and (viii) all insurance
policies in the possession of the Company pertaining to fiduciary liability insurance covering the fiduciaries for each Company Employee
Plan.
(g) No Foreign Plans. The Company has not established or maintained: (i) any plan, program, policy, practice, Contract or other
arrangement mandated by a Governmental Body other than the United States; (ii) any Company Employee Plan that is subject to any of the
Legal Requirements of any jurisdiction outside of the United States; or (iii) any Company Employee Plan that covers or has covered
Company Employees whose services are or have been performed primarily outside of the United States.
(h) Absence of Certain Retiree Liabilities. No Company Employee Plan provides (except at no cost to the Company), or reflects or
represents any liability of the Company to provide, retiree life insurance, retiree health benefits or other retiree employee welfare benefits to
any Person for any reason. Other than commitments made that involve no future costs to the Company, the Company has never represented,
promised or contracted (whether in oral or written form) to any Company Employee (either individually or to Company Employees as a group)
or any other Person that such Company Employee(s) or other person would be provided with retiree life insurance, retiree health benefit or
other retiree employee welfare benefits, except to the extent required by applicable Legal Requirements.
(i) No Defaults. The Company has performed all obligations required to be performed by it under each Company Employee Plan and is
not in default or violation of, and the Company has no Knowledge of any default or violation by any other party to, the terms of any
Company Employee Plan. Each of the Company Employee Plans has been operated and administered in all material respects in accordance
with applicable Legal Requirements, including, without limitation, the applicable tax qualification requirements under the Code. The Company
is not a party to any Contract nor has it granted any compensation, equity or award that would (or that would reasonably be expected to) be
deemed deferred compensation subject to the additional 20% tax under Section 409A(a)(1)(B)(i)(II) of the Code or to the transfer of property
rules under Section 409A(b) of the Code, and the Company has no liability or obligation to make any payment or to issue any equity award
or bonus that could be deemed deferred compensation subject to such additional 20% tax or subject to such transfer of property rules. All
contributions to, and material payments from, any Company Employee Plan which may have been required to be made in accordance with the
terms of such Company Employee Plan or applicable Legal Requirements have been timely made, and all contributions for any period ending
on or before the Closing Date which are not yet due, but will be paid on or prior to the Closing Date, are reflected as an accrued liability on
the balance sheet included in the Company Financial Statements. Each Company

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Employee Plan can be amended, terminated or otherwise discontinued after the date of this Agreement, without liability to the Company or to
Parent (other than ordinary administration expenses). There are no audits, inquiries or Legal Proceedings pending or, to the Knowledge of
the Company, threatened by any Governmental Body with respect to any Company Employee Plan.
(j) No Conflict. Except as set forth in Part 2.15(j) of the Disclosure Schedule, neither the execution, delivery or performance of this
Agreement, nor the consummation of the Merger or any of the other transactions contemplated by this Agreement, will or may (either alone
or upon the occurrence of any additional or subsequent events): (i) constitute an event under any Company Employee Plan, Company
Employee Agreement, trust or loan that will or may result (either alone or in connection with any other circumstance or event) in any
payment (whether of severance pay or otherwise), acceleration, forgiveness of indebtedness, vesting, distribution, increase in benefits or
obligation to fund benefits with respect to any Company Employee; or (ii) create or otherwise result in any Liability with respect to any
Company Employee Plan.
(k) Compliance. The Company: (i) is in compliance in all material respects with all applicable Legal Requirements, Contracts and orders,
rulings, decrees, judgments or arbitration awards of any arbitrator or any court or other Governmental Body respecting employment,
employment practices, terms and conditions of employment, wages, hours or other labor-related matters, including Legal Requirements,
orders, rulings, decrees, judgments and awards relating to discrimination, wages and hours, labor relations, leave of absence requirements,
occupational health and safety, privacy, harassment, retaliation, immigration, wrongful discharge or violation of the personal rights of
Company Employees or prospective employees; (ii) has withheld and reported all amounts required by any Legal Requirement or Contract to
be withheld and reported with respect to wages, salaries and other payments to any Company Employee; (iii) has no Liability for any arrears
of wages or any Taxes or any penalty for failure to comply with any of the foregoing; and (iv) has no Liability for any payment to any trust or
other fund governed by or maintained by or on behalf of any Governmental Body with respect to unemployment compensation benefits,
social security or other benefits or obligations for any Company Employee (other than routine payments to be made in the normal course of
business and consistent with past practice).
(l) Labor Relations. The Company has good labor relations, and, except as set forth in Part 2.15(l) of the Disclosure Schedule, the
Company has no Knowledge of any facts indicating that the consummation of the Merger or any of the other transactions contemplated by
this Agreement will have a material adverse effect on the labor relations of the Company. Except as set forth in Part 2.15(l) of the Disclosure
Schedule, there are no pending or, to the Knowledge of the Company, threatened or reasonably anticipated claims or Legal Proceedings
against the Company under any workers’ compensation policy or long-term disability policy.
(m) Claims Against Plans. There are no pending or, to the Knowledge of the Company, threatened or reasonably anticipated claims or
Legal Proceedings against any of the Company Employee Plans, the assets of any of the Company Employee Plans or the Company, or the
Company Employee Plan administrator or any fiduciary of the Company Employee Plans with respect to the operation of such Company
Employee Plans (other than routine, uncontested benefit claims) or asserting any rights or claims to benefits under such Company Employee
Plan, and there are no facts or circumstances which could form the basis for any such claims or Legal Proceedings.

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 (n) Independent Contractors. Part 2.15(n) of the Disclosure Schedule accurately sets forth, with respect to each Person who is or was,
at any time since January 1, 2006, an independent contractor of the Company and who has received or may be entitled to receive in excess of
$25,000 from the Company:
(i) the name of such independent contractor, and the date as of which such independent contractor was originally engaged by
the Company;
(ii) a description of such independent contractor’s performance objectives, services, duties and responsibilities;
(iii) the aggregate dollar amount of the compensation (including all payments or benefits of any type) received by such
independent contractor from the Company with respect to services performed in the fiscal year ended December 31, 2007;
(iv) the terms of compensation of such independent contractor; and
(v) any Governmental Authorization that is held by such independent contractor and that relates to or is useful in connection
with the business of the Company.
(o) No Misclassified Employees. No current or former independent contractor of the Company could be deemed to be a misclassified
employee. No independent contractor is eligible to participate in any Company Employee Plan. The Company has never had any temporary
or leased employees that were not treated and accounted for in all respects as employees of the Company.
(p) Labor-Related Claims. Except as set forth in Part 2.15(p) of the Disclosure Schedule, there is no Legal Proceeding, claim, labor
dispute or grievance pending or, to the Knowledge of the Company, threatened or reasonably anticipated relating to any employment
Contract, compensation, wages and hours, leave of absence, plant closing notification, employment statute or regulation, privacy right, labor
dispute, workers’ compensation policy, long-term disability policy, safety, retaliation, immigration or discrimination matter involving any
Company Employee, including charges of unfair labor practices or harassment complaints.

2.16 Environmental Matters. The Company is in compliance in all material respects with all applicable Environmental Laws, which
compliance includes the possession by the Company of all Environmental Licenses and other Governmental Authorizations required under
applicable Environmental Laws, and compliance with the terms and conditions thereof. The Company has not received any written notice (or, to
the Knowledge of the Company, other communication), whether from a Governmental Body, citizens group, Company Employee or otherwise, that
alleges that the Company is not in compliance with any Environmental Law, and, to the Knowledge of the Company, there are no circumstances
that may prevent or interfere with the Company’s compliance with any Environmental Law in the future. To the Knowledge of the Company, no
current or prior owner of any property leased or controlled by the Company has received any written notice (or, to the Knowledge of the Company,
other communication), whether from a Government Body, citizens group, Company Employee or otherwise, that alleges that such current or prior
owner or the Company is not in compliance with any Environmental Law. The Company has not caused or contributed to any Environmental
Release and there are no circumstances which may give rise to any Environmental Release by the Company. No Contaminants are stored or
contained on or under any of the Properties whether in storage tanks, land fills, pits, ponds, lagoons or otherwise. All Governmental
Authorizations currently held by the Company pursuant to Environmental Laws are identified in Part 2.16 of the Disclosure Schedule.

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 2.17 Insurance. Part 2.17 of the Disclosure Schedule identifies each insurance policy maintained by, at the expense of or for the benefit of
the Company as of the date of this Agreement and identifies any material claims made thereunder as of the date of this Agreement. The Company
has delivered or Made Available to Parent accurate and complete copies of the insurance policies identified on Part 2.17 of the Disclosure
Schedule. Each of the insurance policies identified in Part 2.17 of the Disclosure Schedule is in full force and effect. Since January 1, 2006, the
Company has not received any written notice (or, to the Knowledge of the Company, other communication) regarding any actual or possible:
(i) cancellation or invalidation of any insurance policy; (ii) refusal of any coverage or rejection of any claim under any insurance policy; or
(iii) material adjustment in the amount of the premiums payable with respect to any insurance policy.

2.18 Related Party Transactions. Except as set forth in Part 2.18 of the Disclosure Schedule: (a) no Related Party has, and no Related Party
has had, any interest in any material asset used in or otherwise relating to the business of the Company; (b) no Related Party is, or has been,
indebted to the Company (other than for ordinary travel advances); (c) no Related Party has entered into, or has had any financial interest in, any
material Contract, transaction or business dealing or involving any the Company; (d) to the Knowledge of the Company, no Related Party is
competing with the Company; and (e) no Related Party has any claim or right against any the Company (other than rights under Company Options
and rights to receive compensation for services performed as an employee of the Company or other rights arising in the ordinary course of
employment). No member of the board of directors of the Company has a conflict of interest with respect to the Company, and each such member
has provided confirmation of the foregoing to the Company if required in accordance with applicable Legal Requirements.

2.19 Legal Proceedings; Orders.

(a) Legal Proceedings. There is no pending Legal Proceeding and, to the Knowledge of the Company, no Person has threatened to
commence any Legal Proceeding: (i) that involves the Company or any of the assets owned or used by the Company or any Person whose
liability the Company has or may have retained or assumed, either contractually or by operation of law; (ii) that challenges, or that may have
the effect of preventing, delaying, making illegal or otherwise interfering with, the Merger or any of the other transactions contemplated by
this Agreement; or (iii) that relates to the ownership of any capital stock of the Company, or any option or other right to the capital stock of
the Company, or right to receive consideration as a result of this Agreement. To the Knowledge of the Company, no event has occurred, and
no claim, dispute or other condition or circumstance exists, that will or would reasonably be expected to, give rise to or serve as a basis for
the commencement of any such Legal Proceeding. Except as set forth in Part 2.19(a) of the Disclosure Schedule, no Legal Proceeding
involving claims in excess of $50,000 has ever been commenced by, and no Legal Proceeding involving claims in excess of $50,000 has ever
been pending against, the Company.
(b) Orders. There is no order, writ, injunction, judgment or decree to which the Company, or any of the assets owned or used by the
Company, is subject. To the Knowledge of the Company, no officer or other employee of the Company is subject to any order, writ,
injunction, judgment or decree that prohibits such officer or other employee from engaging in or continuing any conduct, activity or practice
relating to the Company’s business.

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 2.20 Authority; Binding Nature of Agreement; Inapplicability of Anti-takeover Statutes.
(a) Authority; Binding Nature. The Company has the absolute and unrestricted right, power and authority to enter into and to perform
its obligations under this Agreement and under each other agreement, document or instrument referred to in this Agreement to which the
Company is or will be a party; and the execution, delivery and performance by the Company of this Agreement and of each such other
agreement, document and instrument have been duly authorized by all necessary action on the part of the Company and its board of
directors. Assuming due authorization, execution and delivery by the other parties hereto and thereto, this Agreement, and each other
agreement, document or instrument referred to in this Agreement to which the Company is a party constitutes the legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with its terms, subject to: (i) laws of general application relating
to bankruptcy, insolvency and the relief of debtors; and (ii) rules of law governing specific performance, injunctive relief and other equitable
remedies.
(b) Board Approval. The Company’s board of directors has: (i) unanimously determined that the Merger is advisable and fair and in the
best interests of the Company and its stockholders; (ii) unanimously recommended the adoption of this Agreement and the approval of the
Certificate Amendment by the holders of Company Capital Stock and directed that this Agreement, the Merger and the Certificate
Amendment be submitted for consideration by the Company’s stockholders in accordance with Section 5.2; and (iii) to the extent necessary,
adopted a resolution having the effect of causing the Company not to be subject to any state takeover law or similar Legal Requirement that
might otherwise apply to the Merger or any of the other transactions contemplated by this Agreement.
(c) No Takeover Statute. No state or foreign takeover statute or similar Legal Requirement applies or purports to apply to the Merger,
this Agreement or any of the transactions contemplated hereby.

2.21 Non-Contravention; Consents. Except as set forth in Part 2.21 of the Disclosure Schedule, neither: (1) the execution, delivery or
performance of this Agreement or any of the other agreements, documents or instruments referred to in this Agreement; nor (2) the consummation
of the Merger or any of the other transactions contemplated by this Agreement or any such other agreement, document or instrument, will (with or
without notice or lapse of time):
(a) contravene, conflict with or result in a violation of: (i) any of the provisions of any Charter Documents of the Company; or (ii) any
resolution adopted by the stockholders, board of directors or any committee of the board of directors of the Company;
(b) contravene, conflict with or result in a violation of, or give any Governmental Body or other Person the right to challenge any of the
transactions contemplated by this Agreement or to exercise any remedy or obtain any relief under, any Legal Requirement or any order, writ,
injunction, judgment or decree to which the Company or any of the assets owned or used by the Company, is subject;
(c) contravene, conflict with or result in a violation of any of the terms or requirements of, or give any Governmental Body the right to
revoke, withdraw, suspend, cancel, terminate or modify, any Governmental Authorization that is held by the Company or that otherwise
relates to the Company’s business or to any of the assets owned or used by the Company;
(d) contravene, conflict with or result in a violation or breach of, or result in a default under, any provision of any Company Contract
that is or would constitute a Material Contract, or give any Person the right to: (i) declare a default or exercise any remedy under any such
Company Contract; (ii) accelerate the maturity or performance of any such Company Contract; or (iii) cancel, terminate or modify any such
Company Contract; or

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 (e) result in the imposition or creation of any lien or other Encumbrance upon or with respect to any asset owned or used by the
Company (except for minor liens that will not, in any case or in the aggregate, materially detract from the value of the assets subject thereto
or materially impair the operations of the Company).
Except for the filing of the Certificate of Merger with the Secretary of State of the State of Delaware and as set forth in Part 2.21 of the
Disclosure Schedule, the Company is not and the Company will not be required to make any filing with or give any notice to, or to obtain any
Consent from, any Person in connection with: (x) the execution, delivery or performance of this Agreement or any of the other agreements
referred to in this Agreement; or (y) the consummation of the Merger or any of the other transactions contemplated by this Agreement.

2.22 Vote Required.

(a) Merger Vote. The affirmative vote of: (i) the holders of a majority of the shares of Company Capital Stock (voting together as a
single class on an as-converted basis); and (ii) the holders of a majority of the shares of Company Preferred Stock (voting as a separate
class), are the only votes of the holders of any class or series of Company Capital Stock necessary to adopt this Agreement and approve the
other transactions contemplated by this Agreement (other than the Certificate Amendment) (the votes referred to in clauses “(i)” and “(ii)” of
this sentence being referred to collectively as the “Required Merger Stockholder Votes”).
(b) Certificate Amendment Vote. The affirmative vote of: (i) the holders of a majority of the shares of Series A Preferred Stock (voting
together as a separate class on an as-converted basis); (ii) the holders of 66 2/3% of the shares of Series B Preferred Stock (together voting
as a separate class on an as-converted basis); (iii) the holders of 66 2/3% of the shares of Series C Preferred Stock (voting as a separate class
on an as-converted basis); (iv) the holders of 66 2/3% of the shares of Series D Preferred Stock (voting as a separate class on an as-
converted basis); and (v) the holders of a majority of the shares of Company Capital Stock, are the only votes of the holders of any class or
series of Company Capital Stock necessary to approve the Certificate Amendment (the votes referred to in clauses “(i),” “(ii),” “(iii),” “(iv)”
and “(v)” of this sentence being referred to collectively as the “Required Amendment Stockholder Votes”).

2.23 Brokers. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the
Merger or any of the other transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Company, except
as set forth in Part 2.23 of the Disclosure Schedule. Except as set forth in Part 2.23 of the Disclosure Schedule, no Person is or may become entitled
to receive any fee or other amount from the Company for professional services performed or to be performed in connection with the Merger or any
of the other transactions contemplated by this Agreement.

2.24 Full Disclosure.

(a) Representations and Warranties. This Agreement (including the Disclosure Schedule) does not, and the Company Closing
Certificate (as defined in Section 6.7(d)) and Merger Consideration Certificate (as defined in Section 6.7(e)) will not: (i) contain any
representation, warranty or information that is false or misleading with respect to any material fact; or (ii) omit to state any material fact
necessary in order to make the representations, warranties and information contained and to be contained herein and therein (in the light of
the circumstances under which such representations, warranties and information were or will be made or provided) not false or misleading.

34.
 (b) Information Statement. The information supplied by the Company for inclusion in the Information Statement will not, as of the date
of the Information Statement: (i) contain any statement that is inaccurate or misleading with respect to any material fact; or (ii) omit to state
any material fact necessary in order to make such information (in the light of circumstances under which it is provided) not false or
misleading.

3. REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER S UB

Parent and Merger Sub represent and warrant to the Company as follows:

3.1 Due Organization. Parent is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware
and has full power and authority to conduct its business in the manner in which its business is currently being conducted and to own and use its
assets in the manner in which its assets are currently owned and used. Merger Sub is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware.

3.2 Non-Contravention; Consents.

(a) Non-Contravention. Neither: (i) the execution, delivery or performance of this Agreement or any of the other agreements,
documents or instruments referred to in this Agreement; nor (ii) the consummation of the Merger or any of the other transactions
contemplated by this Agreement or any of such other agreements, documents or instruments, will (with or without notice or lapse of time)
contravene, conflict with or result in a violation of: (A) any of the provisions of the certificate of incorporation or bylaws of Parent or Merger
Sub; (B) any resolution adopted by the stockholders, the board of directors or any committee of the board of directors of Parent or Merger
Sub; or (C) any provision of any material contract to which Parent is bound.
(b) Consents. Except for the filing of the Certificate of Merger with the Secretary of State of the State of Delaware and any applicable
filings required to be made by Parent or Merger Sub, notices required to be given by Parent or Merger Sub or Consents required to be
obtained by Parent or Merger Sub, in each case from any Governmental Body in connection with the Merger, neither Parent nor Merger Sub
will be required to make any filing with or give any notice to, or to obtain any Consent from, any Person in connection with: (i) the execution,
delivery or performance of this Agreement or any of the other agreements referred to in this Agreement; or (ii) the consummation of the
Merger or any of the other transactions contemplated by this Agreement.

3.3 Authority; Binding Nature of Agreement. Parent and Merger Sub have the absolute and unrestricted right, power and authority to enter
into and perform their obligations under this Agreement and under each other agreement, document and instrument referred to in this Agreement
to which Parent or Merger Sub is a party; and the execution, delivery and performance by Parent and Merger Sub of this Agreement and any of
each such other agreement, document and instrument have been duly authorized by all necessary action on the part of Parent and Merger Sub and
their respective boards of directors. This Agreement and each other agreement, document or instrument referred to in this Agreement to which
Parent or Merger Sub is a party constitutes the legal, valid and binding obligation of Parent and Merger Sub, as the case may be, enforceable
against them in accordance with its terms, subject to: (a) laws of general application relating to bankruptcy, insolvency and the relief of debtors;
and (b) rules of law governing specific performance, injunctive relief and other equitable remedies.

35.
 3.4 Legal Proceedings. There is no pending Legal Proceeding and, to the knowledge of Parent and Merger Sub, no Person has threatened to
commence any Legal Proceeding, that challenges, or that may have the effect of preventing, delaying, making illegal or otherwise interfering with,
the Merger or any of the other transactions contemplated by this Agreement.

4. CERTAIN COVENANTS OF THE COMPANY

4.1 Access and Investigation. During the period from the date of this Agreement and continuing until the earlier of the termination of this
Agreement pursuant to Section 8 or the Effective Time (the “Pre-Closing Period”), the Company shall, and shall cause its Representatives to:
(a) provide Parent and Parent’s Representatives with reasonable access during normal business hours to the Company’s Representatives,
personnel and assets and to all existing books, records, Tax Returns, work papers and other documents and information relating to the Company;
and (b) provide Parent and Parent’s Representatives with copies of such existing books, records, Tax Returns, work papers and other documents
and information relating to the Company, and with such additional financial, operating and other data and information regarding the Company, as
Parent may reasonably request; provided, however, that any attorney-client privileged documents or information need only be disclosed pursuant
to reasonable procedures designed to preserve such privilege. During the Pre-Closing Period, Parent and its Representatives will hold any such
information that is confidential to the Company in accordance with the provisions of the Confidentiality Agreement. During the Pre-Closing Period,
Parent may make inquiries of Persons having business relationships with the Company (including suppliers, licensors, distributors and customers)
and the Company shall help facilitate (and shall provide reasonable cooperation to Parent in connection with) such inquiries.

4.2 Operation of the Business of the Company. During the Pre-Closing Period, the Company shall ensure that:
(a) the Company shall conduct its business and operations in the ordinary course and in substantially the same manner as such
business and operations have been conducted prior to the date of this Agreement;
(b) the Company shall use reasonable efforts to preserve intact its current business organization, keep available the services of its
current officers and employees and maintain its relations and good will with all suppliers, customers, landlords, creditors, employees and
other Persons having business relationships with the Company;
(c) the Company shall not cancel any of its respective insurance policies identified in Part 2.17 of the Disclosure Schedule;
(d) the Company shall not declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of
capital stock or other securities, nor repurchase, redeem or otherwise reacquire any shares of capital stock or other securities;
(e) the Company shall not sell, issue or authorize the issuance of: (i) any capital stock or other security; (ii) any option or right to
acquire any capital stock (or cash based on the value of capital stock) or other security; or (iii) any instrument convertible into or
exchangeable for any capital stock (or cash based on the value of capital stock) or other security (except that the Company shall be permitted
to issue Company Capital Stock upon the exercise of Company Options or Company Warrants, or upon the conversion of Company
Preferred Stock, in each case outstanding as of the date of this Agreement and in accordance with their terms as in effect on the date of this
Agreement;

36.
 (f) the Company shall not amend or waive any of its rights under, or permit the acceleration of vesting under: (i) any provision of any
Company Option Plan; (ii) any provision of any agreement evidencing any outstanding Company Option; or (iii) any provision of any
restricted stock agreement;
(g) the Company shall not amend or permit the adoption of any amendment to the Company’s Charter Documents, or effect or permit
the Company to become a party to any Acquisition Transaction, recapitalization, reclassification of shares, stock split, reverse stock split or
similar transaction;
(h) the Company shall not form any Subsidiary or acquire any equity interest or other interest in any other Entity;
(i) the Company shall not make any capital expenditure, except for capital expenditures that, when added to all other capital
expenditures made on behalf of the Company during the Pre-Closing Period, do not exceed $50,000;
(j) the Company shall not: (i) enter into, or permit any of the assets owned or used by it to become bound by, any Contract that is or
would constitute a Material Contract (including any Contract relating to the manufacture or assembly of any products of the Company and
any lease of any real property to be occupied by the Company); or (ii) amend or prematurely terminate, or waive any material right or remedy
under, any such Contract;
(k) the Company shall not: (i) acquire, lease or license any right or other asset from any other Person for an aggregate value in excess
of $25,000; (ii) sell or otherwise dispose of, or lease or license, any right or other asset to any other Person; or (iii) waive or relinquish any
right, material to the conduct of the business of the Company as currently conducted;
(l) the Company shall not: (i) lend money to any Person (except that the Company may make routine travel advances to current
employees of the Company in the ordinary course of business consistent with past practices); or (ii) incur or guarantee any indebtedness for
borrowed money;
(m) the Company shall not: (i) except as contemplated by this Agreement, establish, adopt, amend or terminate any Company Employee
Plan; (ii) pay any bonus or make any profit-sharing payment, cash incentive payment or similar payment, other than commissions paid in the
ordinary course of business and consistent with past practices; (iii) increase the amount of the wages, salary, commissions, fringe benefits or
other compensation (including equity-based compensation, whether payable in cash or otherwise) or remuneration payable to any of its
directors, officers or employees; (iv) promote or change the title of any of its employees (retroactively or otherwise); or (v) hire or make an
offer to hire any new employee;
(n) except as required by GAAP, the Company shall not change any of its methods of accounting or accounting practices in any
material respect;
(o) the Company shall not make or change any Tax election, adopt or change a material accounting method in respect of Taxes, enter
into a Tax allocation agreement, Tax sharing agreement, Tax indemnity agreement or closing agreement, settle or comprise a claim, notice,
audit report or assessment in respect of Taxes, or consent to an extension or waiver of the statutory limitation period applicable to a claim or
assessment in respect of Taxes;

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 (p) the Company shall not commence or settle any Legal Proceeding other than: (i) for routine collection of bills; (ii) in such cases
where it in good faith determines that failure to commence a suit would result in material impairment of a valuable aspect of its business,
provided that it notifies Parent prior to the filing of such suit; or (iii) for breach of this Agreement;
(q) the Company shall not accelerate the collection of any accounts receivable or delay the payment of any accounts payable; and
(r) the Company shall not agree or commit to take any of the actions described in clauses “(d)” through “(q)” above.
Notwithstanding the foregoing, the Company may take any action described in: (i) clauses “(d)” through “(q)” above if: (A) Parent
gives its prior written consent to the taking of such action by the Company; or (B) such action is expressly contemplated by this Agreement;
and (ii) Part 4.2 of the Disclosure Schedule after consultation with Parent.

4.3 Notification; Updates to Disclosure Schedule.

(a) Notification. During the Pre-Closing Period, the Company shall promptly notify Parent in writing of: (i) the discovery by the
Company of any event, condition, fact or circumstance that occurred or existed on or prior to the date of this Agreement and that caused or
constitutes a breach of or an inaccuracy in any representation or warranty made by the Company in this Agreement; (ii) any event,
condition, fact or circumstance that occurs, arises or exists after the date of this Agreement and that would cause or constitute a breach of or
an inaccuracy in any representation or warranty made by the Company in this Agreement if: (A) such representation or warranty had been
made as of the time of the occurrence, existence or discovery of such event, condition, fact or circumstance; or (B) such event, condition,
fact or circumstance had occurred, arisen or existed on or prior to the date of this Agreement; (iii) any breach of any covenant or obligation
of the Company; and (iv) any event, condition, fact or circumstance that would make the timely satisfaction of any of the conditions set forth
in Section 6 or Section 7 impossible or unlikely.
(b) Updates. If any event, condition, fact or circumstance that is required to be disclosed pursuant to Section 4.3(a) requires any
change in the Disclosure Schedule, or if any such event, condition, fact or circumstance would require such a change assuming the
Disclosure Schedule were dated as of the date of the occurrence, existence or discovery of such event, condition, fact or circumstance, then
the Company shall promptly deliver to Parent an update to the Disclosure Schedule specifying such change. No such update shall be
deemed to supplement or amend the Disclosure Schedule for the purpose of: (i) determining the accuracy of any of the representations and
warranties made by the Company in this Agreement; or (ii) determining whether any of the conditions set forth in Section 6 has been
satisfied.

4.4 No Negotiation. During the Pre-Closing Period, the Company shall not, and the Company shall not authorize or permit any
Representative to: (a) solicit or knowingly encourage the initiation or submission of any expression of interest, inquiry, proposal or offer from any
Person (other than Parent) relating to a possible Acquisition Transaction; (b) participate in any discussions or negotiations or enter into any
agreement, understanding or arrangement with, or provide any non-public information to, any Person (other than Parent or its Representatives)
relating to or in connection with a possible Acquisition Transaction; or (c) entertain or accept any proposal or offer from any Person (other than
Parent) relating to a possible Acquisition Transaction. The Company shall promptly (and in any event within 48 hours of receipt thereof) notify
Parent in writing of any inquiry, indication of interest, proposal or offer relating to a possible Acquisition Transaction that is received by the
Company during the Pre-Closing Period (including the identity of the Person making or submitting such inquiry, indication of interest, proposal or
offer, and the terms thereof).

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 4.5 Termination of Certain Employee Benefit Plans.
(a) Termination of 401(k) Plan. The Company shall take (or cause to be taken) all actions necessary or appropriate to terminate,
effective no later than the day immediately preceding the Closing Date, any Plan that contains a cash or deferred arrangement intended to
qualify under Section 401(k) of the Code (the “401(k) Plans”), unless Parent, in its sole and absolute discretion, agrees to sponsor and
maintain such 401(k) Plans by providing the Company with written notice of such election at least three days before the Effective Time.
Unless Parent provides such notice to the Company, Parent shall receive from the Company, prior to the Effective Time, evidence that the
Company’s board of directors has adopted resolutions to terminate the 401(k) Plans (the form and substance of which resolutions shall be
subject to review and approval of Parent), effective no later than the date immediately preceding the Closing Date. In the event that the
distributions of assets from the trust of a 401(k) Plan which is terminated is reasonably anticipated to trigger liquidation charges, surrender
charges, or other fees to be imposed upon the account of any participant or beneficiary of such terminated plan or upon any Company or
plan sponsor, then the Company shall take such actions as are necessary to reasonably estimate the amount of such charges and/or fees and
provide such estimate in writing to Parent prior to the Effective Time.
(b) Termination of Severance Plans. The Company shall take (or cause to be taken) all actions necessary or appropriate to terminate,
effective no later than the day immediately preceding the Closing Date, any group severance, separation or salary continuation Company
Employee Plans, programs or arrangements (the “Severance Plans”), unless Parent, in its sole and absolute discretion, agrees to sponsor and
maintain such Severance Plans by providing the Company with written notice of such election at least three days before the Effective Time.
Unless Parent provides such notice to the Company, Parent shall receive from the Company, prior to the Effective Time, evidence that the
Company’s board of directors has adopted resolutions to terminate the Severance Plans (the form and substance of which resolutions shall
be subject to review and approval of Parent), effective no later than the date immediately preceding the Closing Date.

4.6 Termination of Agreements. The Company shall use its commercially reasonable efforts to cause the agreements and benefit plan
identified on Schedule 4.6 to be terminated effective as of the Effective Time.

4.7 FIRPTA Matters. At the Closing: (a) the Company shall deliver to Parent a statement (in such form as may be reasonably requested by
counsel to Parent) conforming to the requirements of Section 1.897- 2(h)(1)(i) of the United States Treasury Regulations (the “FIRPTA
Statement”); and (b) the Company shall deliver to the Internal Revenue Service the notification required under Section 1.897- 2(h)(2) of the United
States Treasury Regulations (the “FIRPTA Notification”).

5. CERTAIN COVENANTS OF THE PARTIES

5.1 Filings and Consents.
(a) Filings. Each party shall use commercially reasonable efforts to file, as soon as practicable after the date of this Agreement, all
notices, reports and other documents required to be filed by such party with any Governmental Body with respect to the Merger and the
other transactions

39.
contemplated by this Agreement, and to submit promptly any additional information requested by any such Governmental Body to the
extent that the Company or Parent determine that it is reasonable and prudent to do so. The Company and Parent shall respond as promptly
as practicable to any inquiries or requests received from any state attorney general, antitrust authority or other Governmental Body in
connection with antitrust or related matters. Subject to the confidentiality provisions of the Confidentiality Agreement, Parent and the
Company each shall promptly supply the other with any information which may be required in order to effectuate any filings (including
applications) pursuant to (and to otherwise comply with its obligations set forth in) this Section 5.1(a). Except where prohibited by applicable
Legal Requirements or any Governmental Body, and subject to the confidentiality provisions of the Confidentiality Agreement, the Company
shall: (i) cooperate with Parent with respect to any filings made by Parent in connection with the Merger; (ii) permit Parent to review (and
consider in good faith the views of Parent in connection with) any documents before submitting such documents to any Governmental Body
in connection with the Merger; and (iii) promptly provide Parent with copies of all filings, notices and other documents (and a summary of
any oral presentations) made or submitted by the Company with or to any Governmental Body in connection with the Merger.
(b) Efforts. Subject to Section 5.1(c), Parent and the Company shall use commercially reasonable efforts to take, or cause to be taken, all
actions necessary to consummate the Merger and make effective the other transactions contemplated by this Agreement. Without limiting
the generality of the foregoing, but subject to Section 5.1(c), each party to this Agreement: (i) shall make all filings (if any) and give all
notices (if any) required to be made and given by such party in connection with the Merger and the other transactions contemplated by this
Agreement; and (ii) shall use commercially reasonable efforts to obtain each Consent (if any) required to be obtained (pursuant to any
applicable Legal Requirement or Contract, or otherwise) by such party in connection with the Merger or any of the other transactions
contemplated by this Agreement.
(c) Limitations. Notwithstanding anything to the contrary contained in Section 5.1(b) or elsewhere in this Agreement, neither Parent
nor Merger Sub shall have any obligation under this Agreement: (i) to divest or agree to divest (or cause any of its Subsidiaries or the
Company to divest or agree to divest) any of its respective businesses, product lines or assets, or to take or agree to take (or cause any of its
Subsidiaries or the Company to take or agree to take) any other action or to agree (or cause any of its Subsidiaries or the Company to agree)
to any limitation or restriction on any of its respective businesses, product lines or assets; or (ii) to contest any Legal Proceeding relating to
the Merger or any of the other transactions contemplated by this Agreement.

5.2 Stockholder Consent.

(a) Information Statement. As promptly as practicable (and in any event, subject to the timely receipt of the approval of Parent as
contemplated within this Section 5.2(a), within five business days) after the execution of this Agreement, the Company shall, in accordance
with its Charter Documents and applicable Legal Requirements, provide to its stockholders an Information Statement and other appropriate
documents in connection with the obtaining of written consents of the stockholders of the Company in favor of the adoption of this
Agreement and approval of the Certificate Amendment and the other transactions contemplated by this Agreement. The Information
Statement shall include the unanimous recommendation of the board of directors of the Company in favor of the adoption of this Agreement
and the approval of the Certificate Amendment and the other transactions contemplated by this Agreement. Notwithstanding anything to
the contrary contained in this Agreement, the Information Statement and any other materials submitted to the Company’s stockholders in
connection with the transactions contemplated by this Agreement shall be subject to prior review and reasonable approval by Parent.

40.
 (b) Parachute Payments. As promptly as practicable after the execution of this Agreement, the Company shall submit to the
stockholders of the Company (in a manner satisfactory to Parent) for approval by such number of stockholders of the Company as is
required by the terms of Section 280G(b)(5)(B) of the Code a written consent in favor of a single proposal to render the parachute payment
provisions of Section 280G of the Code and the Treasury Regulations thereunder (collectively, “Section 280G”) inapplicable to any and all
payments and/or benefits provided pursuant to Company Employee Plans, Company Employee Agreements or other Contracts that might
result, separately or in the aggregate, in the payment of any amount and/or the provision of any benefit that would not be deductible by
reason of Section 280G or that would be subject to an excise tax under Section 4999 of the Code (together, the “Section 280G Payments”).
Any such stockholder approval shall be obtained in a manner which satisfies all applicable requirements of Section 280G(b)(5)(B) of the Code
and the Treasury Regulations thereunder, including Q-7 of Section 1.280G-1 of such Treasury Regulations. The Company agrees that: (i) in
the absence of such stockholder approval, no Section 280G Payments shall be made; and (ii) prior to the distribution to the Company’s
stockholders of the written consent described above, the Company shall deliver to Parent waivers duly executed by each Person who might
receive any Section 280G Payment. The form and substance of all stockholder approval documents contemplated by this Section 5.2(b),
including the waivers, shall be subject to the review and approval of Parent.

5.3 Public Announcements. From and after the date of this Agreement, except as expressly contemplated by this Agreement, the Company
shall not (and the Company shall ensure that none of its Representatives) issue any press release or make any public statement regarding (or
otherwise disclose to any Person the existence or terms of) this Agreement or the Merger or any of the other transactions or documents
contemplated by this Agreement, without Parent’s prior written consent. During the Pre-Closing Period, except as expressly contemplated by this
Agreement, Parent will use its best efforts to consult with the Company prior to issuing any press release or making any public statement
regarding this Agreement or the Merger, or regarding any of the other transactions contemplated by this Agreement.

5.4 Commercially Reasonable Efforts. Prior to the Closing: (a) the Company shall use all commercially reasonable efforts to cause the
conditions set forth in Section 6 to be satisfied on a timely basis; and (b) Parent and Merger Sub shall use all commercially reasonable efforts to
cause the conditions set forth in Section 7 to be satisfied on a timely basis.

5.5 Employee Benefits.

(a) Parent shall, to the extent permitted under Parent’s employee benefit plans and programs, use commercially reasonable efforts to:
(a) credit the employees of the Company who become employees of Parent as of the Closing (“Continuing Employees”) for their past service
with the Company for purposes of eligibility and vesting under Parent’s 401(k), medical, vision and dental plans (except to the extent such
service credit will result in benefit accruals or the duplication of benefits); and (b) grant the Continuing Employees service credit for
purposes of Parent’s vacation leave policy.
(b) Parent shall ensure that any payments required to be made pursuant to the Maple Incentive Bonus Plan are made on a timely basis
in accordance with the terms of the plan document.

5.6 Communications with Employees. Prior to the Closing Date, the Company shall not (and the Company shall ensure that none of its
Representatives) communicate with Company Employees regarding post-Closing employment matters with Parent or any Subsidiary or affiliate of
Parent, including post-Closing employee benefit plans and compensation, without the prior written approval of Parent.

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 5.7 Amendment to Certificate of Incorporation. The Company shall: (a) use commercially reasonable efforts to cause to be adopted the
Certificate Amendment; and (b) file the Certificate Amendment with the Secretary of State of the State of Delaware promptly after being requested
to do so by Parent and cause the Certificate Amendment to take effect upon filing.

6. CONDITIONS PRECEDENT TO OBLIGATIONS OF PARENT AND MERGER S UB

The obligations of Parent and Merger Sub to cause the Merger to be effected and otherwise cause the transactions contemplated by this
Agreement to be consummated are subject to the satisfaction (or waiver by Parent), at or prior to the Closing, of each of the following conditions:

6.1 Accuracy of Representations.

(a) Accuracy at Signing. Each of the representations and warranties made by the Company in this Agreement shall have been accurate
in all material respects as of the date of this Agreement, other than representations and warranties that are qualified by their terms by a
reference to a “Material Adverse Effect” or other materiality qualifications, or any similar qualifications, contained or incorporated directly or
indirectly in such representations and warranties, which representations and warranties as so qualified shall be true and correct in all
respects; provided, however, that for purposes of determining the accuracy of such representations and warranties any update of or
modification to the Disclosure Schedule made or purported to have been made on or after the date of this Agreement shall be disregarded.
(b) Accuracy at Closing. Each of the representations and warranties made by the Company in this Agreement shall be accurate in all
material respects as of the Closing Date as if made on and as of the Closing Date, other than representations and warranties which by their
terms are made as of a specific date, which shall have been accurate in all material respects as of such date and representations and
warranties that are qualified by their terms by a reference to a “Material Adverse Effect” or other materiality qualifications, or any similar
qualifications, contained or incorporated directly or indirectly in such representations and warranties, which representations and warranties
as so qualified shall be true and correct in all respects; provided, however, that for purposes of determining the accuracy of such
representations and warranties any update of or modification to the Disclosure Schedule made or purported to have been made on or after
the date of this Agreement shall be disregarded.

6.2 Performance of Covenants. Each of the covenants and obligations that the Company is required to comply with or to perform at or prior
to the Closing shall have been complied with and performed in all material respects.

6.3 Governmental and Other Consents.

(a) Governmental Consents. All filings with and other Consents of any Governmental Body required to be made or obtained in
connection with the Merger and the other transactions contemplated by this Agreement shall have been made or obtained and shall be in full
force and effect and any waiting period under any applicable antitrust or competition law, regulation or other Legal Requirement shall have
expired or been terminated.
(b) Other Consents. All material Consents of third parties (other than Governmental Bodies) required to be obtained in connection with
the Merger and the other transactions contemplated by this Agreement shall have been obtained and shall be in full force and effect.

42.
 6.4 No Material Adverse Effect. Since the date of this Agreement, there shall not have occurred any Material Adverse Effect, and no event
shall have occurred or circumstance shall exist that, in combination with any other events or circumstances, would reasonably be expected to have
or result in a Material Adverse Effect, in each case that has not been cured.

6.5 Stockholder Approval. The Certificate Amendment shall have been duly approved by the Required Amendment Stockholder Votes. The
adoption of this Agreement shall have been duly approved by the Required Merger Stockholder Votes. The number of shares of Company Capital
Stock that constitute (or that are or may be eligible to become) Dissenting Shares shall not be more than 5% of the Company Capital Stock
outstanding immediately prior to the Closing.

6.6 Certificate Amendment. The Company shall have provided Parent with evidence satisfactory to Parent that the Company has filed the
Certificate Amendment with the Secretary of State of the State of Delaware and that such Certificate Amendment is in full force and effect.

6.7 Agreements and Documents. Parent shall have received the following agreements and documents, each of which shall be in full force
and effect:
(a) the Escrow Agreement, duly executed by the Stockholders’ Agent;
(b) Non-competition and Non-Solicitation Agreements, in the form previously delivered to Parent by each Person identified on
Schedule 6.7(b), duly executed by each Person identified on Schedule 6.7(b);
(c) agreements, in form and substance reasonably satisfactory to Parent, terminating the agreements and benefit plan identified on
Schedule 4.6;
(d) a certificate duly executed on behalf of the Company by the chief executive officer and chief financial officer of the Company and
containing the representation and warranty of the Company that: (i) the conditions set forth in Sections 6.1, 6.2, 6.4, 6.5, 6.8, 6.10, 6.13 and
6.14, have been duly satisfied; and (ii) the Unaudited Interim Financial Statements (as defined below): (A) present fairly the financial position
of the Company as of the respective dates thereof and the results of operations and cash flows of the Company for the periods covered
thereby; and (B) have been prepared in accordance with GAAP applied on a basis consistent with the financial statements of the Company
as of, and for the period ended, December 31, 2007, except that the financial statements referred to in this clause “(d)” are subject to year-end
audit adjustments (which adjustments will not be material) (the “Company Closing Certificate”);
(e) a certificate (the “Merger Consideration Certificate”), duly executed on behalf of the Company by the chief financial officer of the
Company, containing the following information and the representation and warranty of the Company that all of such information is true and
accurate as of the Closing:
(i) the aggregate amount of Company Transaction Expenses: (A) paid prior to the Closing; and (B) payable after the Closing
(with respect to services performed or actions taken prior to the Closing);
(ii) the aggregate amount of unrestricted cash, accounts receivable (including accounts receivable recorded in connection with
customer invoices generated upon shipment of product pursuant to valid enforceable Contracts with customers) and inventory and
each category of

43.
 liabilities (including current and long term liabilities) of the Company as the Closing (it being understood that: (A) with respect to
accounts receivable, an allowance for doubtful accounts determined in accordance with GAAP applied on a basis consistent with past
practices shall also be included; and (B) with respect to inventory, obsolete inventory (determined in accordance with GAAP applied
on a basis consistent with past practices) shall not be included);
(iii) the name and address of record of each Person who is a stockholder of the Company immediately prior to the Effective Time
and who is entitled to receive Merger Consideration pursuant to this Agreement;
(iv) the number of shares of Company Capital Stock of each class and series held by each such stockholder immediately prior to
the Effective Time;
(v) the consideration that each stockholder is entitled to receive pursuant to Section 1.5;
(vi) the cash amount to be contributed to the Escrow Fund with respect to the shares of Company Capital Stock held by each
such stockholder pursuant to Section 1.5(c); and
(vii) the cash amount to be contributed to the Stockholders’ Agent Escrow Fund with respect to the shares of Company Capital
Stock held by each such stockholder pursuant to Section 1.5(c);
(f) documentation, reasonably satisfactory to Parent, in support of the calculation of the amounts set forth in the Merger Consideration
Certificate;
(g) documentation, reasonably satisfactory to Parent, evidencing the assignment by Massimiliano Poletto to the Company of the
domain name “MAZUNETWORKS.COM”;
(h) written resignations of all officers and directors of the Company, effective as of the Effective Time;
(i) the unaudited balance sheet of the Company as of September 30, 2008, and the related unaudited statement of income, statements of
stockholders’ equity and statements of cash flows for the nine months ended September 30, 2008, together with the notes thereto, all
prepared in accordance with GAAP applied on a basis consistent with the financial statements of the Company as of, and for the period
ended, December 31, 2007, except that the financial statements referred to in this clause “(i)” are subject to year-end audit adjustments (which
adjustments will not be material) (the “Unaudited Interim Financial Statements”);
(j) the Certificate of Merger, duly executed by the Company;
(k) written acknowledgments pursuant to which the Company’s outside legal counsel and any financial advisor, accountant or other
Person who performed services for or on behalf of the Company, or who is otherwise entitled to any compensation from the Company, in
connection with this Agreement, any of the transactions contemplated by this Agreement or otherwise, acknowledges: (i) the total amount of
fees, costs and expenses of any nature that is payable or has been paid to such Person in connection with this Agreement and any of the
transactions contemplated by this Agreement or otherwise; and (ii) that it has been paid in full and is not (and will not be) owed any other
amount by the Company with respect to this Agreement, the transactions contemplated by this Agreement or otherwise;

44.
 (l) a legal opinion executed by Gunderson Dettmer in the form previously agreed to by Parent and the Company; and
(m) the FIRPTA Statement executed by the Company.

6.8 FIRPTA Compliance. The Company shall have filed with the Internal Revenue Service the FIRPTA Notification.

6.9 No Restraints. No temporary restraining order, preliminary or permanent injunction or other order preventing the consummation of the
Merger shall have been issued by any court of competent jurisdiction and remain in effect, and there shall not be any Legal Requirement enacted
or deemed applicable to the Merger that makes consummation of the Merger illegal.

6.10 No Legal Proceedings. No Governmental Body and no other Person shall have commenced or threatened to commence any Legal
Proceeding: (a) challenging the Merger or any of the other transactions contemplated by this Agreement or seeking the recovery of damages in
connection with the Merger or any of the other transactions contemplated by this Agreement; (b) seeking to prohibit or limit the exercise by Parent
of any material right pertaining to its ownership of stock of Merger Sub or the Company; (c) that may have the effect of preventing, delaying,
making illegal or otherwise interfering with the Merger or any of the other transactions contemplated by this Agreement; or (d) seeking to compel
the Company, Parent or any affiliate of Parent to dispose of or hold separate any material assets as a result of the Merger or any of the other
transactions contemplated by this Agreement.

6.11 No Options/Warrants. The Company shall have provided Parent with evidence reasonably satisfactory to Parent as to the exercise or
termination of all options, warrants or other rights to purchase shares of Company Capital Stock.

6.12 Termination of Employee Plans. The Company shall have provided Parent with evidence reasonably satisfactory to Parent as to the
termination of the benefit plans referred to in Section 4.5.

6.13 Employees. None of the individuals identified on Schedule 6.13 shall have ceased to be employed by the Company, or shall have
expressed an intention to terminate his or her employment with the Company or to decline to accept employment with Parent.

6.14 Section 280G Stockholder Approval. Any agreements, contracts or arrangements that may result, separately or in the aggregate, in a
Section 280G Payment shall have been approved by such number of stockholders of the Company as is required by the terms of Section 280G in
order for such payments and benefits not to be deemed parachute payments under Section 280G of the Code, with such approval to be obtained in
a manner which satisfies all applicable requirements of Section 280G(b)(5)(B) of the Code and all applicable regulations (whether proposed or final)
relating to Section 280G of the Code, or, in the absence of such stockholder approval, each Person who would otherwise have been entitled to any
such payments or benefits shall have duly executed and delivered to Parent the waiver referred to in Section 5.2(b).

6.15 Release of Lighthouse Liens. The Company shall have provided Parent with either: (a) evidence reasonably satisfactory to Parent of
the release by Lighthouse Capital Partners V, L.P (and any affiliate thereof) of all Encumbrances on any of the assets of the Company; or (b) signed
documentation (including appropriate UCC-3 termination statements) reasonably satisfactory to Parent pursuant to which Lighthouse Capital
Partners V, L.P (and any affiliate thereof) will release all Encumbrances on any of the assets of the Company promptly after receipt of payment of
the outstanding amounts due under its loan agreement with the Company.

45.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY
The obligations of the Company to effect the Merger and otherwise consummate the transactions contemplated by this Agreement are subject to
the satisfaction (or waiver by the Company), at or prior to the Closing, of the following conditions:

7.1 Accuracy of Representations.

(a) Accuracy at Signing. Each of the representations and warranties made by Parent and Merger Sub in this Agreement shall have been
accurate in all material respects as of the date of this Agreement, other than representations and warranties that are qualified by their terms
by a reference to a “Material Adverse Effect” or other materiality qualifications, or any similar qualifications, contained or incorporated
directly or indirectly in such representations and warranties, which representations and warranties as so qualified shall be true and correct in
all respects.
(b) Accuracy at Closing. Each of the representations and warranties made by Parent and Merger Sub in this Agreement shall be
accurate in all material respects as of the Closing Date as if made on and as of the Closing Date, other than representations and warranties
which by their terms are made as of a specific date, which shall have been accurate in all material respects as of such date and
representations and warranties that are qualified by their terms by a reference to a “Material Adverse Effect” or other materiality
qualifications, or any similar qualifications, contained or incorporated directly or indirectly in such representations and warranties, which
representations and warranties as so qualified shall be true and correct in all respects.

7.2 Performance of Covenants. Each of the covenants and obligations that Parent and Merger Sub is required to comply with or to perform
at or prior to the Closing shall have been complied with and performed in all material respects.

7.3 Stockholder Approval. This Agreement shall have been duly adopted by the Required Merger Stockholder Votes.

7.4 Documents. The Company shall have received the following documents: (a) the Escrow Agreement, duly executed by Parent; and (b) a
certificate duly executed on behalf of Parent by an officer of Parent and containing the representation and warranty of Parent that the conditions
set forth in Section 7.1 and 7.2 have been satisfied.

7.5 No Restraints. No temporary restraining order, preliminary or permanent injunction or other order preventing the consummation of the
Merger shall have been issued by any court of competent jurisdiction and remain in effect, and there shall not be any Legal Requirement enacted
or deemed applicable to the Merger that makes consummation of the Merger illegal.

8. TERMINATION
8.1 Termination Events. This Agreement may be terminated prior to the Closing (whether before or after the adoption of this Agreement by
the Company’s stockholders):
(a) by the mutual written consent of Parent and the Company;

46.
 (b) by Parent if the Closing has not taken place on or before 5:00 p.m. (Pacific time) on May 20, 2009 (other than as a result of any
failure on the part of Parent to comply with or perform any covenant or obligation of Parent or Merger Sub set forth in this Agreement or in
any other agreement or instrument delivered to the Company in connection with the transactions contemplated by this Agreement);
(c) by the Company if the Closing has not taken place on or before 5:00 p.m. (Pacific time) on May 20, 2009 (other than as a result of
any failure on the part of the Company or any of the stockholders of the Company to comply with or perform any covenant or obligation set
forth in this Agreement or in any other agreement or instrument delivered to Parent in connection with the transactions contemplated by this
Agreement);
(d) by either Parent or the Company if: (i) a court of competent jurisdiction or other Governmental Body shall have issued a final and
nonappealable order, decree or ruling, or shall have taken any other action, having the effect of permanently restraining, enjoining or
otherwise prohibiting the Merger; or (ii) there shall be any Legal Requirement enacted, promulgated, issued or deemed applicable to the
Merger by any Governmental Body that would make consummation of the Merger illegal;
(e) by Parent if: (i) any of the representations and warranties of the Company contained in this Agreement shall be inaccurate as of the
date of this Agreement, or shall have become inaccurate as of a date subsequent to the date of this Agreement, such that the condition set
forth in Section 6.1 would not be satisfied; or (ii) any of the covenants of the Company contained in this Agreement shall have been
breached such that the condition set forth in Section 6.2 would not be satisfied; provided, however, that if an inaccuracy in any of the
representations and warranties of the Company as of a date subsequent to the date of this Agreement or a breach of a covenant by the
Company is curable by the Company through the use of reasonable efforts within 30 days after Parent notifies the Company in writing of the
existence of such inaccuracy or breach (the “Company Cure Period”), then Parent may not terminate this Agreement under this Section 8.1(e)
as a result of such inaccuracy or breach prior to the expiration of the Company Cure Period, provided the Company, during the Company
Cure Period, continues to exercise reasonable efforts to cure such inaccuracy or breach (it being understood that Parent may not terminate
this Agreement pursuant to this Section 8.1(e) with respect to such inaccuracy or breach if such inaccuracy or breach is cured prior to the
expiration of the Company Cure Period);
(f) by the Company if: (i) any of Parent’s representations and warranties contained in this Agreement shall be inaccurate as of the date
of this Agreement, or shall have become inaccurate as of a date subsequent to the date of this Agreement, such that the condition set forth
in Section 7.1 would not be satisfied; or (ii) if any of Parent’s covenants contained in this Agreement shall have been breached such that the
condition set forth in Section 7.2 would not be satisfied; provided, however, that if an inaccuracy in any of Parent’s representations and
warranties as of a date subsequent to the date of this Agreement or a breach of a covenant by Parent is curable by Parent through the use of
reasonable efforts within 30 days after the Company notifies Parent in writing of the existence of such inaccuracy or breach (the “Parent Cure
Period”), then the Company may not terminate this Agreement under this Section 8.1(f) as a result of such inaccuracy or breach prior to the
expiration of the Parent Cure Period, provided Parent, during the Parent Cure Period, continues to exercise reasonable efforts to cure such
inaccuracy or breach (it being understood that the Company may not terminate this Agreement pursuant to this Section 8.1(f) with respect to
such inaccuracy or breach if such inaccuracy or breach is cured prior to the expiration of the Parent Cure Period); or

47.
 (g) by Parent if the Required Merger Stockholder Votes or the Required Amendment Stockholder Votes are not obtained within one
day after the date of this Agreement.

8.2 Termination Procedures. If Parent wishes to terminate this Agreement pursuant to Section 8.1, Parent shall deliver to the Company a
written notice stating that Parent is terminating this Agreement and setting forth a brief description of the basis on which Parent is terminating this
Agreement. If the Company wishes to terminate this Agreement pursuant to Section 8.1, the Company shall deliver to Parent a written notice
stating that the Company is terminating this Agreement and setting forth a brief description of the basis on which the Company is terminating this
Agreement.

8.3 Effect of Termination. If this Agreement is terminated pursuant to Section 8.1, all further obligations of the parties under this Agreement
shall terminate; provided, however, that: (a) none of the Company or Parent shall be relieved of any obligation or liability arising from any prior
breach by such party of any provision of this Agreement; (b) the parties shall, in all events, remain bound by and continue to be subject to the
provisions set forth in Section 10; and (c) the parties shall, in all events, remain bound by and continue to be subject to Section 5.3 and the
Confidentiality Agreement.

9. INDEMNIFICATION, ETC.
9.1 Survival of Representations, Etc.
(a) General Survival. Subject to Section 9.1(b) and Section 9.1(d), the representations and warranties made by the Company in this
Agreement and the representations and warranties set forth in the Company Closing Certificate and the Merger Consideration Certificate, in
each case other than the Specified Representations, shall survive the Effective Time and shall expire on the first anniversary of the Closing
Date (the “Termination Date”); provided, however, that if, at any time prior to the Termination Date, any Indemnitee (acting in good faith)
delivers to the Stockholders’ Agent a written notice alleging the existence of an inaccuracy in or a breach of any of such representations and
warranties and asserting a claim for recovery under Section 9.2 based on such alleged inaccuracy or breach, then the claim asserted in such
notice shall survive the Termination Date until such time as such claim is fully and finally resolved.
(b) Specified Representations. Notwithstanding anything to the contrary contained in Section 9.1(a), but subject to Section 9.1(d), the
Specified Representations (other than the representations and warranties set forth in Section 2.14, which shall survive until 30 days after the
expiration of the statute of limitations applicable thereto (including any extensions thereof)) shall survive the Effective Time until the earlier
of: (i) 30 days after the expiration of the statute of limitations applicable thereto (including any extensions thereof); or (ii) the third
anniversary of the Closing Date; provided, however, that if, at any time prior to the applicable expiration date referred to in this sentence, any
Indemnitee (acting in good faith) delivers to the Stockholders’ Agent a written notice alleging the existence an inaccuracy in or a breach of
any of such Specified Representations and asserting a claim for recovery under Section 9.2 based on such alleged inaccuracy or breach, then
the claim asserted in such notice shall survive the Termination Date until such time as such claim is fully and finally resolved.
(c) Parent Representations. All representations and warranties made by Parent and Merger Sub shall terminate and expire as of the
Effective Time, and any liability of Parent or Merger Sub with respect to such representations and warranties shall thereupon cease.

48.
 (d) Intentional Misrepresentation; Fraud. Notwithstanding anything to the contrary contained in Section 9.1(a) or Section 9.1(b), the
limitations set forth in Section 9.1(a) and 9.1(b) shall not apply in the case of claims based upon intentional misrepresentation or fraud. For
the purposes of this Section 9, the term “fraud” is intended to encompass circumstances involving a misrepresentation made knowingly,
intentionally or with reckless indifference to the truth, rather than mere negligence or gross negligence.
(e) Representations Not Limited. The representations, warranties, covenants and obligations of the Company, Parent and Merger Sub,
and the rights and remedies that may be exercised by the Indemnitees, shall not be limited or otherwise affected by or as a result of any
information furnished to, or any investigation made by or knowledge of, any of the Indemnitees or any of their Representatives.
Notwithstanding anything contained in this Agreement, no party hereto makes any representations or warranties whatsoever as to the
accuracy of any estimates, projections, forecasts and budgets (it being understood, however, that: (i) the Company represents and warrants
to Parent that all such estimates, projections, forecasts and budgets have been prepared in good faith based upon assumptions and
information that the Company reasonably believed to be true and correct as of the time such estimates, projections, forecasts or budgets
were made available to Parent; and (b) no provision in this sentence or elsewhere in this Agreement shall limit any party’s rights or remedies
in the case of fraud).
(f) Disclosure Schedule. For purposes of this Agreement, each statement or other item of information set forth in the Disclosure
Schedule or in any update to the Disclosure Schedule shall be deemed to be a representation and warranty made by the Company in this
Agreement.

9.2 Indemnification.
(a) Indemnification by the Stockholders. From and after the Effective Time (but subject to Section 9.1), each Effective Time Holder
(collectively, the “Indemnitors”), severally and not jointly, shall hold harmless and indemnify each of the Indemnitees from and against, and
shall compensate and reimburse each of the Indemnitees for, any Damages which are directly or indirectly suffered or incurred by any of the
Indemnitees or to which any of the Indemnitees may otherwise directly or indirectly become subject (regardless of whether or not such
Damages relate to any third party claim) and which arise directly or indirectly from or as a result of, or are directly or indirectly connected
with:
(i) any inaccuracy in or breach of any representation or warranty made by the Company in this Agreement as of the date of this
Agreement (without giving effect to: (i) any materiality or similar qualification limiting the scope of such representation or warranty; or
(ii) any update of or modification to the Disclosure Schedule made or purported to have been made on or after the date of this
Agreement);
(ii) any inaccuracy in or breach of any representation or warranty made by the Company: (i) in this Agreement as if such
representation or warranty was made on and as of the Closing; or (ii) in the Company Closing Certificate (in each case, without giving
effect to: (A) any materiality or similar qualification limiting the scope of such representation or warranty; or (B) any update of or
modification to the Disclosure Schedule made or purported to have been made on or after the date of this Agreement);
(iii) any inaccuracy in or breach of any representation or warranty set forth in the Merger Consideration Certificate;
(iv) any breach of any covenant or obligation of the Company in this Agreement;

49.
 (v) the exercise by any stockholder of the Company of such stockholder’s appraisal rights under the DGCL for any amount in
excess of what is payable by Parent in accordance with Section 1.5 hereof; or
(vi) any Legal Proceeding relating to any breach or alleged breach or any other matter of the type referred to in clause “(i),” “(ii),”
“(iii),” “(iv)“ or “(v)” above (including any Legal Proceeding commenced by any Indemnitee for the purpose of enforcing any of its
rights under this Section 9).
(b) Damage to Parent. The parties acknowledge and agree that, if the Surviving Corporation suffers, incurs or otherwise becomes
subject to any Damages as a result of or in connection with any inaccuracy in or breach of any representation, warranty, covenant or
obligation, then (without limiting any of the rights of the Surviving Corporation as an Indemnitee) Parent shall also be deemed, by virtue of
its ownership of the stock of the Surviving Corporation, to have incurred Damages as a result of and in connection with such inaccuracy or
breach; provided, however, that any recovery by either party of such Damages shall preclude recovery of such Damages by the other party.
(c) Tax Matters. All indemnity payments made under this Agreement shall be treated as purchase price adjustments for federal and
state income tax purposes.

9.3 Limitations.
(a) Basket. Subject to Section 9.3(b), the Indemnitors shall not be required to make any indemnification payment pursuant to
Section 9.2(a)(i) or Section 9.2(a)(ii) for any inaccuracy in or breach of any representation or warranty in this Agreement until such time as the
total amount of all Damages (including the Damages arising from such inaccuracy or breach and all other Damages arising from any other
inaccuracies or breaches of any representations or warranties) that have been directly or indirectly suffered or incurred by any one or more
of the Indemnitees, or to which any one or more of the Indemnitees has or have otherwise directly or indirectly become subject, exceeds
$75,000 in the aggregate. If the total amount of such Damages exceeds $75,000 in the aggregate, then the Indemnitees shall be entitled to be
indemnified against and compensated and reimbursed for the entire amount of such Damages, and not merely the portion of such Damages
exceeding $75,000.
(b) Applicability of Basket. The limitations set forth in Section 9.3(a) shall not apply: (i) in the case of intentional misrepresentation or
fraud; (ii) to inaccuracies in or breaches of any of the Specified Representations; (iii) to the matters referred to in Sections 9.2(a)(iii), 9.2(a)(iv)
and 9.2(a)(v); or (v) to the matters referred to in Section 9.2(a)(vi) (to the extent related to any of the matters referred to in clauses “(i)”
through “(iii)” of this sentence).
(c) Recourse to Escrow. Subject to Section 9.3(d), recourse by the Indemnitees to the Escrow Amount shall be the Indemnitees’ sole
and exclusive remedy for monetary Damages resulting from the matters referred to in Section 9.2.
(d) Applicability of Liability Cap. The limitations set forth in Section 9.3(c) shall not apply: (i) in the case of intentional
misrepresentation or fraud; (ii) to inaccuracies in or breaches of any of the Specified Representations; (iii) to the matters referred to in
Sections 9.2(a)(iii), 9.2(a)(iv) and 9.2(a)(v); or (iv) to the matters referred to in Section 9.2(a)(vi) (to the extent related to any of the matters
referred to in clauses “(i)” through “(iii)” of this sentence). Except in the case of intentional misrepresentation or fraud, the total amount of
indemnification payments that each Indemnitor can be required to make to the Indemnitees pursuant to Section 9.2 shall be limited to the
Merger Consideration received by such Indemnitor.

50.
 9.4 No Contribution. Each Indemnitor waives, and acknowledges and agrees that he shall not have and shall not exercise or assert (or
attempt to exercise or assert), any right of contribution, right of indemnity or other right or remedy against Merger Sub or the Company in
connection with any indemnification obligation or any other liability to which he may become subject under or in connection with this Agreement
or any other agreement or document delivered to Parent in connection with this Agreement.

9.5 Defense of Third Party Claims. In the event of the assertion or commencement by any Person of any claim or Legal Proceeding (whether
against Merger Sub, the Company, Parent or any other Person) with respect to which any Indemnitor may become obligated to hold harmless,
indemnify, compensate or reimburse any Indemnitee pursuant to Section 9, Parent shall have the right, at its election, to proceed with the defense
of such claim or Legal Proceeding on its own with counsel reasonably satisfactory to the Stockholders’ Agent. If Parent so proceeds with the
defense of any such claim or Legal Proceeding:
(a) subject to the other provisions of Section 9, all reasonable and documented out-of-pocket expenses relating to the defense of such
claim or Legal Proceeding shall be borne and paid exclusively by the Indemnitors;
(b) each Indemnitor shall make available to Parent any documents and materials in his possession or control that may be necessary to
the defense of such claim or Legal Proceeding; and
(c) Parent shall have the right to settle, adjust or compromise such claim or Legal Proceeding; provided, however, that if Parent settles,
adjusts or compromises any such claim or Legal Proceeding without the consent of the Stockholders’ Agent, such settlement, adjustment or
compromise shall not be conclusive evidence of the amount of Damages incurred by the Indemnitee in connection with such claim or Legal
Proceeding (it being understood that if Parent requests that the Stockholders’ Agent consent to a settlement, adjustment or compromise, the
Stockholders’ Agent shall not unreasonably withhold or delay such consent).

Parent shall give the Stockholders’ Agent prompt written notice of the commencement of any such Legal Proceeding against Parent, Merger Sub
or the Company; provided, however, that any failure on the part of Parent to so notify the Stockholders’ Agent shall not limit any of the
obligations of the Indemnitors under Section 9 (except to the extent such failure materially prejudices the defense of such Legal Proceeding). If
Parent does not elect to proceed with the defense of any such claim or Legal Proceeding, the Stockholders’ Agent may proceed with the defense
of such claim or Legal Proceeding with counsel reasonably satisfactory to Parent; provided, however, that the Stockholders’ Agent may not settle,
adjust or compromise any such claim or Legal Proceeding without the prior written consent of Parent (which consent may not be unreasonably
withheld or delayed).

9.6 Setoff. Subject to the other provisions of this Section 9, in addition to any rights of setoff or other similar rights that Parent or any of the
other Indemnitees may have at common law or otherwise, Parent shall have the right to withhold and deduct any sum that may be owed to any
Indemnitee under this Section 9 from any amount otherwise payable by any Indemnitee to any Indemnitor in respect of shares of such
Indemnitor’s Company Capital Stock (it being understood that: (a) if there are any Available Escrow Funds (as defined below), Parent shall seek
recovery of any indemnification claim against such Available Escrow Funds prior to seeking recovery pursuant to the setoff rights described in
this Section 9.6; and (b) “Available Escrow Funds” shall mean any portion of the Escrow Fund that remains in the Escrow Fund and is not subject
to pending claims).

51.
10. MISCELLANEOUS PROVISIONS
10.1 Stockholders’ Agent.
(a) Appointment. By virtue of the adoption of this Agreement, the Indemnitors irrevocably nominate, constitute and appoint Donald A.
Sullivan as the agent and true and lawful attorney in fact of the stockholders (the “Stockholders’ Agent”), with full power of substitution, to
act in the name, place and stead of the Indemnitors for purposes of executing any documents and taking any actions that the Stockholders’
Agent may, in his sole discretion, determine to be necessary, desirable or appropriate in connection with any claim for indemnification,
compensation or reimbursement under Section 9 or under the Escrow Agreement. Donald A. Sullivan hereby accepts his appointment as
Stockholders’ Agent.
(b) Authority. The Indemnitors grant to the Stockholders’ Agent full authority to execute, deliver, acknowledge, certify and file on
behalf of such Indemnitors (in the name of any or all of the Indemnitors or otherwise) any and all documents that the Stockholders’ Agent
may, in his sole discretion, determine to be necessary, desirable or appropriate, in such forms and containing such provisions as the
Stockholders’ Agent may, in his sole discretion, determine to be appropriate, in performing his duties as contemplated by Section 10.1(a).
Notwithstanding anything to the contrary contained in this Agreement or in any other agreement executed in connection with the
transactions contemplated hereby: (i) each Indemnitee shall be entitled to deal exclusively with the Stockholders’ Agent on all matters
relating to any claim for indemnification, compensation or reimbursement under Section 9 or under the Escrow Agreement; and (ii) each
Indemnitee shall be entitled to rely conclusively (without further evidence of any kind whatsoever) on any document executed or purported
to be executed on behalf of any Indemnitor by the Stockholders’ Agent, and on any other action taken or purported to be taken on behalf of
any stockholder by the Stockholders’ Agent, as fully binding upon such stockholder.
(c) Power of Attorney. The Indemnitors recognize and intend that the power of attorney granted in Section 10.1(a): (i) is coupled with
an interest and is irrevocable; (ii) may be delegated by the Stockholders’ Agent; and (iii) shall survive the death or incapacity of each of the
Indemnitors.
(d) Replacement. If the Stockholders’ Agent shall die, resign, become disabled or otherwise be unable to fulfill his responsibilities
hereunder, the Indemnitors shall (by consent of those Persons entitled to at least a majority of the Merger Consideration), within 30 days
after such death, disability or inability, appoint a successor to the Stockholders’ Agent (who shall be reasonably satisfactory to Parent) and
immediately thereafter notify Parent of the identity of such successor. Any such successor shall succeed the Stockholders’ Agent as
Stockholders’ Agent hereunder. If for any reason there is no Stockholders’ Agent at any time, all references herein to the Stockholders’
Agent shall be deemed to refer to the Indemnitors.
(e) Stockholder’s Agent Escrow Fund. The Company and the Stockholders’ Agent will, at least two days prior to the Closing Date,
direct by joint written notice(s) to the Paying Agent that on the Closing Date a portion of the Merger Consideration otherwise payable to the
Effective Time Holders, in an amount equal to the Stockholders’ Agent Escrow Amount, shall be withheld and paid directly by the Paying
Agent to an account maintained by the Escrow Agent pursuant to the terms of an escrow agreement in a form to be agreed to by the
Company and the Stockholders’ Agent (the

52.
 “Stockholders’ Agent Escrow Agreement”) as designated in such notice, as a fund for the fees and expenses of the Stockholders’ Agent
incurred in connection with this Agreement (the “Stockholders’ Agent Escrow Fund”), with any balance of the Stockholders’ Agent Escrow
Fund not used for such purposes to be returned to the Effective Time Holders in accordance with the Stockholders’ Agent Escrow
Agreement. The Effective Time Holders, by approval of this Agreement, agree that all interest or other income earned from the investment of
the Stockholders’ Agent Escrow Fund in any Tax year shall be reported as allocated to the Effective Time Holders in proportion to their
interests in the Stockholders’ Agent Escrow Fund.
(f) Exculpation. The Stockholders’ Agent shall not be liable to any Effective Time Holder for any act done or omitted hereunder as
Stockholders’ Agent while acting in good faith and in the exercise of reasonable judgment, and any act done or omitted pursuant to the
advice of counsel shall be conclusive evidence of such good faith. The Effective Time Holders shall jointly and severally indemnify the
Stockholders’ Agent and hold him harmless against any loss, liability or expense incurred without gross negligence or bad faith on the part
of the Stockholders’ Agent and arising out of or in connection with the acceptance or administration of his duties hereunder. Nothing in this
paragraph shall limit Parent’s rights against the Stockholders’ Agent.

10.2 Further Assurances. Each party hereto shall execute and cause to be delivered to each other party hereto such instruments and other
documents, and shall take such other actions, as such other party may reasonably request (prior to, at or after the Closing) for the purpose of
carrying out or evidencing any of the transactions contemplated by this Agreement.

10.3 Fees and Expenses. Subject to Sections 1.5 and 9, the Escrow Agreement and Exhibit B, each party to this Agreement shall bear and pay
all fees, costs and expenses that have been incurred or that are incurred in the future by such party in connection with the transactions
contemplated by this Agreement, including all fees, costs and expenses incurred by such party in connection with or by virtue of: (a) the
negotiation, preparation and review of this Agreement (including the Disclosure Schedule) and all agreements, certificates, opinions and other
instruments and documents delivered or to be delivered in connection with the transactions contemplated by this Agreement; (b) the preparation
and submission of any filing or notice required to be made or given in connection with any of the transactions contemplated by this Agreement,
and the obtaining of any Consent required to be obtained in connection with any of such transactions; and (c) the consummation of the Merger.

10.4 Attorneys’ Fees. If any Legal Proceeding relating to this Agreement or the enforcement of any provision of this Agreement is brought
against any party hereto, the prevailing party shall be entitled to recover reasonable attorneys’ fees, costs and disbursements (in addition to any
other relief to which the prevailing party may be entitled).

10.5 Notices. Any notice or other communication required or permitted to be delivered to any party under this Agreement shall be in writing
and shall be deemed properly delivered, given and received: (a) if delivered by hand, when delivered; (b) if sent via facsimile with confirmation of
receipt, when transmitted and receipt is confirmed; (c) if sent by electronic mail, telegram, cablegram or other electronic transmission, upon
delivery; (d) if sent by registered, certified or first class mail, the third business day after being sent; and (e) if sent by overnight delivery via a
national courier service, one business day after being sent, in each case to the address or facsimile telephone number set forth beneath the name
of such party below (or to such other address or facsimile telephone number as such party shall have specified in a written notice given to the
other parties hereto):
If to Parent or Merger Sub:
Riverbed Technology, Inc.
199 Fremont St.
San Francisco, CA 94105
Attention: Brett Nissenberg
Facsimile: (415) 520-0208
Email: brett.nissenberg@riverbed.com

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 If to the Company:
Mazu Networks, Inc.
125 CambridgePark Drive, 4th Floor
Cambridge, MA 02140
Attention: Paul Brady, Chief Executive Officer
Facsimile: (617) 354-9272
Email: paul.brady@mazunetworks.com
with a copy (which shall not constitute notice) to:
Gunderson Dettmer
610 Lincoln Street
Waltham, MA 02451
Attention: Marc F. Dupré
Facsimile: (781) 890-8800
Email: mdupre@gunder.com
If to the Stockholders’ Agent:
Donald A. Sullivan
c/o Greylock Partners
880 Winter Street, Suite 300
Waltham, MA 02451
Facsimile: (781) 622-2300
Email: dsullivan@greylock.com

10.6 Headings. The bold-faced headings contained in this Agreement are for convenience of reference only, shall not be deemed to be a part
of this Agreement and shall not be referred to in connection with the construction or interpretation of this Agreement.

10.7 Counterparts and Exchanges by Electronic Transmission or Facsimile. This Agreement may be executed in several counterparts, each
of which shall constitute an original and all of which, when taken together, shall constitute one agreement. The exchange of a fully executed
Agreement (in counterparts or otherwise) by electronic transmission in .PDF format or by facsimile shall be sufficient to bind the parties to the
terms and conditions of this Agreement.

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 10.8 Governing Law; Dispute Resolution.
(a) Governing Law. This Agreement shall be construed in accordance with, and governed in all respects by, the internal laws of the
State of Delaware (without giving effect to principles of conflicts of laws).
(b) Venue. Except as otherwise provided in the Escrow Agreement or in Section 10.8(c), any Legal Proceeding relating to this
Agreement or the enforcement of any provision of this Agreement (including a Legal Proceeding based upon intentional misrepresentation
or fraud) may be brought or otherwise commenced in any state or federal court located in the State of Delaware. Each party to this
Agreement: (i) expressly and irrevocably consents and submits to the jurisdiction of each state and federal court located in the State of
Delaware (and each appellate court located in the State of Delaware) in connection with any such Legal Proceeding; (ii) agrees that each
state and federal court located in the State of Delaware shall be deemed to be a convenient forum; and (iii) agrees not to assert (by way of
motion, as a defense or otherwise), in any such Legal Proceeding commenced in any state or federal court located in the State of Delaware,
any claim that such party is not subject personally to the jurisdiction of such court, that such Legal Proceeding has been brought in an
inconvenient forum, that the venue of such proceeding is improper or that this Agreement or the subject matter of this Agreement may not
be enforced in or by such court.
(c) Indemnification Claims. Any claim for indemnification, compensation or reimbursement pursuant to Section 9 (and, at the option of
any Indemnitee, any other claim for a monetary remedy, such as in the case of a claim based upon intentional misrepresentation or fraud,
relating to this Agreement or the Merger after the Closing) shall be brought and resolved exclusively in accordance with Exhibit B being
understood that, for the avoidance of doubt and without limiting any portion of Section 10.8(b): (i) at the option of any Indemnitee, any claim
based upon intentional misrepresentation or fraud may be brought and resolved in accordance with Section 10.8(b) rather than in accordance
with Exhibit B; and (ii) nothing in this Section 10.8(c) shall prevent Parent from seeking preliminary injunctive relief from a court of competent
jurisdiction).

10.9 Successors and Assigns. This Agreement shall be binding upon: (a) the Company and its successors and assigns (if any); (b) Parent
and its successors and assigns (if any); and (c) Merger Sub and its successors and assigns (if any). This Agreement shall inure to the benefit of:
(i) the Company; (ii) Parent; (iii) Merger Sub; (iv) the other Indemnitees; and (v) the respective successors and assigns (if any) of the foregoing.
After the Closing Date, Parent may freely assign any or all of its rights under this Agreement (including its indemnification rights under Section 9),
in whole or in part, to any other Person without obtaining the consent or approval of any other party hereto or of any other Person.

10.10 Remedies Cumulative; Specific Performance. The rights and remedies of the parties hereto shall be cumulative (and not alternative).
The parties to this Agreement agree that, in the event of any breach or threatened breach by any party to this Agreement of any covenant,
obligation or other provision set forth in this Agreement, for the benefit of any other party to this Agreement: (a) such other party shall be entitled
(in addition to any other remedy that may be available to it) to: (i) a decree or order of specific performance or mandamus to enforce the observance
and performance of such covenant, obligation or other provision; and (ii) an injunction restraining such breach or threatened breach; and (b) such
other party shall not be required to provide any bond or other security in connection with any such decree, order or injunction or in connection
with any related action or Legal Proceeding.

55.
 10.11 Waiver. No failure on the part of any Person to exercise any power, right, privilege or remedy under this Agreement, and no delay on
the part of any Person in exercising any power, right, privilege or remedy under this Agreement, shall operate as a waiver of such power, right,
privilege or remedy; and no single or partial exercise of any such power, right, privilege or remedy shall preclude any other or further exercise
thereof or of any other power, right, privilege or remedy. No Person shall be deemed to have waived any claim arising out of this Agreement, or
any power, right, privilege or remedy under this Agreement, unless the waiver of such claim, power, right, privilege or remedy is expressly set forth
in a written instrument duly executed and delivered on behalf of such Person; and any such waiver shall not be applicable or have any effect
except in the specific instance in which it is given.

10.12 Waiver of Jury Trial. Each of the parties hereto hereby irrevocably waives any and all right to trial by jury in any Legal Proceeding
arising out of or related to this Agreement or the transactions contemplated hereby.

10.13 Amendments. This Agreement may not be amended, modified, altered or supplemented other than by means of a written instrument
duly executed and delivered: (a) prior to the Closing Date, on behalf of all parties hereto; and (b) after the Closing Date, on behalf of Parent and the
Stockholders’ Agent (acting exclusively for and on behalf of all of the Effective Time Holders).

10.14 Severability. In the event that any provision of this Agreement, or the application of any such provision to any Person or set of
circumstances, shall be determined to be invalid, unlawful, void or unenforceable to any extent, the remainder of this Agreement, and the
application of such provision to Persons or circumstances other than those as to which it is determined to be invalid, unlawful, void or
unenforceable, shall not be impaired or otherwise affected and shall continue to be valid and enforceable to the fullest extent permitted by law.

10.15 Parties in Interest. Except for the provisions of Section 9, none of the provisions of this Agreement is intended to provide any rights
or remedies to any Person other than the parties hereto and their respective successors and assigns (if any).

10.16 Entire Agreement. This Agreement and the other agreements referred to herein set forth the entire understanding of the parties hereto
relating to the subject matter hereof and thereof and supersede all prior agreements and understandings among or between any of the parties
relating to the subject matter hereof and thereof; provided, however, that the Confidentiality Agreement shall not be superseded by this
Agreement and shall remain in effect in accordance with its terms until the earlier of: (a) the Effective Time; or (b) the date on which such
Confidentiality Agreement is terminated in accordance with its terms.

10.17 Disclosure Schedule. The Disclosure Schedule shall be arranged in separate parts corresponding to the numbered and lettered
sections contained herein permitting such disclosure, and the information disclosed in any numbered or lettered part shall be deemed to relate to
and to qualify only the particular representation or warranty set forth in the corresponding numbered or lettered section herein permitting such
disclosure, provided, however, that any information disclosed in the Disclosure Schedule shall be deemed disclosed and incorporated into any
other section of the Disclosure Schedule to the extent that it is readily apparent from a plain reading of the disclosure the such disclosure is
applicable to such other sections.

56.
10.18 Construction.
(a) Gender; Etc. For purposes of this Agreement, whenever the context requires: the singular number shall include the plural, and vice
versa; the masculine gender shall include the feminine and neuter genders; the feminine gender shall include the masculine and neuter
genders; and the neuter gender shall include the masculine and feminine genders.
(b) Ambiguities. The parties hereto agree that any rule of construction to the effect that ambiguities are to be resolved against the
drafting party shall not be applied in the construction or interpretation of this Agreement.
(c) Including. As used in this Agreement, the words “include” and “including,” and variations thereof, shall not be deemed to be terms
of limitation, but rather shall be deemed to be followed by the words “without limitation.”
(d) References. Except as otherwise indicated, all references in this Agreement to “Sections,” “Schedules” and “Exhibits” are intended
to refer to Sections of this Agreement and Schedules and Exhibits to this Agreement.

[Remainder of page intentionally left blank]

57.
The parties hereto have caused this Agreement to be executed and delivered as of the date first written above.

RIVERBED TECHNOLOGY, INC.,

a Delaware corporation

By: /s/ Jerry M. Kennelly

Jerry M. Kennelly
Chief Executive Officer

MAPLE ACQUISITION S UB, INC.,

a Delaware corporation

By: /s/ Jerry M. Kennelly

Jerry M. Kennelly
Chief Executive Officer

MAZU NETWORKS, INC.,

a Delaware corporation

By: /s/ Paul Brady

Paul Brady
Chief Executive Officer

S TOCKHOLDERS’ AGENT:

/s/ Donald A. Sullivan

Donald A. Sullivan
 EXHIBIT A

CERTAIN DEFINITIONS

For purposes of the Agreement (including this Exhibit A):

Acquisition Transaction. “Acquisition Transaction” shall mean any transaction or series of transactions involving:
(e) the sale, license or disposition of all or a material portion of the Company’s business or assets;
(f) the issuance, disposition or acquisition of: (i) any capital stock or other equity security of the Company (other than Company
Capital Stock issued upon exercise of Company Options or Company Warrants outstanding as of the date of the Agreement); (ii) any option,
call, warrant or right (whether or not immediately exercisable) to acquire any capital stock, unit or other equity security of the Company (other
than stock options granted to employees of the Company in routine transactions in accordance with Section 4.2 of the Agreement); or
(iii) any security, instrument or obligation that is or may become convertible into or exchangeable for any capital stock, unit or other equity
security of the Company; or
(g) any merger, consolidation, business combination, reorganization or similar transaction involving any the Company.

Agreement. “Agreement” shall mean the Agreement of Merger to which this Exhibit A is attached (including the Disclosure Schedule), as it may
be amended from time to time.

Certificate Amendment. “Certificate Amendment” shall mean the amendment to the Company’s Certificate of Incorporation in the form of Exhibit C
to the Agreement.

Code. “Code” shall mean the Internal Revenue Code of 1986, as amended.

Company Capital Stock. “Company Capital Stock” shall mean the shares of Company Common Stock and Company Preferred Stock.

Company Common Stock. “Company Common Stock” shall mean the shares of common stock of the Company, par value $0.0001 per share.

Company Contract. “Company Contract” shall mean any Contract: (a) to which the Company is a party; (b) by which the Company or any of its
assets is or may become bound or under which the Company has, or may become subject to, any obligation; or (c) under which the Company has
or may acquire any right or interest.

Company Employee. “Company Employee” shall mean any current or former employee, independent contractor or director of the Company.

Company Employee Agreement. “Company Employee Agreement” shall mean each management, employment, severance, consulting, relocation,
repatriation or expatriation agreement or other Contract between the Company and any Company Employee, other than any such management,
employment, severance, consulting, relocation, repatriation or expatriation agreement or other Contract with a Company Employee which is
terminable “at will” without any obligation on the part of the Company to make any payments or provide any benefits in connection with such
termination.
Company Employee Plan. “Company Employee Plan” shall mean any plan, program, policy, practice, Contract or other arrangement providing for
compensation, severance, termination pay, deferred compensation, performance awards, stock or stock-related awards, fringe benefits or other
employee benefits or remuneration of any kind, whether written, unwritten or otherwise, funded or unfunded, that is or has been maintained,
contributed to, or required to be contributed to, by the Company for the benefit of any Company Employee, or with respect to which the Company
has or may have any liability or obligation, excluding any Company Employee Agreement.

Company IP. “Company IP” shall mean all Intellectual Property and Intellectual Property Rights in which the Company has (or purports to have) an
ownership interest or an exclusive license or similar exclusive right.

Company IP Contract. “Company IP Contract” shall mean any Contract to which the Company is or was a party or by which the Company is or
was bound, that contains any assignment or license of, or any covenant not to assert or enforce, any Intellectual Property Right or that otherwise
relates to any Company IP or any Intellectual Property developed by, with or for the Company.

Company Option. “Company Option” shall mean each option to purchase shares of Company Capital Stock (or exercisable for cash) outstanding
under the Company Option Plan or otherwise.

Company Option Plan. “Company Option Plan” shall mean the Company’s 2000 Stock Option Plan.

Company Preferred Stock. “Company Preferred Stock” shall mean the shares of Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock and Series D Preferred Stock, each having a par value of $0.0001 per share.

Company Privacy Policy. “Company Privacy Policy” shall mean each external or internal, past or present privacy policy of the Company, including
any policy relating to: (a) the privacy of users of any Company Website; (b) the collection, storage, disclosure, and transfer of any User Data or
Personal Data; and (c) any employee Personal Data.

Company Transaction Expenses. “Company Transaction Expenses” shall mean all fees, costs, expenses, payments, expenditures or Liabilities of
the Company (including those described in Section 10.3 of the Agreement), whether incurred prior to the date of the Agreement, during the Pre-
Closing Period or at the Effective Time, and whether or not invoiced prior to the Effective Time, that relate to the Agreement, any of the
transactions contemplated by the Agreement, including any fees, costs or expenses payable to the Company’s outside legal counsel or to any
financial advisor, accountant or other Person who performed services for or on behalf of the Company, or who is otherwise entitled to any
compensation from the Company, in connection with the Agreement, any of the transactions contemplated by the Agreement and the process
resulting in such transactions.

Company Warrant. “Company Warrant” shall mean each warrant to purchase shares of Company Capital Stock (or exercisable for cash).

Company Website. “Company Website” shall mean the website operated by the Company at http://www.mazunetworks.com.
Confidentiality Agreement. “Confidentiality Agreement” shall mean that certain Mutual Nondisclosure Agreement dated September 11, 2007
between Parent and the Company.

Consent. “Consent” shall mean any approval, clearance, consent, ratification, permission, waiver or authorization (including any Governmental
Authorization).

Contaminant. “Contaminant” includes any material, substance, chemical, gas, liquid, waste, effluent, pollutant or contaminant which, whether on
its own or admixed with another, is identified or defined in or regulated by or pursuant to any Environmental Laws or which upon release into the
Environment presents a danger to the Environment or to the health or safety or welfare of any Person.

Contract. “Contract” shall mean any written, oral or other agreement, contract, subcontract, lease, understanding, arrangement, instrument, note,
warranty, insurance policy, benefit plan or legally binding commitment or undertaking of any nature.

Damages. “Damages” shall include any loss, damage, injury, decline in value, lost opportunity, Liability, claim, demand, settlement, judgment,
award, fine, penalty, Tax, fee (including reasonable and documented attorneys’ fees), charge, cost (including reasonable costs of investigation) or
expense of any nature.

Disclosure Schedule. “Disclosure Schedule” shall mean the schedule (dated as of the date of the Agreement) delivered to Parent on behalf of the
Company and prepared in accordance with Section 10.17 of the Agreement.

Effective Time Holders. “Effective Time Holders” shall mean the Non-Dissenting Stockholders.

Encumbrance. “Encumbrance” shall mean any lien, pledge, hypothecation, charge, mortgage, security interest, encumbrance, claim or restriction of
any nature.

Entity. “Entity” shall mean any corporation (including any non-profit corporation), general partnership, limited partnership, limited liability
partnership, joint venture, estate, trust, company (including any limited liability company or joint stock company), firm or other enterprise,
association, organization or entity.

Environment. “Environment” includes: (a) any and all buildings, structures, fixtures, fittings, appurtenances, pipes, conduits, valves, tanks,
vessels and containers whether above or below ground level; and (b) ambient air, land surface, sub-surface strata, soil, surface water, ground
water, river sediment, marshes, wet lands, flora and fauna.

Environmental Law. “Environmental Law” shall mean: (a) the common law; and (b) all Legal Requirements, by-laws, orders, instruments, directives,
decisions, injunctions and judgments of any government, local government, international, supranational, executive, administrative, judicial or
regulatory authority or agency and all approved codes of practice (whether voluntary or compulsory) relating to the protection of the Environment
or of human health or safety or welfare or to the manufacture, formulation, processing, treatment, storage, containment, labeling, handling,
transportation, distribution, recycling, reuse, release, disposal, removal, remediation, abatement or clean-up of any Contaminant and any
amendment thereto and any and all regulations, orders and notices made or served thereunder or pursuant thereto).
Environmental Licenses. “Environmental License” means any Consent or Governmental Approval required by or pursuant to any applicable
Environmental Laws.

Environmental Release. “Environmental Release” means the spilling, leaking, pumping, pouring, emitting, releasing, emptying, discharging,
injecting, escaping, leaching, dumping, leaving, discarding or disposing of any Contaminant into or upon the Environment.

Escrow Agent. “Escrow Agent” shall mean U.S. Bank, N.A.

Escrow Agreement. “Escrow Agreement” shall mean the escrow agreement to be entered into among Parent, the Stockholders’ Agent and the
Escrow Agent on the Closing Date, substantially in the form previously agreed to by Parent and the Company.

Escrow Fund. “Escrow Fund” shall mean the escrow fund established pursuant to the Escrow Agreement.

GAAP. “GAAP” shall mean generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the
Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board, that are applicable to the circumstances of the date of determination, consistently applied.

Governmental Authorization. “Governmental Authorization” shall mean any: (a) permit, license, certificate, franchise, permission, clearance,
registration, qualification or authorization issued, granted, given or otherwise made available by or under the authority of any Governmental Body
or pursuant to any Legal Requirement; or (b) right under any Contract with any Governmental Body.

Governmental Body. “Governmental Body” shall mean any: (a) nation, state, commonwealth, province, territory, county, municipality, district or
other jurisdiction of any nature; (b) federal, state, local, municipal, foreign or other government; or (c) governmental or quasi-governmental
authority of any nature (including any governmental division, department, agency, commission, instrumentality, official, organization, unit, body or
Entity and any court or other tribunal).

Indemnitees. “Indemnitees” shall mean the following Persons: (a) Parent; (b) Parent’s current and future affiliates (including Merger Sub and,
following the Merger, the Surviving Corporation); (c) the respective Representatives of the Persons referred to in clauses “(a)” and “(b)” above;
and (d) the respective successors and assigns of the Persons referred to in clauses “(a)”, “(b)” and “(c)” above; provided, however, that the
Effective Time Holders shall not be deemed to be “Indemnitees.”

Information Statement. “Information Statement” shall mean a statement prepared by the Company and relating to the vote by the stockholders of
the Company on the adoption of the Agreement and the approval of the Certificate Amendment and the other transactions contemplated by the
Agreement.

Intellectual Property. “Intellectual Property” shall mean sales methodologies and processes, training protocols and similar methods and
processes, algorithms, APIs, apparatus, circuit designs and assemblies, gate arrays, net lists, test vectors, databases, data collections, diagrams,
formulae, inventions (whether or not patentable), know-how, logos, marks (including brand names, product names, logos, and slogans), methods,
network configurations and architectures, processes, proprietary information, protocols, schematics, specifications, software, software code (in
any form, including source code and executable or object code), subroutines, techniques, user interfaces, URLs, web sites, works of authorship
and other forms of technology (whether or not embodied in any tangible form and including all available tangible embodiments of the foregoing,
such as instruction manuals, laboratory notebooks, prototypes, samples, studies and summaries).
Intellectual Property Rights. “Intellectual Property Rights” shall mean all rights of the following types, which may exist or be created under the
laws of any jurisdiction in the world: (a) rights associated with works of authorship, including exclusive exploitation rights, copyrights and moral
rights; (b) trademark and trade name rights and similar rights; (c) trade secret rights; (d) patent and industrial property rights; (e) other proprietary
rights in Intellectual Property; and (f) rights in or relating to registrations, renewals, extensions, combinations, divisions, and reissues of, and
applications for, any of the rights referred to in clauses “(a)” through “(e)” above.

Knowledge. An individual shall be deemed to have “Knowledge” of a particular fact or other matter if: (a) such individual is actually aware of such
fact or other matter; or (b) a prudent individual, after reasonable investigation, should have known such fact or other matter. The Company shall be
deemed to have “Knowledge” of a particular fact or other matter if any executive officer or director of the Company or any other Person identified
on Annex I to this Exhibit A has Knowledge of such fact or other matter.

Legal Proceeding. “Legal Proceeding” shall mean any action, suit, litigation, arbitration, proceeding (including any civil, criminal, administrative,
investigative or appellate proceeding), hearing, audit or investigation commenced, brought, conducted or heard by or before, or otherwise
involving, any court or other Governmental Body or any arbitrator or arbitration panel.

Legal Requirement. “Legal Requirement” shall mean any federal, state, local, municipal, foreign or other law, statute, constitution, principle of
common law, resolution, ordinance, code, edict, decree, rule, regulation, ruling or requirement issued, enacted, adopted, promulgated, implemented
or otherwise put into effect by or under the authority of any Governmental Body.

Liability. “Liability” shall mean any debt, obligation, duty or liability of any nature (including any unknown, undisclosed, unmatured, unaccrued,
unasserted, contingent, indirect, conditional, implied, vicarious, derivative, joint, several or secondary liability), regardless of whether such debt,
obligation, duty or liability would be required to be disclosed on a balance sheet prepared in accordance with GAAP and regardless of whether
such debt, obligation, duty or liability is immediately due and payable.

Made Available. Any statement in the Agreement to the effect that any information, document or other material has been “Made Available” shall
mean that: (a) such information, document or material was made available by the Company for review by Parent or Parent’s Representatives for a
reasonable period of time prior to the execution of the Agreement in the virtual data room maintained by the Company with RR Donnelley in
connection with the transactions contemplated by the Agreement (it being understood that a document that was only made available for review in
the virtual data room in the two days prior to the execution of the Agreement shall only be deemed to have been made available for a reasonable
period of time if the Company shall have promptly notified Parent or its outside legal counsel that such document was uploaded into the virtual
data room); and (b) Parent and Parent’s Representatives had access to such information, document or material throughout such period of time.

Maple Incentive Bonus Plan. “Maple Incentive Bonus Plan” shall mean an incentive bonus plan to be prepared by Parent during the Pre-Closing
Period and having the terms described on Schedule 5.5(b).

Material Adverse Effect. “Material Adverse Effect” shall mean any change, event, effect, claim, circumstance or matter (each, an “Effect”) that
(considered together with all other Effects) is, or would reasonably be expected to be or to become, materially adverse to: (a) the business,
condition, assets
(taken as a whole), capitalization, operations, results of operations, financial performance or prospects of the Company; (b) Parent’s right to own,
or to receive dividends or other distributions with respect to, the stock of the Surviving Corporation; or (c) the ability of the Company to perform
any of its or his material covenants or obligations under this Agreement; provided however, that: (i) an Effect that has been cured in all respects
shall not constitute a Material Adverse Effect; and (ii) in no event shall any Effects resulting from any changes in laws (to the extent that such
changes do not have a disproportionate impact on the Company) be deemed to constitute a Material Adverse Effect.

Merger Consideration. “Merger Consideration” shall mean the cash consideration that a holder of shares of Company Capital Stock who does not
perfect his, her or its appraisal rights under the DGCL is entitled to receive in exchange for such shares of Company Capital Stock pursuant to
Section 1.5.

Non-Dissenting Stockholder. “Non-Dissenting Stockholder” shall mean each stockholder of the Company that does not perfect such
stockholder’s appraisal rights under the DGCL and is otherwise entitled to receive consideration pursuant to Section 1.5.

Open Source Code. “Open Source Code” shall mean any software code that is distributed as “free software” or “open source software” or is
otherwise distributed publicly in source code form under terms that permit modification and redistribution of such software. Open Source Code
includes software code that is licensed under the GNU General Public License, GNU Lesser General Public License, Mozilla License, Common
Public License, Apache License, BSD License, Artistic License, or Sun Community Source License.

Parent Common Stock. “Parent Common Stock” shall mean the common stock, par value $0.0001 per share, of Parent.

Person. “Person” shall mean any individual, Entity or Governmental Body.

Personal Data. “Personal Data” shall mean a natural person’s name, street address, telephone number, e-mail address, photograph, social security
number, driver’s license number, passport number, or customer or account number, or any other piece of information that allows the identification
of a natural person.

Properties. “Properties” means the leasehold properties held or occupied by the Company.

Registered IP. “Registered IP” shall mean all Intellectual Property Rights that are registered, filed or issued under the authority of, with or by any
Governmental Body, including all patents, registered copyrights, registered trademarks and all applications for any of the foregoing.

Related Party. “Related Party” shall mean: (a) each individual who is, or who has at any time since inception been, an officer or director of the
Company; (b) each member of the immediate family of each of the individuals referred to in clauses “(a),” above; and (c) any trust or other Entity
(other than the Company) in which any one of the Persons referred to in clauses “(a)” and “(b)” above holds (or in which more than one of such
Persons collectively hold), beneficially or otherwise, a material voting, proprietary or equity interest.

Representatives. “Representatives” shall mean officers, directors, employees, agents, attorneys, accountants, advisors and representatives.
Series A Preferred Stock. “Series A Preferred Stock” shall mean the shares of Series A Convertible Preferred Stock and Series A-1 Convertible
Preferred Stock of the Company.

Series B Preferred Stock. “Series B Preferred Stock” shall mean the shares of Series B Convertible Preferred Stock and Series B-1 Convertible
Preferred Stock of the Company.

Series C Preferred Stock. “Series C Preferred Stock” shall mean the shares of Series C Convertible Preferred Stock and Series C-1 Convertible
Preferred Stock of the Company.

Series D Preferred Stock. “Series D Preferred Stock” shall mean the shares of Series D Convertible Preferred Stock of the Company.

Specified Representations. “Specified Representations” shall mean: (a) the representations and warranties set forth in Sections 2.3, 2.10, 2.12 and
2.14 of the Agreement; and (b) the representations and warranties set forth in the Company Closing Certificate, to the extent such representations
and warranties relate to any of the matters addressed in any of the representations and warranties specified in clause “(a)” of this sentence.

Subsidiary. An entity shall be deemed to be a “Subsidiary” of another Person if such Person directly or indirectly owns or purports to own,
beneficially or of record: (a) an amount of voting securities of or other interests in such Entity that is sufficient to enable such Person to elect at
least a majority of the members of such Entity’s board of directors or other governing body; or (b) at least 50% of the outstanding equity, voting,
beneficial or financial interests in such Entity.

Tax. “Tax” includes all forms of taxation and statutory, governmental, supra-governmental, state, principal, local government or municipal
impositions, duties, contributions, charges and levies, whenever imposed, and all penalties, charges, surcharges, costs, expenses and interest
relating thereto and without limitation all employment taxes and any deductions or withholdings of any sort.

Tax Return. “Tax Return” shall mean any return (including any information return), report, statement, declaration, estimate, schedule, notice,
notification, form, election, certificate or other document or information filed with or submitted to, or required to be filed with or submitted to, any
Governmental Body in connection with the determination, assessment, collection or payment of any Tax or in connection with the administration,
implementation or enforcement of or compliance with any Legal Requirement relating to any Tax.

User Data. “User Data” shall mean any Personal Data or other data or information collected by or on behalf of the Company from users of any
Company Website.
 ANNEX I TO EXHIBIT A

PERSONS WHOSE KNOWLEDGE IS IMPUTED TO THE COMPANY

Michael Bartlett

Andrew Ratin

Dee Lin

Max Poletto

Eddie Kohler
 EXHIBIT B

DISPUTE RESOLUTION PROCEDURES

Subject to the provisions of Sections 9.3 and 10.8(c) of the Agreement: (i) until the earlier of the termination of the Escrow Agreement or the time at
which the aggregate amount of the claims made by the Indemnitees pursuant to Section 9 of the Agreement exceed the Escrow Amount (such time
being referred to as the “Direct Claim Time”), any claim for indemnification, compensation or reimbursement pursuant to Section 9 of the
Agreement (and, at the option of any Indemnitee, any other claim for a monetary remedy, such as in the case of a claim based upon intentional
misrepresentation or fraud, relating to the Agreement or the Merger after the Closing) shall be brought and resolved exclusively in accordance with
the procedures set forth in the Escrow Agreement; and (ii) from and after the Direct Claim Time, any claim for indemnification, compensation or
reimbursement pursuant to Section 9 of the Agreement (and, at the option of any Indemnitee, any other claim for a monetary remedy, such as in the
case of a claim based upon intentional misrepresentation or fraud, relating to the Agreement or the Merger after the Closing) shall be brought and
resolved exclusively as follows:

(a) If any Indemnitee has or claims in good faith to have incurred or suffered Damages for which it is or may be entitled to indemnification,
compensation or reimbursement under Section 9 of the Agreement or for which it is or may otherwise be entitled to a monetary remedy relating to
the Agreement or the Merger, such Indemnitee may deliver a claim notice (a “Claim Notice”) to the Stockholders’ Agent. Each Claim Notice shall:
(i) state that the Indemnitee believes in good faith that the Indemnitee is entitled to indemnification, compensation or reimbursement under
Section 9 of the Agreement or is or may otherwise be entitled to a monetary remedy relating to the Agreement or the Merger; (ii) contain a brief
description of the facts and circumstances supporting the Indemnitee’s claim; and (iii) if practicable, contain a non-binding, preliminary, good faith
estimate of the amount to which the Indemnitee claims to be entitled (the aggregate amount of such estimate, as it may be modified by the
Indemnitee in good faith from time to time, being referred to as the “Claimed Amount”).

(b) During the 20-business day period commencing upon receipt by the Stockholders’ Agent of a Claim Notice from an Indemnitee (the
“Dispute Period”), the Stockholders’ Agent may deliver to the Indemnitee a written response (the “Response Notice”) in which the Stockholders’
Agent: (i) agrees that the full Claimed Amount is owed to the Indemnitee; (ii) agrees that part, but not all, of the Claimed Amount is owed to the
Indemnitee; or (iii) indicates that no part of the Claimed Amount is owed to the Indemnitee. If the Response Notice is delivered in accordance with
clause “(ii)” or “(iii)” of the preceding sentence, the Response Notice shall also contain a brief description of the facts and circumstances
supporting the Stockholders’ Agent’s claim that only a portion or no part of the Claimed Amount is owed to the Indemnitee, as the case may be
(any part of the Claimed Amount that is not agreed to be owed to the Indemnitee pursuant to the Indemnitee’s Claim Notice being referred to as
the “Contested Amount”). If a Response Notice is not received by the Indemnitee from the Stockholders’ Agent prior to the expiration of the
Dispute Period, then the Stockholders’ Agent shall be conclusively deemed to have agreed that an amount equal to the full Claimed Amount is
owed to the Indemnitee.

(c) If the Stockholders’ Agent in its Response Notice agrees that the full Claimed Amount is owed to the Indemnitee, or if no Response
Notice is received by the Indemnitee from the Stockholders’ Agent prior to the expiration of the Dispute Period, the Indemnitors shall, within 10
business days following the earlier of the delivery of such Response Notice or the expiration of the Dispute Period, pay (and the Stockholders’
Agent shall use commercially reasonable efforts to cause the Indemnitors to pay) the Claimed Amount to the Indemnitee.
 (d) If the Stockholders’ Agent in the Response Notice agrees that part, but not all, of the Claimed Amount is owed to the Indemnitee (the
“Agreed Amount”), the Indemnitors shall, within 10 business days following the delivery of such Response Notice, pay (and the Stockholders’
Agent shall use commercially reasonable efforts to cause the Indemnitors to pay) the Agreed Amount to the Indemnitee.

(e) If any Response Notice expressly indicates that there is a Contested Amount, the Stockholders’ Agent and the Indemnitee shall attempt
in good faith to resolve the dispute related to the Contested Amount. If the Stockholders’ Agent and the Indemnitee resolve such dispute, such
resolution shall be binding on the Stockholders’ Agent, the Indemnitors and such Indemnitee and a settlement agreement stipulating the amount
owed to such Indemnitee (the “Stipulated Amount”) shall be signed by such Indemnitee and the Stockholders’ Agent. The Indemnitors shall,
within 10 business days following the execution of such settlement agreement, or such shorter period of time as may be set forth in the settlement
agreement, pay (and the Stockholders’ Agent shall use commercially reasonable efforts to cause the Indemnitors to pay) the Stipulated Amount to
the Indemnitee.

(f) In the event that there is a dispute relating to any Claim Notice or Contested Amount (whether it is a matter between the Indemnitee, on
the one hand, and the Stockholders’ Agent, on the other hand, or it is a matter that is subject to a claim or Legal Proceeding asserted or
commenced by a third party brought against the Indemnitee or the Company in a litigation or arbitration), such dispute (an “Arbitrable Dispute”)
shall be settled by binding arbitration. Notwithstanding the preceding sentence, nothing in this Exhibit B shall prevent the Indemnitee from
seeking preliminary injunctive relief from a court of competent jurisdiction pending settlement of any Arbitrable Dispute.
(i) Except as herein specifically stated, any Arbitrable Dispute shall be resolved by arbitration in San Francisco, California in
accordance with JAMS’ Comprehensive Arbitration Rules and Procedures (the “JAMS Rules”) then in effect. However, in all events, the
provisions contained herein shall govern over any conflicting rules which may now or hereafter be contained in the JAMS Rules. Any
judgment upon the award rendered by the arbitrator shall be entered in any court having jurisdiction over the subject matter thereof. The
arbitrator shall have the authority to grant any equitable and legal remedies that would be available if any judicial proceeding was instituted
to resolve an Arbitrable Dispute. The final decision of the arbitrator, as entered by a court of competent jurisdiction, will be furnished by the
arbitrator to the Stockholders’ Agent and the Indemnitee in writing and will constitute a final, conclusive and non-appealable determination
of the issue in question, binding upon the Stockholders’ Agent, the Indemnitors and the Indemnitee, and an order with respect thereto may
be entered in any court of competent jurisdiction.
(ii) Any such arbitration will be conducted before a single arbitrator who will be compensated for his or her services at a rate to be
determined by the Indemnitee and the Stockholders’ Agent or by JAMS, but based upon reasonable hourly or daily consulting rates for the
arbitrator in the event the parties are not able to agree upon his or her rate of compensation.
(iii) The arbitrator shall be mutually agreed upon by the Indemnitee and the Stockholders’ Agent. In the event the Indemnitee and the
Stockholders’ Agent are unable to agree within 20 business days following submission of the dispute to JAMS by one of the parties, JAMS
will have the authority to select an arbitrator from a list of arbitrators who satisfy the criteria set forth in clause “(iv)” hereof.
 (iv) No arbitrator shall have any past or present family, business or other relationship with the Indemnitee, the Company, the
Stockholders’ Agent, any of the Indemnitors or any “affiliate” (as such term is defined in Rule 12b-2 of the Securities Act of 1933, as
amended (the “Securities Act”)), director or officer thereof, unless following full disclosure of all such relationships, the Indemnitee and the
Stockholders’ Agent agree in writing to waive such requirement with respect to an individual in connection with any dispute.
(v) The arbitrator shall be instructed to hold up to five eight hour, one day hearings regarding the disputed matter within 60 days of his
designation and to render a written award, including a written opinion, no later than 10 business days after the conclusion of such hearing, in
each case unless otherwise mutually agreed in writing by the Indemnitee and the Stockholders’ Agent.
(vi) The Indemnitee and the Stockholders’ Agent (on behalf of the Indemnitors) will each pay 50% of the initial compensation to be
paid to the arbitrator in any such arbitration and 50% of the costs of transcripts and other normal and regular expenses of the arbitration
proceedings; provided, however, that: (A) the prevailing party in any arbitration will be entitled to an award of attorneys’ fees and costs;
and (B) all costs of arbitration, other than those provided for above, will be paid by the losing party, and the arbitrator will be authorized to
determine the identity of the prevailing party and the losing party.
(vii) The arbitrator chosen in accordance with these provisions will not have the power to alter, amend or otherwise affect the terms of
these arbitration provisions or any other provisions contained in this Exhibit B or the Agreement.
(viii) Except as specifically otherwise provided in this Exhibit B or the Agreement, arbitration will be the sole and exclusive remedy of
the parties for any Arbitrable Dispute or any other dispute arising out of or relating to this Exhibit B or the Agreement.

(g) Upon resolution of the arbitration described in clause “(f)” of this Exhibit B, the Indemnitors shall, within 10 business days following the
entry of the arbitrator’s decision by a court of competent jurisdiction, or such shorter period of time as may be set forth in the arbitrator’s decision,
pay (and the Stockholders’ Agent shall use commercially reasonable efforts to cause the Indemnitors to pay) the amount of the award specified in
the arbitrator’s decision, if any, to the Indemnitee.
 EXHIBIT C

FORM OF CERTIFICATE AMENDMENT

CERTIFICATE OF AMENDMENT OF
RESTATED CERTIFICATE OF INCORPORATION OF
MAZU NETWORKS, INC.

MAZU NETWORKS, INC., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware
(the “Corporation”), DOES HEREBY CERTIFY:

FIRST: The name of the Corporation is Mazu Networks, Inc.

S ECOND: The date on which the Certificate of Incorporation of the Corporation was originally filed with the Secretary of State of the State of
Delaware is May 23, 2000, under the name of Mazu Networks, Inc.

THIRD: The Board of Directors of the Corporation, acting in accordance with the provisions of Sections 141 and 242 of the General
Corporation Law of the State of Delaware, adopted resolutions amending its Restated Certificate of Incorporation as follows (the “Amendment”):

The following sentence shall be added to the end of paragraph “c” of Section D.2 of Article IV:

“Notwithstanding anything to the contrary contained in this Section D.2, neither the merger (the “Riverbed Merger”) of the Corporation with
Maple Acquisition Sub, Inc., a wholly-owned subsidiary of Riverbed Technology, Inc., pursuant to the terms of that certain Agreement of Merger,
dated as of January 20, 2009, by and among Riverbed Technology, Inc., Maple Acquisition Sub, Inc., the Corporation, and the Stockholders’
Agent as defined therein (the “Merger Agreement”), nor any of the other transactions contemplated by the Merger Agreement, shall be deemed to
be a liquidation, dissolution or winding up of the Corporation.”

The following paragraph shall be added as paragraph “d” to Section D.2 of Article IV:

“Notwithstanding the other provisions of this Article IV, Section D.2 or any other provision of this Restated Certificate of Incorporation, upon the
closing of the Riverbed Merger, the holders of shares of Common Stock, Series A Preferred Stock, Series A-1 Preferred Stock, Series B Preferred
Stock, Series B-1 Preferred Stock, Series C Preferred Stock and Series D Preferred Stock shall not be entitled to receive or be required to take any
amounts or consideration on account of such shares in connection with the Merger as provided in Section D.2.a, D.2.b or D.2.c, but shall only be
entitled to receive or be required to take such amounts as set forth in Section 1.5 of the Merger Agreement.”

The following sentence shall be added to the end of paragraph “k” of Section D.4 of Article IV:

“Notwithstanding any other provision in this Restated Certificate of Incorporation, the Corporation shall not be required to send any notice to the
holders of Preferred Stock pursuant to this Section D.4.k (or pursuant to any other provision in this Restated Certificate of Incorporation) in
connection with the Riverbed Merger or any of the other transactions contemplated by the Merger Agreement, including any vote of any of the
stockholders to approve the Riverbed Merger or any such transactions.”
 FOURTH: Thereafter pursuant to a resolution of the Board of Directors, the Amendment was submitted to the stockholders of the
Corporation for their approval, and was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State
of Delaware.

IN WITNESS WHEREOF, Mazu Networks, Inc. has caused this Certificate of Amendment to be signed by its duly authorized and elected Chief
Executive Officer this day of , 2009.

MAZU NETWORKS, INC.

By:
Paul Brady
Chief Executive Officer
TAB 12b
Sample merger
agreement for the
acquisition of a publicly
traded company
(Marvell Technology/Aquantia)

161
DealPointData.com
Aquantia Corp./Marvell Technology Group Ltd. $466m
Merger Agreement in a 8-K on 05/10/2019
SEC Document
SEC Filing
EX-2.1 2 d741486dex21.htm EX-2.1

Exhibit 2.1

AGREEMENT AND PLAN OF MERGER

by and among:

MARVELL TECHNOLOGY GROUP LTD.,

a Bermuda exempted company;

ANTIGUA ACQUISITION CORP.,

a Delaware corporation;

and

AQUANTIA CORP.
a Delaware corporation

Dated as of May 6, 2019

 TABLE OF CONTENTS

Page
SECTION 1. DESCRIPTION OF TRANSACTION 1
1.1 Merger of Merger Sub into the Company 1
1.2 Effects of the Merger 1
1.3 Closing; Effective Time 1
1.4 Certificate of Incorporation and Bylaws; Directors and Officers 2
1.5 Conversion of Shares 2
1.6 Closing of the Company’s Transfer Books 3
1.7 Exchange of Certificates 3
1.8 Dissenting Shares 5
1.9 Further Action 5
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY 5
2.1 Subsidiaries; Due Organization; Etc. 5
2.2 Certificate of Incorporation and Bylaws 6
2.3 Capitalization, Etc. 6
2.4 SEC Filings; Financial Statements 8
2.5 Absence of Changes 9
2.6 Title to Assets 10
2.7 Real Property; Equipment; Leasehold 10
2.8 Intellectual Property 10
2.9 Material Contracts 14
2.10 Company Products 17
2.11 Major Customers and Suppliers 17
2.12 Liabilities 17
2.13 Compliance with Legal Requirements 18
2.14 Governmental Authorizations 19
2.15 Tax Matters 19
2.16 Employee and Labor Matters; Benefit Plans 21
2.17 Environmental Matters 25
2.18 Insurance 26
2.19 Legal Proceedings; Orders 26
2.20 Authority; Binding Nature of Agreement 26
2.21 Takeover Statutes; No Rights Plan 27
2.22 Vote Required 27
2.23 Non-Contravention; Consents 27
2.24 Fairness Opinion 27
2.25 Advisors’ Fees 28
2.26 Disclosure 28
SECTION 3. REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB 28
3.1 Due Organization 28
3.2 Legal Proceedings; Orders 28
3.3 Authority; Binding Nature of Agreement 28
3.4 Non-Contravention; Consents 28
3.5 Funding 29
3.6 Stock Ownership 29
3.7 Disclosure 29
SECTION 4. CERTAIN COVENANTS OF THE COMPANY 29
4.1 Access and Investigation; Confidentiality 29
4.2 Operation of the Company’s Business 30
4.3 No Solicitation 34

i
 TABLE OF CONTENTS
( CONTINUED)

Page
SECTION 5. ADDITIONAL COVENANTS OF THE PARTIES 36
5.1 Proxy Statement 36
5.2 Company Stockholders’ Meeting 36
5.3 Treatment of Company Options and Company Restricted Stock Units 40
5.4 Treatment of Company ESPP 41
5.5 Treatment of Company Warrants 42
5.6 Employee Benefits 42
5.7 Indemnification of Officers and Directors 43
5.8 Regulatory Approvals and Related Matters 44
5.9 Disclosure 46
5.10 Resignation of Officers and Directors 47
5.11 Delisting 47
5.12 Section 16 Matters 47
5.13 Stockholder Litigation 47
5.14 Takeover Statutes and Rights 47
SECTION 6. CONDITIONS PRECEDENT TO OBLIGATIONS OF PARENT AND MERGER SUB 47
6.1 Accuracy of Representations 47
6.2 Performance of Covenants 48
6.3 Stockholder Approval 48
6.4 Closing Certificate 48
6.5 No Material Adverse Effect 48
6.6 Regulatory Matters 48
6.7 No Restraints 49
6.8 No Governmental Litigation 49
SECTION 7. CONDITIONS PRECEDENT TO OBLIGATION OF THE COMPANY 49
7.1 Accuracy of Representations 49
7.2 Performance of Covenants 49
7.3 Stockholder Approval 49
7.4 Closing Certificate 49
7.5 Regulatory Matters 49
7.6 No Restraints 49
SECTION 8. TERMINATION 50
8.1 Termination 50
8.2 Effect of Termination 52
8.3 Expenses; Termination Fees 52
SECTION 9. MISCELLANEOUS PROVISIONS 54
9.1 Amendment 54
9.2 Waiver 55
9.3 No Survival of Representations and Warranties 55
9.4 Entire Agreement; Counterparts; Exchanges by Electronic Delivery 55
9.5 Applicable Law; Jurisdiction; Waiver of Jury Trial 55
9.6 Disclosure Schedule 56
9.7 Attorneys’ Fees 56
9.8 Assignability; No Third-Party Beneficiaries 56
9.9 Notices 57
9.10 Cooperation 58
9.11 Severability 58
9.12 Remedies 58
9.13 Construction 58

ii
 EXHIBITS

Exhibit A - Certain Definitions

Exhibit B - Persons Entering into Support Agreements and Noncompetition Agreements

Exhibit C - Form of Certificate of Incorporation of Surviving Corporation

iii
 AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND P LAN OF MERGER (this “Agreement”) is made and entered into as of May 6, 2019, by and among: MARVELL
TECHNOLOGY GROUP LTD., a Bermuda exempted company (“Parent”); ANTIGUA ACQUISITION CORP., a Delaware corporation and a wholly
owned subsidiary of Parent (“Merger Sub”); and AQUANTIA CORP., a Delaware corporation (the “Company”). Certain capitalized terms used
in this Agreement are defined in Exhibit A.

RECITALS
A. Parent, Merger Sub and the Company intend to effect a merger of Merger Sub into the Company (the “Merger”) in accordance with
this Agreement and the DGCL. Upon consummation of the Merger, Merger Sub will cease to exist, and the Company will become a wholly
owned subsidiary of Parent.

B. The respective boards of directors of Parent, Merger Sub and the Company have approved this Agreement and the Merger.

C. In order to induce Parent to enter into this Agreement and cause the Merger to be consummated, concurrently with the execution and
delivery of this Agreement: (i) each stockholder of the Company listed in Part 1 of Exhibit B is executing a voting and support agreement in
favor of Parent (each such agreement, a “Support Agreement”); and (ii) each individual listed in Part 2 of Exhibit B is executing a
noncompetition and non-solicitation agreement in favor of the Company and Parent, which shall become effective at the Effective Time.

AGREEMENT
The parties to this Agreement, intending to be legally bound, agree as follows:

Section 1. DESCRIPTION OF TRANSACTION

1.1 Merger of Merger Sub into the Company. Upon the terms and subject to the conditions set forth in this Agreement, at the
Effective Time, Merger Sub shall be merged with and into the Company, and the separate existence of Merger Sub shall cease. The Company
will continue as the surviving corporation in the Merger (the “Surviving Corporation”).

1.2 Effects of the Merger. The Merger shall have the effects set forth in this Agreement and in the applicable provisions of the
DGCL.

1.3 Closing; Effective Time. The consummation of the Contemplated Transactions (the “Closing”) shall take place at the offices
of Hogan Lovells US LLP, 4085 Campbell Avenue, Suite 100, Menlo Park, California, 94025 (or, at Parent’s election, by means of a virtual
closing through electronic exchange of signatures) at 8:00 a.m. (California Time) on a Business Day to be mutually agreed by Parent and the
Company, which shall be no later than the third Business Day after the satisfaction or waiver of the last to be satisfied or waived of the
conditions set forth in Section 6 and Section 7 (other than those conditions set forth in Sections 6.4 and 7.4, which are to be satisfied at the
Closing, but subject to the satisfaction or waiver of each of such conditions), or at such other place, time or date as Parent and the Company
may jointly designate. Notwithstanding anything to the contrary contained in this Section 1.3, if the Closing would otherwise be required to
occur under this Section 1.3 during the last 15 days of any fiscal quarter of Parent, then Parent may elect, by delivering a written notice to the
Company at least one Business Day prior to the date on which the Closing would otherwise be required to occur, to delay the Closing until the
second Business Day of the following fiscal quarter of Parent. If Parent so elects to delay the Closing, then each of Parent, Merger Sub and the
Company shall, effective as of the date the Closing would otherwise be required to occur, (a) deliver the certificates required to be delivered
pursuant to Sections 6.4 and 7.4, as applicable, and (b) irrevocably waive in
writing each of the conditions set forth in Section 6 (other than Section 6.7) and Section 7 (other than Section 7.6), as applicable. The date on
which the Closing actually takes place is referred to as the “Closing Date.” Subject to the provisions of this Agreement, a certificate of merger
satisfying the applicable requirements of the DGCL shall be duly executed by the Company in connection with the Closing and, concurrently
with or as soon as practicable following the Closing on the Closing Date, filed with the Secretary of State of the State of Delaware. The
Merger shall become effective at the time of the filing of such certificate of merger with the Secretary of State of the State of Delaware or at
such later time as may be mutually agreed by Parent and the Company and specified in such certificate of merger (the time at which the
Merger becomes effective being referred to as the “Effective Time”).

1.4 Certificate of Incorporation and Bylaws; Directors and Officers. Unless otherwise mutually agreed by Parent and the
Company prior to the Effective Time:

(a) the Certificate of Incorporation of the Surviving Corporation shall be amended and restated as of the Effective Time to
conform to Exhibit C;

(b) the Bylaws of the Surviving Corporation shall be amended and restated as of the Effective Time to conform to the
Bylaws of Merger Sub as in effect immediately prior to the Effective Time; and

(c) the directors and officers of the Surviving Corporation immediately after the Effective Time shall be the respective
individuals who are the directors and officers of Merger Sub immediately prior to the Effective Time, until the earlier of their resignation or
removal or until their respective successors are duly elected or appointed and qualified, as the case may be.

1.5 Conversion of Shares.

(a) At the Effective Time, by virtue of the Merger and without any further action on the part of Parent, Merger Sub, the
Company or any stockholder of the Company:
(i) any shares of Company Common Stock held, directly or indirectly, by any wholly owned Subsidiary of the Company
immediately prior to the Effective Time shall be unaffected by the Merger and shall remain outstanding as an equal number of
shares of common stock of the Surviving Corporation;
(ii) any shares of Company Common Stock held by the Company (or held in the Company’s treasury) or held, directly
or indirectly, by Parent, Merger Sub or any other wholly owned Subsidiary of Parent immediately prior to the Effective Time shall
be canceled and retired and shall cease to exist, and no consideration shall be delivered in exchange therefor;
(iii) except as provided in clauses “(i)” and “(ii)” of this Section 1.5(a) and subject to Sections 1.5(b), 1.7 and 1.8, each
share of Company Common Stock outstanding immediately prior to the Effective Time shall be converted into the right to receive
$13.25 in cash (such cash amount, as it may be adjusted pursuant to Section 1.5(c), the “Price Per Share”), without interest; and
(iv) each share of the common stock, $0.0001 par value per share, of Merger Sub outstanding immediately prior to the
Effective Time shall be converted into one share of common stock of the Surviving Corporation.

(b) If any shares of Company Common Stock outstanding immediately prior to the Effective Time constitute Company
Restricted Stock, then: (i) the Price Per Share payable in exchange for each such share of Company Restricted Stock will be unvested and
subject to the same repurchase option, risk of forfeiture or other conditions applicable to such Company Restricted Stock; and (ii) such
consideration need not be paid until such time as such repurchase option, risk of forfeiture or other condition lapses or otherwise terminates.
Prior to the Closing, the Acquired Companies shall use commercially reasonable efforts to take all action that may be

2
reasonably necessary, including obtaining all reasonably necessary Consents, to ensure that, from and after the Effective Time, Parent is
entitled to exercise any such repurchase option or other right set forth in any such Company Restricted Stock purchase agreement or other
Contract with respect to such unvested consideration.

(c) If, during the period commencing on the date of this Agreement and ending at the Effective Time, the outstanding
shares of Company Common Stock are changed into a different number or class of shares by reason of any stock split, division or subdivision
of shares, stock dividend, reverse stock split, consolidation of shares, reclassification, recapitalization or other similar transaction, or if a stock
dividend is declared by the Company during such period, or a record date with respect to any such event shall occur during such period, then
the consideration to be paid in respect of shares of Company Common Stock pursuant to Section 1.5(a)(iii) shall be adjusted to the extent
appropriate.

1.6 Closing of the Company’s Transfer Books. At the Effective Time: (a) except for shares of Company Common Stock that
continue to be held by a Subsidiary of the Company in accordance with Section 1.5(a)(i), all shares of Company Common Stock outstanding
immediately prior to the Effective Time shall automatically be canceled and retired and shall cease to exist, and all holders of certificates
representing shares of Company Common Stock outstanding immediately prior to the Effective Time (each such certificate, a “Company
Stock Certificate”) or uncertificated shares of Company Common Stock represented by book entry (each such share, an “Uncertificated
Share”) shall cease to have any rights as stockholders of the Company; and (b) the stock transfer books of the Company shall be closed with
respect to all shares of Company Common Stock outstanding immediately prior to the Effective Time. No further transfer of any such shares
of Company Common Stock shall be made on such stock transfer books after the Effective Time. If, after the Effective Time, a valid
Company Stock Certificate or Uncertificated Share is presented to the Paying Agent or to the Surviving Corporation or Parent, such Company
Stock Certificate or Uncertificated Share shall be canceled and shall be exchanged as provided in Section 1.7.

1.7 Exchange of Certificates.

(a) On or prior to the Closing Date, Parent shall select a reputable bank or trust company to act as paying agent in the
Merger (the “Paying Agent”). Subject to Section 1.8, Parent shall use reasonable efforts to cause to be deposited with the Paying Agent
promptly after the Effective Time on the Closing Date, but in no event later than one Business Day following the Closing Date, cash sufficient
to make payments of the Merger Consideration payable pursuant to Section 1.5, other than payments of the Merger Consideration that may
become payable pursuant to Section 1.5(b) (the “Payment Fund”). The Payment Fund shall be invested by the Paying Agent as directed by
Parent; provided, however, that any such investments shall be in short-term obligations of the United States with maturities of no more than 30
days or guaranteed by the United States and backed by the full faith and credit of the United States. No investment of the Payment Fund shall
relieve Parent, the Surviving Corporation or the Paying Agent from promptly making the payments required by this Section 1, and following
any losses from any such investment, Parent shall promptly provide additional cash funds to the Paying Agent in the amount of such losses to
the extent the funds in the Payment Fund are insufficient for such purposes, which additional funds will be deemed to be part of the Payment
Fund. Following the Effective Time, Parent shall retain cash sufficient to make, or cause to be made, payments of the Merger Consideration
payable to the former holders of Company Restricted Stock pursuant to Section 1.5(b) in accordance with Section 1.5(b).

(b) Promptly after the Effective Time, the Paying Agent will mail to the Persons who were record holders of Company
Stock Certificates or Uncertificated Shares immediately prior to the Effective Time: (i) a letter of transmittal in customary form and containing
such provisions as Parent may reasonably specify (including a provision confirming that delivery of Company Stock Certificates or transfer of
Uncertificated Shares shall be effected, and risk of loss and title to Company Stock Certificates or Uncertificated Shares shall pass, only upon
proper delivery of such Company Stock Certificates or transfer of the Uncertificated Shares to the Paying Agent); and (ii) instructions for use
in effecting the surrender of Company Stock Certificates or transfer of Uncertificated Shares in exchange for Merger Consideration. The form
and substance of such letter of

3
transmittal and instructions shall be as reasonably agreed to by Parent and the Company prior to the Effective Time. Upon surrender of a
Company Stock Certificate to the Paying Agent for exchange (or compliance with the reasonable procedures established by the Paying Agent
for transfer of Uncertificated Shares), together with the delivery of a duly executed letter of transmittal and such other documents as may be
reasonably required by the Paying Agent or Parent: (A) the holder of such Company Stock Certificate or Uncertificated Shares shall be entitled
to receive in exchange therefor the cash consideration that such holder has the right to receive pursuant to the provisions of Section 1.5, in full
satisfaction of all rights pertaining to the shares of Company Common Stock formerly represented by such Company Stock Certificate or
Uncertificated Shares; and (B) the Company Stock Certificate or Uncertificated Shares so surrendered or transferred shall be canceled. In the
event of a transfer of ownership of any shares of Company Common Stock which are not registered in the transfer records of the Company,
payment of Merger Consideration may be made to a Person other than the holder in whose name the Company Stock Certificate formerly
representing such shares or Uncertificated Shares is registered if: (1) any such Company Stock Certificate shall be properly endorsed or
otherwise be in proper form for transfer; and (2) such holder shall have paid any fiduciary or surety bonds and any transfer or other similar
Taxes required by reason of the payment of such Merger Consideration to a Person other than such holder (or shall have established to the
reasonable satisfaction of Parent that such bonds and Taxes have been paid or are not applicable). Until surrendered or transferred as
contemplated by this Section 1.7(b), each Company Stock Certificate and each Uncertificated Share shall be deemed, from and after the
Effective Time, to represent only the right to receive Merger Consideration as contemplated by Section 1.5. If any Company Stock Certificate
shall have been lost, stolen or destroyed, Parent may, in its discretion and as a condition precedent to the payment of any Merger
Consideration with respect to the shares of Company Common Stock previously represented by such Company Stock Certificate, require the
owner of such lost, stolen or destroyed Company Stock Certificate to provide an appropriate affidavit and to deliver a bond (in such sum as
Parent may direct) as indemnity against any claim that may be made against the Paying Agent, Parent, Merger Sub or the Surviving
Corporation with respect to such Company Stock Certificate. No interest shall be paid or will accrue on any Merger Consideration payable to
holders of Company Stock Certificates or in respect of Uncertificated Shares.

(c) Any portion of the Payment Fund that remains undistributed to former holders of shares of Company Common Stock as
of the date that is 180 days after the date on which the Merger becomes effective shall be delivered to Parent upon demand, and any former
holders of shares of Company Common Stock who have not theretofore surrendered their Company Stock Certificates, or complied with the
procedures established by the Paying Agent for transfer of Uncertificated Shares, in accordance with this Section 1.7 shall thereafter look only
to Parent for satisfaction of their claims for Merger Consideration.

(d) Each of the Paying Agent, Parent, Merger Sub and the Surviving Corporation shall be entitled to deduct and withhold
from any consideration payable or otherwise deliverable pursuant to this Agreement to any holder or former holder of Company Common
Stock or any Company Equity Award such amounts as may be required to be deducted or withheld from such consideration under the Code or
any provision of state, local or foreign Tax law or under any other applicable Legal Requirement. To the extent such amounts are so deducted
or withheld and paid over to the proper Governmental Body, such amounts shall be treated for all purposes under this Agreement as having
been paid to the Person to whom such amounts would otherwise have been paid.

(e) If any Company Stock Certificate has not been surrendered, or any Uncertificated Share has not been transferred, by the
earlier of: (i) the fifth anniversary of the date on which the Merger becomes effective; and (ii) the date immediately prior to the date on which
the cash amount that such Company Stock Certificate or Uncertificated Share represents the right to receive would otherwise escheat to or
become the property of any Governmental Body, then such cash amount shall, to the extent permitted by applicable Legal Requirements,
become the property of the Surviving Corporation, free and clear of any claim or interest of any Person previously entitled thereto.

(f) None of Parent, Merger Sub, the Surviving Corporation or the Paying Agent shall be liable to any holder or former
holder of Company Common Stock or to any other Person with respect to any Merger

4
Consideration delivered to any public official pursuant to any applicable abandoned property law, escheat law or similar Legal Requirement.

1.8 Dissenting Shares.

(a) Notwithstanding anything to the contrary contained in this Agreement, shares of Company Common Stock held by a
holder who has made a proper demand for appraisal of such shares of Company Common Stock in accordance with Section 262 of the DGCL
and who has otherwise complied with all applicable provisions of Section 262 of the DGCL (any such shares being referred to as “Dissenting
Shares” until such time as such holder fails to perfect or otherwise loses such holder’s appraisal rights under Section 262 of the DGCL with
respect to such shares) shall not be converted into or represent the right to receive Merger Consideration in accordance with Section 1.5, but
shall be entitled only to such rights as are granted by the DGCL to a holder of Dissenting Shares.

(b) If any Dissenting Shares shall lose their status as such (through failure to perfect or otherwise), then such shares shall be
deemed automatically to have been converted into, as of the Effective Time, and to represent only, the right to receive Merger Consideration
in accordance with Section 1.5, without interest thereon, upon surrender of the Company Stock Certificate representing such shares or, if such
shares are Uncertificated Shares, upon compliance with the procedures established by the Paying Agent for the transfer of such Uncertificated
Shares.

(c) The Company shall give Parent: (i) prompt notice of any demand for appraisal received by the Company prior to the
Effective Time pursuant to the DGCL, any withdrawal of any such demand and any other demand, notice or instrument delivered to the
Company prior to the Effective Time pursuant to the DGCL; and (ii) the opportunity to participate in and direct all negotiations and
proceedings with respect to any such demand, notice or instrument. The Company shall not make any payment or settlement offer prior to the
Effective Time with respect to any such demand, notice or instrument unless Parent shall have given its prior written consent to such payment
or settlement offer.

1.9 Further Action. If, at any time after the Effective Time, any further action consistent with the terms of this Agreement is
determined by Parent or the Surviving Corporation to be necessary or desirable to carry out the purposes of this Agreement or to vest the
Surviving Corporation with full right, title and possession of and to all rights and property of Merger Sub and the Company, the officers and
directors of the Surviving Corporation and Parent shall be fully authorized (in the name of Merger Sub, in the name of the Company or
otherwise) to take such action.

Section 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to Parent and Merger Sub as follows (it being understood that each representation and warranty
contained in this Section 2 is subject to: (a) the exceptions and disclosures set forth in the Disclosure Schedule (subject to Section 9.6); and
(b) disclosure in any Company SEC Report filed with the SEC at least three Business Days before the date of this Agreement (but (i) without
giving effect to any amendment thereto filed with the SEC thereafter, (ii) excluding any disclosure contained under the heading “Risk
Factors,” any disclosure of risks included in any “forward-looking statements” disclaimer and any other statement or other disclosure that is
similarly predictive or forward-looking and (iii) excluding any Company SEC Reports that are not publicly available on the SEC’s Electronic
Data Gathering Analysis and Retrieval System (“EDGAR”) on the date that is three Business Days before the date of this Agreement)):

2.1 Subsidiaries; Due Organization; Etc.

(a) Part 2.1(a) of the Disclosure Schedule contains an accurate and complete list, as of the date of this Agreement, of the
name and jurisdiction of organization of each Subsidiary of the Company. Neither the

5
Company nor any of the other Acquired Companies owns any capital stock of, or any equity interest of any nature in, any other Entity, other
than (i) equity interests of another Acquired Company and (ii) equity interests held as passive investments as part of the Company’s cash
management programs purchased in accordance with the Company’s cash management policy. None of the Acquired Companies has at any
time been a general partner of or otherwise been liable for any of the debts or other obligations of, any general partnership, limited partnership
or other Entity. None of the Acquired Companies has agreed or is obligated to make, or is bound by any Contract under which it may become
obligated to make, any material future investment in or capital contribution to any other Entity.

(b) Each of the Acquired Companies is duly organized, validly existing and in good standing (in jurisdictions that
recognize the concept of good standing) under the laws of the jurisdiction of its organization and has all necessary power and authority: (i) to
conduct its business in the manner in which its business is currently being conducted and (ii) to own and use its assets in the manner in which
its assets are currently owned and used, except where the failure to be so duly organized, validly existing or in good standing or to have such
power and authority would not, individually or in the aggregate, reasonably be expected to have or result in a Material Adverse Effect. Each of
the Acquired Companies is qualified to do business as a foreign entity, and is in good standing (in jurisdictions that recognize the concept of
good standing), under the laws of all jurisdictions where the nature of its business requires such qualification, except where the failure to be so
duly qualified or in good standing would not, individually or in the aggregate, reasonably be expected to have or result in a Material Adverse
Effect.

2.2 Certificate of Incorporation and Bylaws. The Company has Made Available to Parent accurate and complete copies of the
certificate of incorporation, bylaws and other charter and organizational documents of each of the Acquired Companies, including all
amendments thereto. The Company has Made Available to Parent accurate and complete copies of: (a) the charters of all committees of the
Company’s board of directors; (b) each code of conduct or similar policy adopted by any of the Acquired Companies or by the board of
directors (or similar governing body), or any committee of the board of directors (or similar governing body), of any of the Acquired
Companies; and (c) the minutes of the meetings and other proceedings (including any actions taken by written consent or otherwise without a
meeting) of the holders of equity securities and board of directors or similar governing body (and to the extent applicable, each committee
thereof) of each of the Acquired Companies for the period from October 23, 2017 through the date of this Agreement. The minutes of the
meetings and other proceedings (including any actions taken by written consent or otherwise without a meeting) of the board of directors or
similar governing body (and to the extent applicable, each committee thereof) of each of the Acquired Companies Made Available to Parent
are complete and redacted only with respect to (x) discussions of the Contemplated Transactions or other similar strategic transactions and
(y) identities of employees, and not with respect to any other matter. No Acquired Company is in violation of any of the provisions of the
certificate of incorporation or bylaws (or equivalent charter and organizational documents), including all amendments thereto, of such Entity
in any material respect.

2.3 Capitalization, Etc.

(a) The authorized capital stock of the Company consists of: (i) 95,000,000 shares of Company Common Stock, of which
35,532,571 shares have been issued and are outstanding as of the close of business on May 3, 2019 (the “Specified Equity Date”); and (ii)
5,000,000 shares of preferred stock, $0.00001 par value per share, of which no shares have been issued or are outstanding. From the close of
business on the Specified Equity Date until the date of this Agreement, no shares of Company Common Stock have been issued, except for
shares of Company Common Stock issued pursuant to the exercise of Company Options or the vesting of Company RSUs, in each case,
outstanding on the Specified Equity Date and in accordance with their terms. The Company does not hold any shares of its capital stock in its
treasury. There are no shares of Company Common Stock beneficially owned by any Subsidiary of the Company. All of the outstanding
shares of Company Common Stock have been duly authorized and validly issued, and are fully paid and nonassessable. There are no shares of
Company Common Stock held by any of the Acquired Companies. There is no Company Contract relating to the

6
voting or registration of, or restricting any Person from purchasing, selling, pledging or otherwise disposing of (or from granting any option or
similar right with respect to), any shares of Company Common Stock. None of the Acquired Companies is under any obligation, or is bound
by any Contract pursuant to which it may become obligated, to repurchase, redeem or otherwise acquire any outstanding shares of Company
Common Stock or other securities.

(b) As of the close of business on the Specified Equity Date: (i) 2,132,487 shares of Company Common Stock are subject
to issuance pursuant to Company Options granted and outstanding under the Company Equity Plans; (ii) 1,652,606 shares of Company
Common Stock are reserved for future issuance pursuant to the Company’s 2017 Employee Stock Purchase Plan (the “ESPP”); (iii) 3,181,015
shares of Company Common Stock are subject to issuance and/or delivery pursuant to Company RSUs that vest solely based on time-based
vesting requirements; (iv) no shares of restricted Company Common Stock are outstanding; (v) no shares of Company Common Stock are
subject to stock appreciation rights, whether granted under the Company Equity Plans or otherwise; (vi) no Company Equity Awards are
outstanding other than those granted under the Company Equity Plans; and (vii) 2,149,327 shares of Company Common Stock are reserved
for future issuance pursuant to Company Equity Awards not yet granted under the Company Equity Plans. Part 2.3(b) of the Disclosure
Schedule accurately sets forth the following information with respect to each Company Equity Award outstanding as of the close of business
on the Specified Equity Date: (A) the Company Equity Plan (if any) pursuant to which such Company Equity Award was granted; (B) the
employee identification number of the holder of such Company Equity Award; (C) the number of shares of Company Common Stock subject
to such Company Equity Award (including, for Company Equity Awards subject to performance-based vesting requirements, both the target
and the maximum number of shares of Company Common Stock); (D) the exercise price (if any) of such Company Equity Award; (E) the date
on which such Company Equity Award was granted; (F) the applicable vesting schedule, and the extent to which such Company Equity
Award is vested and/or exercisable; (G) the date on which such Company Equity Award expires; (H) if such Company Equity Award is a
Company Option, whether it is an “incentive stock option” (as defined in the Code) or a non-qualified stock option; (I) if such Company
Equity Award is a Company RSU, whether such Company RSU is subject to Section 409A of the Code and the regulations and guidance
thereunder (“Section 409A”); (J) if such Company Equity Award is a Company RSU, the dates on which shares of Company Common Stock
are scheduled to be delivered, if different from the applicable vesting schedule; and (K) whether the vesting of such Company Equity Award
would be accelerated, in whole or in part, as a result of the Merger or any of the other Contemplated Transactions, alone or in combination
with any termination of employment or other event. The exercise price of each Company Option is no less than the fair market value of a share
of Company Common Stock as determined on the date of grant of such Company Option. All grants of Company Equity Awards were
recorded on the Company’s financial statements (including any related notes thereto) contained in the Company SEC Reports in accordance
with GAAP, and no such grants involved any “back dating,” “forward dating” or similar practices with respect to the effective date of grant
(whether intentionally or otherwise).

(c) The Company has Made Available to Parent accurate and complete copies of all equity-based plans or, if not granted
under an equity plan, such other Contract, pursuant to which any stock options, stock appreciation rights, restricted stock units, deferred stock
units or restricted stock awards (including all outstanding Company Equity Awards, whether payable in equity, cash or otherwise) are currently
outstanding, and the forms of all stock option, stock appreciation right, restricted stock unit, deferred stock unit and restricted stock award
agreements evidencing such stock options, stock appreciation rights, restricted stock units, deferred stock units or restricted stock awards
(whether payable in equity, cash or otherwise).

(d) Except (y) as set forth in Part 2.3(b) of the Disclosure Schedule and (z) for changes since the Specified Equity Date
resulting from the exercise or settlement, as applicable, of Company Equity Awards outstanding on such date in accordance with their terms,
there is no: (i) outstanding equity-based compensation award, subscription, option, call, warrant or right (whether or not currently exercisable)
to acquire any shares of the capital stock or other securities of any of the Acquired Companies; (ii) outstanding security, instrument or
obligation that is or may become convertible into or exchangeable for any shares of the capital stock or other

7
securities of any of the Acquired Companies; or (iii) stockholder rights plan (or similar plan commonly referred to as a “poison pill”) or
Contract under which any of the Acquired Companies is or may become obligated to sell or otherwise issue any shares of its capital stock or
any other securities.

(e) All outstanding shares of Company Common Stock, options, warrants, equity-based compensation awards (whether
payable in equity, cash or otherwise) and other securities of the Acquired Companies have been issued and granted in compliance with: (i) all
applicable securities laws and other applicable Legal Requirements in all material respects; and (ii) all requirements set forth in applicable
Contracts in all material respects.

(f) All of the outstanding shares of capital stock of each of the Company’s Subsidiaries have been duly authorized and
validly issued, are fully paid and nonassessable and free of preemptive rights, and are owned beneficially and of record by the Company, free
and clear of any Encumbrances.

2.4 SEC Filings; Financial Statements.

(a) The Company has Made Available to Parent accurate and complete copies of all registration statements, proxy
statements, Certifications (as defined below) and other statements, reports, schedules, forms and other documents filed by the Company with
the SEC since October 6, 2017, and all amendments thereto (the “Company SEC Reports”). All statements, reports, schedules, forms and
other documents required to have been filed by the Company or any of its officers with the SEC have been so filed on a timely basis. None of
the Company’s Subsidiaries is required to file any documents with the SEC. As of the time it was filed with the SEC (or, if amended or
superseded by a filing prior to the date of this Agreement, then on the date of such filing): (i) each of the Company SEC Reports complied as
to form in all material respects with the applicable requirements of the Securities Act, the Exchange Act and the Sarbanes-Oxley Act (as the
case may be); and (ii) none of the Company SEC Reports contained any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were
made, not misleading. With respect to each annual report on Form 10-K and each quarterly report on Form 10-Q included in the Company
SEC Reports, the principal executive officer and principal financial officer of the Company have made all certifications required by Rules
13a-14 and 15d-14 under the Exchange Act and Sections 302 and 906 of the Sarbanes-Oxley Act (each such required certification, a
“Certification”), and the statements contained in each Certification are accurate and complete as of its date. For purposes of this Agreement,
(A) “principal executive officer” and “principal financial officer” shall have the meanings given to such terms in the Sarbanes-Oxley Act and
(B) the term “file” and variations thereof shall be broadly construed to include any manner in which any document or information is furnished,
supplied or otherwise made available to the SEC. As of the date of this Agreement, there are no unresolved comments issued by the staff of
the SEC with respect to any of the Company SEC Reports. As of the date of this Agreement, to the knowledge of the Company, none of the
Company SEC Reports is the subject of any ongoing review by the SEC.

(b) The consolidated financial statements (including any related notes) contained or incorporated by reference in the
Company SEC Reports: (i) complied as to form in all material respects with the published rules and regulations of the SEC applicable thereto;
(ii) were prepared in accordance with GAAP applied on a consistent basis throughout the periods covered (except as may be indicated in the
notes to such financial statements or, in the case of unaudited financial statements, as permitted by Form 10-Q of the SEC, and except that
the unaudited financial statements may not contain footnotes and are subject to normal and recurring year-end adjustments that will not,
individually or in the aggregate, be material in amount); and (iii) fairly present in all material respects the consolidated financial position of the
Company and its consolidated subsidiaries as of the respective dates thereof and the consolidated results of operations and cash flows of the
Company and its consolidated subsidiaries for the periods covered thereby. No financial statements of any Person other than the Acquired
Companies are required by GAAP to be included in the consolidated financial statements of the Company.

8
 (c) The Acquired Companies maintain a system of internal accounting controls sufficient to provide reasonable assurance
that: (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability; (iii) access to assets is
permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared
with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company has Made
Available to Parent accurate and complete copies of all written descriptions of, and all policies, manuals and other documents promulgating,
such internal accounting controls.

(d) The Acquired Companies maintain disclosure controls and procedures required by Rule 13a-15 or 15d-15 under the
Exchange Act. Such disclosure controls and procedures are effective in all material respects to ensure that all material information concerning
the Acquired Companies is made known on a timely basis to the individuals responsible for the preparation of the Company’s filings with the
SEC and other public disclosure documents. To the knowledge of the Company, the Company has disclosed, based on its most recent
evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of
directors (i) any significant deficiency or material weakness in the design or operation of its internal control over financial reporting that is
reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information and (ii) any fraud,
whether or not material, that involves management or any other employee who has (or has had) a significant role in the Company’s internal
control over financial reporting. The Company is in compliance with the applicable listing and other rules and regulations of the New York
Stock Exchange and, since November 3, 2017, has not received any notice from the New York Stock Exchange asserting any non-compliance
with such rules and regulations.

(e) The Company has Made Available to Parent accurate and complete copies of the documentation creating or governing
all securitization transactions and “off-balance sheet arrangements” (as defined in Item 303(c) of Regulation S-K under the Exchange Act)
effected by any of the Acquired Companies since January 1, 2017.

(f) The Company is in compliance in all material respects with the provisions of the Sarbanes-Oxley Act applicable to it. No
Acquired Company has outstanding, or has arranged any outstanding, “extension of credit” to any director or executive officer within the
meaning of Section 402 of the Sarbanes-Oxley Act.

(g) Since December 31, 2017, there have been no changes in any of the Company’s accounting policies or in the methods
of making accounting estimates or changes in estimates that, individually or in the aggregate, are material to the Company’s financial
statements (including, any related notes thereto) contained in the Company SEC Reports, except as described in the Company SEC Reports or
except as may have been required by any regulatory authority. The reserves reflected in such financial statements have been determined and
established in accordance with GAAP and have been calculated in a consistent manner.

2.5 Absence of Changes. Between December 31, 2018 and the date of this Agreement: (a) there has not been any Material Adverse
Effect, and no event has occurred or circumstance has arisen that, in combination with any other events or circumstances, would reasonably be
expected to have or result in a Material Adverse Effect; and (b) except as set forth in Part 2.5(b)-1 of the Disclosure Schedule, none of the
Acquired Companies has taken any action, or authorized, approved, committed, agreed or offered to take any action, that if taken during the
Pre-Closing Period would require Parent’s consent under Section 4.2(b). Since December 31, 2017, except as set forth in Part 2.5(b)-2 of the
Disclosure Schedule, there has not been any change in any Acquired Company’s sales practices, pricing policies, accounts receivable or
accounts payable or any “channel stuffing” or other sale method that would have, or would reasonably be expected to have, the effect of
artificially or temporarily increasing the Acquired Companies’ consolidated revenues. Since December 31, 2018, none of the Acquired
Companies has requested or knowingly encouraged that the Acquired Companies’ “sell-in” distributors order any inventory in excess of
anticipated demand or provided any special payment incentive to such distributors to encourage purchases in excess of anticipated demand
inconsistent with historic inventory levels.

9
The Company has Made Available to Parent copies of any change to the rights of return, concessions or payment terms of any Material
Contract.

2.6 Title to Assets. The Acquired Companies own, and have good and valid title to, all assets purported to be owned by them that
are material to the Acquired Companies, taken as a whole, including: (a) all assets reflected on the Company Balance Sheet that are material to
the Acquired Companies, taken as a whole (except for inventory sold or otherwise disposed of in the ordinary course of business since the date
of the Company Balance Sheet); and (b) all other assets reflected in the books and records of the Acquired Companies as being owned by the
Acquired Companies. All of such assets that are material to the Acquired Companies are owned by the Acquired Companies free and clear of
any Encumbrances, except for Permitted Encumbrances.

2.7 Real Property; Equipment; Leasehold.

(a) None of the Acquired Companies owns any real property or any interest in real property. Part 2.7(a) of the Disclosure
Schedule sets forth an accurate and complete description of each real property lease, sublease, license or occupancy agreement pursuant to
which any of the Acquired Companies leases, subleases, licenses or occupies real property from any other Person (the “Leases”). (All real
property leased, subleased or licensed to the Acquired Companies, including all buildings, structures, fixtures and other improvements leased,
subleased or licensed to the Acquired Companies, are referred to as the “Leased Real Property”.) The Acquired Companies have valid and
subsisting leasehold interests in and to all of the Leased Real Property, except where the failure to have such interests would not, individually
or in the aggregate, reasonably be expected to be material to the Acquired Companies, taken as a whole. Except as would not reasonably be
expected to interfere in any material respect with the current use and operation of any Leased Real Property by any Acquired Company, all of
the Leases are valid and in full force and effect, have not been modified, amended or supplemented, in writing or otherwise, and all rents,
additional rents and other amounts due to date pursuant to each Lease have been paid, and to the knowledge of the Company, there is no
default or event which, with the passage of time, the giving of notice or both, would become a default by any party under any Lease. The
Company has Made Available to Parent accurate and complete copies of all Leases.

(b) The present use and operation of the Leased Real Property is authorized by, and is in compliance, in all material
respects, with, all applicable zoning, land use, building, fire, health, labor, safety and health laws and other Legal Requirements. There is no
Legal Proceeding pending, or to the knowledge of the Company threatened, that challenges or adversely affects, or would challenge or
adversely affect, the continuation of the present use or operation of any Leased Real Property. The Company has not received any written
notice of any condemnation proceedings relating to any Leased Real Property and, to the knowledge of the Company, no condemnation
proceedings relating to any Leased Real Property are pending or threatened.

(c) There are no subleases, licenses, occupancy agreements or other contractual obligations granted by any Acquired
Company or, to the knowledge of the Company, by any other Person that authorize the right of use or occupancy of any of the Leased Real
Property to any Person other than the Acquired Companies, and there is no Person in possession of any of the Leased Real Property other than
the Acquired Companies.

(d) Except as would not, individually or in the aggregate, reasonably be expected to have or result in a Material Adverse
Effect, all items of equipment and other tangible assets owned by or leased to the Acquired Companies (including the Leased Real Property)
are adequate for the uses to which they are being put, are in good and safe condition and repair (ordinary wear and tear excepted) and are
adequate for the conduct of the businesses of the Acquired Companies in the manner in which such businesses are currently being conducted.

2.8 Intellectual Property.

(a) Part 2.8(a) of the Disclosure Schedule accurately identifies: (i) each Patent, registered trademark and each other material
item of Registered IP in which any Acquired Company has (or purports to

10
have) an ownership interest, or an exclusive license or similar exclusive right, in any field or territory; (ii) the jurisdiction in which such item of
Registered IP has been registered or filed and the applicable application, registration or serial number and date; and (iii) the record owner and,
if different, the legal owner and beneficial owner (and if any other Person has an ownership interest in such item of Registered IP, the nature
of such ownership interest).

(b) Part 2.8(b)(i) of the Disclosure Schedule accurately identifies each material Company Inbound License. Part 2.8(b)(ii) of
the Disclosure Schedule accurately identifies each material Company Outbound License. Part 2.8(b)(iii) of the Disclosure Schedule separately
and accurately identifies each Company Patent License.

(c) Except as would not, individually or in the aggregate, reasonably be expected to be material to the Acquired Companies,
taken as a whole, the Acquired Companies exclusively own all right, title and interest in and to the Company IP (other than Intellectual
Property and Intellectual Property Rights licensed to the Acquired Companies under Company Inbound Licenses), free and clear of any
Encumbrances, except for Permitted Encumbrances. Without limiting the generality of the foregoing, except as would not, individually or in
the aggregate, reasonably be expected to be material to the Acquired Companies, taken as a whole: (i) all documents and instruments
necessary to perfect the rights of the Acquired Companies in the Company IP that is a Patent, registered trademark or other material item of
Registered IP have been validly executed, delivered and filed in a timely manner with the appropriate Governmental Body; (ii) each Person who
is or was involved in the creation, contribution or development of any Intellectual Property or Intellectual Property Rights in the course of that
Person’s work with or for any Acquired Company has validly and irrevocably assigned to an Acquired Company all such Intellectual Property
and Intellectual Property Rights and is bound by confidentiality provisions protecting such Intellectual Property and Intellectual Property
Rights, and to the extent not assignable by law, has granted a waiver of such Person’s moral rights and other non-assignable rights in and to
such Intellectual Property and Intellectual Property Rights, as applicable; (iii) no Governmental Body, university, college, or other educational
institution or research center has, or to the knowledge of the Company purports to have, any ownership in, or rights to, any Company IP;
(iv) each Acquired Company has taken reasonable steps to maintain the confidentiality of its trade secrets and other confidential information,
and to otherwise protect, create, enforce, maintain and preserve its Intellectual Property Rights, and, to the knowledge of the Company, there
has been no violation, infringement or unauthorized access or disclosure of the foregoing; (v) (A) none of the Acquired Companies: (1) is or
has been a member or promoter of, made any submission or contribution to, or is subject to any Contract with, any forum, consortium, patent
pool, standards body or similar Person (each, a “Standards Organization”) that would obligate any Acquired Company to grant or offer a
license or other right to, or otherwise impair its control of, any Company-Owned IP; or (2) has received a request in writing from any Person
for any license or other right to any Company-Owned IP in connection with the activities of or any participation in any Standards
Organization; and (B) no Company-Owned IP is subject to any commitment that would require the grant of any license or right to any Person
or otherwise limit any Acquired Company’s control of any Company-Owned IP or has been, is or was required to be, identified by an
Acquired Company or, to the knowledge of the Company, any other Person as essential to any Standards Organization or any standard
promulgated by any Standards Organization; and (vi) the Acquired Companies own or otherwise have sufficient rights in, and after the
Closing the Surviving Corporation will continue to own and otherwise have sufficient rights in, all Intellectual Property Rights necessary to
conduct the business of the Acquired Companies as currently conducted. To the Company’s knowledge, each of the Acquired Companies has
and enforces a policy requiring each employee and consultant to execute a proprietary rights and confidentiality agreement substantially in the
form Made Available to Parent, and all current and former employees and consultants of the Acquired Companies who have created or
modified any of the Company IP have executed such an agreement assigning all of such employees’ and consultants’ rights in and to the
Company IP to one of the Acquired Companies.

(d) All Patents and registered trademarks that constitute Company-Owned IP and all other material Company-Owned IP
that is Registered IP are subsisting, and to the knowledge of the Company, valid

11
and enforceable, except as would not, individually or in the aggregate, reasonably be expected to be material to the Acquired Companies,
taken as a whole. Without limiting the generality of the foregoing: (i) with respect to each Patent and registered trademark that constitutes
Company-Owned IP and all other material Company-Owned IP that is Registered IP, all necessary: (A) fees, payments and filings have been
timely submitted to the relevant Governmental Body or domain name registrar; and (B) other actions have been timely taken, in the case of
each of clauses “(A)” and “(B),” to maintain each such item of Company IP that is Registered IP in full force and effect; and (ii) no Legal
Proceeding is or has been pending or, to the knowledge of the Company, threatened in writing, in which the ownership, scope, validity or
enforceability of any Patent or registered trademark that constitutes Company-Owned IP or any other material Company–Owned IP is being,
has been, or would reasonably be expected to be contested or challenged.

(e) Neither the execution, delivery or performance of this Agreement nor the consummation of any of the Contemplated
Transactions will, with or without notice or lapse of time, result in, or give any other Person the right or option to cause or declare, any of the
following (including if a Consent is required to avoid any of the following): (i) a loss of, or Encumbrance on, any Patents or registered
trademarks that constitute Company-Owned IP and all other material Company–Owned IP; (ii) a breach of or default under any Company
Inbound License, Company Outbound License or Company Patent License; (iii) the grant, assignment or transfer to any other Person of any
license or other right or interest under, in or to any Company-Owned IP or Intellectual Property Rights owned by Parent, the Surviving
Corporation or any of their Affiliates or the satisfaction of any condition as a result of which any Person would be permitted to exercise any
license or other right or interest under, in or to any Company IP or Intellectual Property Right owned by Parent, the Surviving Corporation or
any of their Affiliates; (iv) Parent, the Surviving Corporation or any of their Affiliates being bound by, or subject to, any exclusivity
commitment, non-competition agreement or other limitation or restriction on the operation of their respective businesses or the use,
exploitation, assertion or enforcement of Intellectual Property or Intellectual Property Rights anywhere in the world; (v) a reduction of any
royalties or other payments that an Acquired Company would otherwise be entitled to with respect to any Company IP; or (vi) Parent, the
Surviving Corporation or any of their Affiliates being obligated to pay any royalties or other amounts to any Person in excess of those payable
by the Acquired Companies prior to the Closing, in the case of each of clauses “(i)” through “(vi)” above, except as would not, individually or
in the aggregate, reasonably be expected to have or result in a Material Adverse Effect.

(f) No Acquired Company has ever infringed, misappropriated or otherwise violated or made unlawful use (directly,
contributorily, by inducement or otherwise) of any Intellectual Property or Intellectual Property Right of any other Person, and none of the
Company Products or the conduct of the business of any Acquired Company infringes, violates or makes unlawful use of any Intellectual
Property Right of any other Person, and no Company Product contains any Intellectual Property misappropriated from any other Person, in
each case in any material way or in a manner that would create a material liability for any of the Acquired Companies. Without limiting the
generality of the foregoing: (i) no infringement, misappropriation, unlawful use or similar claim or Legal Proceeding is pending or, to the
knowledge of the Company, threatened in writing against any Acquired Company or against any other Person who is or may be entitled to be
indemnified, defended, held harmless or reimbursed by any Acquired Company with respect to such claim or Legal Proceeding; and (ii) since
January 1, 2017, no Acquired Company has received any written notice or, to the knowledge of the Company, other communication relating
to any actual, alleged or suspected infringement, misappropriation, violation or unlawful use by any Company Product, or by any Acquired
Company, of any Intellectual Property or Intellectual Property Right of another Person, including: (A) any letter or other communication
asserting infringement, misappropriation, violation or unlawful use or threatening litigation, or suggesting or offering that any Acquired
Company obtain a license to any Intellectual Property Right of another Person and implying or suggesting that any Acquired Company has
been or is infringing, misappropriating, violating or making unlawful use of any such Intellectual Property or Intellectual Property Right; or
(B) any letter or other communication requesting or demanding defense of, or indemnification with respect to, any infringement claim.

12
 (g) Neither the execution, delivery or performance of this Agreement nor the consummation of any of the Contemplated
Transactions will, or would reasonably be expected to, with or without notice or lapse of time, result in the delivery, license or disclosure of
(or a requirement that any Acquired Company or other Person deliver, license, or disclose) any Source Material for any Company Product or
other material Company IP to any escrow agent or other Person. No event has occurred or circumstance or condition exists that, with or
without notice or lapse of time, will, or would reasonably be expected to, give rise to or serve as a basis for an obligation to deliver, license or
disclose any Source Material for any Company Product or other material Company-Owned IP to any escrow agent or other Person.

(h) Except as would not reasonably be expected to be, individually or in the aggregate, material to the Acquired Companies,
taken as a whole, no Company Software contains, is derived from, is distributed or made available with, or is being or was developed using
Open Source Software in a manner such that the terms under which such Open Source Software is licensed impose or purport to impose a
requirement or condition that an Acquired Company grant a license under or to, or refrain from asserting or enforcing, its Intellectual Property
Rights or that any other Software included in the Company IP, or part thereof, be: (i) disclosed, distributed or made available in source code
form; (ii) licensed for the purpose of making modifications or derivative works; or (iii) redistributable at no or minimal charge, in each case
other than circumstances in which any Acquired Company intentionally released Software constituting Company-Owned IP as Open Source
Software. Each Acquired Company has at all times complied with, and is currently in material compliance with, all of the licenses, conditions,
and other requirements applicable to Open Source Software.

(i) The Acquired Companies’ receipt, collection, monitoring, maintenance, creation, transmission, transfer, use, processing,
analysis, disclosure, storage, disposal and security of Protected Information has complied, and complies in all material respects with: (i) each
Company Contract; (ii) applicable Information Privacy and Security Laws; and (iii) applicable policies and procedures adopted by the Acquired
Companies relating to Protected Information. Except as would not, individually or in the aggregate, reasonably be expected to be material to
the Acquired Companies, taken as a whole, each Acquired Company has all lawful bases, authorizations, rights, consents, data processing
agreements and data transfer agreements that are required under any Information Privacy and Security Law to receive, access, use and disclose
Protected Information in such Acquired Company’s possession or under its control in connection with the operation of the business of such
Acquired Company.

(j) The Acquired Companies have adopted, and are and have been in compliance in all material respects with, commercially
reasonable policies and procedures that apply to the Acquired Companies with respect to privacy, data protection, processing, security and the
collection and use of Protected Information gathered or accessed in the course of the operations of the Acquired Companies.

(k) Each Acquired Company takes reasonable and appropriate steps to protect the confidentiality, integrity and security of
its Protected Information and its IT Systems against any unauthorized use, access, interruption, modification or corruption. Each Acquired
Company has implemented and maintains a comprehensive information security program that is designed to: (i) comply with all Information
Privacy and Security Laws and industry standards; (ii) identify internal and external risks to the security of any proprietary or confidential
information in its possession, including Protected Information and the rights and freedoms of the subjects of that Protected Information;
(iii) monitor and protect Protected Information and all IT Systems against any unauthorized use, access, interruption, modification or
corruption, in each case in conformance with Information Privacy and Security Laws; (iv) implement, monitor and maintain appropriate,
adequate and effective administrative, organizational, technical and physical safeguards to control the risks described in clauses “(ii)” and
“(iii)” above; (v) is described in written data security policies and procedures; (vi) assesses each of the Acquired Companies’ data security
practices, programs and risks; and (vii) maintains incident response and notification procedures in compliance with applicable Information
Privacy and Security Laws, including in the case of any breach of security compromising Protected Information. Each Acquired Company is
taking, and has at all times taken, reasonable steps designed to ensure that any Protected Information collected or

13
handled by authorized third parties acting on behalf of such Acquired Company provides similar safeguards, in each case, in compliance in all
material respects with applicable Information Privacy and Security Laws and consistent with general industry standards.

(l) Each Acquired Company has taken all reasonable measures to secure all Company Technology prior to selling,
distributing, deploying or making it available and has made patches and updates to such Company Technology in accordance with industry
standards. Without limiting the generality of the foregoing, each Acquired Company has performed penetration tests and vulnerability scans
of all Company Technology and those tests and scans were conducted in accordance with industry standards. Each material vulnerability
identified by any such tests or scans has been fully remediated. To the knowledge of the Company, no Company Technology contains any
listening or recording device of which the user or customer is not made aware, “back door,” “drop dead device,” “time bomb,” “Trojan horse,”
“virus,” or “worm” (as such terms are commonly understood in the software industry), software routine, disabling codes or instructions or
other vulnerabilities, faults or any other code designed or intended to have, or capable of performing, any of the following functions:
(i) disrupting, disabling, harming or otherwise impeding in any manner the operation of, or providing unauthorized access to, Protected
Information, information processed by Company Technology, or a computer system or network or other device on which such code is stored
or installed; or (ii) damaging or destroying any data or file without the user’s consent.

(m) To the knowledge of the Company, there has been no material data security breach of any IT System, or unauthorized
acquisition, access, use or disclosure of any Protected Information, owned, transmitted, used, stored, received or controlled by or on behalf of
any of the Acquired Companies. In each of the past five calendar years, each Acquired Company has performed a security risk assessment in
accordance with industry standards and addressed and fully remediated all threats and deficiencies identified in those security risk
assessments.

(n) The collection, storage, processing, transfer, sharing and destruction of Protected Information in connection with the
Contemplated Transactions, and the execution, delivery and performance of this Agreement and the Contemplated Transactions, complies
with each of the Acquired Companies’ applicable privacy notices and policies and with all applicable Information Privacy and Security Laws,
in each case in all material respects. Each Acquired Company will continue to have at least the same rights to use, process and disclose
Protected Information after the Closing as such Acquired Company had before the Closing in all material respects.

2.9 Material Contracts.

(a) Part 2.9(a) of the Disclosure Schedule identifies, as of the date of this Agreement, each of the following Company
Contracts:
(i) each offer letter, employment agreement, or independent contractor agreement with any Company Associate and, if
applicable, each stock option plan, stock appreciation right plan or stock purchase plan: (A) that is not immediately terminable
at-will by the Company without notice, severance or other cost or liability (other than amounts earned and payable as of the date of
such termination) or, in any jurisdiction that does not recognize at-will employment, that materially deviates from the form of
agreement used by the Company in the ordinary course of business, which form has been Made Available to Parent (the “Form
Employment Agreement”); (B) that provides for retention payments, change of control payments, severance, accelerated vesting, or
any payment or benefit that may or will become due as a result of the Merger or any of the other Contemplated Transactions;
(C) that contains an obligation for any Acquired Company to provide any severance that is not reflected in the Form Employment
Agreement; or (D) pursuant to which any of the Acquired Companies is or may become obligated to make any bonus or incentive
compensation payment (other than payments constituting base salary) in excess of $25,000 to any Company Associate (other than

14
bonus or similar payments consistent with past practices and paid in accordance with existing bonus plans that have been Made
Available to Parent);
(ii) any collective bargaining, union or works council agreement;
(iii) any Contract relating to the acquisition, development, sale or disposition of any business unit, product line or
Company IP;
(iv) any Contract that provides for indemnification of any Company Associate;
(v) any Contract: (A) involving a material joint venture, strategic alliance, partnership or sharing of profits or revenue or
similar agreement; or (B) for any capital expenditure in excess of $100,000;
(vi) any Contract relating to the acquisition, transfer, development (including joint development) or joint ownership of
any material Intellectual Property or Intellectual Property Rights;
(vii) any Contract entered into since October 23, 2017: (A) relating to the disposition or acquisition by any Acquired
Company of any assets or any business (whether by merger, sale or purchase of assets, sale or purchase of stock or equity
ownership interests or otherwise) for consideration in excess of $100,000 individually or $500,000 in the aggregate for all such
Contracts or that contains any ongoing obligations that are material to the Acquired Companies, taken as a whole; or (B) pursuant
to which any Acquired Company will acquire any interest, or will make an investment for consideration in excess of $100,000, in
any other Person, other than another Acquired Company;
(viii) any Contract imposing any restriction in any material respect on the right or ability of any Acquired Company:
(A) to engage in any line of business or compete with, or provide any service to, any other Person or in any geographic area; (B) to
acquire any material product or other material asset or any service from any other Person, sell any material product or other material
asset to or perform any service for any other Person, or transact business or deal in any other manner with any other Person; or
(C) to develop, sell, supply, license, distribute, offer, support or service any material product or any Intellectual Property or other
asset to or for any other Person.
(ix) any Contract that: (A) grants exclusive rights to license, market, sell or deliver any product or service of any
Acquired Company; (B) contains any “most favored nation” or similar provision in favor of the counterparty; (C) contains a right
of first refusal, first offer or first negotiation or any similar right with respect to any asset owned by an Acquired Company that is
material to the Acquired Companies, taken as a whole; or (D) provides for a “sole source” or similar relationship or contains any
provision that requires the purchase of all or any portion of an Acquired Company’s requirements from any third party;
(x) any mortgage, indenture, guarantee, loan, credit agreement, security agreement or other Contract relating to the
borrowing of money or extension of credit, in each case, in excess of $100,000, other than: (A) accounts receivable and accounts
payable; and (B) loans to or guarantees of obligations of direct or indirect wholly owned Subsidiaries of the Company, in each
case, arising or provided in the ordinary course of business consistent with past practice;
(xi) any Contract: (A) that creates any obligation under any interest rate, currency or commodity derivative or hedging
transaction; or (B) pursuant to which any Acquired Company creates or grants a material Encumbrance on any of its material
properties or other material assets;
(xii) any Contract with a Major Customer or Major Supplier that has obligations that are or will be required to be
performed and that have not been fully performed, other than a purchase order for the sale or purchase of products or services in
the ordinary course of business under which the Acquired Companies have made or received payments of less than $250,000 in
aggregate;
(xiii) any Contract providing for outsourcing, contract manufacturing, testing, assembly or fabrication, as applicable, of
any product, technology or service of an Acquired Company under which

15
 any of the Acquired Companies has made or received (or must make or will receive) payments in excess of $100,000 in aggregate in
either 2019 or 2018;
(xiv) any Contract that contemplates or will involve the payment or delivery of cash or other consideration by any
Acquired Company in an amount or having a value in excess of $100,000 in the aggregate, or contemplates or will involve the
performance of services for any Acquired Company having a value in excess of $250,000 in the aggregate, other than (A) a
purchase order for the sale or purchase of products or services in the ordinary course of business under which the Acquired
Companies will make payments of less than $500,000 in aggregate, (B) Company Employment Agreements, (C) Contracts
evidencing any Company Equity Award, (D) Contracts between any of the Acquired Companies and any Company Associate that
is terminable “at will” without any obligations on the part of any Acquired Company to make any severance, change in control or
similar payment or benefit and (E) any Contract disclosed on Part 2.9(a)(i) of the Disclosure Schedule;
(xv) any settlement, conciliation or similar Contract: (A) that materially restricts or imposes any material obligation on
any Acquired Company or materially disrupts the business of any of the Acquired Companies as currently conducted; or (B) that
would require any of the Acquired Companies to pay consideration valued at more than $100,000 in the aggregate after the date of
this Agreement;
(xvi) any Contract that contains an epidemic failure, epidemic defect, recall or other similar or extraordinary remedy in
favor of the counterparty for any defect, error or failure of any product, part or component thereof;
(xvii) any material Government Contract;
(xviii) any Contract (other than a Contract evidencing any Company Equity Award on the form or forms used by the
Company in the ordinary course of business and Made Available to Parent): (A) relating to the acquisition, issuance, voting,
registration, sale or transfer of any security or (B) providing any Person with any preemptive right, right of participation, right of
maintenance or any similar right with respect to any security;
(xix) any Contract entered into in connection with any of the Contemplated Transactions that would obligate an
Acquired Company to make any payment in excess of $50,000 in connection with any of the Contemplated Transactions; and
(xx) any Contract involving any vendor managed inventory arrangement in which an Acquired Company has
responsibility for maintaining inventory levels or retaining title or risk of non-sale on products, parts or components delivered to
the counterparty.

For purposes of this Agreement, (x) Company Contracts of the type required to be set forth in Part 2.9(a) of the Disclosure Schedule, (y) the
Leases relating to the Leased Real Property located in San Jose, California, India and Russia and (z) any “material contract” (as such term is
defined in Item 601(b)(10) of Regulation S-K of the Securities Act) shall be deemed to constitute a “Material Contract.” The Company has
Made Available to Parent an accurate and complete copy of each Material Contract.

(b) Except as would not, individually or in the aggregate, reasonably be expected to be material to the Acquired Companies,
taken as a whole, each Company Contract that constitutes a Material Contract is valid and in full force and effect, and is enforceable in
accordance with its terms, subject to the Enforceability Exceptions. Except as would not, individually or in the aggregate, reasonably be
expected to be material to the Acquired Companies, taken as a whole, (i) none of the Acquired Companies, and, to the knowledge of the
Company, no other Person, has violated or breached, or committed any default under, any Company Contract that constitutes a Material
Contract and (ii) to the knowledge of the Company, no event has occurred, and no circumstance or condition exists, that (with or without
notice or lapse of time) would reasonably be expected to: (A) result in a material violation or breach of any of the provisions of any Company
Contract; (B) give any Person the right to declare a default or exercise any remedy under any Company Contract that constitutes a

16
Material Contract; or (C) give any Person the right to cancel, terminate or modify any Company Contract that constitutes a Material Contract.
Since January 1, 2018, none of the Acquired Companies has received any written notice or, to the knowledge of the Company, other
communication regarding any actual or possible violation or breach of, or default under, any Company Contract that constitutes a Material
Contract.

2.10 Company Products.

(a) No Acquired Company is obligated to, and no Acquired Company has indicated that it would (i) provide any recipient
of any Company Product or prototype (or any other Person) with any upgrade, improvement or enhancement of a Company Product or
prototype or (ii) design or develop a new product, or a customized, improved or new version of a Company Product, for any other Person, in
each case, other than in accordance with the Company’s standard product support policies.

(b) Each Company Product sold, licensed, delivered, provided or otherwise made available by any Acquired Company or
accepted by any customer of any of the Acquired Companies (i) conformed and complied in all material respects with the terms and
requirements of any applicable warranty or other Contract and with all applicable Legal Requirements and (ii) was free of any design defect,
manufacturing or construction defect or other defect or deficiency at the time it was sold, licensed, delivered, provided or otherwise made
available, other than any defect that has not had and could not reasonably be expected to have an adverse effect, in any material respect, on
such Company Product or the operation or performance thereof. To the knowledge of the Company, no Company Product has ever been the
subject of any recall or other similar action of any Governmental Body.

2.11 Major Customers and Suppliers.

(a) Part 2.11(a)-1 of the Disclosure Schedule sets forth an accurate and complete list of each customer (including
distributors and resellers) who was one of the 10 largest sources of revenues for the Acquired Companies during 2017 or 2018, based on
amounts paid or payable (such customers, together with the customers identified in Part 2.11(a)-2 of the Disclosure Schedule, being referred
to as “Major Customers”). No Acquired Company has any pending material dispute with any Major Customer. To the knowledge of the
Company, no Acquired Company has received any written notice from any Major Customer to the effect that such Major Customer will not
continue as a customer of any of the Acquired Companies or to the effect that such Major Customer intends to terminate or materially modify
any existing Contract with any of the Acquired Companies, including by materially changing the terms of, or reducing the scale of the
business conducted with, any of the Acquired Companies. The Acquired Companies have satisfied all material commitments under each
Contract with a Major Customer with respect to Company Products that are currently under development, including commitments relating to
delivery schedules and product performance.

(b) Part 2.11(b) of the Disclosure Schedule sets forth an accurate and complete list of each supplier who was one of the 10
largest suppliers of the Acquired Companies during 2017 or 2018, based on amounts paid or payable to such suppliers (each a “Major
Supplier”). No Acquired Company has any pending material dispute with any Major Supplier. To the knowledge of the Company, no
Acquired Company has received any written notice or other communication from any Major Supplier to the effect that such Major Supplier
will not continue as a supplier of any of the Acquired Companies or to the effect that such Major Supplier intends to terminate or materially
modify any existing Contract with any of the Acquired Companies, including by materially changing the terms of, or reducing the scale of the
business conducted with, any of the Acquired Companies.

2.12 Liabilities.

(a) None of the Acquired Companies has, and none of the Acquired Companies is or may become responsible for
performing or discharging, any accrued, contingent or other liability of any nature, either matured or unmatured, except for: (a) liabilities
identified as such in the “liabilities” column of the Company Balance

17
Sheet (including any notes to the Company Balance Sheet related thereto); (b) liabilities that have been incurred by the Acquired Companies
since the date of the Company Balance Sheet in the ordinary course of business in amounts consistent with past practices; (c) liabilities for
performance of executory obligations of the Acquired Companies under Company Contracts, to the extent such liabilities did not arise as a
result of a breach of such Company Contracts; (d) liabilities and obligations that would not reasonably be expected to be, individually or in
the aggregate, material to the Acquired Companies, taken as a whole; (e) liabilities and obligations incurred in connection with the preparation
and negotiation of this Agreement or pursuant to this Agreement or in connection with the Merger; and (f) liabilities described in Part 2.12(a)
of the Disclosure Schedule.

(b) Part 2.12(b) of the Disclosure Schedule lists all indebtedness of the Acquired Companies for borrowed money
outstanding as of the date of this Agreement in excess of $250,000 in the aggregate (other than any indebtedness owed to another Acquired
Company).

(c) Part 2.12(c) of the Disclosure Schedule sets forth all obligations of the Acquired Companies outstanding as of the date
of this Agreement in respect of interest rate or currency obligations, swaps, hedges or similar arrangements that are material to the Acquired
Companies, taken as a whole.

2.13 Compliance with Legal Requirements.

(a) Each of the Acquired Companies is, and has at all times since May 1, 2014 been, in compliance in all material respects
with all applicable Legal Requirements. Since May 1, 2014, none of the Acquired Companies has received any written notice or, to the
knowledge of the Company, other communication from any Governmental Body or other Person regarding any actual or possible violation of,
or failure to comply with, any Legal Requirement.

(b) None of the Acquired Companies, and no director, officer, other employee or, to the knowledge of the Company, any
agent or third party acting on behalf of any of the Acquired Companies, has directly or indirectly: (i) used any funds for any unlawful
contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made, offered, or authorized any unlawful payment
to any foreign or domestic government official or employee or to any foreign or domestic political party or campaign or violated any provision
of any applicable anti-corruption or anti-bribery Legal Requirement, including the Foreign Corrupt Practices Act of 1977, as amended, and the
United Kingdom Bribery Act of 2010 (collectively, “Anti-Corruption Laws”); or (iii) made, offered or authorized any bribe, rebate, payoff,
influence payment, kickback or other similar unlawful payment. For purposes of this Section 2.13(b), an “unlawful payment” shall include any
transfer of funds or any other thing of value, such as a gift, transportation or entertainment, which transfer is in violation of any applicable
Anti-Corruption Law, including any payment to a third party all or part of the proceeds of which is used for a corrupt payment. Since May 1,
2014, none of the Acquired Companies or any other Entity under their control has been investigated, charged or prosecuted for any violation
of any applicable Anti-Corruption Law. None of the Acquired Companies or any Entity under their control has disclosed to any Governmental
Body information that establishes or indicates that an Acquired Company violated or may have violated any Anti-Corruption Law applicable
to the Acquired Companies, or are aware of any circumstances that would reasonably be expected to give rise to an investigation in the future.

(c) Since May 1, 2014, each of the Acquired Companies and each Entity under their control: (i) has been and is in
compliance, in all material respects, with all U.S. Export and Import Laws and all applicable Foreign Export and Import Laws; and (ii) has
prepared and timely applied for, and obtained and complied with, all licenses, registrations and other authorizations for export, re-export,
deemed (re)export, transfer or import required in accordance with U.S. Export and Import Laws and Foreign Export and Import Laws for the
conduct of its business.

(d) Since May 1, 2014, none of the Acquired Companies or any of their respective directors, officers, employees or, to the
knowledge of the Company, any agents acting on behalf of any of the Acquired Companies: (i) is or has been a Person with whom
transactions are prohibited or limited under any applicable

18
U.S. Export and Import Law or Foreign Export and Import Law, including those administered by OFAC, the Bureau of Industry and Security
of the U.S. Department of Commerce, the United Nations Security Council, the European Union, Her Majesty’s Treasury or any other similar
Governmental Body; (ii) has violated or made a disclosure (voluntary or otherwise) to any Governmental Body regarding compliance with any
U.S. Export and Import Law or Foreign Export and Import Law; (iii) has engaged in any transaction or otherwise dealt directly or indirectly,
without the required Governmental Authorization, with the Crimea Region of Ukraine/Russia since December 19, 2014, or with Cuba, Iran,
North Korea, Sudan or Syria with respect to any goods, software or services, or any other country against which the U.S. maintains an arms
embargo if the transaction involved goods, software, services or technology controlled by ITAR; or (iv) has employed or is currently
employing at any of its facilities any national of Cuba, Iran, North Korea, Sudan or Syria, or a person ordinarily resident in the Crimea region
of Ukraine/Russia.

(e) None of the Acquired Companies has been cited or fined for failure to comply with any U.S. Export and Import Law or
Foreign Export and Import Law, and no economic sanctions-related, export-related or import-related Legal Proceeding, investigation or
inquiry is or has been pending or, to the knowledge of the Company, threatened against any Acquired Company or any officer or director of
any Acquired Company (in his or her capacity as an officer or director of any Acquired Company) by or before (or, in the case of a threatened
matter, that would come before) any Governmental Body.

2.14 Governmental Authorizations.

(a) Except as would not, individually or in the aggregate, reasonably be expected to be material to the Acquired Companies,
taken as a whole: (i) the Acquired Companies hold, and since May 1, 2014 have held, all material Governmental Authorizations, and have
made all filings required under applicable Legal Requirements, necessary to enable the Acquired Companies to conduct their respective
businesses in the manner in which such businesses are currently being conducted; (ii) all such Governmental Authorizations are valid and in
full force and effect; (iii) each Acquired Company is, and since May 1, 2014 has been, in compliance in all material respects with the terms
and requirements of such Governmental Authorizations; and (iv) since May 1, 2014, none of the Acquired Companies has received any written
notice or, to the knowledge of the Company, other communication from any Governmental Body regarding (A) any actual or possible
violation of or failure to comply with any term or requirement of any material Governmental Authorization or (B) any actual or possible
revocation, withdrawal, suspension, cancellation, termination or material modification of any material Governmental Authorization.

(b) Part 2.14(b) of the Disclosure Schedule describes the terms of each grant, incentive or subsidy provided or made
available to or for the benefit of any of the Acquired Companies by any Governmental Body or otherwise. Except as would not, individually or
in the aggregate, reasonably be expected to be material to the Acquired Companies, taken as a whole, each of the Acquired Companies is in
full compliance with all of the terms and requirements of each grant, incentive or subsidy identified or required to be identified in Part 2.14(b)
of the Disclosure Schedule. Neither the execution, delivery or performance of this Agreement nor the consummation of the Merger or any of
the other Contemplated Transactions will (with or without notice or lapse of time) give any Person the right to revoke, withdraw, suspend,
cancel, terminate or modify any grant, incentive or subsidy identified or required to be identified in Part 2.14(b) of the Disclosure Schedule.

2.15 Tax Matters. Except as could not reasonably be expected to have or result in a Material Adverse Effect:

(a) (i) each of the Tax Returns required to be filed by or on behalf of any Acquired Company with any Governmental Body
with respect to any taxable period ending on or before the Closing Date (the “Acquired Company Returns”): (A) has been or will be filed on or
before the applicable due date (including any extensions of such due date); and (B) has been, or will be when filed, accurate and complete and
in compliance with all applicable Legal Requirements; and (ii) all Taxes of the Acquired Companies for any taxable period ending on or

19
before the Closing Date have been or will be timely paid or accrued (in accordance with GAAP) on or before the Closing Date, other than any
Taxes that are being contested in good faith by the Acquired Companies;

(b) the Company Balance Sheet fully reserves for or accrues all actual and contingent liabilities of the Acquired Companies
for Taxes with respect to all periods through the date of the Company Balance Sheet;

(c) no extension or waiver of the limitation period applicable to any of the Acquired Company Returns has been granted (by
the Company or any other Person) and remains in effect (other than any such extension that arises solely as a result of an extension of time to
file a Tax Return obtained in the ordinary course of business of not more than six months);

(d) (i) no Acquired Company has received written notice of any Tax audit, claim or Legal Proceeding that is pending or, to
the knowledge of the Company, has been threatened against or with respect to any Acquired Company in respect of any Tax; (ii) there are no
Encumbrances for Taxes upon any of the assets of any of the Acquired Companies except liens for current Taxes not yet due and delinquent;
and (iii) no Acquired Company has ever received a written claim by any Governmental Body in a jurisdiction where an Acquired Company
does not file a Tax Return that it is or may be subject to taxation by that jurisdiction;

(e) since April 30, 2016, no Acquired Company has constituted either a “distributing corporation” or a “controlled
corporation” within the meaning of Section 355(a)(1)(A) of the Code in connection with a distribution of stock qualifying for tax-free
treatment under Section 355 of the Code;

(f) no Acquired Company has any Liability for the Taxes of any Person under Treas. Reg. § 1.1502-6 (or any similar
provision of state, local or foreign Legal Requirement, including any arrangement for group or consortium relief or similar arrangement), or as
a transferee or successor, or otherwise by operation of Legal Requirements;

(g) none of the Acquired Companies is, or has ever been, a party to or bound by any Tax indemnity agreement, Tax sharing
agreement, Tax allocation agreement or similar Contract (except for an agreement (i) solely between the Acquired Companies, (ii) that will
terminate as of Closing or (iii) entered into in the ordinary course of business and not primarily related to the allocation or sharing of Taxes);

(h) the prices and terms for the provision of any material property or material services by or to the Acquired Companies are
arm’s length for purposes of relevant transfer pricing Legal Requirements and the Acquired Companies have maintained contemporaneous
documentation and prepared all required transfer pricing reports as, and to the extent, reflected in the applicable Tax Return;

(i) no Acquired Company has participated in, or is currently participating in, a “Listed Transaction” or a “Reportable
Transaction” within the meaning of Treasury Regulation Section 1.6011-4(b)(2) or a similar transaction under any corresponding or similar
Legal Requirement;

(j) none of the Acquired Companies will be required to include any material items of income in, or exclude any material
items of deduction from, taxable income for a taxable period ending after the Closing as a result of: (i) any change in accounting method
pursuant to Section 481 or 263A of the Code (or any comparable provision under state, local or foreign Tax Legal Requirements) as a result of
transactions or events occurring, or accounting methods employed, prior to the Closing; (ii) deferred intercompany gain described in the
Treasury Regulations under Section 1502 of the Code (or any similar provision of U.S. state, local or foreign Tax Legal Requirements) arising
from any transaction that occurred prior to the Closing; (iii) any installment sale or open transaction that occurred prior to the Closing; (iv) any
prepaid amount received outside the ordinary course of business prior to the Closing; or (v) any election under Section 108(i) of the Code
made prior to the Closing; and

(k) each of the Acquired Companies has withheld from each payment made to Company Associates or to its past or present
suppliers, creditors, stockholders or other third parties all Taxes required to be

20
withheld and has, within the time and in the manner required by applicable Legal Requirements, paid such withheld amounts to the proper
Governmental Bodies and complied with all reporting and record retention requirements related to such Taxes.

2.16 Employee and Labor Matters; Benefit Plans.

(a) The Company has Made Available to Parent a list (redacted to the extent required by applicable Legal Requirements) of
all current employees (identified by employee identification number) of each of the Acquired Companies as of the date of this Agreement, and
correctly reflects in all material respects: (i) their dates of hire; (ii) their job titles or positions; (iii) their current annual base salaries or hourly
wages; (iv) their current year annual target bonus or commission amounts and actual bonus paid in connection with the last employee review
program, if any; (v) any other compensation payable to them (including housing allowances, compensation payable pursuant to bonus,
deferred compensation or commission arrangements or other compensation); (vi) any Governmental Authorizations that are held by them and
that relate to the business of any Acquired Company; (vii) any promises made to them in writing with respect to changes or additions to their
compensation or benefits; (viii) their city and state or country of employment or service; (ix) their employer or employing entity; (x) the annual
vacation or paid time off entitlement in days and any accrued and unpaid vacation pay or paid time off entitlements as of April 30, 2019; (xi)
leave of absence status and expected date of return to active employment, if any; (xii) if such employee is located in the United States, whether
such employees are classified as exempt or non-exempt under the Fair Labor Standards Act; and (xiii) their status as full-time, part-time,
temporary or seasonal employees. The employment of each employee of an Acquired Company who performs services for such Acquired
Company exclusively or primarily in the United States is terminable by such Acquired Company “at will” (and without penalty or Liability,
other than accrued wages and vested rights, whether in respect of severance payments and benefits or otherwise) and the employment of each
employee of an Acquired Company who performs services for such Acquired Company exclusively or primarily outside the United States and
receives a salary or annual base compensation in excess of $200,000 per year is terminable either “at will” or at the expiration of a standard
notice period as set forth in applicable local regulations or contained in a written Contract identified in Part 2.16(a)-3 of the Disclosure
Schedule. The Company has Made Available to Parent accurate and complete copies of all employee manuals and handbooks, disclosure
materials, policy statements, form employee acknowledgments, and other materials relating to employment with the Acquired Companies in
effect as of the date of this Agreement.

(b) None of the Acquired Companies is or has ever been a party to, subject to, or under any obligation to bargain for, any
collective bargaining agreement, works council, labor, voluntary recognition or similar agreement with respect to any Company Associate or
other Contract with a labor organization, union, works council or similar entity representing any Company Associate, and there are no labor
organizations representing, purporting to represent or, to the knowledge of the Company, seeking to represent any employee or Contract
Worker of any of the Acquired Companies. To the knowledge of the Company, there are no organizing, election or similar activities pending
or threatened by or on behalf of any union, works council, employee representative or other labor organization or group of employees with
respect to any Company Associate in his or her capacity as a service provider to an Acquired Company. No trade union, council of trade
unions, employee bargaining agency or affiliated bargaining agent holds bargaining rights with respect to any Company Associate by way of
certification, interim certification, voluntary recognition or succession rights, or has applied or threatened to apply to be certified as the
bargaining agent of any Company Associate in his or her capacity as a service provider to an Acquired Company. No Acquired Company has
ever agreed to recognize any labor union, works council or other collective bargaining representative, nor has any labor union, works council
or other collective bargaining representative been certified as the exclusive bargaining representative of any Company Associate. There is no
challenge regarding representation as to any labor union, works council, employee association or other collective bargaining representative
with respect to any Company Associate, and no labor union, works council or other collective bargaining representative claims to or is seeking
to represent any Company Associate. There is no union, works council, employee representative or other labor organization, which, pursuant
to any applicable Legal Requirement, must be notified, consulted or with which negotiations

21
need to be conducted in connection with any of the Contemplated Transactions. To the knowledge of the Company, none of the Acquired
Companies is engaging, and since April 1, 2016 none of the Acquired Companies has engaged, in any unfair labor practice of any nature.
Since April 1, 2016, there has not been any unfair labor practice complaint or charge pending or, to the knowledge of the Company,
threatened, against any Acquired Company before the U.S. National Labor Relations Board or any similar body in the United States or any
other country in which any Acquired Company has employees or performs services. No petition has been filed with the National Labor
Relations Board or any similar agency requesting certification of a collective bargaining representative and no other union organizing efforts
are pending or, to the knowledge of the Company, threatened. No Acquired Company has been the subject of a slowdown, strike, picketing,
boycott, group work stoppage, labor dispute, attempt to organize or union organizing activity, or any similar activity or dispute, affecting any
of the Acquired Companies or any of their employees, and no labor dispute is pending, or to the knowledge of the Company, threatened,
against any Acquired Company.

(c) Part 2.16(c) of the Disclosure Schedule accurately sets forth in all material respects, with respect to each individual who
is or was a consultant, intern or other independent contractor of any Acquired Company since January 1, 2019 and will be paid more than
$25,000:
(i) the name of such independent contractor, the Acquired Company that has engaged such independent contractor,
location of service and country of engagement and the date on which such independent contractor was originally engaged by such
Acquired Company;
(ii) whether such independent contractor is subject to a written Contract or is engaged through an agency or on a
contingency basis;
(iii) a description of such independent contractor’s performance objectives, services, duties and responsibilities;
(iv) the aggregate dollar amount of the compensation (including all payments or benefits of any type) received by such
independent contractor from any Acquired Company with respect to services performed in the year ended December 31, 2018;
(v) the terms of current compensation of such independent contractor; and
(vi) any Governmental Authorization that is held by such independent contractor and that relates to the business of any
Acquired Company.

Accurate and complete copies of all Contracts identified in Part 2.16(c)(ii) of the Disclosure Schedule have been Made Available to Parent.

(d) Except as would not reasonably be expected to result in a Liability that is, or would reasonably be expected to be,
material to the Acquired Companies, taken as a whole, each Company Associate that renders or has rendered services to any of the Acquired
Companies that is classified as a Contract Worker or other non-employee status or as an exempt or non-exempt employee, is properly
characterized as such for all purposes, including: (i) for purposes of the Fair Labor Standards Act and similar applicable state, local, provincial
and foreign Legal Requirements governing the payment of wages (including overtime and premium wages); (ii) applicable Tax Legal
Requirements; (iii) unemployment insurance and worker’s compensation obligations; (iv) all other applicable Legal Requirements; and (v) for
purposes of all applicable Company Employee Plans and perquisites. No Contract Worker is eligible to participate in any Company Employee
Plan. To the knowledge of the Company, none of the Acquired Companies has any material Liability for any misclassification of any
Company Associate as an independent contractor or any non-exempt employee as an exempt employee. None of the Acquired Companies has
ever had any temporary, seasonal or leased employees that were not treated and accounted for in all respects as employees of such Acquired
Company.

(e) No Person has claimed or, to the knowledge of the Company, has reason to claim that any Company Associate: (i) is in
violation, in any material respect, of any term of any employment Contract,

22
noncompetition agreement, nonsolicitation agreement, any restrictive covenant with such Person, or has interfered, in any material respect, in
the employment relationship between such Person and any of its present or former employees; or (ii) is in violation of any patent disclosure
agreement or has disclosed or utilized any trade secret or proprietary information or documentation of such Person. To the knowledge of the
Company, no Company Associate has used or proposed to use any trade secret, information or documentation confidential or proprietary to
any former employer or other Person for whom such individual performed services or violated any confidential relationship with any Person in
connection with the development, manufacture or sale of any product or proposed product, or the development or sale of any service or
proposed service, of any Acquired Company.

(f) Except as would not reasonably be expected to result in a Liability that is, or would reasonably be expected to be,
material to the Acquired Companies, taken as a whole, each Acquired Company is, and since January 1, 2014 has been, in compliance with all
applicable Legal Requirements respecting employment, hiring practices, employment practices, terms and conditions of employment, wages,
hours or other labor-related matters, including Legal Requirements relating to discrimination, equal pay, wages and hours, overtime, business
expense reimbursements, labor relations, leaves of absence, paid sick leave laws, work breaks, classification of employees (including exempt
and independent contractor status), occupational health and safety, privacy, fair credit reporting, harassment, retaliation, disability rights and
benefits, reasonable accommodation, equal employment, fair employment practices, immigration, wrongful discharge or violation of personal
rights including the Worker Adjustment and Retraining Notification Act (and any similar foreign, provincial, state or local statute or
regulation) (the “WARN Act”). None of the Acquired Companies has effectuated a “plant closing,” “termination,” “relocation,” or “mass
layoff” as those terms are used in the WARN Act and similar laws or has become subject to any obligation under any applicable Legal
Requirement or otherwise to notify or consult with, prior to or after the Effective Time, any Governmental Body or other Person with respect
to the impact of the Contemplated Transactions. None of the Acquired Companies is a party to any Contract or subject to any Legal
Requirement that restricts any Acquired Company from relocating, consolidating, merging or closing, in whole or in part, any portion of the
business of such Acquired Company. Except as would not reasonably be expected to result in a Liability that is, or would reasonably be
expected to be, material to the Acquired Companies, taken as a whole, each of the Acquired Companies has properly accrued in the ordinary
course of business, and has timely made all payments for, all wages, overtime, salaries, commissions, bonuses, fees and other compensation
for any services performed, directly or indirectly, for any Acquired Company as of the date of this Agreement. Except as would not reasonably
be expected to result in a Liability that is, or would reasonably be expected to be, material to the Acquired Companies, taken as a whole, none
of the Acquired Companies has any liability for any arrears of wages, salaries, overtime pay, premium pay, commissions, bonuses, benefits,
severance pay or other amounts, including pursuant to any Contract, policy, practice or applicable Legal Requirement, or any Taxes or any
penalty for failure to comply with any of the foregoing. Except as would not result in a material Liability to the Acquired Companies, taken as
a whole, none of the Acquired Companies has any Liability for any payment to any trust or other fund governed by or maintained by or on
behalf of any Governmental Body with respect to unemployment compensation benefits, worker’s compensation, social security or other
benefits or obligations (other than routine payments to be made in the ordinary course of business consistent with past practice). Each of the
Acquired Companies maintains records of all hours worked by each employee eligible for overtime compensation that are accurate and
complete in all material respects and compensates all employees in accordance with the requirements of the Fair Labor Standards Act and the
applicable Legal Requirements of all jurisdictions where such Acquired Company maintains employees. Each of the Acquired Companies has
always been in compliance with the requirements of the Immigration Reform Control Act of 1986 in all material respects, and each employee
who requires permission and/or authorization to work in the jurisdiction in which they carry out their employment had at the time of hire
current and appropriate permission and/or authorization to work in that jurisdiction. To the knowledge of the Company, none of the Acquired
Companies’ employment policies or practices has ever been or is currently being audited or investigated by any Governmental Body.

(g) To the knowledge of the Company, no allegation, complaint, charge or claim (formal or informal) of sexual harassment,
sexual assault, sexual misconduct or similar behavior (a “Sexual Misconduct

23
Allegation”) has been made against any person who is or was an officer, director, manager or supervisory-level employee of any Acquired
Company. No Acquired Company has entered into any settlement agreement, tolling agreement, non-disparagement agreement,
confidentiality agreement or non-disclosure agreement, or any Contract or provision similar to any of the foregoing, relating directly or
indirectly to any Sexual Misconduct Allegation against any Acquired Company or any person who is or was an officer, director, manager,
employee or Contract Worker of any Acquired Company.

(h) Part 2.16(h) of the Disclosure Schedule contains an accurate and complete list, as of the date of this Agreement, of each
material Company Employee Plan and each material Company Employee Agreement and separately identifies each material Foreign Plan.
None of the Acquired Companies has committed in writing to establish or enter into any new arrangement that would constitute a material
Company Employee Plan or Company Employee Agreement, or to materially modify any material Company Employee Plan or Company
Employee Agreement (except to conform any such Company Employee Plan or Company Employee Agreement to the requirements of any
applicable Legal Requirements). The Company has Made Available to Parent, in each case, to the extent applicable: (i) accurate and complete
copies of all documents setting forth the terms of each material Company Employee Plan and each material Company Employee Agreement,
including all amendments thereto and all related trust documents; (ii) the most recent summary plan description, together with summaries of
the material modifications thereto, if any, required under ERISA with respect to each material Company Employee Plan; (iii) all trust
agreements, insurance contracts and funding agreements; (iv) all discrimination tests required under the Code for each Company Employee
Plan intended to be qualified under Section 401(a) of the Code for the most recent plan year; and (v) the most recent IRS determination or
opinion letter issued with respect to each Company Employee Plan intended to be qualified under Section 401(a) of the Code.

(i) Each Company Employee Plan has been established, maintained and operated in all material respects in accordance with
its terms and in compliance in all material respects with all applicable Legal Requirements, including ERISA and the Code. Any Company
Employee Plan intended to be qualified under Section 401(a) of the Code and each trust intended to be qualified under Section 501(a) of the
Code has obtained a favorable determination letter (or opinion letter, if applicable) as to its qualified status under the Code and, to the
knowledge of the Company, nothing has occurred since the date of the most recent determination that would reasonably be expected to
adversely affect such qualification. Each Company Employee Plan intended to be tax qualified under applicable Legal Requirements is so tax
qualified, and, to the knowledge of the Company, no event has occurred and no circumstance or condition exists that could reasonably be
expected to result in the disqualification of any such Company Employee Plan. No “prohibited transaction,” within the meaning of
Section 4975 of the Code or Sections 406 and 407 of ERISA, and not otherwise exempt under Section 408 of ERISA, has occurred with
respect to any Company Employee Plan. Each Company Employee Plan can be amended, terminated or otherwise discontinued after the
Closing in accordance with its terms. There is no audit, inquiry or Legal Proceeding pending or, to the knowledge of the Company, threatened
or reasonably anticipated by the IRS, DOL or any other Governmental Body with respect to any Company Employee Plan. None of the
Acquired Companies or any ERISA Affiliate has ever incurred any material penalty or Tax with respect to any Company Employee Plan under
Section 502(i) of ERISA or Sections 4975 through 4980 of the Code. Except as would not, individually or in the aggregate, reasonably be
expected to result in a material Liability, each of the Acquired Companies and ERISA Affiliates have timely made all contributions and other
payments required by and due under the terms of each Company Employee Plan, and, to the extent not yet due, such contributions and other
payments have been adequately accrued in the consolidated financial statements (including any related notes) contained or incorporated by
reference in the Company SEC Reports. Each Foreign Plan that is required to be registered or approved by any Governmental Body under
applicable Legal Requirements has been so registered or approved, except as would not, individually or in the aggregate, result in a Liability
that is, or would reasonably be expected to be, material to the Acquired Companies, taken as a whole.

(j) None of the Acquired Companies, and no ERISA Affiliate, maintains, sponsors or contributes to, or has within the past
six years ever maintained, established, sponsored, participated in, or contributed to, or been obligated to contribute to or has any liability in
respect of, any: (i) Company Pension Plan subject to

24
Title IV of ERISA or Section 412 of the Code; (ii) “multiemployer plan” within the meaning of Section (3)(37) of ERISA; or (iii) plan
described in Section 413 of the Code. No Company Employee Plan is or has been funded by, associated with or related to a “voluntary
employee’s beneficiary association” within the meaning of Section 501(c)(9) of the Code. No Company Employee Plan subject to ERISA
holds stock issued by the Company or any of its current ERISA Affiliates as a plan asset. Except as would not, individually or in the
aggregate, result in a Liability that is, or would reasonably be expected to be, material to the Acquired Companies, taken as a whole, the fair
market value of the assets of each funded Foreign Plan, the Liability of each insurer for any Foreign Plan funded through insurance, or the
book reserve established for any Foreign Plan, together with any accrued contributions, is sufficient to procure or provide in full for the
accrued benefit obligations (determined on an ongoing basis accrued to the date of this Agreement), with respect to all current and former
participants in such Foreign Plan according to the reasonable actuarial assumptions and valuations most recently used to determine employer
contributions to and obligations under such Foreign Plan, and none of the Contemplated Transactions will cause any such assets or insurance
obligations to be less than such benefit obligations.

(k) No Company Employee Plan or Company Employee Agreement provides (except at no cost to the Acquired Companies
or any Affiliate of any Acquired Company), or reflects or represents any Liability of any of the Acquired Companies or any Affiliate of any
Acquired Company to provide, post-termination or retiree life insurance, post-termination or retiree health benefits or other post-termination
or retiree employee welfare benefits to any Person for any reason, except as may be required by COBRA or other applicable Legal
Requirements.

(l) Except as set forth in Part 2.16(l) of the Disclosure Schedule, and except as expressly required or provided by this
Agreement, neither the execution of this Agreement nor the consummation of the Contemplated Transactions will (either alone or in
combination with another event, whether contingent or otherwise): (i) result in any payment (whether of bonus, change in control, retention,
severance pay or otherwise), acceleration, forgiveness of indebtedness, vesting, distribution, increase in benefits or obligation to fund benefits
with respect to any Company Associate; or (ii) create any limitation or restriction on the right of any Acquired Company to merge, amend or
terminate any Company Employee Plan or Company Employee Agreement. Without limiting the generality of the foregoing, no amount
payable to any Company Associate as a result of the execution and delivery of this Agreement or the consummation of any of the
Contemplated Transactions (either alone or in combination with any other event) would be an “excess parachute payment” within the meaning
of Section 280G or would be nondeductible under Section 280G of the Code. None of the Acquired Companies has any obligation to
compensate any Company Associate for any Taxes incurred by such Company Associate under Section 4999 of the Code.

(m) Except as listed on Part 2.16(m) of the Disclosure Schedule, each Company Employee Plan, Company Employee
Agreement or other Contract between any Acquired Company and any Company Associate that is a “nonqualified deferred compensation
plan” subject to Section 409A is and has at all times been administered in documentary and operational compliance with the requirements of
Section 409A, except as would not result in a material Liability. No Acquired Company has any obligation to gross-up or otherwise reimburse
any Company Associate for any tax incurred by such person pursuant to Section 409A.

2.17 Environmental Matters.

(a) Except as would not, individually or in the aggregate, reasonably be expected to have or result in a Material Adverse
Effect, (i) each of the Acquired Companies is, and since October 23, 2017 has been, in compliance with, and is not subject to any Liability
under, any applicable Environmental Law, including timely applying for, possessing, maintaining, and complying with the terms and
conditions of all material Governmental Authorizations required under applicable Environmental Laws and (ii) none of the properties currently
or, to the knowledge of the Company, formerly owned, leased or operated by any of the Acquired Companies contains any Hazardous
Materials.

25
 (b) Since January 1, 2018, or earlier for matters that remain unresolved, none of the Acquired Companies has received any
written notice or, to the knowledge of the Company, other communication from any Person that alleges that any of the Acquired Companies
is in violation of, or has any material Liability under, any Environmental Law. Except as could not reasonably be expected to result in any
material Liability to any Acquired Company, there has been no Release at, on, under or from any Leased Real Property or any other property
that is or was owned, operated or leased by any of the Acquired Companies or at any property or facility at which any Acquired Company has
arranged for the transportation, disposal or treatment of Hazardous Materials.

(c) The Acquired Companies have Made Available to Parent copies of all material environmental assessments,
Governmental Authorizations, reports, audits and other material documents in their possession or under their control that relate to the
Acquired Companies’ compliance with or any Liability under any Environmental Law.

2.18 Insurance. The Company has Made Available to Parent a copy of all material insurance policies and all material self-insurance
programs and arrangements relating to the business, assets and operations of the Acquired Companies. Except as would not, individually or in
the aggregate, reasonably be expected to have or result in a Material Adverse Effect: (a) each of such insurance policies is in full force and
effect, except for policies that have expired under their terms in the ordinary course and that have been replaced with policies of comparable
coverage; (b) no written notice of default or termination has been received by any Acquired Company in respect thereof; and (c) all premiums
due thereon have been paid in full. Since January 1, 2018, none of the Acquired Companies has received any written notice or, to the
knowledge of the Company, other communication regarding any: (i) cancellation or invalidation of any insurance policy; (ii) actual or possible
refusal of any coverage or rejection of any material claim under any insurance policy; or (iii) actual or possible material adjustment in the
amount of the premiums payable with respect to any insurance policy.

2.19 Legal Proceedings; Orders.

(a) There is no pending Legal Proceeding and, to the knowledge of the Company, no Person has threatened to commence
any Legal Proceeding: (i) that involves any of the Acquired Companies or any of the assets owned or used by any of the Acquired Companies,
except as would not reasonably be expected to, individually or in the aggregate, materially impact the business and operations of the Acquired
Companies; or (ii) that challenges, or that may have the effect of preventing, delaying, making illegal or otherwise interfering with, the Merger
or any of the Contemplated Transactions.

(b) Except as would reasonably be expected to, individually or in the aggregate, materially impact the business and
operations of the Acquired Companies, (i) there is no Order to which any of the Acquired Companies, or any of the assets owned or used by
any of the Acquired Companies, is subject and (ii) to the knowledge of the Company, no officer or other key employee of any of the Acquired
Companies is subject to any Order that prohibits such officer or such employee from engaging in or continuing any conduct, activity or
practice relating to the business of any of the Acquired Companies.

2.20 Authority; Binding Nature of Agreement. The Company has the necessary corporate power and authority to enter into and
to perform its obligations under this Agreement and to consummate the Contemplated Transactions, subject, in the case of the consummation
of the Merger, only to the adoption of this Agreement by the Required Company Stockholder Vote. The Company’s board of directors (at a
meeting duly called and held) has: (a) unanimously determined that the Merger is advisable and fair to, and in the best interests of, the
Company and its stockholders; (b) unanimously approved the execution, delivery and performance of this Agreement by the Company and the
consummation of the Contemplated Transactions, including the Merger; and (c) unanimously recommended the adoption of this Agreement
by the holders of Company Common Stock and directed that this Agreement be submitted for adoption by the Company’s stockholders at the
Company Stockholders’ Meeting. This Agreement has been duly executed and delivered by the Company and constitutes

26
the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to the
Enforceability Exceptions.

2.21 Takeover Statutes; No Rights Plan. The Company’s board of directors has taken all actions so that the restrictions applicable
to business combinations contained in Section 203 of the DGCL are, and will be, inapplicable to the execution, delivery and performance of
this Agreement and the Support Agreements and to the consummation of the Merger and the other Contemplated Transactions. None of such
actions by the Company’s board of directors has been amended, rescinded or modified. There are no other “fair price,” “moratorium,” “control
share acquisition,” “business combination” or other similar anti-takeover statutes or regulations (each, a “Takeover Statute”) applicable to, or
purporting to be applicable to, this Agreement, any Support Agreement, any Acquired Company, the Merger or any of the other Contemplated
Transactions, including any Takeover Statute that would limit or restrict Parent or any of its Affiliates from exercising its ownership of shares
of Company Common Stock acquired in the Merger. The Company has no stockholder rights plan, “poison pill” or similar agreement or
arrangement designed to have the effect of delaying, deferring or discouraging any Person from acquiring control of the Company.

2.22 Vote Required. The affirmative vote of the holders of a majority of the shares of Company Common Stock outstanding on
the record date for the Company Stockholders’ Meeting (the “Required Company Stockholder Vote”) is the only vote of the holders of any
class or series of the Company’s capital stock necessary to adopt this Agreement and approve the Merger and the other Contemplated
Transactions.

2.23 Non-Contravention; Consents. Neither the execution, delivery or performance of this Agreement nor the consummation of
the Merger or any of the other Contemplated Transactions, will directly or indirectly (with or without notice or lapse of time): (a) contravene,
conflict with or result in a violation of (i) any of the provisions of the certificate of incorporation, bylaws or other charter or organizational
documents of any of the Acquired Companies or (ii) any resolution adopted by the stockholders or equityholders, the board of directors (or
similar governing body) or any committee of the board of directors (or similar governing body) of any of the Acquired Companies; (b) other
than as set forth in Part 2.23(b) of the Disclosure Schedule, contravene, conflict with or result in a violation of, or give any Governmental
Body or other Person the right to challenge the Merger or any of the other Contemplated Transactions or to exercise any remedy or obtain any
relief under, any Legal Requirement or any Order to which any of the Acquired Companies, or any of the assets owned or used by any of the
Acquired Companies, is subject; (c) contravene, conflict with or result in a violation of any of the terms or requirements of, or give any
Governmental Body the right to revoke, withdraw, suspend, cancel, terminate or modify, any Governmental Authorization that is held by any
of the Acquired Companies or that otherwise relates to the business of any of the Acquired Companies or to any of the assets owned or used
by any of the Acquired Companies; (d) contravene, conflict with or result in a violation or breach of, or result in a default under, any provision
of any Material Contract, or give any Person the right to: (i) declare a default or exercise any remedy under any Material Contract;
(ii) accelerate the maturity or performance of any Material Contract; or (iii) cancel, terminate or modify in any material respect any right,
benefit, obligation or other term of any Material Contract; or (e) result in the imposition or creation of any Encumbrance upon or with respect
to any asset owned or used by any of the Acquired Companies (except, in the case of clauses “(b)” through “(e)” above, for any such
contraventions, conflicts, violations, breaches, defaults or other occurrences that would not, individually or in the aggregate, reasonably be
expected to be material to the Acquired Companies, taken as a whole). Except as may be required by the Exchange Act, the DGCL, the HSR
Act, any foreign antitrust Legal Requirement, the DPA and the rules and regulations thereunder or any other Legal Requirement applicable to
the CFIUS Condition, none of the Acquired Companies was, is or will be required to make any filing with or give any notice to, or to obtain
any Consent from, any Person in connection with (x) the execution, delivery or performance of this Agreement or any other agreement referred
to herein or (y) the consummation of the Merger or any of the other Contemplated Transactions, except as would not, individually or in the
aggregate, reasonably be expected to be material to the Acquired Companies, taken as a whole.

2.24 Fairness Opinion. The Company’s board of directors has received the written opinion of Barclays Capital Inc., financial
advisor to the Company, dated May 6, 2019, to the effect that, as of the date

27
thereof and subject to the limitations, qualifications and assumptions set forth therein, from a financial point of view, the Price Per Share to be
received by the stockholders of the Company (other than holders of Dissenting Shares and shares that will remain outstanding or will be
canceled without consideration pursuant to Sections 1.5(a)(i) and 1.5(a)(ii)) is fair to such stockholders of the Company. The Company will
furnish, for informational purposes only, a complete copy of such written opinion to Parent as soon as practicable following the execution of
this Agreement, and the Company has received the authorization of Barclays Capital Inc. to include such opinion in the Proxy Statement.

2.25 Advisors’ Fees. Except for Barclays Capital Inc., no broker, finder or investment banker is entitled to any brokerage, finder’s
or other fee or commission in connection with the Merger or any of the other Contemplated Transactions based upon arrangements made by
or on behalf of any of the Acquired Companies. The Company has provided to Parent accurate and complete copies of all agreements under
which any such fees, commissions or other amounts have been paid or may become payable and all indemnification and other agreements
related to the engagement of Barclays Capital Inc.

2.26 Disclosure. None of the information supplied or to be supplied by or on behalf of the Company for inclusion or incorporation
by reference in the Proxy Statement will, at the time the Proxy Statement is mailed to the stockholders of the Company or at the time of the
Company Stockholders’ Meeting (or any adjournment or postponement thereof), contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under
which they are made, not misleading. The Proxy Statement will comply as to form in all material respects with the provisions of the Exchange
Act and the rules and regulations promulgated by the SEC thereunder.

Section 3. REPRESENTATIONS AND WARRANTIES OF P ARENT AND MERGER SUB

Parent and Merger Sub represent and warrant to the Company as follows:

3.1 Due Organization. Parent is an exempted company duly organized, validly existing and in good standing under the laws of
Bermuda and Merger Sub is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware.

3.2 Legal Proceedings; Orders. Except as would not, individually or in the aggregate, have or result in a Parent Material Adverse
Effect, as of the date of this Agreement: (a) there is no Legal Proceeding pending against or that, to the knowledge of Parent, has been
threatened against Parent or any of its Subsidiaries and (b) there is, to the knowledge of Parent, no investigation by any Governmental Body
pending or threatened against Parent or any of its Subsidiaries. As of the date of this Agreement, neither Parent nor any of its Subsidiaries is
subject to any order, decree or ruling that, individually or in the aggregate, has had or would reasonably be expected to have or result in a
Parent Material Adverse Effect.

3.3 Authority; Binding Nature of Agreement. Parent and Merger Sub have all requisite corporate power and authority to perform
their obligations under this Agreement and to consummate the Contemplated Transactions, and the execution, delivery and performance by
Parent and Merger Sub of this Agreement and the consummation by Parent and Merger Sub of the Contemplated Transactions have been duly
authorized by all necessary corporate action on the part of Parent and Merger Sub, subject only to the adoption of this Agreement by Parent in
its capacity as sole stockholder of Merger Sub. This Agreement has been duly executed and delivered by Parent and Merger Sub and
constitutes the legal, valid and binding obligation of Parent and Merger Sub, enforceable against Parent and Merger Sub in accordance with its
terms, subject to the Enforceability Exceptions.

3.4 Non-Contravention; Consents. Neither the execution, delivery or performance of this Agreement by Parent and Merger Sub
nor the consummation by Parent and Merger Sub of the Merger or the Contemplated

28
Transactions will: (a) conflict with or result in a violation of any of the provisions of the certificate of incorporation, memorandum of
association, bye-laws or other charter or organizational documents of Parent or Merger Sub; or (b) result in a violation by Parent or Merger
Sub of any Legal Requirement or Order to which Parent or Merger Sub is subject, except for any violation that will not have a material adverse
effect on Parent’s ability to consummate the Merger. Except as may be required by the Securities Act, the Exchange Act, state securities or
“blue sky” laws, state takeover laws, the DGCL, the HSR Act, any foreign antitrust Legal Requirement, the DPA and the rules and regulations
thereunder or any other Legal Requirement applicable to the CFIUS Condition, neither Parent nor Merger Sub is required to make any filing
with or give any notice to, or to obtain any Consent from, any Governmental Body in connection with: (i) the execution, delivery or
performance by Parent or Merger Sub of this Agreement; or (ii) the consummation of the Merger or any of the other Contemplated
Transactions by Parent or Merger Sub.

3.5 Funding. Parent has, and will have as of the Effective Time, sufficient cash, available lines of credit or other sources of readily
available funds to enable it to pay all amounts required to be paid as Merger Consideration in the Merger.

3.6 Stock Ownership. As of the date of this Agreement, neither Parent nor Merger Sub beneficially own any shares of capital stock
of the Company. During the three-year period ending on the date of this Agreement, neither Parent nor Merger Sub, nor any of their
“affiliates” or “associates,” has been an “interested stockholder” with respect to the Company, as those quoted terms are defined in Section
203 of the DGCL.

3.7 Disclosure. None of the information supplied by or on behalf of Parent for inclusion in the Proxy Statement will, at the time
the Proxy Statement is mailed to the stockholders of the Company or at the time of the Company Stockholders’ Meeting (or any adjournment
or postponement thereof), contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading.

Section 4. CERTAIN COVENANTS OF THE COMPANY

4.1 Access and Investigation; Confidentiality.

(a) During the period from the date of this agreement until the earlier of the Effective Time and the termination of this
Agreement pursuant to Section 8.1 (the “Pre-Closing Period”), the Company shall, and shall ensure that the other Acquired Companies and its
and their respective Representatives: (i) provide Parent and Parent’s Representatives with reasonable access to the Acquired Companies’
Representatives, personnel, properties and assets and to all existing books, records, Tax Returns, work papers and other documents and
information relating to the Acquired Companies upon reasonable advance notice during normal business hours of the Company and in such a
manner as not to unreasonably interfere with the normal operation of the business of the Acquired Companies; and (ii) provide Parent and
Parent’s Representatives with such copies of the existing books, records, Tax Returns, work papers and other documents and information
relating to the Acquired Companies, and with such additional financial, operating and other data and information regarding the Acquired
Companies, as Parent may reasonably request. Without limiting the generality of the foregoing, during the Pre-Closing Period, the Company
shall promptly provide Parent, upon request, with copies of any material notice, report or other document received by any of the Acquired
Companies from any Governmental Body. Any investigation by Parent of premises occupied by the Acquired Companies shall be subject to
the Acquired Companies’ reasonable security measures and shall not include invasive soil testing. Nothing in this Section 4.1(a) shall require
the Acquired Companies to disclose any information to Parent if such disclosure would (x) jeopardize any attorney-client or similar legal
privilege applicable to such information or (y) contravene any applicable Legal Requirement or confidentiality agreement to which any
Acquired Company is a party (other than a confidentiality agreement referred to in Section 4.3(b)). If any Acquired Company does not provide
or cause its Representatives to provide such access or such information in reliance on the immediately preceding sentence, then the Company
shall (1) promptly (and in any event within 48 hours) provide

29
a written notice to Parent stating that it is withholding such access or such information and stating the justification therefor and (2) use
commercially reasonable efforts to provide such access or such information in a way that would not violate such Legal Requirement or
agreement or jeopardize such privilege, including disclosing information subject to execution of a joint defense agreement in customary form
or limiting disclosure to external counsel for Parent, to the extent the Company’s and Parent’s outside antitrust counsel mutually agree that
doing so may be reasonably required in order to comply with applicable Antitrust Laws. The Company shall take the actions referred to in Part
4.1(a) of the Disclosure Schedule as specified in Part 4.1(a) of the Disclosure Schedule.

(b) The Confidentiality Agreement (other than Sections 6 and 14 thereof) shall remain in full force and effect in accordance
with its terms until the Effective Time, at which time the Confidentiality Agreement shall automatically terminate without further action.
Sections 6 and 14 of the Confidentiality Agreement shall terminate upon the execution and delivery of this Agreement.

4.2 Operation of the Company’s Business.

(a) During the Pre-Closing Period, except (w) as may be required by applicable Legal Requirements, (x) with the prior
written consent of Parent, (y) as expressly required by this Agreement or (z) as set forth in Part 4.2(a) of the Disclosure Schedule: (i) the
Company shall conduct, and shall ensure that each of the other Acquired Companies conducts, its business and operations in the ordinary
course and in accordance with past practices; (ii) the Company shall use commercially reasonable efforts to ensure that each of the Acquired
Companies preserves intact its current business organization, keeps available the services of its current officers and employees (other than for
routine terminations in the ordinary course of business of officers or employees that are not at the level of vice president or above) and
maintains its relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licensees, employees and other Persons
having material business relationships with such Acquired Company; and (iii) the Company shall promptly notify Parent of the receipt of any
notice or other communication from any Person alleging that the Consent of such Person is or may be required in connection with the Merger
or any of the other Contemplated Transactions.

(b) During the Pre-Closing Period, except (w) as may be required by applicable Legal Requirements, (x) with the prior
written consent of Parent; (y) as expressly required by this Agreement or (z) as set forth in Part 4.2(b) of the Disclosure Schedule, the
Company shall not, and the Company shall ensure that the other Acquired Companies do not:
(i) declare, accrue, set aside or pay any dividend or make any other distribution (whether in cash, stock or otherwise) in
respect of any shares of capital stock, or repurchase, redeem or otherwise reacquire any shares of capital stock or other securities;
(ii) sell, issue, grant or authorize the sale, issuance or grant of: (A) any capital stock or other security; (B) any option,
stock appreciation right, restricted stock unit, deferred stock unit, market stock unit, performance stock unit, restricted stock award
or other equity-based compensation award (whether payable in cash, stock or otherwise), call, warrant or right to acquire any
capital stock or other security; or (C) any instrument convertible into or exchangeable for any capital stock or other security (except
that (1) the Company may issue shares of Company Common Stock upon the valid exercise of, or the vesting or scheduled delivery
of shares pursuant to, Company Equity Awards outstanding as of the date of this Agreement or issued during the Pre-Closing
Period in compliance with this Section 4.2(b)(ii), in each case in accordance with their terms and (2) the Company may, in the
ordinary course of business and consistent with past practices, but subject to the limitations set forth in Part 4.2(b)(ii) of the
Disclosure Schedule, grant to employees of the Acquired Companies hired during the Pre-Closing Period in compliance with
Section 4.2(b)(xiv) and to non-officer employees of the Acquired Companies Company Options (having an exercise price equal to
the fair market value of the Company Common Stock covered by such Company Option, determined as of the time of the grant of
such Company Option) and Company RSUs, in each case containing no vesting acceleration provisions and containing the
Company’s standard vesting schedule);

30
 (iii) amend or waive any of its rights under, or accelerate the vesting under, any provision of any of the Company
Equity Plans or any provision of any Contract evidencing any Company Equity Award, or otherwise modify any of the terms of
any outstanding Company Equity Award, warrant or other security or any related Contract;
(iv) amend or permit the adoption of any amendment to its certificate of incorporation or bylaws or other charter or
organizational documents, or effect or become a party to any liquidation, dissolution, merger, consolidation, share exchange,
business combination, plan or scheme of arrangement, amalgamation, restructuring, recapitalization, reclassification of shares,
stock split, reverse stock split, division or subdivision of shares, consolidation of shares or similar transaction;
(v) (A) form any Subsidiary; or (B) acquire any equity interest or other interest in any other Entity;
(vi) make any capital expenditure or incur any obligation or liability in respect thereof in excess of the amount budgeted
for such expenditure in the Company’s capital expenditure budget as set forth in Part 4.2(b)(vi) of the Disclosure Schedule (except
that the Acquired Companies may make unbudgeted capital expenditures that, when added to all other unbudgeted capital
expenditures made by or on behalf of the Acquired Companies during a fiscal quarter, do not exceed $50,000 in the aggregate);
(vii) (A) enter into or become bound by, or permit any of the assets owned or used by it to become bound by, any
Material Contract; or (B) renew, extend, amend or terminate, or waive or exercise any material right or remedy under, any Material
Contract, other than in the ordinary course of business and consistent with past practices;
(viii) enter into or become bound by any Contract imposing any material restriction on the right or ability of any
Acquired Company (A) to engage in any line of business or compete with, or provide services to, any other Person or in any
geographic area, (B) to acquire any material product or other material asset or any service from any other Person, sell any product
or other material asset to or perform any service for any other Person, (C) transact business or deal in any other manner with any
other Person or (D) to develop, sell, supply, license, distribute, offer, support or service any product or any Intellectual Property or
other asset to or for any other Person;
(ix) enter into or become bound by any Contract that (A) grants material and exclusive rights to license, market, sell or
deliver any product of any Acquired Company, (B) contains any “most favored nation” or similar provision in favor of the other
party or (C) contains a right of first refusal, first offer or first negotiation or any similar right with respect to any asset owned by an
Acquired Company that is material to the Acquired Companies, taken as a whole;
(x) (A) acquire, lease or license any right or other asset from any other Person or sell or otherwise dispose of, or lease or
license, any right or other asset to any other Person (except in each case for immaterial assets acquired, leased, licensed or disposed
of by the Company in the ordinary course of business and consistent with past practices and the renewal of any non-material Lease
upon the expiration thereof for a renewal term no greater than six months); or (B) waive or relinquish any material right;
(xi) make any pledge of any of its material assets or permit any of its material assets to become subject to any
Encumbrance, except for Encumbrances that do not, individually or in the aggregate, materially adversely affect the value or use of
such property for its current and anticipated purposes;
(xii) (A) lend or advance money to any Person, other than routine advances to employees and independent contractors
for travel and other normal business expenses incurred in the ordinary course of business consistent with past practices; or
(B) incur, assume, guarantee or prepay any indebtedness (directly, contingently, or otherwise), except that any Acquired Company
may lend money to any other

31
Acquired Company, or incur any indebtedness to, or guarantee any indebtedness of, any other Acquired Company, in each case in
the ordinary course of business and consistent with past practices;
(xiii) (A) enter into any collective bargaining agreement, works council agreement or other Contract with any employee
representative body or (B) establish, adopt, enter into, materially amend or terminate any Company Employee Plan or Company
Employee Agreement or any plan, practice, agreement, arrangement or policy that would be a Company Employee Plan or
Company Employee Agreement if it was in existence on the date of this Agreement (other than extensions, renewals or
replacements of any Company Employee Plan, in the ordinary course of business consistent with past practice), pay, or make any
new commitment to pay, any bonus, cash incentive payment or profit-sharing or similar payment to, or increase or make any
commitment to increase the amount of the wages, salary, commissions, fringe benefits or other compensation (excluding equity-
based compensation, which is addressed in Section 4.2(b)(ii)) or remuneration payable to, any of its directors, officers or other
employees (except that the Company (1) may provide routine, reasonable salary increases to non-officer employees in the ordinary
course of business and in accordance with past practices in connection with the Company’s customary employee review process,
(2) may make customary bonus payments consistent with past practices in accordance with existing bonus plans referred to in Part
2.16(h) of the Disclosure Schedule and (3) may, subject to Section 4.2(b)(xiv), pay, or make any new commitment to pay, in each
case in the ordinary course of business consistent with past practice, any compensation (excluding equity-based compensation,
which is addressed in Section 4.2(b)(ii)) to any newly hired Company Associate);
(xiv) (A) hire any employee at the level of senior director or above or with an annual base salary in excess of $240,000;
(B) promote any employee to the level of senior director or above; or (C) engage any consultant or independent contractor, unless
the engagement of such consultant or independent contractor may be terminated by such Acquired Company on less than six
months’ notice;
(xv) (A) change in any material respect (1) any of its pricing policies, product return policies, product maintenance
polices, service policies, product modification or upgrade policies or other business policies or (2) any of its methods of
accounting or accounting practices, including with respect to Taxes; (B) offer any discount, rebate, strategic buy or Contract or
purchase order modification to any customer or distributor that has the effect of artificially or temporarily increasing the Acquired
Companies’ consolidated revenues; or (C) write down any of its material assets in excess of $50,000 in the aggregate, except for
depreciation and amortization in accordance with GAAP or in the ordinary course of business consistent with past practice;
(xvi) (A) adopt any material method of Tax accounting or make any material Tax election (or allow any material Tax
election previously made to expire) that is inconsistent with any of the positions taken, elections made or methods used in
preparing or filing Tax Returns with respect to periods ending prior to the Closing (including positions, elections or methods that
would have the effect of deferring income to periods ending after the Closing Date or accelerating deductions to periods ending on
or before the Closing Date); (B) prepare or file any material Tax Return or amended Tax Return inconsistent with past practices;
(C) settle or otherwise compromise any claim, dispute, notice, audit report or assessment relating to a material amount of Taxes, or
enter into, cancel or modify any closing agreement or similar agreement relating to Taxes; or (D) request any ruling, closing
agreement or similar guidance with respect to a material amount of Taxes;
(xvii) (A) commence any Legal Proceeding; or (B) settle any Legal Proceeding, other than (i) Permitted Settlements,
(ii) settlements entered into in accordance with Section 5.13 or (iii) routine collection matters in the ordinary course of business
and consistent with past practices;
(xviii) abandon, forfeit, permit to lapse, terminate or cancel any material right (including any Intellectual Property
Rights) or take any action or fail to take any action if the taking of or failure to take such action will, or would reasonably be
expected to, result in any of the foregoing;

32
 (xix) enter into any Contract covering any Company Associate or make any payment to any Company Associate that,
considered individually or collectively with any other such Contracts or payments, will or would reasonably be expected to be
characterized as a “parachute payment” within the meaning of Section 280G(b)(2) of the Code or give rise directly or indirectly to
the payment of any amount that would not be deductible pursuant to Section 162(m) of the Code (or any comparable provision
under U.S. state or local or non-U.S. Tax Legal Requirements);
(xx) convene any special meeting of the Company’s stockholders, except in accordance with Section 5.2;
(xxi) other than in the ordinary course of business, transfer or repatriate to the U.S. cash, cash equivalents or liquid
short-term or long-term investments held outside the U.S. if any material U.S. withholding or income Taxes would be incurred in
connection with such repatriation; provided, however, that in the event that (A) the Company notifies Parent of any such proposed
transfer or repatriation and (B) Parent fails to promptly and in good faith consider such proposed transfer or repatriation and
respond to the Company with respect thereto, the written consent of Parent for such transfer or repatriation shall be deemed to
have been obtained by the Company;
(xxii) become party to or approve or adopt any stockholder rights plan or “poison pill” agreement or similar takeover
protection;
(xxiii) cancel or terminate or allow to lapse without a commercially reasonable substitute policy therefor, or amend in
any material respect or enter into, any material insurance policy, other than the renewal of existing insurance policies or entering
into comparable substitute policies therefor; or
(xxiv) authorize, approve, agree, commit or offer to take any of the actions described in clauses “(i)” through “(xxiii)”
of this Section 4.2(b).

Notwithstanding the foregoing, Parent will not unreasonably withhold, delay or condition its consent to the taking of: (1) any action
prohibited by clause “(v)(A)”, “(vi),” “(vii),” “(x),” “(xi),” “(xii)(A)”, “(xiv),” “(xv)(A),” “(xv)(C)”, “(xvi)”, “(xvii)(B)” or “(xxiii)” above; or
(2) any action prohibited by clause “(xxiv)” above (to the extent relating to clause “(v)(A)”, “(vi),” “(vii),” “(x)(A),” “(xi),” “(xii)(A)”, “(xiv),”
“(xv)(A),” “(xv)(C)”, “(xvi)”, “(xvii)(B)” or “(xxiii)” above). Parent acknowledges and agrees that nothing contained in this Agreement shall
give Parent the right to control or direct the operations of the Company prior to the Effective Time within the meaning of applicable Antitrust
Laws. If the Company expects to rely on clause “(w)” of this Section 4.2(b) to take, or permit any other Acquired Company to take, any action
that would otherwise be prohibited by this Section 4.2(b), then at least three Business Days before such action is taken, the Company shall
deliver a written notice to Parent stating that the Company intends to take or permit the taking of such action and specifying the Legal
Requirement requiring the taking of such action.

(c) During the Pre-Closing Period, the Company shall promptly notify Parent in writing of: (i) any written communication
from any Person alleging that the Consent of such Person (or another Person) is or may be required in connection with the Merger or any of
the other Contemplated Transactions; (ii) the obtaining of actual knowledge by any officer or director of the Company of any event,
condition, fact or circumstance that occurred or existed on or prior to the date of this Agreement and that caused or constitutes a material
inaccuracy in any representation or warranty made by the Company in this Agreement; (iii) the obtaining of actual knowledge by any officer or
director of the Company of any event, condition, fact or circumstance that occurs, arises or exists after the date of this Agreement and that
would cause or constitute a material inaccuracy in any representation or warranty made by the Company in this Agreement if (A) such
representation or warranty had been made as of the time of the occurrence, existence or discovery of such event, condition, fact or
circumstance or (B) such event, condition, fact or circumstance had occurred, arisen or existed on or prior to the date of this Agreement;
(iv) any breach of any covenant or obligation of the Company that, either individually or in the aggregate with any other breaches, would
reasonably be expected to cause the condition to closing set forth in Section 6.2 not to be satisfied; and (v) any event, condition, fact or
circumstance that would make the timely satisfaction of any of the conditions set forth in Section 6 impossible or unlikely or that has had or
would

33
reasonably be expected to have or result in a Material Adverse Effect. Without limiting the generality of the foregoing, the Company shall
promptly advise Parent in writing of any Legal Proceeding or material claim threatened, commenced or asserted against or with respect to any
of the Acquired Companies. No notification given to Parent pursuant to this Section 4.2(c) shall limit or otherwise affect any of the
representations, warranties, covenants or obligations of the Company contained in this Agreement.

4.3 No Solicitation.

(a) The Company shall not (and shall not resolve or publicly propose to) directly or indirectly, and shall ensure that the
other Acquired Companies do not (and do not resolve or publicly propose to), and shall use its reasonable best efforts to cause its and their
respective Representatives not to, directly or indirectly (other than with respect to Parent and Merger Sub and their Representatives acting on
Parent’s behalf): (i) solicit, initiate, knowingly encourage, assist, knowingly induce or knowingly facilitate the making, submission or
announcement of any Acquisition Proposal or Acquisition Inquiry (including by approving any transaction, or approving any Person (other
than Parent and its Affiliates) becoming an “interested stockholder,” for purposes of Section 203 of the DGCL) or take any action that could
reasonably be expected to lead to an Acquisition Proposal or Acquisition Inquiry; (ii) furnish or otherwise provide access to any information
regarding any of the Acquired Companies to any Person in connection with or in response to an Acquisition Proposal or Acquisition Inquiry;
(iii) engage in discussions or negotiations with any Person with respect to any Acquisition Proposal or Acquisition Inquiry; (iv) approve,
endorse or recommend any Acquisition Proposal; or (v) enter into any letter of intent, memorandum of understanding, agreement in principle
or similar document or any Contract relating directly or indirectly to, or that contemplates or is intended or could reasonably be expected to
result directly or indirectly in, an Acquisition Transaction.

(b) Notwithstanding anything to the contrary contained in Section 4.3(a), prior to the adoption of this Agreement by the
Required Company Stockholder Vote, the Company may furnish non-public information regarding the Acquired Companies to, and may enter
into discussions or negotiations with, any Person in response to an unsolicited, bona fide, written Acquisition Proposal that is submitted to the
Company after the date of this Agreement by such Person (and not withdrawn) if: (i) none of the Acquired Companies or any of their
respective Representatives shall have materially breached any of the provisions set forth in this Section 4.3; (ii) the Company’s board of
directors determines in good faith, after having taken into account the advice of an independent financial advisor of nationally recognized
reputation and the Company’s outside legal counsel, that such Acquisition Proposal constitutes or could reasonably be expected to result in a
Superior Offer; (iii) the Company’s board of directors determines in good faith, after having taken into account the advice of the Company’s
outside legal counsel, that the failure to take such action would reasonably be expected to be inconsistent with its fiduciary obligations to the
Company’s stockholders under applicable Delaware law; (iv) at least two Business Days prior to furnishing any such non-public information
to, or entering into discussions or negotiations with, such Person, the Company: (A) gives Parent written notice of the identity of such Person
and of the Company’s intention to furnish non-public information to, or enter into discussions or negotiations with, such Person; and
(B) receives from such Person, and delivers to Parent a copy of, an executed confidentiality agreement containing customary limitations on the
use and disclosure of all non-public written and oral information furnished to such Person by or on behalf of the Acquired Companies,
“standstill” provisions no less favorable to the Company than the “standstill” provisions contained in the Confidentiality Agreement and other
provisions no less favorable to the Company than the provisions of the Confidentiality Agreement as in effect immediately prior to the
execution of this Agreement (it being understood that, for purposes of this clause “(B)” only, the amendment to the Confidentiality
Agreement referred to Section 4.1(b) shall be disregarded); and (v) at least 24 hours prior to furnishing any non-public information to such
Person, the Company furnishes such non-public information to Parent (to the extent such non-public information has not been previously
furnished by the Company to Parent).

(c) If the Company, any other Acquired Company or any Representative of any Acquired Company receives an Acquisition
Proposal or an Acquisition Inquiry, or receives any request for non-public

34
information in connection with an Acquisition Proposal or an Acquisition Inquiry, at any time during the Pre-Closing Period, then the
Company shall promptly (and in no event later than 24 hours after receipt of such Acquisition Proposal or Acquisition Inquiry or any such
request): (i) advise Parent both orally and in writing of such Acquisition Proposal, Acquisition Inquiry or request (including the identity of the
Person making or submitting such Acquisition Proposal, Acquisition Inquiry or request and the material terms and conditions thereof); and
(ii) provide Parent with copies of all documents and communications received by any Acquired Company or any Representative of any
Acquired Company setting forth the terms and conditions of, or otherwise relating to, such Acquisition Proposal, Acquisition Inquiry or
request. The Company shall keep Parent fully informed, on a reasonably current basis, with respect to the status of any such Acquisition
Proposal, Acquisition Inquiry or request and any modification or proposed modification thereto, and shall (A) promptly (and in no event later
than 24 hours) notify Parent if it intends to provide non-public information in connection with, or to engage in discussions or negotiations
concerning, such Acquisition Proposal, Acquisition Inquiry or request and (B) promptly (and in no event later than 24 hours after transmittal
or receipt of any correspondence or communication) provide Parent with a copy of any correspondence or communication between or
otherwise involving (1) any Acquired Company or any Representative of any Acquired Company and (2) the Person that made or submitted
such Acquisition Proposal, Acquisition Inquiry or request or any Representative of such Person. As and to the extent required by
Section 4.3(b)(v), the Company shall provide Parent with 24 hours’ prior notice (or such lesser prior notice as is provided to the members of
the board of directors of the Company) of any meeting of the board of directors of the Company at which the board is expected to consider
providing non-public information to any Person in connection with any Acquisition Proposal or Acquisition Inquiry.

(d) The Company shall, and shall ensure that each of the other Acquired Companies shall, and shall use its reasonable best
efforts to cause its and their respective Representatives to, immediately cease and cause to be terminated any existing solicitation or
encouragement of, or discussions or negotiations with, any Person relating to any Acquisition Proposal or Acquisition Inquiry.

(e) The Company: (i) agrees that it will not, and it shall ensure that none of the other Acquired Companies will, release or
permit the release of any Person from, or amend, waive or permit the amendment or waiver of any provision of, any confidentiality,
non-solicitation, no-hire, “standstill” or similar agreement or provision to which any of the Acquired Companies is or becomes a party or
under which any of the Acquired Companies has or acquires any rights; and (ii) will use its reasonable best efforts to enforce or cause to be
enforced each such agreement or provision at the request of Parent (it being understood that such reasonable efforts will require the Company
to pursue litigation against any Person that breaches any “standstill” provision or other “deal protection” provision in any such agreement);
provided, however, that (except as expressly set forth in the immediately preceding parenthetical) such reasonable efforts will not require the
Company to pursue any litigation; and provided, further, that the Company may release a Person from, or amend or waive any provision of,
any “standstill” agreement or provision if: (A) the Company’s board of directors determines in good faith, after having taken into account the
advice of the Company’s outside legal counsel, that the failure to release such Person from such agreement or provision or the failure to
amend such agreement or waive such provision would reasonably be expected to be inconsistent with its fiduciary obligations to the
Company’s stockholders under applicable Delaware law; and (B) the Company provides Parent with written notice of the Company’s intent to
take such action at least 48 hours before taking such action.

(f) Promptly after the date of this Agreement, the Company shall: (i) request each Person that has received confidential
information from any of the Acquired Companies or any of their respective Representatives at any time since January 1, 2018 pursuant to a
confidentiality or similar agreement in connection with such Person’s consideration of a possible Acquisition Proposal or investment in any
Acquired Company to return or destroy all confidential information previously furnished to such Person by or on behalf of any of the
Acquired Companies; and (ii) except as otherwise permitted by Section 4.3(b), prohibit any third party from having access to any physical or
electronic data room relating to any possible Acquisition Proposal or Acquisition Inquiry.

(g) The Company acknowledges and agrees that any action taken by any Representative of any Acquired Company (whether
or not such Representative is purporting to act on behalf of any of the Acquired

35
Companies) which, if taken by the Company, would constitute a breach of any provision set forth in this Section 4.3 shall be deemed to
constitute a breach of such provision by the Company.

Section 5. ADDITIONAL COVENANTS OF THE P ARTIES

5.1 Proxy Statement. As promptly as practicable (and in any event within 12 Business Days) after the date of this Agreement, the
Company shall prepare and cause to be filed with the SEC the Proxy Statement. The Company shall consult with Parent and provide Parent
and its counsel a reasonable opportunity to review and comment on the Proxy Statement and any amendment or supplement thereto (and to
review and comment on any comments of the SEC or its staff on the Proxy Statement or any amendment or supplement thereto), and shall
reasonably consider all comments made by Parent, prior to the filing thereof. The Company shall cause the Proxy Statement to comply with all
applicable rules and regulations of the SEC and all other applicable Legal Requirements. The Company shall promptly provide Parent and its
legal counsel with a copy or a description of any comments received by the Company or its legal counsel from the SEC or its staff with
respect to the Proxy Statement or any amendment or supplement thereto, and shall respond promptly to any such comments. The Company
shall cause the Proxy Statement to be mailed to the Company’s stockholders as promptly as practicable after the earlier of (a) receiving
notification that the SEC or its staff is not reviewing the Proxy Statement and (b) the conclusion of any SEC or staff review of the Proxy
Statement. If any event relating to any of the Acquired Companies occurs, or if the Company becomes aware of any information, that should
be disclosed in an amendment or supplement to the Proxy Statement, then the Company shall promptly inform Parent thereof and shall
promptly file such amendment or supplement with the SEC and, if appropriate, mail such amendment or supplement to the stockholders of
the Company.

5.2 Company Stockholders’ Meeting.

(a) The Company shall: (i) take all action necessary under all applicable Legal Requirements to call, give notice of and hold
a meeting of the holders of Company Common Stock (the “Company Stockholders’ Meeting”) to vote on a proposal to adopt this Agreement;
and (ii) submit such proposal to, and use its reasonable best efforts to solicit proxies in favor of such proposal from, such holders at the
Company Stockholders’ Meeting, and shall not submit any other proposal to such holders in connection with the Company Stockholders’
Meeting without the prior written consent of Parent. The Company, in consultation with Parent, shall set a record date for Persons entitled to
notice of, and to vote at, the Company Stockholders’ Meeting and shall not change such record date without the prior written consent of
Parent, which consent shall not be unreasonably withheld if such change is required by any Legal Requirement. The Company Stockholders’
Meeting shall be held (on a date selected by the Company in consultation with Parent) as promptly as practicable after the commencement of
the mailing of the Proxy Statement to the Company’s stockholders. The Company shall ensure that all proxies solicited in connection with the
Company Stockholders’ Meeting are solicited in compliance with all applicable Legal Requirements. Notwithstanding anything to the contrary
contained in this Agreement: (A) the Company shall not postpone or adjourn the Company Stockholders’ Meeting without the consent of
Parent, other than (1) to the extent necessary to ensure that any supplement or amendment to the Proxy Statement that is required by
applicable Legal Requirements is disclosed to the Company’s stockholders or (2) if, as of the time at which the Company Stockholders’
Meeting is scheduled, there are insufficient shares of Company Common Stock represented (either in person or by proxy) to constitute a
quorum necessary to conduct the business to be conducted at the Company Stockholders’ Meeting, to the extent necessary to obtain such a
quorum; and (B) the Company shall postpone or adjourn the Company Stockholders’ Meeting if Parent requests such postponement or
adjournment in order to permit the solicitation of additional proxies in favor of the adoption of this Agreement, in which case, the Company
shall use its reasonable best efforts during any such postponement or adjournment to solicit and obtain such proxies in favor of the adoption
of this Agreement as soon as reasonably practicable.

(b) Subject to Section 5.2(d): (i) the Proxy Statement shall include a statement to the effect that the Company’s board of
directors has unanimously determined and believes that the Merger is advisable and fair to and in the best interests of the Company and its
stockholders; (ii) has unanimously approved this Agreement

36
and unanimously approved the Contemplated Transactions, including the Merger, in accordance with the requirements of the DGCL; and
(iii) unanimously recommends that the Company’s stockholders vote to adopt this Agreement at the Company Stockholders’ Meeting. (The
unanimous determination that the Merger is advisable and fair to and in the best interests of the Company and its stockholders and the
unanimous recommendation of the Company’s board of directors that the Company’s stockholders vote to adopt this Agreement are
collectively referred to as the “Company Board Recommendation.”) The Company shall ensure that the Proxy Statement includes the opinion
of the financial advisor referred to in Section 2.24.

(c) Except as provided in Section 5.2(d), neither the Company’s board of directors nor any committee thereof shall:
(i) withdraw or modify in a manner adverse to Parent or Merger Sub, or permit the withdrawal or modification in a manner adverse to Parent or
Merger Sub of, the Company Board Recommendation (it being understood and agreed that the Company Board Recommendation shall be
deemed to have been modified by the Company’s board of directors in a manner adverse to Parent and Merger Sub if the Company Board
Recommendation shall no longer be unanimous); (ii) recommend the approval, acceptance or adoption of, or approve, endorse, accept or
adopt, any Acquisition Proposal; (iii) approve or recommend, or cause or permit any Acquired Company to execute or enter into, any letter of
intent, memorandum of understanding, agreement in principle, merger agreement, acquisition agreement, option agreement, joint venture
agreement, partnership agreement or other similar document or Contract constituting or relating directly or indirectly to, or that contemplates
or is intended or would reasonably be expected to result directly or indirectly in, an Acquisition Transaction, other than a confidentiality
agreement referred to in clause “(iv)(B)” of Section 4.3(b); or (iv) resolve, agree or publicly propose to, or permit any Acquired Company or
any Representative of any Acquired Company to agree or publicly propose to, take any of the actions referred to in this Section 5.2(c).

(d) Notwithstanding anything to the contrary contained in Section 5.2(c), at any time prior to the adoption of this
Agreement by the Required Company Stockholder Vote, the Company’s board of directors may withdraw or modify the Company Board
Recommendation and, in the case of clause “(i)” below, may also cause the Company to terminate this Agreement in accordance with
Section 8.1(i) and, concurrently with such termination, cause the Company to enter into an Alternative Acquisition Agreement in accordance
with, and subject to compliance with, the provisions of Section 8.1(i):
(i) if: (A) an unsolicited, bona fide, written Acquisition Proposal is made to the Company after the date of this
Agreement and is not withdrawn; (B) such Acquisition Proposal did not result directly or indirectly from a material breach of any
of the provisions of Section 4.3 or Section 5.2 or the Confidentiality Agreement; (C) the Company provides Parent with 48 hours’
prior written notice (or such lesser prior notice as is provided to the members of the Company’s board of directors) of any meeting
of the Company’s board of directors at which such board of directors will consider and determine whether such Acquisition
Proposal is a Superior Offer, with a written notice specifying the date and time of such meeting, the reasons for holding such
meeting, the terms and conditions of the Acquisition Proposal that is the basis of the potential action by the Company’s board of
directors (including a copy of any draft Contract relating to such Acquisition Proposal) and the identity of the Person making such
Acquisition Proposal; (D) the Company’s board of directors determines in good faith, after having taken into account the advice of
an independent financial advisor of nationally recognized reputation and the advice of the Company’s outside legal counsel, that
such Acquisition Proposal constitutes a Superior Offer; (E) the Company’s board of directors determines in good faith, after
having taken into account the advice of the Company’s outside legal counsel, that, in light of such Superior Offer, the failure to
withdraw or modify the Company Board Recommendation, or the failure to terminate this Agreement pursuant to Section 8.1(i) in
order to accept such Superior Offer, would reasonably be expected to be inconsistent with its fiduciary obligations to the
Company’s stockholders under applicable Delaware law; (F) no less than four Business Days prior to withdrawing or modifying the
Company Board Recommendation or terminating this Agreement pursuant to Section 8.1(i) in order to accept such Superior Offer,
the Company’s board of directors delivers to Parent a written notice (a

37
“Recommendation Change Notice”) (1) stating that the Company has received a Superior Offer that did not result directly or
indirectly from a material breach of any of the provisions of Section 4.3 or Section 5.2 or the Confidentiality Agreement,
(2) stating that the Company’s board of directors intends to withdraw or modify the Company Board Recommendation (and
describing any intended modification of the Company Board Recommendation) or terminate this Agreement pursuant to
Section 8.1(i) in order to accept such Superior Offer, (3) specifying the material terms and conditions of such Superior Offer,
including the identity of the Person making such Superior Offer and (4) attaching copies of the most current and complete draft of
any Contract relating to such Superior Offer and all other documents and written communications relating to such Superior Offer
not previously provided to Parent; (G) for four Business Days after receipt by Parent of such Recommendation Change Notice, the
Company’s board of directors has not withdrawn or modified the Company Board Recommendation and the Company has not
attempted to terminate this Agreement pursuant to Section 8.1(i); (H) throughout such four Business Day period, the Company
engages (to the extent requested by Parent) in good faith negotiations with Parent to amend this Agreement in such a manner that
the failure to withdraw or modify the Company Board Recommendation, or the failure to terminate this Agreement pursuant to
Section 8.1(i) in order to accept such Superior Offer, would not reasonably be expected to be inconsistent with the fiduciary
obligations of the Company’s board of directors to the Company’s stockholders under applicable Delaware law; and (I) at the time
of withdrawal or modification of the Company Board Recommendation or the termination of this Agreement pursuant to
Section 8.1(i) in order to accept such Superior Offer, the Company’s board of directors determines in good faith, after taking into
account the advice of an independent financial advisor of nationally recognized reputation and the advice of the Company’s
outside legal counsel, that the failure to withdraw or modify the Company Board Recommendation, or the failure to terminate this
Agreement pursuant to Section 8.1(i) in order to accept such Superior Offer, would still reasonably be expected to be inconsistent
with the fiduciary obligations of the Company’s board of directors to the Company’s stockholders under applicable Delaware law
in light of such Superior Offer; provided, however, that when making such determination, the Company’s board of directors shall
be obligated to consider any changes to the terms of this Agreement proposed by Parent as a result of the negotiations required by
clause “(H)” above or otherwise; or
(ii) if: (A) there shall occur or arise after the date of this Agreement a material event, material development or change in
circumstances that relates to and is material to the Acquired Companies (taken as a whole) (but does not relate to any Acquisition
Proposal) that was not known, and would not reasonably be expected to have been known or foreseen, by any of the Acquired
Companies on the date of this Agreement (or if known, the consequences of which were not known, and would not reasonably be
expected to have been known or foreseen, by any of the Acquired Companies as of the date of this Agreement), which event,
development or change in circumstance, or any material consequence thereof, becomes known to any of the Acquired Companies
prior to the adoption of this Agreement by the Required Company Stockholder Vote and did not result from or arise out of the
announcement or pendency of, or any action required to be taken (or to be refrained from being taken) pursuant to, this Agreement
(any such material event, material development or material change in circumstances being referred to as a “Change in
Circumstances”); (B) the Company provides Parent with 48 hours’ prior written notice (or such lesser prior notice as is provided to
the members of the Company’s board of directors) of any meeting of the Company’s board of directors at which such board of
directors will consider and determine whether such Change in Circumstances requires the Company’s board of directors to
withdraw or modify the Company Board Recommendation, with a written notice specifying the date and time of such meeting, the
reasons for holding such meeting and a reasonably detailed description of such Change in Circumstances; (C) the Company’s
board of directors determines in good faith, after having taken into account the advice of an independent financial advisor of
nationally recognized reputation and the advice of the Company’s outside legal counsel, that, in light of such Change in
Circumstances, the failure to withdraw or modify the Company Board Recommendation would reasonably be expected to be
inconsistent with its fiduciary obligations to the

38
 Company’s stockholders under applicable Delaware law; (D) no less than four Business Days prior to withdrawing or modifying the
Company Board Recommendation, the Company’s board of directors delivers to Parent a written notice (1) stating that a Change in
Circumstances has arisen, (2) stating that it intends to withdraw or modify the Company Board Recommendation in light of such
Change in Circumstances and describing any intended modification of the Company Board Recommendation and (3) containing a
reasonably detailed description of such Change in Circumstances; (E) throughout such four Business Day period, the Company
engages (to the extent requested by Parent) in good faith negotiations with Parent to amend this Agreement in such a manner that
the failure to withdraw or modify the Company Board Recommendation would not reasonably be expected to be inconsistent with
the fiduciary obligations of the Company’s board of directors to the Company’s stockholders under applicable Delaware law in
light of such Change in Circumstances; and (F) at the time of withdrawing or modifying the Company Board Recommendation,
the Company’s board of directors determines in good faith, after taking into account the advice of an independent financial advisor
of nationally recognized reputation and the advice of the Company’s outside legal counsel, that the failure to withdraw or modify
the Company Board Recommendation would still reasonably be expected to be inconsistent with the fiduciary obligations of the
Company’s board of directors to the Company’s stockholders under applicable Delaware law in light of such Change in
Circumstances; provided, however, that when making such determination, the Company’s board of directors shall be obligated to
consider any changes to the terms of this Agreement proposed by Parent as a result of the negotiations required by clause “(E)”
above or otherwise.

For purposes of clause “(i)” of the first sentence of this Section 5.2(d), any change in the form or amount of the consideration payable in
connection with a Superior Offer, and any other material change to any of the terms of a Superior Offer, will be deemed to be a new Superior
Offer, requiring a new Recommendation Change Notice and a new advance notice period; provided, however, that the advance notice period
applicable to any such change to a Superior Offer pursuant to clause “(i)(F)” of the first sentence of this Section 5.2(d) shall be two Business
Days rather than four Business Days. The Company agrees to keep confidential, and not to disclose to the public or to any Person, other than
the Company’s Representatives, any and all information regarding any negotiations that take place pursuant to clause “(i)(H)” or clause “(ii)
(E)” of the first sentence of this Section 5.2(d) (including the existence and terms of any proposal made on behalf of Parent or the Company
during such negotiations), unless (aa) the disclosure of such information is required by applicable Legal Requirements or (bb) the Company’s
board of directors determines in good faith, after having taken into account the advice of the Company’s outside legal counsel, that the failure
to disclose such information would reasonably be expected to be inconsistent with its fiduciary obligations to the Company’s stockholders
under applicable Delaware law. The Company shall ensure that any withdrawal or modification of the Company Board Recommendation:
(x) does not change or otherwise affect the approval of this Agreement or any of the Support Agreements by the Company’s board of
directors for purposes of Section 203 of the DGCL; and (y) does not have the effect of causing any corporate Takeover Statute of the State of
Delaware or any other state to be applicable to this Agreement or any of the Support Agreements, the Merger or any of the other
Contemplated Transactions.

(e) Nothing contained in this Section 5.2 or elsewhere in this Agreement shall prohibit the Company from (i) taking and
disclosing to its stockholders a position contemplated by Rule 14d-9 or Rule 14e-2(a) promulgated under the Exchange Act or (ii) making any
disclosure to its stockholders if the Company’s board of directors determines in good faith, after having taken into account the advice of the
Company’s outside legal counsel, that the failure to do so would reasonably be expected to be inconsistent with its fiduciary obligations to the
Company’s stockholders under applicable Delaware law; provided, however, that this Section 5.2(e) shall not be deemed to permit the
Company’s board of directors to withdraw or modify the Company Board Recommendation in a manner adverse to Parent or Merger Sub or
take any of the actions referred to in Section 5.2(c) except, in the case of a withdrawal or modification of the Company Board
Recommendation, to the extent permitted by Section 5.2(d); provided, further, that in the case of each of clauses “(i)” and “(ii)” above, any
such disclosure, other than a “stop, look and listen” communication or similar communication of the type contemplated by Section 14d-9(f)
of the Exchange Act, shall be deemed to be a

39
withdrawal or modification of the Company Board Recommendation in a manner adverse to Parent and Merger Sub unless the Company’s
board of directors publicly and unanimously reaffirms the Company Board Recommendation in such disclosure.

(f) Subject to the Company’s right to terminate this Agreement in accordance with Section 8.1(i), the Company’s obligation
to call, give notice of and hold the Company Stockholders’ Meeting in accordance with Section 5.2(a) shall not be limited or otherwise
affected by the making, commencement, disclosure, announcement or submission of any Superior Offer or other Acquisition Proposal, by any
Change in Circumstances or by any withdrawal or modification of the Company Board Recommendation. Without limiting the generality of
the foregoing, the Company agrees that unless this Agreement is terminated in accordance with Section 8.1, the Company shall not submit
any Acquisition Proposal to a vote of its stockholders.

5.3 Treatment of Company Options and Company Restricted Stock Units.

(a) At the Effective Time, and without any action on the part of Parent, the Company or any other Person, each In the
Money Option that is vested (after giving effect to any applicable terms of vesting acceleration) and held by a Person who is not a Continuing
Employee (each, a “Cash-Out Option”) shall be canceled and extinguished, and the holder thereof shall be entitled to receive (subject to any
applicable withholding Taxes, or other amounts required by applicable Legal Requirements to be withheld) an amount in cash equal to the
product of (i) the total number of shares of Company Common Stock subject to such Cash-Out Option multiplied by (ii) the excess of (A) the
Price Per Share over (B) the per share exercise price for the Company Common Stock subject to such Cash-Out Option. Following the
Effective Time, any such canceled Cash-Out Option shall entitle the former holder of such Cash-Out Option only to the payment described in
this Section 5.3(a), which shall be made by the Surviving Corporation within 10 Business Days after the Effective Time.

(b) At the Effective Time, by virtue of the Merger and without any action on the part of Parent, the Company or any other
Person, each In the Money Option that is held by a Continuing Employee, whether vested or unvested, shall be assumed by Parent and
converted into an option to purchase, on the same terms and conditions as were applicable under such Company Option (including any
provisions with respect to the acceleration of vesting following the Effective Time), that number of Parent Common Shares (rounded down to
the nearest whole share) equal to the product of (i) the total number of shares of Company Common Stock subject to such Company Option,
multiplied by (ii) the Conversion Ratio, at an exercise price per Parent Common Share (rounded up to the nearest whole cent) equal to the
quotient obtained by dividing (A) the per share exercise price for the Company Common Stock subject to such Company Option, by (B) the
Conversion Ratio (each such assumed Company Option, as so adjusted, a “Converted Option”); provided, however, that, following the
Effective Time, all references to the “Company” in each Company Equity Plan and each award agreement shall be deemed to be references to
Parent. The assumption and conversion of Converted Options contemplated by this Section 5.3(b) shall in each case be effected in a manner
intended to comply with Section 409A of the Code.

(c) At the Effective Time, and without any action on the part of Parent, the Company or any other Person, each Out of the
Money Option and each In the Money Option that is unvested (after giving effect to any applicable terms of vesting acceleration) and held by
a Person who is not a Continuing Employee shall be canceled and extinguished for no consideration.

(d) At the Effective Time, and without any action on the part of Parent, the Company or any other Person, each Company
RSU that is outstanding and unvested immediately prior to the Effective Time (after giving effect to any applicable terms of vesting
acceleration) and held by a Continuing Employee shall be converted into that number of Parent restricted stock units, rounded down to the
nearest whole share, equal to the product of (i) the total number of shares of Company Common Stock subject to such Company RSU,
multiplied by (ii) the Conversion Ratio (each such assumed Company RSU, as so adjusted, a “Converted RSU”). Any

40
Converted RSU issued pursuant to this Section 5.3(d) shall be subject to the same terms and conditions as were applicable to such Company
RSU prior to the Effective Time (including any provisions with respect to the acceleration of vesting following the Effective Time); provided,
however, that all references to the “Company” in each Company Equity Plan and each award agreement shall be deemed to be references to
Parent.

(e) At the Effective Time, and without any action on the part of Parent, the Company or any other Person, each Company
RSU that is outstanding and unvested (after giving effect to any applicable terms of vesting acceleration) immediately prior to the Effective
Time and held by a Person who is not a Continuing Employee shall be canceled and extinguished for no consideration.

(f) At the Effective Time, and without any action on the part of Parent, the Company or any other Person, each Company
RSU that is outstanding and vested (and with respect to which shares of Company Common Stock have not yet been issued) immediately
prior to the Effective Time (after giving effect to any applicable terms of vesting acceleration and including those Company RSUs that become
vested immediately prior to or as of the Effective Time) shall be canceled and extinguished, and the holder thereof shall be entitled to receive
(subject to any applicable withholding Taxes, or other amounts required by applicable Legal Requirements to be withheld) an amount in cash
equal to the product of (i) the Price Per Share, multiplied by (ii) the total number of shares of Company Common Stock subject to such
Company RSU. Following the Effective Time, any such canceled Company RSU shall entitle the former holder of such Company RSU only to
the payment described in this Section 5.3(f), which shall be made by the Surviving Corporation within 10 Business Days after the Effective
Time or at such other time or times following the Effective Time consistent with the terms of the Company RSU to the extent necessary to
avoid the imposition of additional income Tax under Section 409A of the Code.

(g) Notwithstanding anything to the contrary contained in this Agreement, if a Company Equity Award is subject to the
Legal Requirements of a non-U.S. jurisdiction and Parent determines that such Company Equity Award may not be subject to the treatment
set forth in Section 5.3(a), Section 5.3(b), Section 5.3(c), Section 5.3(d), Section 5.3(e) or Section 5.3(f), as applicable, under the applicable
Legal Requirements of such non-U.S. jurisdiction, Parent shall provide for such treatment that is in compliance with such Legal Requirements
and reasonably agreed upon by Parent and the Company at least 20 calendar days prior to the Effective Time.

(h) Effective immediately prior to the Effective Time, each Director Option and each Director RSU that is then outstanding
and unvested shall be vested in full.

(i) The amount of cash, if any, that a holder of a Company Equity Award is entitled to receive with respect to such
Company Equity Award pursuant to Section 5.3(a) or Section 5.3(f) shall be rounded down to the nearest cent (with $0.005 being rounded
upward) and computed after aggregating the cash amounts payable for all Company Equity Awards held by such holder pursuant to Sections
5.3(a) and 5.3(f).

(j) Prior to the Effective Time, each of Parent and the Company shall take all actions necessary (including obtaining any
required consents) to effectuate the provisions set forth in this Section 5.3; provided, however, that no such action taken shall be required to
be irrevocable until immediately prior to the Effective Time. Parent agrees to file, as soon as reasonably practicable but in no event later than
ten Business Days after the Effective Time, a registration statement on Form S-8 (if available for use by Parent) with respect to the Parent
Common Shares issuable with respect to Converted Options and Converted RSUs, in each case that are eligible to be registered on Form S-8,
and shall use commercially reasonable efforts to maintain the effectiveness of such registration statement (and maintain the current status of
the prospectus or prospectuses contained therein) for so long as the Converted Options and Converted RSUs assumed in accordance with this
Agreement remain outstanding.

5.4 Treatment of Company ESPP. As soon as practicable after the date of this Agreement, the Company shall take all action that
may be necessary to provide that: (w) no new offering period (or similar

41
period during which shares may be purchased) shall commence under the ESPP following the commencement of the offering period
scheduled to commence on May 15, 2019 (the “Final Offering Period”) (it being understood and agreed that the offering period scheduled to
commence on May 15, 2019 shall have a maximum duration of six months); (x) participants in the ESPP as of the date of this Agreement may
not increase their payroll deductions under the ESPP from those in effect at the commencement of the Final Offering Period; (y) no new
participants may commence participation in the ESPP following the commencement of the Final Offering Period; and (z) the Final Offering
Period may not be extended beyond its original six month duration. Without limiting the foregoing, as soon as reasonably practicable after the
date of this Agreement (but in any event prior to the Closing), the Company shall take such action as may be necessary to: (i) cause the Final
Offering Period (or similar period during which shares may be purchased) to be the final offering period under the ESPP and to be terminated
no later than three Business Days prior to the anticipated Closing Date (the “Final Exercise Date”); (ii) make any pro-rata adjustments that may
be necessary to reflect the shortened offering period (or similar period), but otherwise treat such shortened offering period (or similar period)
as a fully effective and completed offering period for all purposes under the ESPP; (iii) cause each participant’s then-outstanding share
purchase right under the ESPP (the “Company ESPP Rights”) to be exercised as of the Final Exercise Date; and (iv) terminate the ESPP as of
the Effective Time. On the Final Exercise Date, the funds credited as of such date under the ESPP within the associated accumulated payroll
withholding account for each participant under the ESPP shall be used to purchase shares of Company Common Stock in accordance with the
terms of the ESPP (as amended pursuant to this Section 5.4), and each share purchased thereunder immediately prior to the Effective Time
shall be canceled at the Effective Time and converted into the right to receive the Price Per Share in accordance with Section 1.5, subject to
withholding of any applicable income and employment withholding Taxes. Any accumulated contributions of each participant under the
ESPP as of immediately prior to the Effective Time shall, to the extent not used to purchase shares in accordance with the terms and
conditions of the ESPP (as amended pursuant to this Section 5.4), be refunded to such participant as promptly as practicable following the
Effective Time (without interest). No further Company ESPP Rights shall be granted or exercised under the ESPP after the Final Exercise Date.
The Company shall provide timely notice to participants of the setting of the Final Exercise Date and the termination of the ESPP in
accordance with the terms of the ESPP.

5.5 Treatment of Company Warrants.

(a) Prior to the Closing, the Company shall properly provide timely prior written notice of this Agreement, the Merger and
the other Contemplated Transactions to the holders of the Warrants in accordance with the terms of the Warrants.

(b) As promptly as practicable after the date of this Agreement, but no later than three Business Days prior to the Closing
Date, the Company shall, in consultation with Parent, use its reasonable best efforts to cause the Warrants to be amended to provide that the
Warrants shall be canceled, terminated and extinguished without consideration at the Effective Time and that, from and after the Effective
Time, the holders of the Warrants shall have no rights with respect thereto. Each such amendment shall be in form and substance reasonably
satisfactory to Parent, and shall be subject to advance review and reasonable approval by Parent.

5.6 Employee Benefits.

(a) For a period of one year following the Effective Time, and in addition to the applicable Legal Requirements of each
jurisdiction, Parent shall, or shall cause the Surviving Corporation to, maintain, for each employee of the Acquired Companies who continues
in employment with Parent, the Surviving Corporation or any Subsidiary thereof, base salary at a level that is no less favorable than the base
salary provided to such employee immediately prior to the Effective Time. Parent shall, and shall cause the Surviving Corporation or the
applicable Parent Subsidiary, to honor and abide by the terms of any written severance and change in control plan, agreement or arrangement
for the benefit of the Continuing Employees that is in effect as of the date of this Agreement and is set forth in Part 5.6(a) of the Disclosure
Schedule.

42
 (b) With respect to each benefit plan, program, practice, policy or arrangement maintained by Parent or its Subsidiaries
(including the Surviving Corporation) following the Effective Time and in which any of the Continuing Employees participate (the “Parent
Plans”), and except to the extent necessary to avoid duplication of benefits, for purposes of determining eligibility to participate and vesting,
service with the Company and its Subsidiaries (or predecessor employers to the extent the Company provides past service credit under its
benefit plans) shall, to the extent permitted by the terms of the applicable Parent Plan, be treated as service with Parent and its Subsidiaries.
Each applicable Parent Plan shall, to the extent permitted by the terms of the applicable Parent Plan, waive eligibility waiting periods and
pre-existing condition limitations to the extent waived or not included under the corresponding Company Employee Plan. To the extent
permitted under the applicable Parent Plan, Parent agrees to give or cause its Subsidiaries (including the Surviving Corporation) to give the
Continuing Employees credit under the applicable Parent Plan for amounts paid prior to the Effective Time during the calendar year in which
the Effective Time occurs under a corresponding Company Employee Plan for purposes of applying deductibles, co-payments and
out-of-pocket maximums as though such amounts had been paid in accordance with the terms and conditions of the Parent Plan.

(c) Parent agrees that all Continuing Employees located in the U.S. shall be eligible to continue to participate in the
Surviving Corporation’s health and welfare benefit plans, subject in each case to the terms and conditions of such plans; provided, however,
that nothing in this Section 5.6(a) or elsewhere in this Agreement shall: (i) be construed to create a right in any Company Associate to
employment with Parent, the Surviving Corporation or any other Subsidiary of Parent; (ii) be deemed to establish, amend, modify or cause to
be adopted any Company Employee Plan or any other benefit plan, program, agreement or arrangement maintained or sponsored by Parent,
the Surviving Corporation or any of their respective Affiliates; or (iii) limit the ability of Parent, the Surviving Corporation or any of their
respective Affiliates from establishing, amending, modifying or terminating any benefit plan, program, agreement or arrangement at any time
assumed, established, sponsored or maintained by any of them, in each case, following the Effective Time. Except for Indemnified Persons to
the extent of their rights pursuant to Section 5.7, no Company Associate shall be deemed to be a third party beneficiary of this
Agreement. Nothing in this Section 5.6(a) shall limit the effect of Section 9.8.

(d) Unless otherwise requested by Parent in writing at least five Business Days prior to the Closing Date, the Company shall
take (or cause to be taken) all actions necessary or appropriate to terminate, effective no later than the day prior to the date on which the
Merger becomes effective, any Company Employee Plan that contains a cash or deferred arrangement intended to qualify under Section 401(k)
of the Code (a “Company 401(k) Plan”). If the Company is required to terminate any Company 401(k) Plan, then the Company shall provide
to Parent prior to the Closing Date written evidence of the adoption by the Company’s board of directors of resolutions authorizing the
termination of such Company 401(k) Plan (the form and substance of which shall be subject to the prior review and reasonable approval of
Parent), effective no later than the day prior to the date on which the Merger becomes effective. The Company also shall take such other
actions in furtherance of terminating such Company 401(k) Plan as Parent may reasonably request.

(e) To the extent any employee notification or consultation requirements are imposed by applicable Legal Requirements
with respect to the Contemplated Transactions (as reasonably determined by the Company, based on its outside counsel’s advice), the
Company shall consult with Parent and shall ensure that such notification or consultation requirements are complied with prior to the
Effective Time. Prior to the Effective Time, the Acquired Companies shall, at Parent’s request, reasonably cooperate with Parent in
communications with Continuing Employees regarding post-Closing employment matters, including post-Closing employee benefits and
compensation or other compensation or benefits matters related to or impacted by any of the Contemplated Transactions (whether alone or in
combination with additional events), including the matters described in this Section 5.6.

5.7 Indemnification of Officers and Directors.

(a) All rights to indemnification by the Company existing in favor of those Persons who are directors and officers of any
Acquired Company (the “Indemnified Persons”) for their acts and omissions as

43
directors and officers occurring prior to the Effective Time, as provided in the Company’s or the applicable Acquired Company’s certificate of
incorporation or bylaws (as in effect as of the date of this Agreement) and as provided in those indemnification agreements between an
Acquired Company and such Indemnified Persons (as in effect as of the date of this Agreement) Made Available to Parent, shall survive the
Merger and shall continue in full force and effect (to the extent such rights to indemnification are available under and consistent with
applicable Delaware law) for a period of six years from the date on which the Merger becomes effective.

(b) From the Effective Time until the sixth anniversary of the Effective Time, the Surviving Corporation shall maintain in
effect, for the benefit of the Indemnified Persons with respect to their acts and omissions as directors and officers occurring prior to the
Effective Time, the existing policy of directors’ and officers’ liability insurance maintained by the Company as of the date of this Agreement
in the form Made Available to Parent (the “Existing D&O Policy”), to the extent that such directors’ and officers’ liability insurance coverage
is available on commercially reasonable terms; provided, however, that: (i) the Surviving Corporation may substitute for the Existing D&O
Policy a policy or policies of comparable coverage; and (ii) the Surviving Corporation shall not be required to pay annual premiums for the
Existing D&O Policy (or for any substitute policies) in excess of 300% of the annual premium paid prior to the date of this Agreement by the
Company for the Existing D&O Policy (the “Maximum Premium”). If any future annual premiums for the Existing D&O Policy (or any
substitute policies) exceed the Maximum Premium in the aggregate, the Surviving Corporation shall be entitled to reduce the amount of
coverage of the Existing D&O Policy (or any substitute policies) to the amount of coverage that can be obtained for a premium equal to the
Maximum Premium. Parent and the Surviving Corporation or, prior to the Effective Time, the Company shall have the right to purchase a
pre-paid, non-cancellable “tail” policy on the Existing D&O Policy for a claims reporting or discovery period of six years from the Effective
Time and otherwise on terms and conditions that are no less favorable than the terms and conditions of the Existing D&O Policy; provided,
however, that neither Parent nor the Surviving Corporation shall be obligated to, and the Company shall not (without the prior written consent
of Parent), expend an amount for such “tail” policy in excess of the Maximum Premium. If such “tail” policy is purchased, the Surviving
Corporation shall, and Parent shall cause the Surviving Corporation to, maintain such “tail” policy in full force and effect in lieu of all other
obligations of the Surviving Corporation under the first sentence of this Section 5.7(b).

(c) The provisions of this Section 5.7 are intended to be for the benefit of, and will be enforceable by, each of the
Indemnified Persons, who are intended third-party beneficiaries of this Section 5.7 from and after the Effective Time.

5.8 Regulatory Approvals and Related Matters.

(a) Each party shall use its reasonable best efforts, and will cause its Subsidiaries to use their reasonable best efforts, to file,
as soon as practicable after the date of this Agreement, all notices, reports and other documents required to be filed by such party with any
Governmental Body with respect to the Merger and the other Contemplated Transactions, and to submit promptly any additional information
requested by any such Governmental Body. Without limiting the generality of the foregoing, the Company and Parent shall: (i) as promptly as
practicable, but in no event later than 10 Business Days after the date of this Agreement, prepare and file the notifications required under the
HSR Act; (ii) respond as promptly as practicable to (A) any inquiries or requests received from the Federal Trade Commission or the
Department of Justice for additional information or documentation and (B) any inquiries or requests received from any state attorney general,
foreign antitrust authority or other Governmental Body in connection with antitrust or related matters; (iii) engage in pre-filing discussions
with CFIUS, as deemed advisable by Parent; (iv) as promptly as practicable after the date of this Agreement prepare and file with CFIUS a
declaration pursuant to 31 C.F.R. § 801.402(a), which declaration shall state that if the action taken by CFIUS at the end of the declaration
assessment period satisfies the CFIUS Condition, then the parties intend to consummate the Merger promptly after the satisfaction or waiver
of the last to be satisfied or waived of the conditions set forth in Section 6 and Section 7, (v) if, at the conclusion of the 30-day declaration
assessment period described in 31 C.F.R. § 801.404, the CFIUS Condition has not been

44
satisfied, then Parent and the Company shall forgo the submission of an initial draft of the Joint Voluntary Notice to CFIUS pursuant to
31 C.F.R. § 800.401(f), unless CFIUS specifically requests such a draft, and shall promptly prepare and submit a formal Joint Voluntary Notice
to CFIUS pursuant to 31 C.F.R. § 800.401(a); and (vi) use commercially reasonable efforts to respond as promptly as practicable, and no later
than the deadline specified by CFIUS for such a response, to any information request from CFIUS in connection with the CFIUS assessment,
review or investigation of the Merger. The Company and Parent agree that if CFIUS suggests or requests, or if Parent determines it to be
reasonably appropriate in connection with satisfying the CFIUS Condition, that the parties withdraw and resubmit the declaration described in
clause “(iv)” above or the Joint Voluntary Notice submitted to CFIUS pursuant to this Section 5.8(a), the Company and Parent shall cooperate
in withdrawing and resubmitting such declaration or Joint Voluntary Notice.

(b) Subject to the confidentiality provisions of the Confidentiality Agreement, Parent and the Company each shall promptly
supply the other with any information which may be required in order to effectuate any filings (including applications) pursuant to (and to
otherwise comply with its obligations set forth in) Section 5.8(a). Notwithstanding anything to the contrary contained in this Section 5.8 or
elsewhere in this Agreement, Parent: (i) shall have the principal responsibility for devising and implementing the strategy of the parties with
respect to seeking any actions or Consents of any Governmental Body with respect to the Merger and coordinating any contacts with any
Governmental Body; and (ii) shall take the lead in all meetings and communications with any Governmental Body in connection with
obtaining any such action or Consent. Except where prohibited by applicable Legal Requirements or any Governmental Body, and subject to
the immediately preceding sentence and the confidentiality provisions of the Confidentiality Agreement, each of Parent and the Company
shall: (A) consult with the other in good faith prior to taking a position with respect to any filing or submission required by Section 5.8(a); (B)
permit the other to review and discuss in advance, and consider in good faith the views of the other in connection with, any analyses,
appearances, presentations, memoranda, briefs, white papers, arguments, opinions or proposals before making or submitting any of the
foregoing to any Governmental Body by or on behalf of any party hereto in connection with any filing or submission required by
Section 5.8(a) or any antitrust-related Legal Proceeding related to this Agreement or the Contemplated Transactions; (C) coordinate with the
other in preparing and exchanging such information; and (D) promptly provide the other (and its counsel) with copies of all filings, notices,
analyses, presentations, memoranda, briefs, white papers, opinions, proposals and other submissions (and a summary of any oral
presentations) made or submitted by such party with or to any Governmental Body in connection with any filing or submission required by
Section 5.8(a).

(c) Each of Parent and the Company shall notify the other promptly upon the receipt of: (i) any communication from any
official of any Governmental Body in connection with any filing or submission made pursuant to this Agreement; (ii) knowledge of the
commencement or threat of commencement of any Legal Proceeding by or before any Governmental Body with respect to the Merger or any
of the other Contemplated Transactions (and shall keep the other party informed as to the status of any such Legal Proceeding or threat); and
(iii) any request by any official of any Governmental Body for any amendment or supplement to any filing made pursuant to this Agreement
or any information required to comply with any Legal Requirement applicable to the Merger or any of the other Contemplated Transactions.
Whenever any event occurs that is required to be set forth in an amendment or supplement to any filing made pursuant to Section 5.8(a),
Parent or the Company, as the case may be, shall (promptly upon learning of the occurrence of such event) inform the other of the occurrence
of such event and cooperate in filing with the applicable Governmental Body such amendment or supplement.

(d) Subject to Section 5.8(e), each of Parent and the Company shall use its reasonable best efforts to take, or cause to be
taken, all actions necessary to consummate the Merger and make effective the other Contemplated Transactions on a timely basis, including
satisfying the CFIUS Condition. Without limiting the generality of the foregoing, but subject to Section 5.8(e), each party to this Agreement:
(i) shall make all filings (if any), give all notices (if any) and provide all information (if any) required to be made, given or provided by such
party in connection with the Merger or any of the other Contemplated Transactions; (ii) shall consult with

45
such party’s employees to the extent required under any applicable Legal Requirement in connection with the Merger or any of the other
Contemplated Transactions; and (iii) shall use its reasonable best efforts to obtain each Consent (if any) required to be obtained (pursuant to
any applicable Legal Requirement or Contract, or otherwise) by such party in connection with the Merger or any of the other Contemplated
Transactions. Parent and the Company shall consult with each other with respect to all of the matters contemplated by clauses “(i),” “(ii)” and
“(iii)” of this Section 5.8(d), and will keep the other apprised of the status of matters relating to the consummation of the Contemplated
Transactions. If Parent reasonably determines in good faith that doing so would be advisable, at the request of Parent, the Company shall
(A) divest, hold separate or take any other action with respect to any of the businesses, product lines or assets of the Acquired Companies,
provided that any such action is conditioned upon the consummation of the Merger, and (B) use its reasonable best efforts to lift any restraint,
injunction or other legal bar to the Merger or any of the other Contemplated Transactions.

(e) Notwithstanding anything to the contrary contained in Section 5.8(d) or elsewhere in this Agreement, neither Parent nor
Merger Sub shall have any obligation under this Agreement to (and none of the Acquired Companies shall, except with the prior written
consent of Parent, agree to): (i) propose, negotiate, commit to or effect, by consent decree, hold separate order or otherwise, the sale,
divestiture, disposition, holding separate or license (or similar arrangement) of, or limit Parent’s freedom of action with respect to, any of the
businesses, product lines or assets of Parent, Merger Sub, any of their respective Subsidiaries or any of the Acquired Companies, or otherwise
propose, proffer or agree to any other requirement, obligation, condition, limitation or restriction on any of the businesses, product lines or
assets of Parent, Merger Sub, any of their respective Subsidiaries or any of the Acquired Companies; (ii) commence or contest, or cause any of
its Subsidiaries or Affiliates to commence or contest, any litigation in which a Governmental Body is a party relating to the Merger or any of
the other Contemplated Transactions, so long as Parent reasonably determines in good faith that commencing or contesting such litigation
would not be advisable; (iii) amend or modify any of Parent’s or Merger Sub’s rights or obligations under this Agreement; or (iv) directly or
indirectly (A) change, or commit to change, its place of domicile or organization or (B) restructure or commit to restructure any of the
Contemplated Transactions, unless, in the case of the actions referred to in the foregoing clause “(i)”, such actions (A) are reasonably
necessary to satisfy the conditions set forth in Sections 6.6 and 7.5 and (B) would not, individually or in the aggregate, reasonably be expected
to result in a material and negative impact on the benefits of the Merger to Parent.

5.9 Disclosure. Parent and the Company shall consult with each other before issuing any press release or otherwise making any
public statement with respect to the Merger or any of the other Contemplated Transactions. Without limiting the generality of the foregoing,
neither the Company nor Parent shall make any disclosure to the public regarding the Merger or any of the other Contemplated Transactions
unless: (a) the other party shall have approved such disclosure; or (b) such party shall have been advised by its legal counsel that such
disclosure is required by a Legal Requirement or the rules of the New York Stock Exchange or the Parent Stock Exchange and shall have
provided the other party with reasonable advance notice of its intention to make such disclosure and the content of such disclosure.
Notwithstanding the foregoing: (i) each of Parent and the Company may, without such consultation or consent, make any public statement in
response to questions from the press, analysts, investors or those attending industry conferences and make internal announcements to
employees, so long as such statements or announcements are consistent with (and not materially expansive of) previous press releases, public
disclosures or public statements or announcements made jointly by the parties (or individually, if approved by the other party); (ii) Parent or
the Company may, without the prior consent of the other party, issue any such press release or make any such public announcement or
statement as may be required by a Legal Requirement or the rules of the New York Stock Exchange or the Parent Stock Exchange if it first
notifies and consults with the other party prior to issuing any such press release or making any such public announcement or statement and
(iii) the Company need not consult with (or obtain the consent of) Parent in connection with any press release, public statement or filing to be
issued or made with respect to any Acquisition Proposal or any withdrawal or modification of the Company Board Recommendation in
accordance with Section 5.2(d).

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 5.10 Resignation of Officers and Directors. The Company shall use commercially reasonable efforts to obtain and deliver to
Parent at or prior to the Effective Time (or, at the option of Parent, at a later date) the resignation of each officer and director of each of the
Acquired Companies, effective as of the Effective Time (it being understood that such resignation shall not constitute a voluntary termination
of employment under any Company Employee Agreement or Company Employee Plan applicable to such individual’s status as an officer or
director of an Acquired Company).

5.11 Delisting. Prior to the Effective Time, the Company shall cooperate with Parent and use its reasonable best efforts to take, or
cause to be taken, all actions, and do or cause to be done all things, reasonably necessary, proper or advisable on its part under applicable
Legal Requirements to enable the de-listing by the Surviving Corporation of the Company Common Stock from the New York Stock
Exchange and the deregistration of the Company Common Stock under the Exchange Act as promptly as practicable after the Effective Time.

5.12 Section 16 Matters. Prior to the Effective Time, the Company shall take such reasonable steps as are required to cause the
disposition of Company Common Stock and Company Equity Awards in connection with the Merger by each officer or director of the
Company who is subject to the reporting requirements of Section 16(a) of the Exchange Act with respect to the Company to be exempt from
Section 16(b) of the Exchange Act pursuant to Rule 16b-3 under the Exchange Act.

5.13 Stockholder Litigation. The Company shall promptly (and in any event within 24 hours) notify Parent in writing of, and shall
give Parent the opportunity to participate fully and actively in (but not control) the defense and settlement of, any stockholder claim or
litigation (including any class action or derivative litigation) against or otherwise involving the Company and/or any of its directors or officers
relating to this Agreement, the Merger or any of the other Contemplated Transactions. No compromise or full or partial settlement of any such
claim or litigation shall be agreed to by the Company without Parent’s prior written consent (not to be unreasonably withheld, conditioned or
delayed).

5.14 Takeover Statutes and Rights. If any Takeover Statute is or may become applicable to this Agreement, the Merger or any of
the other Contemplated Transactions, the Company and the board of directors of the Company shall use their reasonable best efforts to grant
such approvals and take such actions as are necessary so that such transactions may be consummated as promptly as practicable on the terms
contemplated by this Agreement and otherwise act to eliminate or minimize the effects of such Takeover Statute on this Agreement, the
Merger and the other Contemplated Transactions.

Section 6. CONDITIONS P RECEDENT TO O BLIGATIONS OF P ARENT AND MERGER SUB

The obligations of Parent and Merger Sub to effect the Merger and otherwise consummate the Contemplated Transactions are subject to
the satisfaction (or waiver by Parent, on behalf of itself and Merger Sub), at or prior to the Closing, of each of the following conditions:

6.1 Accuracy of Representations.

(a) Each of the representations and warranties of the Company contained in this Agreement, other than the Specified
Representations, shall be accurate in all respects as of the date of this Agreement (other than any such representation or warranty made as of a
specific earlier date, which shall have been accurate in all respects as of such earlier date) and shall be accurate in all respects as of the Closing
Date as if made on and as of the Closing Date (other than any such representation and warranty made as of a specific earlier date, which shall
have been accurate in all respects as of such earlier date), except that any inaccuracies in such representations and warranties will be
disregarded if the circumstances giving rise to all such inaccuracies (considered collectively) do not constitute, and would not reasonably be
expected to have or result in, a Material Adverse Effect; provided, however, that, for purposes of determining the accuracy of such
representations and warranties

47
as of the foregoing dates: (i) all “Material Adverse Effect” and other materiality qualifications limiting the scope of such representations and
warranties shall be disregarded; and (ii) any update of or modification to the Disclosure Schedule made or purported to have been made on or
after the date of this Agreement shall be disregarded.

(b) Each of the representations and warranties of the Company contained in Sections 2.20, 2.21, 2.22, 2.24 and 2.25 shall
have been accurate in all material respects as of the date of this Agreement (other than any such representation or warranty made as of a
specific earlier date, which shall have been accurate in all material respects as of such earlier date) and shall be accurate in all material respects
as of the Closing Date as if made on and as of the Closing Date (other than any such representation and warranty made as of a specific earlier
date, which shall have been accurate in all material respects as of such earlier date); provided, however, that, for purposes of determining the
accuracy of such representations and warranties as of the foregoing dates: (i) all “Material Adverse Effect” and other materiality qualifications
limiting the scope of such representations and warranties shall be disregarded; and (ii) any update of or modification to the Disclosure
Schedule made or purported to have been made on or after the date of this Agreement shall be disregarded.

(c) The representation and warranty contained in Section 2.5(a) shall have been accurate in all respects as of the date of this
Agreement.

(d) Each of the representations and warranties of the Company contained in Sections 2.3(a), 2.3(b) (other than clauses “(F)”
through “(K)”) and 2.3(d) shall have been accurate in all respects as of the date of this Agreement (other than any such representation or
warranty made as of a specific earlier date, which shall have been accurate in all respects as of such earlier date) and shall be accurate in all
respects as of the Closing Date as if made on and as of the Closing Date (other than any such representation and warranty made as of a
specific earlier date, which shall have been accurate in all respects as of such earlier date), except that any inaccuracies in such representations
and warranties that are, in the aggregate, de minimis in nature and amount (i.e., less than $1,000,000 in aggregate value) will be disregarded;
provided, however, that, for purposes of determining the accuracy of such representations and warranties as of the foregoing dates, any update
of or modification to the Disclosure Schedule made or purported to have been made on or after the date of this Agreement shall be
disregarded.

6.2 Performance of Covenants. The covenants and obligations in this Agreement that the Company is required to comply with or
to perform at or prior to the Closing shall have been complied with and performed in all material respects.

6.3 Stockholder Approval. This Agreement shall have been duly adopted by the Required Company Stockholder Vote.

6.4 Closing Certificate. Parent shall have received a certificate executed by the Chief Executive Officer and Chief Financial Officer
of the Company confirming that the conditions set forth in Sections 6.1, 6.2, 6.3, 6.5 and 6.8 have been duly satisfied.

6.5 No Material Adverse Effect. Since the date of this Agreement, there shall not have occurred any Material Adverse Effect that
is continuing.

6.6 Regulatory Matters.

(a) The waiting period (and any extension thereof) applicable to the consummation of the Merger under the HSR Act shall
have expired or been terminated without the imposition of a Burdensome Condition, and there shall not be in effect any voluntary agreement
between Parent or the Company and the Federal Trade Commission or the Department of Justice pursuant to which Parent or the Company
has agreed not to consummate the Merger for any period of time.

48
 (b) The CFIUS Condition shall have been satisfied.

6.7 No Restraints. No temporary restraining order, preliminary or permanent injunction or other Order preventing the
consummation of the Merger shall have been issued by any Specified Governmental Body and remain in effect, and there shall not be any
Legal Requirement enacted or deemed applicable to the Merger by any Specified Governmental Body that makes consummation of the Merger
illegal and remains in effect.

6.8 No Governmental Litigation. There shall not be pending or overtly threatened any Legal Proceeding brought by a
Governmental Body: (a) challenging or seeking to restrain or prohibit the consummation of the Merger or any of the other Contemplated
Transactions; (b) seeking to prohibit or limit in any material respect Parent’s ability to vote, receive dividends with respect to or otherwise
exercise ownership rights with respect to the stock of the Surviving Corporation; (c) that would materially and adversely affect the right of
Parent or any of the Acquired Companies to own the assets or operate the business of the Acquired Companies; (d) seeking to compel any of
the Acquired Companies, Parent or any Subsidiary of Parent, to dispose of or hold separate any material assets as a result of the Merger or any
of the other Contemplated Transactions; or (e) relating to the Merger or any of the other Contemplated Transactions and seeking to impose (or
that would reasonably be expected to result in the imposition of) any criminal sanctions or criminal liability on Parent or any of its Affiliates or
any Acquired Company.

Section 7. CONDITIONS P RECEDENT TO O BLIGATION OF THE COMPANY

The obligation of the Company to effect the Merger and otherwise consummate the Contemplated Transactions is subject to the
satisfaction (or waiver by the Company), at or prior to the Closing, of the following conditions:

7.1 Accuracy of Representations. Each of the representations and warranties of Parent and Merger Sub contained in this
Agreement shall be accurate in all respects as of the date of this Agreement (other than any such representation or warranty made as of a
specific earlier date, which shall have been accurate in all respects as of such earlier date) and shall be accurate in all respects as of the Closing
Date as if made on and as of the Closing Date (other than any such representation or warranty made as of a specific earlier date, which shall
have been accurate in all respects as of such earlier date), except where the failure of the representations and warranties of Parent and Merger
Sub to be accurate would not reasonably be expected to have a material adverse effect on the ability of Parent to consummate the Merger.

7.2 Performance of Covenants. The covenants and obligations in this Agreement that Parent and Merger Sub are required to
comply with or to perform at or prior to the Closing shall have been complied with and performed in all material respects.

7.3 Stockholder Approval. This Agreement shall have been duly adopted by the Required Company Stockholder Vote.

7.4 Closing Certificate. The Company shall have received a certificate executed by an officer of Parent confirming that the
conditions set forth in Sections 7.1 and 7.2 have been duly satisfied.

7.5 Regulatory Matters. The waiting period applicable to the consummation of the Merger under the HSR Act shall have expired
or been terminated, and the CFIUS Condition shall have been satisfied.

7.6 No Restraints.

(a) No temporary restraining order, preliminary or permanent injunction or other order preventing the consummation of the
Merger by the Company shall have been issued by any court of competent jurisdiction or other Governmental Body in the United States and
remain in effect, and there shall not be any Legal Requirement enacted or deemed applicable to the Merger in the United States that makes
consummation of the Merger by the Company illegal.

49
 (b) No temporary restraining order, preliminary or permanent injunction or other binding order preventing the
consummation of the Merger by the Company shall have been issued by any Specified Governmental Body (other than a Governmental Body
in the United States) and remain in effect, and there shall not be any Legal Requirement enacted or deemed applicable to the Merger by any
Specified Governmental Body (other than a Governmental Body in the United States) that makes consummation of the Merger by the
Company illegal and remains in effect, except for any such order, decree, ruling or Legal Requirement that would not reasonably be expected
to give rise to the imposition of criminal sanctions on, or criminal or personal liability to, the officers and directors of the Company if the
Merger were consummated.

Section 8. TERMINATION

8.1 Termination. This Agreement may be terminated prior to the Effective Time (whether before or after the adoption of this
Agreement by the Required Company Stockholder Vote) by written notice of the terminating party to the other parties:

(a) by mutual written consent of Parent and the Company;

(b) by either Parent or the Company if the Merger shall not have been consummated by 11:59 p.m. (California time) on
November 6, 2019 (the “End Date”); provided, however, that: (i) if, as of 11:59 p.m. (California time) on November 6, 2019, a Specified
Circumstance exists and each of the conditions set forth in Sections 6.1, 6.2, 6.3, 6.5, 6.7 (other than with respect to the Specified
Circumstance) and 6.8 (other than with respect to the Specified Circumstance) is satisfied or has been waived, then the Company may, by
providing written notice thereof to Parent at or prior to 11:59 p.m. (California time) on November 6, 2019, extend the End Date to 11:59 p.m.
(California time) on February 6, 2020 (it being understood that, for purposes of this clause “(i),” in order to determine whether the conditions
set forth in Section 6.1 have been satisfied, all references in Section 6.1 to the “Closing Date” shall be deemed to refer instead to November 6,
2019); (ii) if, as of 11:59 p.m. (California time) on November 6, 2019, a Specified Circumstance exists and each of the conditions set forth in
Sections 7.1, 7.2, 7.3 and 7.6 (other than with respect to the Specified Circumstance) is satisfied or has been waived, then Parent may, by
providing written notice thereof to the Company at or prior to 11:59 p.m. (California time) on November 6, 2019, extend the End Date to
11:59 p.m. (California time) on February 6, 2020 (it being understood that, for purposes of this clause “(ii),” in order to determine whether the
conditions set forth in Section 7.1 have been satisfied, all references in Section 7.1 to the “Closing Date” shall be deemed to refer instead to
November 6, 2019); (iii) if, as of 11:59 p.m. (California time) on February 6, 2020, a Specified Circumstance exists and each of the conditions
set forth in Sections 6.1, 6.2, 6.3, 6.5, 6.7 (other than with respect to the Specified Circumstance) and 6.8 (other than with respect to the
Specified Circumstance) is satisfied or has been waived, then the Company may, by providing written notice thereof to Parent at or prior to
11:59 p.m. (California time) on February 6, 2020, extend the End Date to 11:59 p.m. (California time) on May 6, 2020 (it being understood
that, for purposes of this clause “(iii),” in order to determine whether the conditions set forth in Section 6.1 have been satisfied, all references
in Section 6.1 to the “Closing Date” shall be deemed to refer instead to February 6, 2020); (iv) if, as of 11:59 p.m. (California time) on
February 6, 2020, a Specified Circumstance exists and each of the conditions set forth in Sections 7.1, 7.2, 7.3 and 7.6 (other than with respect
to the Specified Circumstance) is satisfied or has been waived, then Parent may, by providing written notice thereof to the Company at or prior
to 11:59 p.m. (California time) on February 6, 2020, extend the End Date to 11:59 p.m. (California time) on May 6, 2020 (it being understood
that, for purposes of this clause “(iv),” in order to determine whether the conditions set forth in Section 7.1 have been satisfied, all references
in Section 7.1 to the “Closing Date” shall be deemed to refer instead to February 6, 2020); and (v) a party shall not be permitted to terminate
this Agreement pursuant to this Section 8.1(b) if the failure to consummate the Merger by the End Date (including any extensions to the End
Date validly made in accordance with this Section 8.1(b)) was proximately caused by the action or failure on the part of such party to act and
such action or failure constituted a material breach of this Agreement;

50
 (c) by either Parent or the Company if a Specified Governmental Body shall have issued a final and nonappealable Order
having the effect of permanently restraining, enjoining or otherwise prohibiting the Merger;

(d) by either Parent or the Company if: (i) the Company Stockholders’ Meeting (including any adjournments and
postponements thereof) shall have been held and completed and the Company’s stockholders shall have taken a final vote on a proposal to
adopt this Agreement; and (ii) this Agreement shall not have been adopted at the Company Stockholders’ Meeting (and shall not have been
adopted at any adjournment or postponement thereof) by the Required Company Stockholder Vote; provided, however, that a party shall not
be permitted to terminate this Agreement pursuant to this Section 8.1(d) if the failure to have this Agreement adopted by the Required
Company Stockholder Vote was proximately caused by the action or failure on the part of such party to act and such action or failure
constituted a material breach of this Agreement;

(e) by either Parent or the Company following a Final CFIUS Turndown; provided, however, that a party shall not be
permitted to terminate this Agreement pursuant to this Section 8.1(e) if such Final CFIUS Turndown was proximately caused by the action or
failure on the part of such party to act and such action or failure constituted a material breach of this Agreement;

(f) by Parent (at any time prior to the adoption of this Agreement by the Required Company Stockholder Vote) if a
Triggering Event shall have occurred;

(g) by Parent if: (i) any of the Company’s representations or warranties contained in this Agreement shall be inaccurate as of
the date of this Agreement or shall have become inaccurate as of a date subsequent to the date of this Agreement (as if made on such
subsequent date) such that any of the conditions set forth in Section 6.1 would not be satisfied (it being understood that, for purposes of
determining the accuracy of such representations or warranties as of the date of this Agreement or as of any subsequent date: (A) all “Material
Adverse Effect” and other materiality and similar qualifications limiting the scope of such representations or warranties shall be disregarded;
and (B) any update of or modification to the Disclosure Schedule made or purported to have been made on or after the date of this Agreement
shall be disregarded); or (ii) any of the Company’s covenants or obligations contained in this Agreement shall have been breached such that
the condition set forth in Section 6.2 would not be satisfied; provided, however, that, for purposes of clauses “(i)” and “(ii)” above, if an
inaccuracy in any of the Company’s representations or warranties as of a date subsequent to the date of this Agreement or a breach of a
covenant or obligation by the Company is curable by the Company prior to the End Date (as it may be extended in accordance with
Section 8.1(b)) and the Company is continuing to exercise its reasonable best efforts to cure such inaccuracy or breach, then Parent may not
terminate this Agreement under this Section 8.1(g) on account of such inaccuracy or breach unless such inaccuracy or breach shall remain
uncured for a period of 30 days commencing on the date that Parent gives the Company written notice of such inaccuracy or breach;

(h) by the Company if: (i) any of Parent’s representations or warranties contained in this Agreement shall be inaccurate as of
the date of this Agreement, or shall have become inaccurate as of a date subsequent to the date of this Agreement (as if made on such
subsequent date) such that the condition set forth in Section 7.1 would not be satisfied (it being understood that, for purposes of determining
the accuracy of such representations or warranties as of the date of this Agreement or as of any subsequent date, all materiality and similar
qualifications limiting the scope of such representations or warranties shall be disregarded); or (ii) if any of Parent’s covenants or obligations
contained in this Agreement shall have been breached such that the condition set forth in Section 7.2 would not be satisfied; provided,
however, that if an inaccuracy in any of Parent’s representations or warranties as of a date subsequent to the date of this Agreement or a breach
of a covenant or obligation by Parent is curable by Parent by the End Date (as it may be extended in accordance with Section 8.1(b)) and
Parent is continuing to exercise its reasonable best efforts to cure such inaccuracy or breach, then the Company may not terminate this
Agreement under this Section 8.1(h) on account of such inaccuracy or breach unless such inaccuracy or breach shall remain uncured for a
period of 30 days commencing on the date that the Company gives Parent written notice of such inaccuracy or breach; or

51
 (i) by the Company (at any time prior to the adoption of this Agreement by the Required Company Stockholder Vote) in
order to accept a Superior Offer and enter into a binding, written, definitive agreement providing for the consummation of the transaction
contemplated by such Superior Offer that has been executed on behalf of the Person that made such Superior Offer (an “Alternative
Acquisition Agreement”), if: (i) the Company’s board of directors, after satisfying all of the requirements set forth in Section 5.2(d) and
otherwise causing the Company to comply with the provisions of Section 4.3 and Section 5.2, shall have authorized the Company to enter
into such Alternative Acquisition Agreement; (ii) the Company shall have delivered to Parent a written notice (that includes a copy of the
Alternative Acquisition Agreement as an attachment) containing the Company’s representation and warranty that the Company’s board of
directors has authorized the execution and delivery of the Alternative Acquisition Agreement on behalf of the Company and that the
Company will enter into the Alternative Acquisition Agreement immediately prior to or concurrently with the termination of this Agreement
pursuant to this Section 8.1(i); (iii) immediately prior to or concurrently with the termination of this Agreement pursuant to this Section 8.1(i),
the Company enters into the Alternative Acquisition Agreement with respect to such Superior Offer; and (iv) immediately prior to or
concurrently with such termination, the Company shall have paid to Parent or its designee the Termination Fee.

Notwithstanding anything to the contrary contained in this Section 8.1, this Agreement may not be terminated by the Company unless any fee
required to be paid by the Company at or prior to the time of such termination pursuant to Section 8.3 shall have been paid in full.

8.2 Effect of Termination. In the event of the termination of this Agreement as provided in Section 8.1, this Agreement shall be of
no further force or effect without any liability or obligation on the part of the Company, Parent, Merger Sub or any of their respective
directors, officers, employees, stockholders, Representatives, agents or advisors; provided, however, that: (a) this Section 8.2, Section 8.3 and
Section 9 shall survive the termination of this Agreement and shall remain in full force and effect; (b) the Confidentiality Agreement (as
amended pursuant to Section 4.1(b)) shall survive the termination of this Agreement and shall remain in full force and effect in accordance
with its terms; and (c) the termination of this Agreement shall not relieve any party from any liability for fraud or any Knowing and Intentional
Breach of any covenant or obligation contained in this Agreement.

8.3 Expenses; Termination Fees.

(a) Except as set forth in this Section 8.3, all fees and expenses incurred in connection with this Agreement or any of the
Contemplated Transactions shall be paid by the party incurring such fees and expenses, whether or not the Merger is consummated; provided,
however, that Parent and the Company shall share equally all fees and expenses, other than attorneys’ fees, incurred in connection with the
filing by the parties hereto of the premerger notification and report forms relating to the Merger under the HSR Act and the filing of any
notice or other document under the DPA or any applicable foreign antitrust or competition-related law or regulation or other Legal
Requirement.

(b) If: (i) this Agreement is terminated by Parent or the Company pursuant to Section 8.1(b); (ii) during the period
commencing after the date of this Agreement and ending at or prior to the time of the termination of this Agreement, an Acquisition Proposal
shall have first been made known to the Company or publicly disclosed, announced, commenced, submitted or made; and (iii) within 12
months after the date of any such termination, an Acquisition Transaction (whether or not relating to such Acquisition Proposal) is
consummated or a definitive agreement providing for an Acquisition Transaction (whether or not relating to such Acquisition Proposal) is
executed, then the Company shall pay to Parent a non-refundable fee in the amount of $16,450,000 (such non-refundable fee being referred to
as the “Termination Fee”) in cash; provided, however, that, for purposes of clause “(iii)” of this Section 8.3(b), all references to “15% or more”
in the definition of “Acquisition Transaction” shall be deemed to be references to “more than 50%”.

(c) If: (i) this Agreement is terminated by Parent or the Company pursuant to Section 8.1(d); (ii) at or prior to the time of
the termination of this Agreement, an Acquisition Proposal shall have been publicly

52
disclosed, announced, commenced, submitted or made and such Acquisition Proposal shall not have been publicly withdrawn at least 10
Business Days prior to the Company Stockholders’ Meeting; and (iii) within 12 months after the date of any such termination, an Acquisition
Transaction (whether or not relating to such Acquisition Proposal) is consummated or a definitive agreement providing for an Acquisition
Transaction (whether or not relating to such Acquisition Proposal) is executed, then the Company shall pay to Parent the Termination Fee in
cash; provided, however, that, for purposes of clause “(iii)” of this Section 8.3(c), all references to “15% or more” in the definition of
“Acquisition Transaction” shall be deemed to be references to “more than 50%”.

(d) If this Agreement is terminated: (i) by Parent or the Company pursuant to any provision of Section 8.1 (other than
Sections 8.1(a) and 8.1(h)) at any time during the period commencing on the occurrence of a Triggering Event and ending 20 Business Days
after the date of the final vote by the Company’s stockholders on a proposal to adopt this Agreement at the Company Stockholders’ Meeting
(with such date to be determined after taking into account any adjournments or postponements of such meeting) (other than a termination of
this Agreement pursuant to Section 8.1(b), Section 8.1(c) (in the case of Section 8.1(c) only, as a result of a challenge, suit or legal proceeding
brought by the FTC or the DOJ under any Federal Antitrust Law or brought by a Governmental Body under the DPA) or Section 8.1(e) where,
as of the time of such termination, a Designated Circumstance exists and each of the conditions referred to in clause “(ii)” of Section 8.3(e)
shall have been satisfied); (ii) by Parent pursuant to Section 8.1(f); or (iii) by the Company pursuant to Section 8.1(i), then the Company shall
pay to Parent the Termination Fee in cash.

(e) If: (i) this Agreement is terminated by Parent or the Company pursuant to Section 8.1(b), Section 8.1(c) (in the case of
Section 8.1(c) only, as a result of a challenge, suit or legal proceeding brought by the FTC or the DOJ under any Federal Antitrust Law or
brought by a Governmental Body under the DPA) or Section 8.1(e); and (ii) as of the time of termination of this Agreement, a Designated
Circumstance exists and each of the conditions set forth in Sections 6.1, 6.2, 6.3, 6.5, 6.7 (other than with respect to the Designated
Circumstance) and 6.8 (other than with respect to the Designated Circumstance) shall have been satisfied (it being understood that, for
purposes of this Section 8.3(e), in order to determine whether the conditions set forth in Section 6.1 shall have been satisfied, all references in
Section 6.1 to the “Closing Date” shall be deemed to refer instead to the date of termination of this Agreement), then Parent shall, within two
Business Days after the date of termination of this Agreement, pay to the Company a nonrefundable fee in the amount of $25,700,000 (such
non-refundable fee being referred to as the “Reverse Termination Fee”) in cash. For the avoidance of doubt, the Company shall be entitled to
receive the Reverse Termination Fee pursuant to the immediately preceding sentence if: (A) any condition set forth in Section 6.6 is not
satisfied as a result of a Governmental Body conditioning its approval on, seeking to impose, or imposing a Burdensome Condition; (B) Parent
declines to accept or agree to the imposition of such Burdensome Condition and declines to waive such unsatisfied condition; (C) this
Agreement is terminated pursuant to Section 8.1(b), Section 8.1(c) (in the case of Section 8.1(c) only, as a result of a challenge, suit or legal
proceeding brought by the FTC or the DOJ under any Federal Antitrust Law or brought by a Governmental Body under the DPA) or
Section 8.1(e); and (D) as of the time of such termination, a Designated Circumstance exists and each of the conditions referred to in clause
“(ii)” of the immediately preceding sentence shall have been satisfied.

(f) Any Termination Fee required to be paid to Parent pursuant to Section 8.3(b) or Section 8.3(c) shall be paid by the
Company contemporaneously with the earlier to occur of the consummation of, or entry into of a definitive agreement relating to, the
Acquisition Transaction contemplated by Section 8.3(b) or Section 8.3(c). Any Termination Fee required to be paid to Parent pursuant to
Section 8.3(d) shall be paid by the Company (A) in the case of a termination of this Agreement by the Company, at or prior to the time of
such termination or (B) in the case of a termination of this Agreement by Parent, within two Business Days after such termination.

(g) Each of the parties acknowledges and agrees that in no event shall Parent or the Company be required to pay the
Termination Fee or Reverse Termination Fee under this Section 8.3 on more than one

53
occasion, whether or not such fee may be payable under more than one provision of this Agreement at the same or at different times and upon
the occurrence of different events. Each of the parties acknowledges and agrees that (i) the covenants and obligations contained in this
Section 8.3 are an integral part of the Contemplated Transactions, and that, without these covenants and obligations, the parties would not
have entered into this Agreement and (ii) neither the Termination Fee nor the Reverse Termination Fee is a penalty, but rather each is
liquidated damages in a reasonable amount that will compensate Parent and Merger Sub or the Company, as the case may be, in the
circumstances in which the Termination Fee or the Reverse Termination Fee is payable for the efforts and resources expended and
opportunities foregone while negotiating this Agreement and in reliance on this Agreement and on the expectation of the consummation of
the Merger, which amount would otherwise be impossible to calculate with precision. Notwithstanding anything to the contrary contained in
this Agreement: (A) except in the case of fraud or a Knowing and Intentional Breach of any of the Company’s covenants or obligations
contained in this Agreement, if this Agreement is validly terminated in accordance with Section 8.1, Parent’s right to receive payment of the
Termination Fee from the Company in the circumstances under which such fee is payable pursuant to this Section 8.3 (plus, if the Termination
Fee is not timely paid, the interest, fees and expenses described in Section 8.3(h)) shall be the sole and exclusive remedy of Parent and Merger
Sub against the Acquired Companies and any of their respective former, current or future officers, directors, partners, stockholders, option
holders, managers, members or Affiliates (each such Person, a “Company Related Party”) for the loss suffered as a result of the failure of the
Merger to be consummated or any loss suffered as a result of any breach of any covenant or agreement in this Agreement, and upon payment
of such amount, none of the Acquired Companies or any of the Company Related Parties shall have any further liability or obligation relating
to or arising out of this Agreement; and (B) except in the case of fraud or a Knowing and Intentional Breach of any of Parent’s or Merger
Sub’s covenants or obligations contained in this Agreement, if this Agreement is validly terminated in accordance with Section 8.1, the
Company’s right to receive payment of the Reverse Termination Fee from Parent in the circumstances under which such fee is payable
pursuant to Section 8.3(e) (plus, if the Reverse Termination Fee is not timely paid, the interest, fees and expenses described in Section 8.3(h))
shall be the sole and exclusive remedy of the Company against Parent, Merger Sub and any of their respective former, current or future
officers, directors, partners, stockholders, option holders, managers, members, Subsidiaries or Affiliates (each such Person, a “Parent Related
Party”) for the loss suffered as a result of the failure of the Merger to be consummated or any loss suffered as a result of any breach of any
covenant or agreement in this Agreement, and upon payment of such amount, none of Parent, Merger Sub or any of the Parent Related Parties
shall have any further liability or obligation relating to or arising out of this Agreement. Nothing in this Section 8.3(g) shall limit the rights of
Parent, Merger Sub or the Company under Section 9.12 (or otherwise with respect to injunctive or similar relief).

(h) If any party fails to pay when due any amount payable under this Section 8.3, then (i) such party shall reimburse the
other party for all reasonable and documented out-of-pocket fees and expenses (including fees and disbursements of counsel) incurred in
connection with the collection of such overdue amount and the enforcement by the other party of its rights under this Section 8.3 and (ii) such
party shall pay to the other party interest on such overdue amount (for the period commencing as of the date such overdue amount was
originally required to be paid and ending on the date such overdue amount is actually paid to the other party in full) at a rate per annum equal
to the sum of the Prime Rate in effect on the date such overdue amount was originally required to be paid plus 500 basis points.

Section 9. MISCELLANEOUS P ROVISIONS

9.1 Amendment. This Agreement may be amended, modified or supplemented by a written agreement signed by the Company,
Parent and Merger Sub at any time (whether before or after the adoption of this Agreement by the Company’s stockholders); provided,
however, that after any such adoption of this Agreement by the Company’s stockholders, no amendment shall be made which by law requires
further approval of the stockholders of the Company without the further approval of such stockholders. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties hereto.

54
 9.2 Waiver.

(a) At any time prior to the Effective Time, the parties may: (i) extend the time for the performance of any of the
obligations or other acts of the other parties; (ii) waive any inaccuracies in the representations and warranties of the other parties contained in
this Agreement or in any document delivered pursuant to this Agreement; (iii) waive compliance with any covenants and agreements
contained in this Agreement; or (iv) subject to the proviso to the first sentence of Section 9.1 and to the extent permitted by applicable Legal
Requirements, waive compliance with any of the agreements or covenants of the other parties or any condition that exists in favor of the
waiving party contained in this Agreement. Any agreement on the part of a party to any such extension or waiver shall be valid only if set
forth in an instrument in writing signed on behalf of such party.

(b) No failure on the part of any party to exercise any power, right, privilege or remedy under this Agreement, and no delay
on the part of any party in exercising any power, right, privilege or remedy under this Agreement, shall operate as a waiver of such power,
right, privilege or remedy; and no single or partial exercise of any such power, right, privilege or remedy shall preclude any other or further
exercise thereof or of any other power, right, privilege or remedy.

(c) No party shall be deemed to have waived any claim arising out of this Agreement, or any power, right, privilege or
remedy under this Agreement, unless the waiver of such claim, power, right, privilege or remedy is expressly set forth in a written instrument
duly executed and delivered on behalf of such party; and any such waiver shall not be applicable or have any effect except in the specific
instance in which it is given.

9.3 No Survival of Representations and Warranties. None of the representations and warranties contained in this Agreement or in
any certificate delivered pursuant to this Agreement shall survive the Merger.

9.4 Entire Agreement; Counterparts; Exchanges by Electronic Delivery. This Agreement (including all Exhibits and Schedules
hereto) and the Confidentiality Agreement (as amended pursuant to Section 4.1(b)) constitute the entire agreement and supersede all prior
agreements and understandings, both written and oral, among or between any of the parties with respect to the subject matter hereof and
thereof; provided, however, that the provisions of the Confidentiality Agreement (as amended pursuant to Section 4.1(b)) shall not be
superseded and shall remain in full force and effect in accordance with their terms (it being understood that nothing in the Confidentiality
Agreement shall limit Parent’s remedies in the event of fraud by any Acquired Company or by any Representative of any Acquired Company).
This Agreement may be executed in several counterparts, each of which shall be deemed an original and all of which shall constitute one and
the same instrument. The exchange of a fully executed Agreement (in counterparts or otherwise) by electronic transmission in .PDF format
shall be sufficient to bind the parties to the terms of this Agreement.

9.5 Applicable Law; Jurisdiction; Waiver of Jury Trial.

(a) This Agreement, and any action, suit or other legal proceeding arising out of or relating to this Agreement (including
the enforcement of any provision of this Agreement), any of the Contemplated Transactions or the legal relationship of the parties to this
Agreement (whether at law or in equity, whether in contract or in tort or otherwise), shall be governed by, and construed and interpreted in
accordance with, the laws of the State of Delaware, regardless of the choice of laws principles of the State of Delaware, as to all matters,
including matters of validity, construction, effect, enforceability, performance and remedies. In any action between any of the parties arising
out of or relating to this Agreement, any of the Contemplated Transactions or the legal relationship of the parties to this Agreement (whether
at law or in equity, whether in contract or in tort or otherwise), each of the parties: (i) irrevocably and unconditionally consents and submits to
the exclusive jurisdiction and venue of the Court of Chancery of the State of Delaware in and for New Castle County, Delaware (unless the
federal courts have exclusive jurisdiction over the matter, in which case the United States District Court for the District of Delaware); (ii) agrees
that it will not attempt to deny or defeat such jurisdiction

55
by motion or other request for leave from such court; and (iii) agrees that it will not bring any such action in any court other than the Court of
Chancery of the State of Delaware in and for New Castle County, Delaware (unless the federal courts have exclusive jurisdiction over the
matter, in which case the United States District Court for the District of Delaware). Service of any process, summons, notice or document to
any party’s address and in the manner set forth in Section 9.9 shall be effective service of process for any such action.

(b) EACH PARTY ACKNOWLEDGES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT
IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OF THE CONTEMPLATED TRANSACTIONS. EACH PARTY ACKNOWLEDGES, AGREES AND CERTIFIES
THAT: (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH OTHER PARTY WOULD, IN THE EVENT OF LITIGATION, SEEK TO PREVENT OR DELAY
ENFORCEMENT OF SUCH WAIVER; (ii) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVER; (iii) IT
MAKES SUCH WAIVER VOLUNTARILY; AND (iv) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.5.

9.6 Disclosure Schedule. The Disclosure Schedule shall be arranged in separate parts corresponding to the numbered and lettered
Sections contained in Section 2 (or any other applicable provision of this Agreement), and the information disclosed in any numbered or
lettered part shall be deemed to relate to and to qualify only the particular representation or warranty, or relate to only the particular provision,
set forth in the corresponding numbered or lettered section in Section 2 (or any other applicable provision of this Agreement), and shall not be
deemed to relate to or to qualify any other representation or warranty, except where it is readily apparent on its face from the substance of the
matter disclosed that such information is intended to qualify another representation or warranty. For purposes of this Agreement, each
statement or other item of information set forth or incorporated in a particular part or subpart of the Disclosure Schedule shall be deemed to
be a representation and warranty made by the Company in the corresponding section or subsection of Section 2.

9.7 Attorneys’ Fees. In any action at law or suit in equity to enforce this Agreement or the rights of any of the parties hereunder,
the prevailing party in such action or suit shall be entitled to receive its reasonable attorneys’ fees and all other reasonable costs and expenses
incurred in such action or suit.

9.8 Assignability; No Third-Party Beneficiaries. This Agreement shall be binding upon, and shall be enforceable by and inure
solely to the benefit of, the parties hereto and their respective successors and permitted assigns; provided, however, that neither this Agreement
nor any of the Company’s rights, interests or obligations hereunder may be assigned or delegated by the Company, in whole or in part, by
operation of law or otherwise, without the prior written consent of Parent, and any attempted assignment or delegation of this Agreement or
any of such rights, interests or obligations by the Company without Parent’s prior written consent shall be void and of no effect. Parent and
Merger Sub may assign any or all of their respective rights or obligations under this Agreement, in whole or in part, to any Affiliate of Parent
without obtaining the consent or approval of any other party hereto; provided, however, that such assignment will not relieve Parent or Merger
Sub of any of their respective obligations under this Agreement. This Agreement is not intended, and shall not be deemed, to create any
agreement of employment with any person, to confer any rights or remedies upon any Person other than the parties hereto and their respective
successors and permitted assigns or to otherwise create any third-party beneficiary hereto, except (a) the Indemnified Persons shall be third-
party beneficiaries of Section 5.7 and (b) in addition to any of the other rights or remedies contained herein, the Company shall have the right
(which right is hereby acknowledged by Parent and Merger Sub) to pursue claims for damages (including claims for damages based on loss of
the economic benefit of the Merger to the Company’s stockholders) on behalf of its stockholders in the event either Parent or Merger Sub
commits fraud or any Knowing and Intentional Breach with respect to its representations, warranties or covenants set forth in this Agreement,
which rights shall be enforceable on

56
behalf of the Company’s stockholders only by the Company, in its sole and absolute discretion through actions approved by the board of
directors of the Company.

9.9 Notices. Each notice, request, demand or other communication under this Agreement shall be in writing and shall be deemed to
have been duly given, delivered or made as follows: (a) if delivered by hand or sent by registered or certified mail in the United States, return
receipt requested, when delivered; (b) if sent by registered, certified or first class mail, the third Business Day after being sent; (c) if sent via an
international courier service, three Business Days after being delivered to such courier; and (d) if sent by email, when sent, provided that (i) the
subject line of such email states that it is a notice delivered pursuant to this Agreement and (ii) the sender of such email does not receive a
written notification of delivery failure. All notices and other communications hereunder shall be delivered to the address or email address set
forth beneath the name of such party below (or to such other address or email address as such party shall have specified in a written notice
given to the other parties hereto):

if to Parent or Merger Sub:

Marvell Technology Group Ltd.

Canon’s Court
22 Victoria Street
Hamilton HM 12 Bermuda
Attention: General Manager
Email: mgaynor@marvell.com

with a copy (which shall not constitute notice) to:

Marvell Semiconductor, Inc.

5488 Marvell Lane
Santa Clara, CA 95054
Attention: Chief Administration and Legal Officer
Email: mgaynor@marvell.com

and

Hogan Lovells US LLP

4085 Campbell Avenue, Suite 100
Menlo Park, California 94025, USA
Attention: Richard E. Climan
Christopher R. Moore
Email: richard.climan@hoganlovells.com
christopher.moore@hoganlovells.com

if to the Company:

Aquantia Corp.
91 E. Tasman Drive
Suite 100
San Jose, California 95134
Attention: Legal Department
Email: legal@aquantia.com

57
 with a copy (which shall not constitute notice) to:

Cooley LLP
55 Hudson Yards
New York, NY 10001-2157
Attention: Babak Yaghmaie
Alfred Browne
Email: byaghmaie@cooley.com
abrowne@cooley.com

9.10 Cooperation. The parties agree to cooperate fully with each other and to execute and deliver such further documents,
certificates, agreements and instruments and to take such other actions as may be reasonably requested by a party to evidence or reflect the
Contemplated Transactions and to carry out the intent and purposes of this Agreement.

9.11 Severability. Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall
not affect the validity or enforceability of the remaining terms and provisions of this Agreement or the validity or enforceability of the invalid
or unenforceable term or provision in any other situation or in any other jurisdiction. If a final judgment of a court of competent jurisdiction
declares that any term or provision of this Agreement is invalid or unenforceable, the parties hereto agree to replace such invalid or
unenforceable term or provision with a valid and enforceable term or provision that will achieve, to the extent possible, the economic, business
and other purposes of such invalid or unenforceable term or provision. In the event that the parties are unable to agree to such replacement,
the parties agree that the court making the determination referred to above shall have the power to limit such term or provision, to delete
specific words or phrases or to replace such term or provision with a term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision, and this Agreement shall be valid and enforceable as so modified.

9.12 Remedies. Any and all remedies in this Agreement expressly conferred upon a party hereto shall be deemed cumulative with
and not exclusive of any other remedy conferred by this Agreement, or by law or equity, upon such party, and the exercise by a party hereto of
any one remedy shall not preclude the exercise of any other remedy, and nothing in this Agreement shall be deemed a waiver by any party of
any right to specific performance or injunctive relief. The Company and Parent acknowledge and agree that irreparable damage would occur in
the event any of the provisions of this Agreement required to be performed by any of the parties were not performed in accordance with their
specific terms or were otherwise breached, and that monetary damages, even if available, would not be an adequate remedy therefor.
Accordingly, in the event of any breach or threatened breach by any party of any covenant or obligation contained in this Agreement, any
non-breaching party shall be entitled to obtain, without proof of actual damages (and in addition to any other remedy to which such
non-breaching party may be entitled at law or in equity): (a) a decree or order of specific performance to enforce the observance and
performance of such covenant or obligation; and (b) an injunction restraining such breach or threatened breach. Each of the parties hereby
waives any requirement for the securing or posting of any bond in connection with any such remedy.

9.13 Construction.

(a) For purposes of this Agreement, whenever the context requires: the singular number shall include the plural, and vice
versa; the masculine gender shall include the feminine and neuter genders; the feminine gender shall include the masculine and neuter
genders; and the neuter gender shall include masculine and feminine genders.

(b) The parties hereto agree that any rule of construction to the effect that ambiguities are to be resolved against the
drafting party shall not be applied in the construction or interpretation of this Agreement.

58
 (c) As used in this Agreement, the words “include,” “including” and variations thereof, shall not be deemed to be terms of
limitation, but rather shall be deemed to be followed by the words “without limitation.” All references in this Agreement to “dollars” or “$”
shall mean United States Dollars.

(d) Unless otherwise indicated or the context otherwise requires: (i) any definition of or reference to any agreement,
instrument or other document or any Legal Requirement in this Agreement shall be construed as referring to such agreement, instrument or
other document or Legal Requirement as from time to time amended, supplemented or otherwise modified; (ii) any reference in this
Agreement to any Person shall be construed to include such Person’s successors and assigns; (iii) all references to “Sections,” “Schedules” and
“Exhibits” in this Agreement or in any Schedule or Exhibit to this Agreement are intended to refer to Sections of this Agreement and
Schedules and Exhibits to this Agreement, respectively; (iv) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall
be construed to refer to this Agreement in its entirety and not to any particular provision of this Agreement; and (v) any statute defined or
referred to in this Agreement shall include all rules and regulations promulgated thereunder.

(e) The headings contained in this Agreement are for convenience of reference only, shall not be deemed to be a part of this
Agreement and shall not be referred to in connection with the construction or interpretation of this Agreement.

[Remainder of page intentionally left blank]

59
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the date first above written.

MARVELL TECHNOLOGY GROUP LTD.

By: /s/ Mitchell Gaynor

Name: Mitchell Gaynor
Title: Chief Administration and Legal Officer

ANTIGUA ACQUISITION CORP.

By: /s/ Mitchell Gaynor

Name: Mitchell Gaynor
Title: Chief Administration and Legal Officer

AQUANTIA CORP.

By: /s/ Faraj Aalaei

Name: Faraj Aalaei
Title: Chief Executive Officer

Merger Agreement Signature Page

 EXHIBIT A

CERTAIN DEFINITIONS

For purposes of the Agreement (including this Exhibit A):

“Acquired Companies” means, collectively, the Company and the Company’s Subsidiaries, and their respective predecessors (including
any Entity that has been merged into the Company or any of its Subsidiaries).

“Acquired Company Returns” has the meaning assigned to such term in Section 2.15(a) of the Agreement.

“Acquisition Inquiry” means an inquiry, indication of interest or request for information (other than an inquiry, indication of interest or
request for information made or submitted by Parent or any of its Subsidiaries) that could reasonably be expected to lead to an Acquisition
Proposal.

“Acquisition Proposal” means any offer or proposal (other than an offer or proposal made or submitted by Parent or any of its
Subsidiaries) contemplating or otherwise relating to any Acquisition Transaction.

“Acquisition Transaction” means any transaction or series of transactions (other than the Contemplated Transactions) involving:
(a) any merger, consolidation, amalgamation, plan or scheme of arrangement, share exchange, business combination, joint venture,
issuance of securities, acquisition of securities, reorganization, recapitalization, tender offer, exchange offer or other similar transaction:
(i) in which any Acquired Company is a constituent or participating corporation; (ii) in which a Person or “group” (as defined in the
Exchange Act and the rules thereunder) of Persons directly or indirectly acquires beneficial or record ownership of securities representing
15% or more of the outstanding securities of any class (or instruments convertible into or exercisable or exchangeable for 15% or more
of any such class) of any Acquired Company; or (iii) in which any Acquired Company issues securities representing 15% or more of the
outstanding securities of any class of such Acquired Company (or instruments convertible into or exercisable or exchangeable for 15%
or more of any such class);
(b) any sale, lease, exchange, transfer, license, sublicense, acquisition or disposition of any business or businesses or assets that
constitute or account for 15% or more of the consolidated net revenues, consolidated net income or consolidated assets of the Acquired
Companies; or
(c) any liquidation or dissolution of any Acquired Company.

“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. For purposes of this definition and the Agreement, the term “control” (and correlative
terms) means the power, whether by contract, equity ownership or otherwise, to direct the policies or management of a Person. The term
“Affiliate” shall be deemed to include current and future “Affiliates.”

“Agreement” has the meaning assigned to such term in the preamble to the Agreement.

“Alternative Acquisition Agreement” has the meaning assigned to such term in Section 8.1(i) of the Agreement.

“Anti-Corruption Laws” has the meaning assigned to such term in Section 2.13(b).

“Antitrust Laws” means all antitrust, competition or trade regulation Legal Requirements or Legal Requirements that are otherwise
designed or intended to prohibit, restrict or regulate actions or transactions having the purpose or effect of monopolization, restraint of trade
or harm to competition, including but not

A-1
limited to the HSR Act, the Sherman Act (as amended), the Clayton Act (as amended) and the Federal Trade Commission Act (as amended).

“Burdensome Condition” means any condition, remedy or action that Parent is not obligated to accept or take pursuant to Section 5.8(e)
of the Agreement.

“Business Day” means any day other than a Saturday, a Sunday or a day on which banking institutions in New York, New York or San
Francisco, California are authorized or obligated by law or executive order to close.

“Cash-Out Option” has the meaning assigned to such term in Section 5.3(a) of the Agreement.

“Certifications” has the meaning assigned to such term in Section 2.4(a) of the Agreement.

“CFIUS” means the Committee on Foreign Investment in the United States or any U.S. Governmental Body acting in its capacity as a
member of CFIUS or directly involved in CFIUS’s assessment, review or investigation of the Contemplated Transactions.

The “CFIUS Condition” shall be deemed to have been satisfied if: (a) the parties receive written notice from CFIUS stating that CFIUS
has concluded that the Contemplated Transactions are neither “covered transactions” nor “pilot program covered transactions” as those terms
are defined at 31 C.F.R. § 800.207 and 31 C.F.R. § 801.210, respectively, and, therefore, not subject to review by CFIUS; (b) the parties receive
written notice from CFIUS stating that CFIUS has concluded all action under Section 721 of the DPA with respect to the Contemplated
Transactions and CFIUS has determined that there are no unresolved national security concerns with respect to the Contemplated
Transactions; provided, however, that if the written notice described in this clause “(b)” requires or contemplates that Parent or any of its
Affiliates take or agree to take, or will take or agree to take, any action or actions that would, individually or in the aggregate, reasonably be
expected to constitute a Burdensome Condition (other than a Burdensome Condition to which Parent had previously agreed in writing), then
the CFIUS Condition shall not be deemed to have been satisfied; (c) the parties receive written notice from CFIUS, pursuant to 31 C.F.R.
§ 801.407(a)(2), that CFIUS is not able to complete action under the DPA with respect to the Contemplated Transactions on the basis of the
declaration submitted and that the parties may file a written notice to CFIUS pursuant to 31 C.F.R. § 800.401(a); or (d) CFIUS shall have sent
a report to the President of the United States requesting the President’s decision and the President has announced a decision not to take any
action to suspend or prohibit the Merger pursuant to the DPA.

“CFIUS Notification Event” shall be deemed to have occurred if CFIUS notifies Parent or the Company that CFIUS intends to send a
report to the President of the United States recommending that the President of the United States act to suspend or prohibit the Merger
pursuant to the DPA.

“Change in Circumstances” has the meaning assigned to such term in Section 5.2(d) of the Agreement.

“Closing” has the meaning assigned to such term in Section 1.3 of the Agreement.

“Closing Date” has the meaning assigned to such term in Section 1.3 of the Agreement.

“COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.

“Code” means the United States Internal Revenue Code of 1986, as amended.

“Company” has the meaning assigned to such term in the preamble to the Agreement.

“Company-Owned IP” means all Intellectual Property and Intellectual Property Rights in which any Acquired Company has (or purports
to have) an ownership interest or an exclusive license or similar exclusive right.

A-2
 “Company Associate” means any current or former employee, Contract Worker, officer, member of the board of directors or managers
(or similar body) or other individual service provider of or to any of the Acquired Companies or any Affiliate of any Acquired Company.

“Company Balance Sheet” means the audited consolidated balance sheet of the Company and its consolidated subsidiaries as of
December 31, 2018 included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018, as filed with the
SEC on March 6, 2019.

“Company Board Recommendation” has the meaning assigned to such term in Section 5.2(b) of the Agreement.

“Company Common Stock” means the common stock, $0.00001 par value per share, of the Company.

“Company Contract” means any Contract: (a) to which any of the Acquired Companies is a party; (b) by which any of the Acquired
Companies or any Company IP or any other asset of any of the Acquired Companies is or may become bound or under which any of the
Acquired Companies has, or may become subject to, any obligation; or (c) under which any of the Acquired Companies has or may acquire
any right or interest.

“Company Employee Agreement” means any management, employment, severance, transaction bonus, change of control, consulting,
relocation, repatriation or expatriation agreement or other Contract between any of the Acquired Companies or any Affiliate of any Acquired
Company and any Company Associate, other than any such Contract which is terminable “at will” without any obligation on the part of any
Acquired Company or any Affiliate of any Acquired Company to make any severance, change in control or similar payment or provide any
benefit.

“Company Employee Plan” means: (a) each “employee benefit plan” (as defined in Section 3(3) of ERISA), whether or not subject to
ERISA; and (b) any other employment, consulting, salary, bonus, commission, other remuneration, stock option, stock purchase or other
equity-based award (whether payable in cash, securities or otherwise), benefit, incentive compensation, profit sharing, savings, pension,
retirement (including early retirement and supplemental retirement), disability, insurance (including life and health insurance), vacation,
deferred compensation, supplemental retirement (including termination indemnities and seniority payments), severance, termination,
redundancy, retention, change of control, death and disability benefits, hospitalization, medical, life or other insurance, flexible benefits,
supplemental unemployment benefits, and similar fringe, welfare or other employee benefit plan, program, agreement, contract, policy or
binding arrangement (whether or not in writing) maintained or contributed to or required to be contributed to by any of the Acquired
Companies or any Affiliate of any Acquired Company for the benefit of or relating to any current or former Company Associate of any
Acquired Company or any ERISA Affiliate of the Acquired Companies, or with respect to which any Acquired Company has any current or is
reasonably likely to have any future Liability, except that such definition shall not include any Company Employee Agreement.

“Company Equity Award” means any Company Option or any Company RSU.

“Company Equity Plans” means the Company’s 2004 Equity Incentive Plan, the Company’s 2015 Equity Incentive Plan, the Company’s
2017 Equity Incentive Plan and the ESPP.

“Company ESPP Rights” has the meaning assigned to such term in Section 5.4 of the Agreement.

“Company Inbound License” means any Contract pursuant to which any Person has licensed any Intellectual Property or Intellectual
Property Rights (whether or not currently exercisable and including a right to receive a license) to any Acquired Company or granted to any
Acquired Company a covenant not to sue or other right or immunity under, in or to any Intellectual Property or Intellectual Property Right
(other than commercially available “shrink wrap” or similar licenses for “off-the-shelf” software).

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 “Company IP” means: (a) all Intellectual Property and Intellectual Property Rights in or to any Company Product; and (b) all Company-
Owned IP.

“Company Option” means an option to purchase shares of Company Common Stock from the Company (whether granted by the
Company pursuant to the Company Equity Plans, assumed by the Company in connection with any merger, acquisition or similar transaction
or otherwise issued or granted).

“Company Outbound License” means any Contract pursuant to which any Acquired Company has granted any Person a license,
covenant not to sue, or other right or immunity under, in or to any Company IP, other than a Contract entered into by an Acquired Company
in the ordinary course of business on a standard form used by such Acquired Company, pursuant to which the Acquired Company grants to
its customer a nonexclusive license to use a Company Product or to incorporate the Company Product into the customer’s own product as a
component thereof.

“Company Patent License” means any Contract pursuant to which: (a) any Acquired Company has granted to any Person a license,
covenant not to sue, or other right or immunity under, in or to any one or more Patents; or (b) any Person has granted to any Acquired
Company any license, covenant not to sue, or other right or immunity under, in or to any one or more Patents (including any Contract that
includes licenses described in both clause “(a)” and clause “(b)”), in each case where the grant of a license, covenant not to sue, or other right
or immunity under, in or to one or more Patents is a primary purpose of the Contract and is not merely incidental to the sale of a product.

“Company Pension Plan” means: (a) each Company Employee Plan that is an “employee pension benefit plan,” within the meaning of
Section 3(2) of ERISA (whether or not subject to ERISA); and (b) any other occupational pension plan, including any final salary or money
purchase plan.

“Company Product” means any version, release or model of any product or service (including Software) that has been, or is currently
being, designed, developed, distributed, provided, licensed or sold by or on behalf of any Acquired Company.

“Company Related Party” has the meaning assigned to such term in Section 8.3(g) of the Agreement.

“Company Restricted Stock” means each share of Company Common Stock that is unvested or is subject to a repurchase option or
obligation, risk of forfeiture or other condition under any applicable restricted stock purchase agreement or other Contract with the Company.

“Company RSU” means each restricted stock unit representing the right to vest in and be issued shares of Company Common Stock by
the Company, whether granted by the Company pursuant to the Company Equity Plans, assumed by the Company in connection with any
merger, acquisition or similar transaction or otherwise issued or granted and whether vested or unvested.

“Company SEC Reports” has the meaning assigned to such term in Section 2.4(a) of the Agreement.

“Company Software” means Software owned, developed (or currently being developed), used, marketed, distributed, licensed or sold by
any of the Acquired Companies at any time (other than commercially available “shrink wrap” or similar “off-the-shelf” software that is not
incorporated in or embodied in any Company Product or otherwise material to an Acquired Company’s business).

“Company Stock Certificate” has the meaning assigned to such term in Section 1.6 of the Agreement.

“Company Stockholders’ Meeting” has the meaning assigned to such term in Section 5.2(a) of the Agreement.

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 “Company Technology” means all IT Systems and Company Software or electronic hardware products or services made available,
provided, sold, licensed to customers or leased to customers by the Acquired Companies, including any microchips, firmware, on-premise
software, mobile applications or browser extensions made available or provided by any of the Acquired Companies.

“Confidentiality Agreement” means that certain Confidentiality Agreement dated as of April 11, 2019, by and between Marvell
Semiconductor, Inc. and the Company, as amended by that certain First Amendment to Confidentiality Agreement, dated as of April 19,
2019.

“Consent” means any approval, consent, ratification, permission, waiver or authorization (including any Governmental Authorization).

“Contemplated Transactions” means all actions and transactions contemplated by the Agreement, including the Merger.

“Continuing Employee” means each employee of the Company or any Acquired Company who is employed immediately prior to the
Effective Time and continues employment with Parent, the Surviving Corporation or any Subsidiary or Affiliate of the Surviving Corporation
after the Effective Time.

“Contract” means any legally binding written, oral or other agreement, contract, subcontract, lease, understanding, instrument, note,
option, warranty, purchase order, license, sublicense, insurance policy, benefit plan or any other legally binding commitment or undertaking of
any nature.

“Contract Worker” means any independent contractor, consultant or retired person or service provider who is or was hired, retained,
employed or used by any of the Acquired Companies and who is not: (a) classified by an Acquired Company as an employee; or
(b) compensated by an Acquired Company through wages reported on a form W-2.

“Conversion Ratio” means the quotient obtained by dividing (a) the Price Per Share by (b) an amount equal to the volume weighted
average trading price of a Parent Common Share on the Parent Stock Exchange for the five consecutive trading days ending on the trading day
immediately preceding the Closing Date.

“Converted Option” has the meaning assigned to such term in Section 5.3(a) of the Agreement.

“Converted RSU” has the meaning assigned to such term in Section 5.3(d) of the Agreement.

A “Designated Circumstance” shall be deemed to exist if: (a) any condition set forth in Section 6.6 of the Agreement is not satisfied and
has not been waived; or (b) as a result of a challenge, suit, action or legal proceeding brought by a Governmental Body under the DPA or by
the FTC or the DOJ under any Federal Antitrust Law, any of the conditions set forth in Section 6.7 or Section 6.8 of the Agreement is not
satisfied and has not been waived.

“DGCL” means the General Corporation Law of the State of Delaware.

“Director Option” means a Company Option held by a non-employee member of the Company’s board of directors.

“Director RSU” means a Company RSU held by a non-employee member of the Company’s board of directors.

“Disclosure Schedule” means the disclosure schedule that has been prepared by the Company in accordance with the requirements of
Section 9.6 of the Agreement and has been delivered by the Company to Parent on the date of the Agreement.

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 “DOJ” means the Antitrust Division of the U.S. Department of Justice.

“DOL” means the United States Department of Labor.

“Domain Name” means the any or all of the following and all worldwide rights in, arising out of, or associated therewith: domain names,
uniform resource locators and other names and locators associated with the internet.

“DPA” means Section 721 of the Defense Production Act of 1950, as amended (50 U.S.C. § 4565), and all rules and regulations
thereunder, including those codified at 31 C.F.R. Part 800 et seq.

“EDGAR” has the meaning assigned to such term in Section 2 of the Agreement.

“Effective Time” has the meaning assigned to such term in Section 1.3 of the Agreement.

“Encumbrance” means any lien, pledge, hypothecation, charge, mortgage, security interest, encumbrance, adverse claim, infringement,
interference, option, right of first refusal, preemptive right, community property interest or restriction of any nature (including any restriction
on the voting of any security, any restriction on the transfer of any security or other asset, any restriction on the receipt of any income derived
from any asset, any restriction on the use of any asset and any restriction on the possession, exercise or transfer of any other attribute of
ownership of any asset).

“End Date” has the meaning assigned to such term in Section 8.1(b) of the Agreement.

“Enforceability Exceptions” means: (a) legal limitations on enforceability arising from applicable bankruptcy and other similar Legal
Requirements affecting the rights of creditors generally; (b) legal limitations on enforceability arising from rules of law governing specific
performance, injunctive relief and other equitable remedies; and (c) legal limitations on the enforceability of provisions requiring
indemnification against liabilities under securities laws in connection with the offering, sale or issuance of securities.

“Entity” means any corporation (including any non-profit corporation), general partnership, limited partnership, limited liability
partnership, joint venture, estate, trust, company (including any company limited by shares, limited liability company or joint stock company),
firm, society or other enterprise, association, organization or entity.

“Environmental Law” means any Legal Requirement, including any Governmental Authorization required thereunder, relating to: (a) the
protection, preservation or restoration of the environment (including air, water vapor, surface water, groundwater, drinking water supply,
surface land, subsurface land, plant or animal life, or any other natural resource); (b) the exposure to, or the use, storage, recycling, treatment,
generation, transportation, processing, handling, distribution, sale, labeling, production, Release or disposal of hazardous or toxic substances,
materials or wastes; or (c) the protection of human health or safety (to the extent relating to exposure to Hazardous Materials).

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“ERISA Affiliate” means any Person under common control with any of the Acquired Companies within the meaning of Sections
414(b), (c), (m) and (o) of the Code, and the regulations thereunder.

“ESPP” has the meaning assigned to such term in Section 2.3(b) of the Agreement.

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

“Existing D&O Policy” has the meaning assigned to such term in Section 5.7(b) of the Agreement.

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 “Federal Antitrust Laws” means the merger regulation provisions of the HSR Act, the Sherman Act (as amended), the Clayton Act (as
amended) and the Federal Trade Commission Act (as amended).

“Final CFIUS Turndown” shall be deemed to have occurred if: (a) a decision to suspend or prohibit the Merger is publicly announced by
the President of the United States pursuant to the DPA; or (b) at any time after a CFIUS Notification Event, Parent makes a determination in
good faith that the CFIIUS Condition is unlikely to be satisfied on terms acceptable to Parent (as provided in the Agreement) and provides the
Company with written notice of such determination.

“Final Exercise Date” has the meaning assigned to such term in Section 5.4 of the Agreement.

“Foreign Export and Import Law” means any Legal Requirement of a Governmental Body (other than a U.S. Governmental Body)
regulating exports, imports or re-exports to or from such foreign country, including the export or re-export of any goods, services or technical
data.

“Foreign Plan” means any: (a) plan, program, policy, practice, Contract or other arrangement of any Acquired Company mandated by a
Governmental Body outside the United States; (b) Company Employee Plan that is subject to any of the Legal Requirements of any
jurisdiction outside the United States; or (c) Company Employee Plan that covers or has covered any Company Associate whose services are or
have been performed primarily outside of the United States.

“Form Employment Agreement” has the meaning assigned to such term in Section 2.9(a)(i).

“FTC” means the U.S. Federal Trade Commission.

“GAAP” means generally accepted accounting principles in the United States.

“Government Contract” means any prime contract, subcontract, purchase order, task order, delivery order, teaming agreement, joint
venture agreement, strategic alliance agreement, basic ordering agreement, pricing agreement, letter contract or other similar arrangement of
any kind that is currently active in performance or that has been active in performance at any time in the five year period prior to the date of
the Agreement with: (a) any Governmental Body; (b) any prime contractor of a Governmental Body in its capacity as a prime contractor; or
(c) any subcontractor at any tier with respect to any contract of a type described in clause “(a)” or clause “(b)” above. A task, purchase or
delivery order under a Government Contract shall not constitute a separate Government Contract, for purposes of this definition, but shall be
part of the Government Contract to which it relates.

“Governmental Authorization” means: (a) any permit, license, certificate, franchise, permission, variance, clearance, registration,
qualification or authorization issued, granted, given or otherwise made available by or under the authority of any Governmental Body or
pursuant to any Legal Requirement; or (b) any right under any Contract with any Governmental Body, and shall also include the expiration of
the waiting period under the HSR Act and any required approval or clearance of any Governmental Body pursuant to any applicable foreign
Legal Requirement relating to antitrust or competition matters.

“Governmental Body” means: (a) multinational or supranational body exercising legislative, judicial or regulatory powers; (b) any nation,
state, commonwealth, province, territory, county, municipality, district or other jurisdiction of any nature; (c) any federal, state, provincial,
local, municipal, foreign or other government; (d) any instrumentality, subdivision, department, ministry, board, court, administrative agency
or commission, or other governmental entity, authority or instrumentality or political subdivision thereof; or (e) any quasi-governmental,
professional association or organization or private body exercising any executive, legislative, judicial, regulatory, taxing, importing or other
governmental functions.

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 “Hazardous Materials” means any substance, material, element, compound, mixture, solution and/or waste to which exposure is
regulated by any Environmental Law, including any toxic waste, pollutant, contaminant, hazardous substance (including toxic mold), toxic
substance, hazardous waste, special waste, industrial substance or petroleum or any derivative or byproduct thereof, radon, radioactive
material, asbestos or asbestos-containing material, urea formaldehyde, foam insulation or polychlorinated biphenyls.

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated
thereunder.

“In the Money Option” means a Company Option that is unexpired, unexercised and outstanding immediately prior to the Effective
Time and has a per share exercise price for the Company Common Stock subject to such Company Option that is less than the Price Per Share.

“Indemnified Persons” has the meaning assigned to such term in Section 5.7(a) of the Agreement.

“Information Privacy and Security Laws” means all applicable Legal Requirements relating to the processing, use, disclosure, collection,
privacy, processing, transfer or security of Protected Information, surveillance, espionage or national security and all regulations promulgated
and guidance issued by Governmental Bodies thereunder.

“Intellectual Property” means any or all of the following: (a) inventions (whether patentable or not), invention disclosures,
improvements, trade secrets, proprietary information, methods, processes, recipes, know-how, materials, chemistries, technical data and
customer lists, and all documentation relating to any of the foregoing; (b) business, technical and know-how information, non-public
information, confidential information, databases and data collections; (c) works of authorship (including Software (whether in source code,
object code, firmware or other form)), interfaces, integrated circuits, photomasks, architectures, designs, diagrams, documentation, files,
layouts, records, schematics, specifications, verilog files, netlists, emulation and simulation reports, IP cores, gate arrays, test vectors and
hardware development tools; (d) URLs and websites; (e) logos and marks (including brand names, product names, and slogans); and (f) any
other form of technology, whether or not embodied in any tangible medium.

“Intellectual Property Rights” means all rights of the following types, which may exist or be created under the Legal Requirements of
any jurisdiction in the world: (a) patents and applications therefor and all reissues, divisions, renewals, extensions, provisionals, certificates of
invention and statutory invention registrations, continued prosecution applications, requests for continued examination, reexaminations,
continuations and continuations-in-part thereof (“Patents”); (b) copyrights, and registrations and applications therefor, mask works, whether
registered or not, and all other rights corresponding thereto throughout the world including moral and economic rights of authors and
inventors, however denominated; (c) rights in industrial designs and any registrations and applications therefor; (d) trade names, trade dress,
slogans, all identifiers of source, fictitious business names (D/B/As), Domain Names, logos, trademarks and service marks, including all
goodwill therein, and any and all common law rights, registrations and applications therefor; (e) rights in trade secrets (including, those trade
secrets defined in the Uniform Trade Secrets Act and under corresponding foreign statutory and common law), business, technical and
know-how information, non-public information, and confidential information, including all source code, documentation, processes,
technology, formulae, customer lists, business and marketing plans, inventions (whether or not patentable) and marketing information and
rights to limit the use or disclosure thereof by any Person; and (f) any other proprietary rights in Intellectual Property or similar or equivalent
rights to any of the foregoing.

“IRS” means the United States Internal Revenue Service.

“IT System” means any software, hardware, network or systems owned or controlled by or on behalf of any of the Acquired Companies,
including any server, workstation, router, hub, switch, data line, desktop application,

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server-based application, mobile application, cloud service hosted or provided by any of the Acquired Companies, mail server, firewall,
database, source code or object code.

“ITAR” means the International Traffic in Arms Regulations.

“Joint Voluntary Notice” means a joint voluntary notice filed with CFIUS in accordance with the DPA.

“Knowing and Intentional Breach” means a material breach that is a consequence of an act undertaken by the breaching party with the
knowledge that the taking of such act, or failure to act, would, or would reasonably be expected to, result in a breach of the Agreement.

“knowledge” means, with respect to the Company, the knowledge of the individuals identified on Part 1.1(a) of the Disclosure Schedule,
after reasonable inquiry.

“Leased Real Property” has the meaning assigned to such term in Section 2.7(a) of the Agreement.

“Leases” has the meaning assigned to such term in Section 2.7(a) of the Agreement.

“Legal Proceeding” means any action, suit, litigation, arbitration, proceeding (including any civil, criminal, administrative, investigative
or appellate proceeding), hearing, inquiry, audit, examination or investigation commenced, brought, conducted or heard by or before, or
otherwise involving, any court or other Governmental Body or any arbitrator or arbitration panel.

“Legal Requirement” means any federal, state, local, municipal, foreign or other law, statute, constitution, principle of common law,
resolution, ordinance, code, edict, decree, rule, regulation, guidance, order, award, ruling or requirement issued, enacted, adopted,
promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Body.

“Liability” means any debt, obligation, duty or liability of any nature (including any unknown, undisclosed, unmatured, unaccrued,
unasserted, contingent, indirect, conditional, implied, vicarious, derivative, joint, several or secondary liability), regardless of whether such
debt, obligation, duty or liability would be required to be disclosed on a balance sheet prepared in accordance with GAAP and regardless of
whether such debt, obligation, duty or liability is immediately due and payable.

Any statement in the Agreement to the effect that any information, document or other material has been “Made Available to Parent”
means that such information, document or material was: (a) filed with the SEC and publicly available on EDGAR in unredacted form at least
three Business Days before the date of the Agreement; or (b) made available for review by Parent or Parent’s Representatives, and properly
labeled and indexed, at least 48 hours prior to the execution of the Agreement in the “Project Strategic” virtual data room maintained by the
Company with Donnelley Financial Solutions, Inc. in connection with the Merger.

“Major Customers” has the meaning assigned to such term in Section 2.11(a) of the Agreement.

“Major Supplier” has the meaning assigned to such term in Section 2.11(b) of the Agreement.

“Material Adverse Effect” means any effect, change, development, event or circumstance that, considered individually or together with
all other effects, changes, developments, events and circumstances, has had or resulted in, or would reasonably be expected to have or result
in, a material adverse effect on: (a) the business, condition (financial or otherwise), operations or results of operations of the Acquired
Companies taken as a whole; or (b) the ability of the Company to timely consummate the Merger or any of the other Contemplated
Transactions; provided, however, that, with respect to clause “(a)” above, a change occurring after the date of the Agreement shall not be
deemed to constitute a Material Adverse Effect (and shall not be taken into account in

A-9
determining whether a Material Adverse Effect has occurred or is reasonably expected to occur) if such change results from: (i) economic
conditions in the United States or in other locations in which the Acquired Companies have material operations, except to the extent such
economic conditions have a disproportionate effect on any of the Acquired Companies as compared to any of the other companies in the
semiconductor industry; (ii) economic conditions that generally affect the semiconductor industry, except to the extent such economic
conditions have a disproportionate effect on any of the Acquired Companies as compared to any of the other companies in the semiconductor
industry; (iii) changes in the stock price or trading volume of the Company Common Stock (it being understood, however, that the facts or
circumstances giving rise to any such change in stock price or trading volume may be taken into account in determining whether a Material
Adverse Effect has occurred or would reasonably be expected to occur); (iv) the failure, in and of itself, of the Company to meet securities
analysts’ published projections of earnings, results of operations or revenues or internal projections of earnings, results of operations or
revenues Made Available to Parent (it being understood, however, that the facts or circumstances giving rise to any such failure may be taken
into account in determining whether a Material Adverse Effect has occurred or would reasonably be expected to occur); (v) changes after the
date of the Agreement in Legal Requirements or other legal or regulatory conditions or changes after the date of the Agreement in GAAP or
other accounting standards (or the interpretation thereof), except in each case to the extent such changes have a disproportionate effect on any
of the Acquired Companies as compared to any of the other companies in the semiconductor industry; (vi) changes after the date of the
Agreement in political conditions, except in each case to the extent such changes or acts have a disproportionate effect on any of the Acquired
Companies as compared to any of the other companies in the semiconductor industry; (vii) acts of God, natural disasters, weather conditions
or other calamities occurring after the date of the Agreement, except in each case to the extent such events or conditions have a
disproportionate effect on any of the Acquired Companies as compared to any of the other companies in the semiconductor industry;
(viii) losses of customers, suppliers, distributors or other business partners or employees that are directly attributable to (A) the execution,
delivery, announcement or pendency of the Agreement, (B) the identity of Parent or any of its Subsidiaries or (C) any written communication
by Parent or any of its Subsidiaries to any of the customers, suppliers, distributors, business partners or employees of the Acquired Companies
regarding the plans or intentions of Parent with respect to the conduct of the business of the Acquired Companies following the Effective
Time; (ix) the costs incurred by the Company in pursuing or defending any litigation that the Company is required to pursue or defend in
order to comply with its obligations under Section 4.3(e) or Section 5.8 of the Agreement; (x) any stockholder class action or derivative
litigation commenced against the Company after the date of the Agreement and arising from allegations of breach of fiduciary duty of the
Company’s directors relating to their approval of the Agreement or from allegations of false or misleading public disclosure by the Company
with respect to the Agreement; or (xi) a failure by the Company to take a specifically identified action that is prohibited by the terms of clause
“(v)(A),” “(vi),” “(vii),” “(x),” “(xi),” “(xii)(A)”, “(xiv),” “(xv)(A),” “(xv)(C)”, “(xvi)”, “(xvii)(B)” or “(xxiii)” of Section 4.2(b) of the Agreement
where (A) the Company requested, in writing, permission from Parent to take such specifically identified action and (B) Parent unreasonably
withheld its consent to the taking of such action. No reduction or other adverse change in the Acquired Companies’ business, condition
(financial or otherwise), operation or results of operations that results directly from the historical facts listed in Part 1.02 of the Disclosure
Schedule shall be taken into account in determining whether a Material Adverse Effect has occurred or is reasonably expected to occur.

“Maximum Premium” has the meaning assigned to such term in Section 5.7(b) of the Agreement.

“Merger” has the meaning assigned to such term in the recitals of the Agreement.

“Merger Consideration” means the cash consideration that a holder of shares of Company Common Stock who does not perfect his, her
or its appraisal rights under the DGCL is entitled to receive in exchange for such shares of Company Common Stock pursuant to Section 1.5
of the Agreement.

“Merger Sub” has the meaning assigned to such term in the preamble to the Agreement.

“OFAC” means the Office of Foreign Assets Control of the U.S. Department of the Treasury.

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 “Open Source Software” means software that is distributed or made available under “open source” or “free software” terms, including
any software distributed or made available under the GPL, LGPL, Mozilla License, Apache License, Common Public License, BSD license or
similar terms and including any Software distributed or made available with any license term or condition that imposes or purports to impose a
requirement or condition that a licensee grant a license or immunity under its Intellectual Property Rights or that any of its Software or part
thereof be: (a) disclosed, distributed or made available in source code form; (b) licensed for the purpose of making modifications or derivative
works; or (c) redistributable at no or nominal charge.

“Order” means any order, writ, injunction, judgment or decree.

“Out of the Money Option” means a Company Option that is unexpired, unexercised and outstanding immediately prior to the Effective
Time and which has a per share exercise price for the Company Common Stock subject to such Company Option that is equal to or greater
than the Price Per Share.

“Parent” has the meaning assigned to such term in the preamble to the Agreement.

“Parent Common Share” means a common share, $0.002 par value per share, of Parent

“Parent Material Adverse Effect” means any effect, change, event or occurrence that would individually or in the aggregate, prevent,
materially delay or materially impair the ability of Parent or Merger Sub to consummate the Merger.

“Parent Plans” has the meaning assigned to such term in Section 5.6(b).

“Parent Related Party” has the meaning assigned to such term in Section 8.3(g) of the Agreement.

“Parent Stock Exchange” means the Nasdaq Global Select Market, but if the Nasdaq Global Select Market is not then the principal U.S.
trading market for Parent Common Shares, then “Parent Stock Exchange” shall be deemed to mean the principal U.S. national securities
exchange registered under the Exchange Act on which Parent Common Shares are then traded.

“Paying Agent” has the meaning assigned to such term in Section 1.7(a) of the Agreement.

“Payment Fund” has the meaning assigned to such term in Section 1.7(a) of the Agreement.

“PCI DSS” means the Payment Card Industry Data Security Standard, issued by the Payment Card Industry Security Standards Council.

“Permitted Encumbrance” means any of the following as to which no enforcement, collection, execution, levy or foreclosure proceeding
shall have been commenced and as to which no Acquired Company is subject to civil or criminal liability due to its existence: (a) liens for
Taxes (i) not yet due and payable or (ii) that are being contested in good faith, and for which adequate reserves have been maintained in
accordance with GAAP; (b) Encumbrances imposed by Legal Requirements, such as materialmen’s, mechanics’, carriers’, workmen’s and
repairmen’s liens and other similar liens arising in the ordinary course of business; (c) pledges or deposits arising in the ordinary course of
business to secure obligations under workers’ compensation laws or similar legislation or to secure public or statutory obligations; and
(d) minor liens that have arisen in the ordinary course of business and that do not, individually or in the aggregate, materially adversely affect
the value of or the use of such property for its current and anticipated purposes.

“Permitted Settlement” means a settlement by an Acquired Company of any pending lawsuit prior to the Closing that: (a) provides for
the payment by such Acquired Company of money damages of less than $200,000 and no other relief of any nature; (b) includes a complete
and unconditional release by all plaintiffs and all

A-11
related parties in favor of the Acquired Companies and their respective current and future Affiliates, Representatives, successors and assigns
from all liabilities and obligations with respect to the claims at issue in such lawsuit; and (c) does not involve a finding or admission of any
wrongdoing on the part of any Acquired Company or any of its Representatives or current or future Affiliates.

“Person” means any individual, Entity or Governmental Body.

“Pre-Closing Period” has the meaning assigned to such term in Section 4.1(a) of the Agreement.

“Price Per Share” has the meaning assigned to such term in Section 1.5(a)(iii) of the Agreement.

“Prime Rate” means the rate of interest quoted in the print edition of The Wall Street Journal, “Money Rates” section, as the prime rate,
as in effect from time to time.

“Protected Information” means any information that: (a) relates to an identified or identifiable individual or device used by an individual;
(b) is governed, regulated or protected by any Information Privacy and Security Law; (c) any Acquired Company receives from or on behalf of
any individual customer of such Acquired Company; (d) is covered by the PCI DSS; (e) is subject to a confidentiality obligation or in which
any Acquired Company has Intellectual Property Rights; or (f) is derived from Protected Information.

“Proxy Statement” means the proxy statement to be sent to the Company’s stockholders in connection with the Company Stockholders’
Meeting.

“Recommendation Change Notice” has the meaning assigned to such term in Section 5.2(d) of the Agreement.

“Registered IP” means all Intellectual Property Rights that are registered, filed or issued with, by or under the authority of any
Governmental Body, including all patents, registered copyrights, registered mask works and registered trademarks and all applications for any
of the foregoing.

“Release” means any emission, spill, seepage, leak, escape, leaching, discharge, injection, pumping, pouring, emptying, dumping,
disposal, migration, threatened release or release of Hazardous Materials from any source into, through or upon the indoor or outdoor
environment.

“Representatives” means directors, officers, other employees, agents, attorneys, accountants, advisors and representatives.

“Required Company Stockholder Vote” has the meaning assigned to such term in Section 2.22 of the Agreement.

“Reverse Termination Fee” has the meaning assigned to such term in Section 8.3(e) of the Agreement.

“Sarbanes-Oxley Act” means the Sarbanes-Oxley Act of 2002, as it may be amended from time to time.

“SEC” means the United States Securities and Exchange Commission.

“Section 409A” has the meaning assigned to such term in Section 2.3(b) of the Agreement.

“Securities Act” means the Securities Act of 1933, as amended.

“Sexual Misconduct Allegation” has the meaning assigned to such term in Section 2.16(g) of the Agreement.

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 “Significant Subsidiary” means, with respect to an Entity, any Subsidiary of such Entity that owns assets that constitute or account for
10% or more of the consolidated net revenues, consolidated net income or consolidated assets of such Entity and all of its Subsidiaries taken
as a whole.

“Software” means, collectively, computer software (including drivers), firmware and other code incorporated or embodied in hardware
devices, data files, source code and object codes, tools, user interfaces, manuals and other specifications and documentation and all know-how
relating thereto.

“Source Material” means, collectively, any Software or integrated-circuit, hardware, or component design or programming materials, or
related documentation, expressed in source code or other human-readable form, and any elements of design or programming in netlist,
hardware description language, or photomask form, including any design databases, GDSII files and circuit schematics and simulations.

A “Specified Circumstance” shall be deemed to exist if: (a) any of the conditions set forth in Section 6.6 or Section 7.5 of the Agreement
is not satisfied and has not been waived; or (b) as a result of a challenge, suit, action or legal proceeding brought by a Specified Governmental
Body under the DPA, the HSR Act or any other applicable Antitrust Law, any of the conditions set forth in Section 6.7, Section 6.8 or
Section 7.6 of the Agreement is not satisfied and has not been waived.

“Specified Equity Date” has the meaning assigned to such term in Section 2.3(a).

“Specified Governmental Body” means any Governmental Body that has jurisdiction over (a) the Company, Parent, Merger Sub or any of
their respective Significant Subsidiaries, (b) any business or asset of any Acquired Company that is material to the Acquired Companies, taken
as a whole or (c) any business or asset of Parent or any of its Subsidiaries that is material to Parent and its Subsidiaries, taken as a whole. For
the avoidance of doubt, any Person exercising authority under the DPA, including the President of the United States, shall be deemed a
“Specified Governmental Body.”

“Specified Representations” means the representations and warranties of the Company contained in Sections 2.3(a), 2.3(b) (other than
clauses “(F)” through “(K)”), 2.3(d), 2.5(a), 2.20, 2.21, 2.22, 2.24 and 2.25 of the Agreement.

“Standards Organization” has the meaning assigned to such term in Section 2.8(c) of the Agreement.

An Entity shall be deemed to be a “Subsidiary” of another Person if such Person directly or indirectly owns or purports to own,
beneficially or of record: (a) an amount of voting securities of other interests in such Entity that is sufficient to enable such Person to elect at
least a majority of the members of such Entity’s board of directors or other governing body; or (b) at least 50% of the outstanding equity,
voting or financial interests in such Entity.

“Superior Offer” means an unsolicited, bona fide, written offer by a third party to purchase, in exchange for consideration consisting
exclusively of cash or publicly traded equity securities or a combination thereof, at least 80% of the outstanding shares of Company Common
Stock, that: (a) was not obtained or made as a result of a material breach of Section 4.3 or Section 5.2 of the Agreement; (b) is not subject to a
financing contingency; and (c) is on terms and conditions that the Company’s board of directors determines in good faith, after having taken
into account the advice of an independent financial advisor of nationally recognized reputation and the Company’s outside legal counsel and
the likelihood and timing of consummation of the transaction contemplated by such offer, to be more favorable from a financial point of view
to the Company’s stockholders than the Merger.

“Support Agreement” has the meaning assigned to such term in the recitals of the Agreement.

“Surviving Corporation” has the meaning assigned to such term in Section 1.1 of the Agreement.

A-13
 “Takeover Statute” has the meaning assigned to such term in Section 2.21 of the Agreement.

“Tax” means any federal, state, local, foreign or other tax of any kind whatsoever (including any income tax, franchise tax, capital gains
tax, gross receipts tax, value-added tax, surtax, estimated tax, unemployment tax, national health insurance tax, excise tax, ad valorem tax,
transfer tax, stamp tax, sales tax, use tax, property tax, business tax, withholding tax or payroll tax, customs duty, or other levy, assessment,
tariff, or charge, in each case in the nature of a tax), including any interest, penalty or addition thereto, imposed, assessed or collected by or
under the authority of any Governmental Body.

“Tax Return” means any return (including any information return), report, statement, declaration, estimate, schedule, notice, notification,
form, election, certificate or other document or information, and any amendment or supplement to any of the foregoing, filed with or
submitted to, or required to be filed with or submitted to, any Governmental Body in connection with the determination, assessment,
collection or payment of any Tax or in connection with the administration, implementation or enforcement of or compliance with any Legal
Requirement relating to any Tax.

“Termination Fee” has the meaning assigned to such term in Section 8.3(b) of the Agreement.

A “Triggering Event” shall be deemed to have occurred if: (a) the Company’s board of directors or any committee thereof shall have:
(i) withdrawn the Company Board Recommendation; (ii) modified the Company Board Recommendation in a manner adverse to Parent; or
(iii) taken, authorized or publicly proposed any of the actions referred to in Section 5.2(c) of the Agreement; (b) the Company’s board of
directors (or any committee thereof) or any director of the Company makes any public statement or takes any other action that is publicly
disclosed by or on behalf of the Company, the Company’s board of directors (or such committee) or such director and that clearly indicates
that the Company’s board of directors (or such committee) or such director no longer supports the Merger or the adoption of this Agreement
by the Company’s stockholders or does not believe that the Merger is fair to and in the best interests of the Company’s stockholders; (c) the
Company shall have failed to include the Company Board Recommendation in the Proxy Statement; (d) the Company’s board of directors
shall have failed to reaffirm, unanimously and publicly, the Company Board Recommendation, or shall have failed to unanimously and
publicly reaffirm its determination that the Merger is in the best interests of the Company’s stockholders, within 10 Business Days (or, if
earlier, prior to the date of the Company Stockholders’ Meeting) after Parent requests in writing that the Company Board Recommendation or
such determination be reaffirmed publicly; (e) a tender or exchange offer relating to shares of Company Common Stock shall have been
commenced and the Company shall not have sent to its securityholders, within 10 Business Days after the commencement of such tender or
exchange offer (or, if earlier, prior to the Company Stockholders’ Meeting), a statement disclosing that the Company recommends rejection of
such tender or exchange offer and unanimously reaffirming the Company Board Recommendation; (f) an Acquisition Proposal shall have been
publicly announced, and the Company shall have failed to issue a press release that (i) unanimously reaffirms the Company Board
Recommendation within 10 Business Days (or, if earlier, prior to the date of the Company Stockholders’ Meeting) after such Acquisition
Proposal is publicly announced and (ii) clearly states the opposition of the Company and the Company’s board of directors to such
Acquisition Proposal; or (g) any of the Acquired Companies or any Representative of any of the Acquired Companies shall have materially
breached any of the provisions set forth in Section 4.3 or Section 5.2.

“U.S. Export and Import Law” means any U.S. Legal Requirement regulating exports, re-export, deemed (re)export, transfer or imports
to or from the United States of goods, services, software or technical data from the United States, including the United States Export Control
Reform Act of 2018, the Export Administration Regulations, the Arms Export Control Act, ITAR, the economic sanctions laws, regulations
and executive orders administered by OFAC, the Tariff Act of 1930 and the Trade Act of 1974.

The Company’s board of directors shall be deemed to have made a “unanimous” determination or to have acted “unanimously” in
adopting resolutions with respect to any matter if: (a) each of the members of the

A-14
Company’s board of directors who votes on such matter has voted in favor of such matter; and (b) none of the members of the Company’s
board of directors has abstained from voting on such matter.

“Uncertificated Shares” has the meaning assigned to such term in Section 1.6 of the Agreement.

“WARN Act” has the meaning assigned to such term in Section 2.16(e) of the Agreement.

“Warrants” means the warrants to purchase shares of Company Common Stock that are identified in Part 1.01 of the Disclosure
Schedule.

A-15
 EXHIBIT B

P ERSONS ENTERING INTO SUPPORT AGREEMENTS AND NONCOMPETITION AGREEMENTS

P ART 1 - P ERSONS ENTERING INTO SUPPORT AGREEMENTS:

Faraj Aalaei
Lip-Bu Tan
WRV II, L.P.
Walden Riverwood Ventures, L.P.
Lindenwood Trust dated 8/13/2014
Dena Aalaei 2007 Irrevocable Trust
Monjeri Investment
A&E Investments, LLC
Joint Stock Company “RUSNANO”

P ART 2 - P ERSONS ENTERING INTO NONCOMPETITION AGREEMENTS:

Faraj Aalaei

B-1
 EXHIBIT C

CERTIFICATE OF INCORPORATION OF THE SURVIVING CORPORATION

EXHIBIT C

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION
OF
AQUANTIA CORP.

ARTICLE I

The name of the Corporation is: Aquantia Corp. (the “Corporation”).

ARTICLE II

The address of the Corporation’s registered office in the State of Delaware is 251 Little Falls Drive, in the City of Wilmington,
County of New Castle, Delaware, 19808. The name of its registered agent at such address is: Corporation Service Company.

ARTICLE III

The nature of the business and the purposes to be conducted and promoted by the Corporation are to conduct any lawful business,
to promote any lawful purpose and to engage in any lawful act or activity for which corporations may be organized under the General
Corporation Law of the State of Delaware (the “DGCL”).

ARTICLE IV

1. The total number of shares of stock which the Corporation shall have authority to issue is one thousand (1,000) shares of
common stock, $0.0001 par value per share (the “Common Stock”).

2. Shares of the Common Stock may be issued from time to time as the Board of Directors of the Corporation (the “Board”) shall
determine and on such terms and for such consideration as shall be fixed by the Board. The amount of the authorized Common Stock of the
Corporation may be increased or decreased by the affirmative vote of the holders of a majority of the outstanding shares of Common Stock of
the Corporation entitled to vote.

ARTICLE V

Elections of directors need not be by written ballot unless required by the Bylaws of the Corporation. Any director may be removed
from office either with or without cause at any time by the affirmative vote of the holders of a majority of the outstanding Common Stock of
the Corporation entitled to vote, given at a meeting of the stockholders called for that purpose, or by the consent of the holders of a majority
of the outstanding Common Stock of the Corporation entitled to vote, given in accordance with DGCL Section 228.

C-1
 ARTICLE VI

In furtherance and not in limitation of the powers conferred upon the Board by law, the Board shall have the power to make,
adopt, alter, amend and repeal from time to time the Bylaws of the Corporation subject to the right of the stockholders entitled to vote with
respect thereto to alter, amend and repeal Bylaws made by the Board.

ARTICLE VII

The liability of the directors of the Corporation for monetary damages shall be eliminated to the fullest extent under applicable
law. To the fullest extent permitted by applicable law, the Corporation is authorized to provide indemnification of (and advancement of
expenses to) directors, officers and agents of the Corporation (and any other persons to which applicable law permits the Corporation to
provide indemnification) through Bylaw provisions, agreements with such directors, officers, agents or other persons, vote of stockholders or
disinterested directors or otherwise in excess of the indemnification and advancement otherwise permitted by such applicable law. If
applicable law is amended after approval by the stockholders of this Article VII to authorize corporate action further eliminating or limiting
the personal liability of directors, then the liability of a director to the Corporation shall be eliminated or limited to the fullest extent permitted
by applicable law as so amended. Any repeal or modification of this Article VII shall only be prospective and shall not affect the rights or
protections or increase the liability of any director under this Article VII in effect at the time of the alleged occurrence of any act or omission
to act giving rise to liability or indemnification.

C-2
TAB 13
Drafting and negotiating
pointers for junior
M&A lawyers

244
Associate Training Materials

M&A “Nuggets” & Cartoons:

Drafting and Negotiating Pointers for Junior M&A Lawyers

This is a compilation of the edited transcripts of the M&A “nuggets” webcasts presented by
Hogan Lovells partner Rick Climan in 2005, 2006, 2016 and 2018. We have also included links
to a few of the instructive M&A negotiating cartoons featuring Rick Climan and fellow Hogan
Lovells partner Keith Flaum.
Contents
Page

REPRESENTATIONS & WARRANTIES; SURVIVAL; NON-RELIANCE CLAUSES .... 1

The “No Undisclosed Liabilities” Representation [2006]....................................................................... 1
The “10b-5” Representation [2005] ........................................................................................................ 1
The Word “Survive” May Be Ambiguous [2016] .................................................................................. 2
Non-Reliance Clauses [2016] ................................................................................................................. 3
“Knowledge” Qualifications in Reps in Public Company Acquisitions [2005] ..................................... 4

CLOSING CONDITIONS/“WALK” RIGHTS ......................................................................... 6

The “Bring-Down” Condition [2005] ..................................................................................................... 6
Distinction Between Closing Conditions and Termination Provisions [2006] ....................................... 6
The “Back-Door MAC” [2005] .............................................................................................................. 8
“Back-Door” vs. “Front-Door” MACs [2018] ........................................................................................ 8
M&A Cartoon: More on MACs [2013] ............................................................................................... 12
M&A Cartoon: A Potentially Controversial Carve-Out to the Buyer’s MAE Walk Right [2014] ...... 12

INDEMNIFICATION; SANDBAGGING ................................................................................ 13

The Word “Indemnify” May Be Ambiguous [2016] ............................................................................ 13
The “Fraud Exception” to Limitations on Indemnification [2006] ....................................................... 14
Consequential Damages Exclusions [2016] .......................................................................................... 15
Is Delaware a “Sandbagging” State? [2018] ......................................................................................... 16
M&A Cartoon: Negotiating the Causal Nexus Verbiage in an Indemnification Provision [2013]...... 19
M&A Cartoon: Negotiating Consequential Damages Waivers [2013] ................................................ 19
M&A Cartoon: Negotiating a Sandbagging Provision [2013] ............................................................. 19

MISCELLANEOUS ................................................................................................................... 20
Third-Party Beneficiaries [2005] .......................................................................................................... 20
Earn-Out Rights as Securities [2006] .................................................................................................... 21
Buyer Power Ratio — A Useful Tool for Gauging Market Practice [2018] ......................................... 21
Contractual Restrictions on the Right to Change the Target Board’s
Merger Recommendation [2006] .......................................................................................................... 23
REPRESENTATIONS & WARRANTIES; SURVIVAL;
NON-RELIANCE CLAUSES

The “No Undisclosed Liabilities” Representation [2006]

CLIMAN: One of the representations in the acquisition agreement that buyers and sellers often
fight about in the course of their negotiations is the sellers’ “no undisclosed liabilities”
representation. Often, the sellers’ lawyer insists that this representation be limited in its reach to
“GAAP” liabilities of the target company — accrued liabilities of the type required to be
reflected on a balance sheet prepared in accordance with generally accepted accounting
principles.

The buyer’s lawyer, on the other hand, is likely to demand that this representation extend not
only to GAAP liabilities but also to unaccrued, “contingent” liabilities of the target company.

But the buyer’s lawyer needs to recognize that even if he or she wins this battle and succeeds in
getting the sellers’ lawyer to accept the broader version of this representation — the version that
extends beyond GAAP liabilities to contingent liabilities — the representation still might not
provide the buyer with as much protection as the buyer might expect.

That’s because, in the M&A context, the term “contingent liability” may be interpreted
somewhat narrowly. In particular, there is judicial authority for the proposition that not every
contingency is a contingent liability.

Assume, for example, that the target company has manufactured and sold hundreds of defective
products that are in the hands of consumers and are ready to explode. Some practitioners might
view the target company as having contingent product liabilities in that situation. But some
courts may take a different view.

These courts might say that those defective products don’t become “contingent liabilities” of the
target company until they actually explode and hurt people.

So “accidents waiting to happen” are not necessarily contingent liabilities, and the lesson here
for the buyer’s lawyer is that he or she should not overestimate the breadth of the protection that
the buyer gets from even a broadly drafted “no undisclosed liabilities” representation. If the
buyer truly wants protection against “accidents waiting to happen,” the buyer’s lawyer should
seek the needed protection elsewhere in the acquisition agreement, perhaps in a specifically
negotiated product liability indemnity, for example.

The “10b-5” Representation [2005]

CLIMAN: We turn to a representation that sellers of private companies are often asked to make
in the definitive acquisition agreement — the so-called “10b-5” representation.

1
This is something of a catch-all provision pursuant to which the sellers represent to the buyer,
using language similar to the language that appears in SEC Rule 10b-5, that the other
representations made by the sellers in the agreement don’t omit any material facts necessary to
make those other representations not misleading.

The sellers’ lawyer has to be sensitive to the fact that the buyer’s right of recovery for a breach
of this contractual representation may in fact be broader than the buyer’s right of recovery under
SEC Rule 10b-5. Why? Because in order to prevail in a Rule 10b-5 securities fraud action, the
buyer must establish that the sellers acted with scienter, and may have to overcome various other
hurdles that a buyer making a contractual indemnification claim may not have to contend with.

Remember, even a purely innocent breach of a representation in the acquisition agreement can
give rise to a contractual indemnification obligation on the part of the sellers, but a purely
innocent misrepresentation normally won’t give rise to civil liability under Rule 10b-5. So the
sellers’ lawyer should not treat the so-called “10b-5” representation (or, as it’s more
appropriately labeled, the “full disclosure” representation) as superfluous boilerplate. It is a
powerful representation, potentially more powerful than SEC Rule 10b-5. And the sellers’
lawyer may be well advised to attempt to cut it back or to attempt to eliminate it entirely in the
course of the negotiations, if he or she can do that.

The Word “Survive” May Be Ambiguous [2016]

CLIMAN: I’d like to talk now about a potentially ambiguous term, and that’s the term
“survive.”

“Survive” is a word that appears in many agreements for the acquisition of a privately held
company. Unlike in a public company acquisition, where the target’s representations die at the
closing, in a private company acquisition, the representations typically survive the closing and
provide the basis for the buyer’s post-closing indemnification remedy.

One of the most hotly negotiated issues for the parties is how long these representations stay in
effect or, more precisely, how long the buyer has to assert post-closing indemnification claims
for breaches of these representations. I’d venture to say that when most practitioners insert
verbiage into the agreement specifying how long the sellers’ representations survive, that is
exactly what they intend to address. They intend to establish a contractual statute of limitations
for bringing post-closing indemnification claims.

So when they say the sellers’ representations will survive the closing for one year, what they
mean is that the buyer cannot validly make an indemnification claim against the sellers more
than a year after the closing based on inaccuracies in the sellers’ representations. But take a look
at the Western Filter decision, which is a Ninth Circuit decision from less than a decade ago,
holding that language to be ambiguous.

There’s a lesson here, particularly for M&A lawyers who represent sellers. When you’re trying
to establish a contractual statute of limitations, do it clearly. Do not rely on the naked term
“survive,” which can be inherently ambiguous. Say something more than simply, “The sellers’
reps will survive for a year.” Gild the lily.

2
Let me read you the type of language that you should be using on the sell side:

“The parties, intending to contractually shorten the applicable statute of limitations, agree that
the target company’s representations will expire on the first anniversary of the closing date and
that all liabilities of the sellers, and all remedies exercisable by the buyer, with respect to those
representations will terminate on that first anniversary.”

That is the way you should be drafting your survival clause if you represent the sellers.

Non-Reliance Clauses [2016]

CLIMAN: I’d like to discuss a very simple clause that appears in many acquisition agreements.
That’s the so-called “non-reliance” clause.

What is a non-reliance clause? It’s a provision included in the acquisition agreement for the
benefit of the sellers. In this provision, the buyer confirms that, except for the express
representations contained in the “representations” section of the acquisition agreement, the buyer
has not relied on any representations or other statements made on behalf of the target company or
the sellers or any of their representatives. Very simple.

This is a seemingly innocuous clause which is mistakenly regarded by some practitioners as

mere boilerplate. But this clause is most definitely not boilerplate. It is a potent provision that
can have a significant effect on a disappointed buyer’s legal remedies. Accordingly, it must be
negotiated with great care.

It’s a clause that can be particularly important in the acquisition of a privately held company. To
appreciate the potential significance of a non-reliance clause, you have to think about what a
disappointed buyer of a privately held company does when it feels, after the closing of the
acquisition, that there were material misrepresentations made to it in connection with the
acquisition. That disappointed buyer may well decide, in the grand American tradition, to sue the
sellers.

The buyer will probably include in its lawsuit a breach of contract claim — a claim under the
express indemnification provisions of the acquisition agreement for breaches of the contractual
representations made by the sellers in that acquisition agreement. Of course, this claim will be
subject to all of the caps, survival limitations and other contractual limitations on indemnification
that were negotiated by the sellers in the acquisition agreement. For that reason, this contractual
remedy is far from a perfect remedy for the buyer.

But our disappointed buyer may well also bring a second type of claim — tort claims for fraud
against the sellers for deliberate misrepresentations made to the buyer in the context of the
acquisition. These tort claims would presumably not be subject to the caps, baskets and other
contractual limitations on indemnification claims.

There are two types of fraud claims the buyer can bring. The first type relates to the express
representations made by the sellers in the “representations” section of the acquisition agreement
itself. The buyer will claim that the sellers knew that certain of these representations were wrong

3
and that the buyer, therefore, has the right to recover from the sellers in tort for their having
defrauded the buyer. That’s one type of fraud claim. We call that fraud “inside the contract.”

The second type of fraud claim the buyer may assert is a little different. It does not tie into any of
the specific representations in the acquisition agreement itself. Rather, the buyer may assert that
certain statements made to it or certain documents delivered to it during the due diligence
investigation of the target company’s business were fraudulent, even though those statements
and documents were not specifically covered by any of the sellers’ express representations in the
acquisition agreement. We refer to this type of claim as a claim for fraud “outside the contract,”
or extra-contractual fraud.

An example of fraud outside the contract would be the delivery by the sellers to the buyer of
fraudulent financial projections, which the sellers cooked up to deceive the buyer into buying the
target company. Because the target company and the sellers typically will not make express
representations in the acquisition agreement about these projections, this type of fraudulent
behavior constitutes fraud outside the contract.

It is in this context — fraud outside the contract — that the presence or absence of a non-reliance
clause can make a huge difference. If the sellers end up getting a good non-reliance clause in the
acquisition agreement, they will be insulated from the buyer’s fraud claim regarding bad
projections, at least in Delaware and certain other jurisdiction that take the same approach as
Delaware. The buyer’s claim for fraud outside the contract will be dismissed because of the
presence of the non-reliance clause.

What’s the reasoning here? The claim will be rejected and dismissed because one of the required
elements of a successful fraud claim is reliance by the buyer. The Delaware courts take the
position that if the buyer brings a claim for fraud outside the contract after specifically
representing that it relied only on the representations expressly included in the acquisition
agreement, then the buyer’s non-reliance representation was in fact a lie, and that should
preclude the buyer from recovering on its fraud claim. On the other hand, if there’s no non-
reliance clause in the acquisition agreement, the buyer should be able to maintain a fraud claim
against the sellers based on the fraudulently-prepared projections.

So the practice pointer here is simple. A good non-reliance clause can actually protect the sellers
against successful tort claims for fraud outside the contract.

“Knowledge” Qualifications in Reps in Public Company Acquisitions [2005]

CLIMAN: The next item relates specifically to the negotiation of representations in public
company acquisitions.

In acquisitions of public companies, the target company’s counsel sometimes spends a fair
amount of negotiating energy attempting to insert knowledge qualifications in the target
company’s representations. But interestingly enough, in the public company acquisition context,
the insertion of these knowledge qualifications may make less of a difference than some
practitioners think. Why is that? Remember, in the acquisition of a public company (as distinct
from the acquisition of a private company), the target company’s representations don’t survive

4
the closing. So there is no post-closing indemnification liability for inaccuracies in those
representations. Accordingly, the primary function of the target company’s representations in
this context is to operate as closing conditions pursuant to the operation of the “bring-down”
condition. By way of reminder, the bring-down condition is the provision that conditions the
buyer’s obligation to close the deal on the target company’s representations being accurate as of
the scheduled closing time as if those representations were re-made at that time (subject, of
course, to some sort of exception for immaterial inaccuracies).

Consider the following simple hypothetical. Suppose the buyer includes in its draft acquisition
agreement an unqualified representation on the part of the target company that the target
company’s intellectual property is not subject to any material encumbrances. Assume that the
target company’s lawyer pushes back and succeeds in inserting a knowledge qualification in this
representation, so that the representation reads “to the target company’s knowledge, the target
company’s intellectual property is not subject to any material encumbrances.” And let’s also
assume that the target company had no knowledge whatsoever of any encumbrance on its IP at
the time the acquisition agreement was signed.

You know what happens next — the buyer discovers a major encumbrance on the target
company’s IP before closing. Does the knowledge qualification in the representation preclude
the buyer from walking away? I think the answer is no. The presence of the knowledge
qualification should make no difference here and the buyer should be able to walk away, just as
it could if there were no knowledge qualification. Why? Because the bring down condition says
that the buyer’s obligation to close is subject to the target company’s representations being
accurate in all material respects at the time of the closing as if those representations were re-
made at that time. And the representation in question here, which is being re-made as of the
closing time, says “to the target company’s knowledge, the target company’s intellectual
property is not subject to any material encumbrances.” Once the buyer tells the target company
about the major encumbrance that the buyer has uncovered, that representation, even with the
knowledge qualification, will be materially inaccurate at the time of the scheduled closing
because the target company will have obtained knowledge of the encumbrance before the
closing. Hence, the buyer should be able to walk away. And note that the buyer can walk away
regardless of whether this encumbrance was already in place at the time of the signing of the
acquisition agreement or arose after the signing.

Now I don’t want to suggest that the inclusion of knowledge qualifications never makes a
difference in a public company acquisition agreement, because there are some situations that we
can come up with where the addition of these qualifications can make a difference. But the
fundamental hypothetical that I just walked through is not one of these situations. The parties’
lawyers need to understand what they’re really fighting about when they quibble over knowledge
qualifications in a public company acquisition.

5
CLOSING CONDITIONS/“WALK” RIGHTS

The “Bring-Down” Condition [2005]

CLIMAN: Our next topic relates to the so-called “bring-down” condition. The bring-down
condition is the provision that conditions the buyer’s obligation to close the deal on the
continued accuracy of the sellers’ representations as if those representations were re-made at the
scheduled closing time (subject to an exception for immaterial inaccuracies).

Some inexperienced sellers’ lawyers tend to lose sight of what a powerful condition the
bring-down condition can be. Some practitioners look at the bring-down condition as 20+
closing conditions rolled into one, because it takes all the sellers’ representations and potentially
turns them into closing conditions. Beyond that, it requires the accuracy of the sellers’
representations to be tested not only at the time of the signing of the acquisition agreement, but
also at the time of the scheduled closing of the acquisition. Hence, the term “bring-down” — the
sellers’ representations are “brought down” to the closing. This can be a very important
condition.

Here’s the problem. There are some representations that may have been accurate at the time of
the signing, but that may become inaccurate as of the scheduled closing time as a result of
routine, post-signing developments of a type that might not necessarily justify giving the buyer a
potential right to walk away.

For example, the acquisition agreement may contain a representation by the sellers that says
“Schedule A sets forth a list of all employees of the target company.” Now, the list on
Schedule A may indeed be accurate as of the signing date. But normal attrition and normal hiring
between signing and closing may render that list materially inaccurate by the time the closing
date rolls around. So this is an example of a representation that the sellers probably would not
want brought down to the closing.

There is a simple technique for making sure a representation doesn’t get brought down. It’s
called “dating the representation.” And it typically entails adding seven simple words to the
representation. Those words are: “as of the date of this agreement.” Experienced lawyers who
represent sellers are vigilant about going through every single representation and deciding which
ones should be dated. Inexperienced lawyers who are not so vigilant may end up giving the
buyer a walk right that the buyer should not necessarily have. So the lesson for the sellers’
lawyer is simple: identify all the representations that should be dated, and date those
representations.

Distinction Between Closing Conditions and Termination Provisions [2006]

CLIMAN: This segment is relevant both to acquisitions of public companies and to acquisitions
of privately held companies.

We sometimes use the general term “walk rights” to embrace two types of provisions in an
acquisition agreement: closing conditions and termination rights. In my experience, however,

6
some practitioners may not fully appreciate the important distinction between these two types of
provisions. We can illustrate this distinction by examining the buyer’s right to walk away from
an acquisition when there has been a material adverse change, or “MAC” for short, in the target
company’s business.

Assume initially that the conditions section of the acquisition agreement contains a “no material
adverse change” closing condition, conditioning the buyer’s obligation to consummate the
acquisition on there having been no material adverse change in the target company’s business
since the signing date. Also assume that the agreement does not contain a separate MAC
termination right in the termination section of the agreement.

Suppose that, a few weeks after the signing of the acquisition agreement, the target company
experiences some sort of severe financial setback that clearly constitutes a MAC. Can the buyer
walk away at that point in time on the basis of the target company’s failure to satisfy the “no
material adverse change” condition? Generally no. The buyer would have to wait until the
specified “drop dead” date, which may be several months away, before the buyer can get out of
the deal.

And by the time the “drop dead” date finally rolls around, it’s conceivable that the target
company will have experienced a financial upturn that, in effect, offsets or “cancels out” the
previous setback. Under these circumstances, the buyer might ultimately be obligated to
complete the transaction, given that following this offsetting financial upturn the target
company’s business is not materially worse than it was on the signing date.

Some buyers might not like the idea of having to wait several months after the occurrence of a
MAC to see whether or not the situation corrects itself. When counseling such a buyer, you
should consider including in the termination section of the acquisition agreement a specific
termination right expressly permitting the buyer to terminate the acquisition agreement
immediately upon the occurrence of a MAC.

Now I should point out that there is another provision that may, in some circumstances, give the
buyer the right to terminate an acquisition agreement before the “drop dead” date on account of a
material adverse change in the target company’s business. That provision is the termination right
that may be exercised by the buyer if there are material uncured inaccuracies in the target
company’s representations. This termination right may be drafted so that it can be triggered not
only by inaccuracies that existed on the date the acquisition agreement was originally signed, but
also by inaccuracies that arise when the representations are “brought down” and re-made as of a
later date.

So, assuming the acquisition agreement contains a typical “no material adverse change”
representation on the part of the target company — a representation that says that since the date
of a recent balance sheet there has been no material adverse change in the target company’s
business — and assuming that this representation is not “dated” (and so can be brought down to
speak as of a later date), the buyer may be able to rely on this representation in tandem with the
termination provision relating to inaccuracies in the target company’s representations to
terminate the acquisition agreement before the “drop dead” date if a MAC occurs.

7
Sound complicated? Well I suppose it is, at least a little. The buyer’s counsel should recognize
that this particular termination right may not be quite as clean as the more direct MAC
termination right that I mentioned earlier, in part because the provision providing for termination
as a result of inaccurate representations may have a cure period tacked on.

But the real lesson here is that closing conditions operate somewhat differently from termination
rights. And the parties’ lawyers need to be sensitive to the inherent timing differences between
these two types of provisions.

The “Back-Door MAC” [2005]

CLIMAN: On the topic of “material adverse change,” let’s turn to the so-called “back-door
MAC” that may appear in the definitive acquisition agreement.

One of the provisions in the acquisition agreement that can provoke a fair amount of debate is
the material adverse change provision, which gives the buyer a right to walk away from the deal
if the target company experiences a material adverse change in its business.

This provision often takes the form of an express condition to closing, and the parties often
spend a lot of time and energy negotiating the definition of “material adverse change” and
various other elements of this provision. Occasionally — in a so-called “hell-or-high-water”
deal, for example — the sellers may actually succeed in eliminating this condition altogether,
although that’s rare. But the lawyers for the sellers need to recognize that this condition can get
introduced into the acquisition agreement through the back-door. Many acquisition agreements
contain a separate representation on the part of the sellers that there has been no material adverse
change in the target company’s business since the date of the target company’s most recent
quarterly balance sheet. If that representation isn’t “dated,” it will be brought down to the closing
by virtue of the operation of the bring-down condition that we discussed earlier. This results in a
so-called “back-door MAC.” The sellers’ lawyer needs to make sure that the acquisition
agreement doesn’t include a “back-door MAC” that is somehow inconsistent with whatever deal
the parties have otherwise struck on the buyer’s MAC-based walk right.

“Back-Door” vs. “Front-Door” MACs [2018]

CLIMAN: I’m going to shed some light on “material adverse change” clauses — also known as
“MAC” clauses — and on “material adverse effect” clauses, which are also known as “MAE”
clauses. Because MACs and MAEs are so closely similar, I’m going to treat them
interchangeably. For ease of reference I’m going to use one single term, MAC, to refer to both a
material adverse change and a material adverse effect.

In this segment, I’m going to explain the differences between front-door and back-door MACs. If
you’ve never heard these terms before, stay tuned.

As most of you who deal regularly with M&A transactions are aware, almost every acquisition
agreement providing for a deferred closing has the buyer’s obligation to complete the acquisition

8
conditioned on the target company not having experienced a MAC in its business or its financial
performance. This can be implemented in one of two ways.

The first is by means of a simple, straightforward express closing condition providing that the
buyer’s obligation to complete the acquisition is conditioned on no MAC having occurred in the
target company’s business or financial performance since the date of the acquisition agreement.
I’m going to refer to this as a front-door MAC condition to distinguish it from a back-door MAC
condition, which is the second way of conditioning the closing of an M&A transaction on the
absence of a MAC.

Here’s what we mean when we refer to a back-door MAC. Most acquisition agreements contain
a representation made by the target company called the “absence of changes” representation. I
think most of you listening are probably familiar with that representation, because it’s part of
almost every agreement. As part of that provision, the target company represents to the buyer
that there has been no MAC in the target company’s business or financial performance since the
date of a recent balance sheet of the target company. I’ll refer to this representation as a “MAC
representation.”

Most acquisition agreements also contain an express closing condition called a “bring-down”
condition. The bring-down condition provides in relevant part that the buyer’s obligation to close
the acquisition is conditioned on the target’s representations, including the MAC representation,
being accurate as if those representations were re-made as of the closing date.

It’s the combination of the MAC representation and this bring-down condition that effectively
conditions the closing of the acquisition on there having been no MAC in the target company’s
business or financial performance since the balance sheet date. This is the back-door MAC
condition.

Some acquisition agreements have only a front-door MAC condition without a back-door MAC
condition. Other agreements have the opposite; they have a back-door MAC condition without a
front-door MAC condition. Some agreements have both.

Normally the target company will want to avoid providing the buyer with both types of MAC
conditions. Why provide two when one will suffice? So how do you get rid of a back-door MAC
condition in the agreement? It’s simple. You “date” the MAC representation. How do you do
that? By simply replacing the phrase “since the balance sheet date” with the phrase “between the
balance sheet date and the date of the acquisition agreement.” When you do this, the
representation will say that there has been no MAC in the target company’s business or financial
performance between the balance sheet date and the date of the acquisition agreement.

This verbiage prevents the representation from getting brought down to the closing pursuant to
the bring-down condition, and so it effectively eliminates any back-door MAC condition.

Some practitioners mistakenly believe that a front-door MAC condition and a back-door MAC
condition are functionally the same thing, and that the parties should be indifferent to whether
the buyer gets a front-door or a back-door MAC condition. But they are not the same. There are
some potentially significant differences between the two.

9
One important difference relates to the time periods they cover. A front-door MAC condition
focuses on whether a MAC has occurred during the period from the date of the acquisition
agreement to the scheduled closing date. A back-door MAC condition, on the other hand,
focuses on a longer period, the period from the balance sheet date (which is typically at least one
month earlier and possibly several months earlier than the date of the acquisition agreement)
through that same scheduled closing date.

It’s easy to come up with a scenario where this makes a difference — a set of hypothetical
circumstances in which a buyer can generally refuse to close an acquisition if the acquisition
agreement contains a front-door MAC condition, but not if the acquisition agreement contains
only a back-door MAC condition. I can give you a highly simplified example.

Assume that the buyer enters into a definitive acquisition agreement at the beginning of the third
quarter, on July 1, and that the acquisition is set to close at the end of that same third quarter on
September 30. So, there will be a three-month period between the signing and scheduled closing.

Assume further that the absence of changes representation in the acquisition agreement refers to
a target company balance sheet dated as of April 1, so the MAC representation says there has
been no MAC since April 1, the beginning of the second quarter. So, we have three key dates:
the balance sheet date is April 1; the date of the acquisition agreement is three months later on
July 1, and the date the acquisition is scheduled to close is three months after that on
September 30.

Now, assume that the target’s financial performance is sensational — hugely above average ––
in the second quarter, but is dismal, dreadful — hugely below average — in the third quarter. In
this simplified example, the buyer may be able to declare a MAC and refuse to close the
acquisition if the acquisition agreement contains a front-door MAC condition, but not if the
acquisition agreement contains only a back-door MAC condition.

Why? If the agreement contains a front-door MAC condition, then the relevant time period for
determining whether a MAC has occurred is the dismal third quarter — a period over which a
MAC may well have occurred.

However, if the acquisition agreement contains only a back-door MAC condition, the picture
changes completely, because in this case the relevant time for determining whether a MAC has
occurred runs from April 1, the balance sheet date, through September 30, the closing date.
That’s a six-month period comprising two consecutive quarters that offset each other — the
second and the third quarters of the year. Over that period the target turned in a sensational
quarter followed by a horrible quarter. The target company’s cumulative financial performance
over those two quarters is about average, and it would be very difficult for the buyer to
successfully argue that the target company’s financial performance since the balance sheet date
constitutes a MAC.

The difference in the relevant time periods for determining whether a MAC has occurred is an
important difference between a back-door and a front-door MAC, but it’s not the only difference.
Another key difference arises from the fact that a back-door MAC condition is tied to the bring-
down of the target company’s MAC representation. Remember that a target company’s

10
representations in an acquisition agreement, including that MAC representation, are generally
qualified by the target company’s disclosures in its disclosure schedule. However, the disclosures
in the target company’s disclosure schedule do not qualify standalone closing conditions, such as
the front-door MAC condition. This distinction can lead to yet other situations where the buyer’s
ability to refuse to close the deal depends on whether its MAC condition is of the front-door type
or the back-door type.

As an example of such a situation consider this simple scenario. Suppose the target company
discloses in its disclosure schedule that the poor financial performance of certain of the target
company’s customers has led to a substantial decline in demand for the target company’s
products, which in turn has led, and may in the future lead, to substantial declines in the target
company’s own financial performance. If the acquisition agreement contains a front-door MAC
condition and the target company’s financial performance between the date of the acquisition
agreement and the scheduled closing is poor enough to constitute a MAC, then by definition the
front-door MAC condition has not been satisfied and the buyer may refuse to close the
acquisition. The disclosures in the target company’s disclosure schedule are completely
irrelevant to this conclusion because the disclosure schedule does not qualify the closing
conditions in the acquisition agreement.

On the other hand, if the acquisition agreement contains only a back-door MAC condition, then,
even if the target company’s financial performance over the period from the balance sheet date to
the scheduled closing date is poor enough to constitute a MAC, the situation may be a lot less
clear. If the cause of the MAC was the poor financial performance of customers that stopped
placing orders, then the target can argue that the MAC representation as brought down to the
closing is accurate, given that it’s qualified by the disclosures in the disclosure schedule. This is
because the representation as brought down says, in effect, “except as disclosed in the disclosure
schedule, there has not been a MAC in the target company’s financial performance since the
balance sheet date.” In other words, there has not been a MAC except for any MAC resulting
from the disclosed decline in customer demand. This may well be an accurate statement, so the
bring-down condition may well be satisfied. And, of course, if the bring-down condition is
satisfied, then the buyer may be required to close the acquisition notwithstanding any MAC that
may have occurred.

What are the takeaways from all of this?

First, sell-side lawyers should generally avoid giving buyers both types of MAC conditions in
their acquisition agreements, because they’re different. In particular, sell-side lawyers should
understand how to “date” the MAC representation to avoid inadvertently giving the buyer a
back-door MAC condition on top of a front-door MAC condition.

Second, if the buyer is given the choice between a back-door and a front-door MAC condition,
the buyer is generally better off opting for a front-door MAC condition, because it’s not qualified
by the target company’s disclosure schedule.

For those of you who have actually been able to get into the weeds and follow what I’ve said on
this topic — and that may not be all of you — I will conclude by observing that I think this
nugget provides yet another example of why you can’t really call yourself a good M&A lawyer

11
M&A Cartoon: More on MACs [2013]

M&A Cartoon: A Potentially Controversial Carve-Out to the Buyer’s MAE

Walk Right [2014]
INDEMNIFICATION; SANDBAGGING

The Word “Indemnify” May Be Ambiguous [2016]

CLIMAN: As M&A lawyers, we tend to use a fair amount of jargon, both when we speak to
each other and when we draft legal documents. We throw around a fair number of terms that
have specialized meanings. The problem is that not all people, and more importantly not all
judges and juries, can be counted on to assign the same meanings to these terms as we do. So for
my next nugget, I’d like to shine the spotlight on a term that commonly appears in definitive
agreements for acquisitions of privately held target companies. And that term is “indemnify.”

The vast majority of agreements for the acquisition of a privately held company contain so-called
“indemnification” provisions, which allow the buyer to get some money back after the closing if
the sellers’ representations turn out to have been inaccurate. The typical indemnification
provision says that the sellers will indemnify the buyer against all losses and damages the buyer
incurs as result of inaccurate representations of the sellers. That’s the word we use, “indemnify.”

Many, if not most, M&A lawyers would tell you that the word “indemnify,” when used in that
context, means essentially the same thing as the word “pay.” What they’re intending to say when
they use the term indemnify is that the sellers will pay to the buyer the amount of all losses and
damages suffered as a result of inaccuracies in the sellers’ representations.

Let’s take a quick example. If the sellers make a representation in the acquisition agreement
stating that all the equipment in the target company’s factories is in good and safe condition, and
if that representation turns out to be inaccurate because some of the equipment was in fact in
horribly bad and dangerous condition, and that bad equipment explodes and turns into a pile of
rubble shortly after the closing, we expect the buyer to be made whole under the indemnification
provision. So if it costs the buyer, say, $10 million to buy new equipment to replace the
equipment destroyed in the explosion, then we expect the buyer to be able to recover that $10
million under a standard indemnification clause.

But not so fast. If the only verb the buyer included in that clause was the naked term
“indemnify,” it’s not at all clear that the buyer can recover that $10 million. Why is that?
Because some people and, more importantly, some courts, construe the term “indemnify” to
cover only third-party claims, such as claims by target company employees who got hurt when
the machine exploded, but not first-party damages, like the cost of replacing some now worthless
equipment.

At the very least, these courts consider the term indemnify ambiguous, as a relatively recent
California case, the Zalkind case, decided in 2011, suggests. I suggest that all of you in the
audience take a look at that case. It might scare you a little.

So what’s the practice pointer here for M&A practitioners who represent buyers? When you’re
representing a buyer, do not rely on the naked term “indemnify.” Make it crystal clear in the
agreement that first-party damages as well as third-party damages are recoverable.

13
Let me give you some language that makes it clear that both third-party and first-party damages
are recoverable by the buyer:

“The sellers shall indemnify the buyer against and shall pay, compensate, and reimburse the
buyer for any damages suffered by the buyer as a result of breaches of the sellers’
representations regardless of whether those damages relate to a third-party claim.”

This is the type of verbiage that a buyer’s lawyer should use. If you don’t word your
indemnification provision this way when you represent the buyer, you may be asking for trouble.

The “Fraud Exception” to Limitations on Indemnification [2006]

CLIMAN: Our next segment relates to the post-closing indemnification provisions you would
typically find in the definitive agreement for the acquisition of a privately held company.

Many of you listening to this webcast are no doubt aware that sellers generally seek significant
contractual limitations on their potential indemnification obligations under the acquisition
agreement. These negotiated limitations may take the form of a dollar ceiling or cap on the
amount of the sellers’ potential indemnification liability, a “basket” designed to eliminate
immaterial indemnification claims by the buyer and a specified survival period beyond which
indemnification claims cannot be made by the buyer. Of course, buyers can be expected to
engage in vigorous negotiations regarding the dollar amounts of the indemnification cap and
basket as well as the duration of the specified survival period. But buyers generally do not
succeed in eliminating these limitations entirely.

Even if buyers can’t completely eliminate these limitations on their indemnification rights,
however, they may attempt to mitigate the effect of these limitations by seeking specific
exceptions — provisions in the acquisition agreement stating that the limitations won’t apply in
certain specified circumstances.

One exception to these limitations that buyers frequently request is the so-called “fraud
exception” — an express statement that the cap, basket and time limitation will not apply in
certain circumstances tied to the commission of a fraud. If a fraud exception is to be included in
the acquisition agreement, the sellers’ attorney must pay particularly close attention to the actual
wording of the exception, because subtle differences in verbiage can have a significant impact
on the sellers’ potential liability.

As Vice Chancellor Strine of Delaware’s Court of Chancery recently confirmed in his decision
in the ABRY Partners case, it is black letter law that a party cannot contractually limit its
liability for its own fraud. So if the buyer’s attorney seeks a statement in the acquisition
agreement to the effect that the contractual limitations on indemnification are not intended to
affect the common law liability of a seller for that seller’s own fraud, the sellers’ attorney might
normally not object to this. After all, this is merely a restatement of a well-recognized legal
principle.

But sometimes the buyer’s counsel seeks something different. The buyer’s counsel might, for
example, attempt to expand the exception clause so that it refers to something beyond fraud —

14
to “fraud or willful misconduct,” for example. This type of expanded language may be
controversial because the additional words may not have as well established a meaning as
“fraud” (which we know must be pleaded with particularity and which typically requires proof
of a number of distinct elements, such as scienter and reliance).

The buyer’s counsel may also seek to expand the scope of the fraud exception in other ways. For
example, the buyer may attempt to word the exception generally to say that the limitations on
indemnification won’t apply “in the event of fraud.” Now this particular formulation does not
really make it clear whose fraud will make the indemnification limitations inapplicable, leaving
open the possibility that a completely innocent seller which did not itself commit fraud may be
obligated to indemnify the buyer without limitation, beyond the negotiated dollar cap and after
the expiration of the negotiated survival period, for the consequences of a fraud committed by
someone else — by another, unrelated seller, for example. This is a result that is not necessarily
compelled by law, and needless to say, a result that many sellers and their counsel would find
objectionable.

So the lesson for the sellers’ counsel is pretty clear here. If you’re going to agree to include a
contractual fraud exception to the limitations on your clients’ indemnification obligations, make
sure the exception is drafted very narrowly.

Consequential Damages Exclusions [2016]

CLIMAN: This nugget relates to a provision I see sellers requesting frequently in acquisitions
of privately held companies. That provision is an express exclusion of so-called “consequential
damages” from the damages that the buyer is entitled to recover from the sellers under the post-
closing indemnification provisions.

The sellers sometimes attempt to justify this requested exclusion of consequential damages by
pointing out that exclusions or waivers of consequential damages are customary in many other
types of commercial agreements. But when I’m representing the buyer, I steadfastly resist the
sellers’ request for a consequential damages exclusion, for a number of reasons.

First, I’m quick to point out that in other types of agreements where consequential damages
exclusions are commonplace — for example, in agreements contemplating the performance of
consulting or other services — there could be a reasonable justification for excluding
consequential damages. In the consulting contract example, the potential damages to which the
consultant would be exposed if the consultant were liable for consequential damages could be
disproportionately high when compared to the relatively small amount of the fees that the
consultant receives for its services. So there’s a certain fairness to limiting the consultant’s
indemnification exposure in that scenario.

But that is not a persuasive rationale in the M&A context, where the buyer is presumably paying
and the sellers are receiving a full price for the target company’s business and for the related
representations and warranties of the sellers. And because U.S. courts award consequential
damages, I’m really not sure how the sellers can justify artificially limiting the damages that a
court or arbitrator can award to the buyer in this context.

15
Second, sometimes consequential damages are the only meaningful damages associated with the
breach of the sellers’ representations. Take the case where the sellers represent in the acquisition
agreement that the target company has all governmental permits necessary to operate its
business. Suppose in fact the target company is missing a key permit and, right after the closing,
the relevant governmental authority comes in and shuts down the target company’s factory for
six months while the process of obtaining that missing permit runs its course. And suppose the
fee payable for the needed permit is $10,000, while the lost profits and other damages to the
buyer associated with the plant shutdown are $15 million. It seems inappropriate that the sellers
should be able to get away with paying only $10,000 by characterizing the other damages — the
lost profits — as unrecoverable consequential damages.

Finally, I’m always reluctant to agree to an exclusion that I don’t fully understand. There appears
to be a fair amount of confusion and inconsistency in the jurisprudence addressing what
constitutes consequential damages and what doesn’t. A couple of years ago, in the Biotronic
case, New York’s highest court, the Court of Appeals, split 4-3 on the question of whether lost
profits constitute consequential damages. And in a Delaware case in 2011, the Pharmaceutical
Product Development case, then Vice-Chancellor and now Chief Justice Leo Strine said, “The
laundry list of precluded damages might have been put in the merger agreement by lawyers who
themselves were unclear on what those terms actually mean. This is not surprising, in light of the
amorphous state of the law and its confusing efforts to clearly delineate the difference between
general damages on the one hand and consequential or special damages on the other.”

I should point out that at least one recent study, the Private Target M&A Deal Points Study
prepared by the M&A Committee of the American Bar Association’s Section of Business Law,
reports that sellers succeed in winning a consequential damages exclusion about half the time.
But even putting aside my strong aversion to the practice of basing negotiating positions on
market studies rather than logic, I feel compelled to point out that those study results may be
somewhat biased.

That deal points study only surveys deals for which the acquisition agreements have been filed
with the SEC. The publicly traded buyers that file their acquisition agreements with the SEC tend
to be smaller buyers, because the private company acquisitions that bigger buyers do tend not to
be material enough to those buyers to require filling the agreements with the SEC. When you
look at statistics relating to deals done by larger buyers, you find that consequential damages
exclusions are not so common. Anyone who would like to see some preliminary statistics that
we’ve started to compile on this should feel free to reach out to me.

The bottom line, in my view, is that it’s a bad idea for a buyer to agree to exclude consequential
damages from the damages it can recover from the sellers.

Is Delaware a “Sandbagging” State? [2018]

CLIMAN: This nugget relates to a practice sometimes pejoratively called “sandbagging.” In its
most extreme form, sandbagging refers to a situation where a buyer of a private company knows
before executing the acquisition agreement that one of the representations made by the target
company or the sellers in the acquisition agreement is inaccurate.

16
In the classic sandbagging scenario, the buyer doesn’t say anything about the inaccuracy it has
discovered until after the closing, when the buyer makes an indemnification claim against the
sellers to recover the damages it suffered as a result of the inaccuracy. Now, at first blush, this
sort of behavior may strike some as highly obnoxious, and not surprisingly some sellers are
inclined to insist on an express provision in the acquisition agreement (we call it an “anti-
sandbagging” clause) which expressly precludes the buyer from recovering damages in this
scenario.

However, there are strong arguments that can be advanced by buyers as to why anti-sandbagging
provisions are inappropriate. One of the most powerful arguments against anti-sandbagging
provisions is that, if such a provision makes its way into the acquisition agreement, then every
single indemnification claim made by the buyer alleging a breach of a representation will
inevitably be met with an assertion by the sellers that the buyer knew of the breach or of the facts
underlying the breach. The buyer will contend that even the most straightforward
indemnification claims (where the fact of the breach and the amount of the associated damages
are clear) will degenerate into protracted battles about what the buyer’s senior management knew
and when they knew it.

It’s widely assumed that an express anti-sandbagging clause will be given effect by the courts.
By the same token, we also assume that provisions expressly permitting buyers to sandbag
(sometimes called “pro-sandbagging” clauses) will likewise be given effect and enforced by the
courts.

What is unclear, however, at least in some jurisdictions, is whether buyers who sandbag will be
entitled to recover damages where the acquisition agreement contains neither an express clause
permitting sandbagging nor an express anti-sandbagging clause — in other words, where the
acquisition agreement is silent on the topic of sandbagging.

Given the uncertainty that exists where the acquisition agreement is silent on sandbagging, one
might be inclined to assume that in almost all private company acquisitions, the parties would
make a point of specifically negotiating and directly addressing the sandbagging question by
including either an express anti-sandbagging clause or an express pro-sandbagging clause in their
agreements.

But the available statistics suggest otherwise. According to the most recent private target deal
points study published by the M&A Committee of the ABA’s Business Law Section, which
surveyed acquisition agreements publicly filed with the SEC, 42% of the agreements surveyed
contained a clause expressly permitting sandbagging and only another six percent contained an
express anti-sandbagging clause. That means that over 50% — a majority of the agreements
surveyed – were silent on the issue.

I’ll be explaining in my next nugget why this deal points study may not necessarily be a fair
indicator of overall market practice. Still, those of us who pay attention to these statistics are
astonished by the large number of agreements that apparently do not expressly address the
question of whether the buyer should be permitted to sandbag the sellers. There are several
possible explanations for why this number is so big.

17
One possible explanation is that some practitioners may not be familiar with the sandbagging
issue and its possible ramifications, and that they therefore just neglect to address it.

Another possible explanation is that some buy-side lawyers intend to include a clause that
expressly allows sandbagging, but draft the clause improperly. For example, instead of saying
that the buyer’s indemnification remedies are not limited by the buyer’s preexisting knowledge
of a breach, a buy-side lawyer might word the clause to say merely that the buyer’s remedies are
not limited by any investigation conducted by the buyer. That verbiage, while perhaps somewhat
helpful to the buyer, does not qualify as a true pro-sandbagging clause.

Yet another possible explanation for the significant number of acquisition agreements that are
silent on the sandbagging issue (and the explanation most relevant to this nugget) is that buy-side
practitioners may generally believe that failing to expressly address sandbagging in the
agreement is the legal equivalent of including a clause permitting sandbagging. In other words,
practitioners may believe that even when an acquisition agreement is silent on sandbagging, the
courts are still going to allow the buyer to sandbag — to recover damages for representation
breaches that the buyer knew about from the outset. These practitioners are going to be very
interested in, and perhaps somewhat concerned about, a recent opinion of the Delaware Supreme
Court.

The views of Delaware judges on sandbagging are particularly important because many
acquisition agreements specify that they’re going to be governed by Delaware law. Past
Delaware Court of Chancery decisions have generally given buy-side practitioners comfort that,
under Delaware law, buyers are able to sandbag sellers even when the acquisition agreement is
silent on the topic. In fact, in a 2015 ruling, Vice Chancellor Laster described Delaware as a
sandbagging state.

Earlier this year, the Delaware Supreme Court weighed in with an opinion that addressed the
sandbagging issue, albeit in dicta. In the case of Eagle Force Holdings vs. Campbell, the Court
recognized in a footnote that the Delaware Supreme Court has yet to resolve the interesting
question of whether a party can recover on a breach of warranty claim where the parties know at
signing that certain warranties were not true. After Eagle Force, Delaware’s status as a
sandbagging state is most certainly in question.

What should we take away from all this? I have two related practice pointers for buy-side
attorneys. First, at least if the acquisition agreement is to be governed by Delaware law, do not
assume that silence on the sandbagging issue is a favorable result for the buyer. More
specifically, do not assume that silence enables your client to recover damages for inaccuracies
in representations that your client knew were inaccurate before your client signed the acquisition
agreement.

You should insist on including an express provision that specifically authorizes your client to
sandbag. Silence is generally not a satisfactory solution for a buyer who wants to retain the
right to sandbag. That is as true today as ever, particularly after this Eagle Force Holdings case.

Second, make sure the sandbagging provision you include is properly drafted. In an effective
sandbagging provision, you must use the word “knowledge” or some variant of that word. It’s

18
M&A Cartoon: Negotiating the Causal Nexus Verbiage in an Indemnification
Provision [2013] (“Rube Goldberg and the Indemnification Provision”)

M&A Cartoon: Negotiating Consequential Damages Waivers [2013]

M&A Cartoon: Negotiating a Sandbagging Provision [2013] (“Like the cat

that ate the canary”)
MISCELLANEOUS

Third-Party Beneficiaries [2005]

CLIMAN: We move to the topic of third-party beneficiaries, and an interesting case.

It is commonplace for the parties to an acquisition agreement to include, way back in the
miscellaneous section, a no third-party beneficiaries provision expressly stating that there are no
third-party beneficiaries to the agreement and that no one other than the parties themselves has
any enforceable rights under the agreement. A few isolated provisions may be excepted out of
this no third-party beneficiaries clause, such as the provision in public company deals relating to
the maintenance of post-closing D&O liability insurance for the target company’s directors and
officers. But typically you don’t see many express exceptions.

At the same time, it’s not unusual in the body of these acquisition agreements, often somewhere
in the covenants section, to have specific provisions dealing with the treatment of the target
company’s employees after the closing. These provisions might say, for example, that the target
company’s employees will be covered by the buyer’s benefit plans after the closing and that
these employees will get credit for their past years of accumulated service with the target
company. And these employee provisions in the acquisition agreement may be even more
specific and describe particular contemplated severance or other arrangements for certain
categories of employees.

But after the closing, if these employees aren’t third-party beneficiaries, who is left to enforce
these provisions? Maybe the target company itself, as a party to the agreement. But in many
cases the target company has in effect changed sides after the closing. It has disappeared into the
buyer, or it has become a wholly-owned subsidiary of the buyer. So in those cases, the target
company’s rights as a party to the agreement aren’t really going to be helpful after the closing to
an employee who doesn’t get the benefits described in the acquisition agreement.

If you ask the practitioners who draft these agreements, “who can legally enforce these
employee-related provisions?”, some of them might be inclined to say, in light of the express no
third-party beneficiaries clause, that the answer is no one. Some of these practitioners might be
inclined to say that, while these employee-related provisions may in effect create a moral
commitment of sorts on the part of the buyer, they do not impose any legally binding obligations
on the buyer.

But practitioners should be aware of the Prouty v. Gores Technology decision handed down last
year by a California appellate court. In that case, the court sided with the employees who sued
for breach of an employment-related provision in the amended acquisition agreement,
notwithstanding the presence of a no third-party beneficiaries clause in the agreement. The court,
in substance, said that the employee provision in the acquisition agreement was a classic third-
party provision, noted that it conflicted with the no third-party beneficiaries provision and then
invoked the rule of contract construction providing that the specific overrides the general in order
to support its holding in favor of the employees. I recommend you read the decision in full,
because I don’t have enough time right now to provide a complete summary.

20
But the lesson is clear. Lawyers for the parties to an acquisition should be particularly careful in
drafting employee-related provisions and third-party beneficiary clauses in the acquisition
agreement. They need to make sure that the intent of the parties regarding the enforceability of
the employee-related provisions is properly reflected.

Earn-Out Rights as Securities [2006]

CLIMAN: Our next topic relates to “earn-outs.” An earn-out is a type of pricing formulation
that may be used in the acquisition of a privately held target company. In an earn-out deal, some
portion of the purchase price payable by the buyer to the sellers is determined after the closing of
the acquisition, and is based in some way on the performance of the acquired business after the
closing.

There are many different varieties of earn-outs. An earn-out formulation can be based on gross
revenues, on net income or on any number of other performance-based measures or milestones.
Earn-outs predictably raise a number of tricky negotiation issues and other challenges with
which the parties have to grapple.

One of the issues that the buyer’s lawyer must not overlook is that the sellers’ earn-out rights
may constitute securities under federal or state securities laws, even if all earn-out payments are
to be made exclusively in cash. Now we don’t have enough time this afternoon to address all of
the factors that need to be analyzed to determine whether a particular earn-out formulation
constitutes a security. But a review of relevant sources will reveal that the transferability of earn-
out rights is among the factors that may be important to this determination.

If a buyer structures an earn-out in a way that results in its being characterized as a security and
fails to ensure compliance with the registration requirements of the securities laws, or an
applicable exemption, then the buyer may find — to its great dismay — that the sellers have a
right of rescission or other rights under the securities laws.

So buyers’ lawyers must be appropriately cautious in structuring earn-out deals, and in

particular, should become very familiar with the various no-action letters issued by the SEC Staff
on this topic.

Buyer Power Ratio — A Useful Tool for Gauging Market Practice [2018]

CLIMAN: Over the past decade and a half, we have seen a wave of so-called “deal points
studies” surveying various categories of M&A transactions. These are studies that have been
circulated widely to M&A practitioners and to other players in the U.S. M&A marketplace. They
examine the resolution of key negotiating points in the definitive acquisition agreement, and they
also purport to define market practice for resolving these points.

Today I’m going to be speaking about deal points studies focusing on acquisitions of privately
held U.S. companies by strategic buyers. There are also other varieties of deal points studies that
cover, for example, acquisitions of public target companies and carve-out transactions. But

21
again, my focus today will be limited to studies surveying acquisitions of privately held U.S.
companies by strategic buyers.

The proliferation of these private-target deal points studies has had, in my view, a noticeable
effect on the negotiating dynamics between buyers and sellers in the U.S. Unfortunately, in some
cases, acquisition agreement negotiations have degenerated into what we might refer to as a
“paint by the numbers” exercise, with the parties relying somewhat blindly on the statistics in
these studies to determine what provisions are “market.”

In my view there are two potential flaws with many of the deal points studies focusing on
acquisitions of private companies. Maybe we should call them “inherent limitations” rather than
“flaws.”

First, the survey samples are skewed. The studies survey only those acquisition agreements that
are publicly available through SEC disclosure. This necessarily excludes transactions done by
the largest buyers, because those transactions are typically not sufficiently material to the buyers
to require filing the related acquisition agreements with the SEC, so they’re not included in the
study sample.

Second, these studies take a “one-size-fits-all” approach to determining market practice. They
indiscriminately lump together large deals with small deals and deals done by large buyers with
deals done by smaller buyers. In this sense they fail to recognize that acquisitions of private
companies do not comprise a single unitary market, but rather comprise multiple markets.

The parties expressing the most frustration with these deal points studies have been large
strategic buyers, who frequently have seen these flawed studies thrown in their faces by sellers
during acquisition negotiations, with the sellers vociferously asserting that the buyers’
negotiating positions are “off-market.” (That, by the way, is considered one of the biggest insults
a party can deliver in deal negotiations today.)

The frustration experienced by these large strategic buyers (which I’ve witnessed firsthand,
given that I represent many of them) stems in part from the fact that the acquisition agreements
for the transactions they do are not even included in the study samples. As I mentioned earlier,
those agreements are generally not filed with the SEC because they’re not material to the buyer.

Last year a new type of deal points study was published jointly by the M&A Committee of the
ABA’s Business Law section and SRS Acquiom. It’s called the “Buyer Power Ratio” deal point
study and it attempts to address both of the limitations that I mentioned earlier.

First, by tapping into a large proprietary database of acquisition agreements available through
SRS Acquiom, this new study was able to survey a more representative sample of transactions –
a sample which includes acquisition agreements that are not filed with the SEC.

Second, the new study breaks down the precedent transactions in the survey sample into separate
categories based on ranges of what the study refers to as “buyer power ratio.” This effectively
enables parties to a proposed acquisition to focus on the group of precedents most relevant to
their deal.

22
Now, what is buyer power ratio? The buyer power ratio (or “BPR” for short) for a transaction is
easy to calculate. It’s the ratio of the size of the buyer, measured by its market capitalization, to
the size of the target company, measured by the purchase price payable in the transaction. For
example, in a transaction in which a buyer with a market capitalization of $50 billion is buying a
private company for $200 million, the BPR would be 50 billion divided by 200 million, which
comes out to 250.

BPR correlates generally with a buyer’s negotiating leverage in a transaction. Buyers in

transactions with high BPRs, where the buyer is much larger than the target company, can
generally expect to obtain more buyer favorable deal terms than buyers in transactions with
lower BPRs.

For example, the BPR study shows that, for transactions with low BPRs (BPRs below 10),
buyers succeed in obtaining so called “10b-5” or full disclosure representations, which are highly
favorable for the buyer, only about 35% of the time. For transactions with BPRs above 400 — a
high level which indicates significant buyer negotiating leverage — the success rate for buyers in
extracting a 10b-5 or full disclosure representation jumps 40 points to 75%. BPR matters.

Needless to say, the same large acquirers who angrily shared with me their frustrations regarding
the earlier deal points studies have now eagerly embraced the BPR study and added it to their
negotiating arsenals. Sell-side negotiators who attempt to use the earlier studies against these
buyers are likely to have the BPR study thrown back in their faces.

I believe the BPR study is available on the M&A Committee’s website. Any listeners who
experience difficulty retrieving it can email me and I’ll get copies into your hands.

Contractual Restrictions on the Right to Change the Target Board’s Merger

Recommendation [2006]

CLIMAN: Our next and last segment addresses an important facet of directors’ fiduciary duties
in the M&A context.

In acquisitions of public companies, it is commonplace for the acquisition agreement to include a

provision requiring the target company’s board of directors to continue to recommend the deal to
the target company’s stockholders after the signing of the acquisition agreement. This provision
typically precludes the target company’s board from withdrawing its recommendation in favor of
the deal, and from adversely modifying that recommendation, subject to a very important
exception. Some buyers attempt to draft this exception very narrowly — perhaps too narrowly —
and that’s the focus of this particular nugget.

Some buyers may actually insist on a provision that allows the target company’s board to
withdraw or change its recommendation only in the face of a superior competing bid for the
target company, and in no other circumstances. What these buyers may be overlooking is that,
at least if the target company is incorporated in Delaware, the target company’s board of
directors generally owes the target company’s stockholders a broad fiduciary duty of candor —
a duty of disclosure. And there may well be circumstances outside the context of a competing

23
bid for the target company in which the target company’s board of directors concludes that it
can no longer support the deal with the buyer.

A classic hypothetical example of this is the gold strike — the situation in which the target
company learns after the signing of the acquisition agreement that there are valuable gold
deposits on its property, and that the target company is therefore far more valuable than it was
thought to be at the time the acquisition agreement was originally signed. This may, of course,
cause the board to question the continued adequacy and fairness of the purchase price that the
buyer has agreed to pay. And yet the narrowly drafted provision that allows the board to
withdraw its recommendation only in the competing bid situation would, by its terms, prohibit
the board from withdrawing its recommendation in this “gold strike” scenario.

The parties’ lawyers need to appreciate that any attempt by a buyer to contractually muzzle the
target company’s board of directors — any attempt to preclude the target company’s board from
withdrawing or changing its recommendation once that board has determined for any reason,
whether or not in the context of a competing bid, that it can no longer support the deal with the
buyer — may be inconsistent with the board’s fiduciary duties.

24
TAB 14
M&A jargon

270
M&A Jargon
Terms introduced and explained in M&A Boot Camp training program
• absence of changes • deal certainty
representation • deal protection
• accrual (of a liability under • deferred closing
GAAP)
• definitive agreement
• actual knowledge
• disappearing corporation
• appraisal/dissenters’ rights
• disclosure schedule
• authorized shares
• divestiture covenant
• back-door MAC
• double materiality
• back-end merger
• drop-dead date
• board recommendation
covenant • earnings accretion/dilution

• break-up fee • earn-out

• bring-down component of • enterprise value

indemnification provision • equity value
• bring-down condition • exclusivity agreement
• buy-side stockholder vote • financial buyer/PE sponsor
• catalyst sub • fixed dollar value exchange
• collar ratio (with or without collar)

• constituent corporations • fixed exchange ratio

(with or without collar)
• constructive knowledge
• floating exchange ratio
• contingent liability (with or without collar)
• contingent value right (CVR) • front-end tender offer
• dated representation
(cont’d on next page)
M&A Jargon
Terms introduced and explained in M&A Boot Camp training program
• generally accepted • market cap
accounting principles • match right
(GAAP)
• material adverse change
• Hart-Scott-Rodino (HSR) Act (MAC)
• hell-or-high-water antitrust • material adverse effect
covenant (MAE)
• hell-or-high-water deal • materiality qualifier
• hostile takeover • materiality scrape
• imputed knowledge • mega-cap company
• indemnification • merger of equals (MOE)
• indemnification escrow • micro-cap company
• inside basis • mid-cap company
• interloper • non-solicitation (of
• knowledge group employees) provision
• knowledge qualifier • no-hire provision
• large-cap company • no-shop provision
• leveraged buyout (LBO) • no-talk provision
• majority of outstanding • outside date
shares • private equity firm
• majority of shares present at • prospects
a stockholders’ meeting
• proxy statement
• management buyout (MBO)
(cont’d on next page)
M&A Jargon
Terms introduced and explained in M&A Boot Camp training program
• recommendation covenant • tax-free reorganization
• registration of shares • tender offer
(under securities laws) • termination right
• Regulation D (exemption • topping/jumping bid
from SEC registration
requirements) • twenty percent (20%) test

• reverse break-up fee • two-step acquisition

(with front-end tender offer
• scienter and back-end merger)
• SEC Rule 10b-5 • two-way due diligence
• simultaneous signing/ • value certainty
closing
• volume-weighted average
• small-cap company price (VWAP)
• stock-for-stock transaction/ • waiting period
stock swap (under HSR Act)
• strategic buyer • walk right
• surviving corporation • weighted average cost of
• synergies capital (WACC)
TAB 15
ABA Private Target M&A
Deal Points Study
(Released 2019)

274
TAB 16
“Buyer Power Ratio”
Deal Points Study
(Released 2017)

339
 Impact of “Buyer Power Ratio”
on Selected M&A Deal Terms
in Acquisitions of Privately Held Target Companies
by Publicly Traded Buyers

July 2017
(Including Transactions Completed 2012 – 2016)

Mergers & Acquisitions Committee

  

  
 
Slide 1

STUDY CHAIRS
Rick Climan (Founding Chair) Paul Koenig
Hogan Lovells US LLP SRS Acquiom Inc.
Silicon Valley, CA Denver, CO

DATA ANALYTICS
Glenn Kramer, PhD
SRS Acquiom Inc.
San Francisco, CA

ADVISORY GROUP
Wilson Chu Jessica C. Pearlman
McDermott Will & Emery LLP K&L Gates LLP
Dallas, TX Seattle, WA

M&A COMMITTEE / MARKET TRENDS SUBCOMMITTEE LEADERSHIP

Scott Whittaker Hal Leibowitz
(M&A Committee Chair) (Market Trends Subcommittee Chair)
Stone Pigman Walther Wittmann L.L.C. WilmerHale
New Orleans, LA Boston, MA

  

  
 
Slide 2

CONTENTS
ABOUT THIS STUDY AND THE “BUYER POWER RATIO”____________________________________
Slide 4
Terminology used in this presentation___________________________________________
Slide 7
Disclaimers_____________________________________________________________________
Slide 8
REPRESENTATIONS & WARRANTIES____________________________________________________
Slide 9
“No undisclosed liabilities” representation_____________________________________
Slide 10
“10b-5” or “full disclosure” representation_____________________________________
Slide 14
CLOSING CONDITIONS______________________________________________________________
Slide 18
“Accuracy of representations” condition – timing________________________________
Slide 19
“Accuracy of representations” condition – materiality___________________________
Slide 23
INDEMNIFICATION AND RELATED PROVISIONS__________________________________________
Slide 27
“Sandbagging”___________________________________________________________________
Slide 28
“Non-reliance” clause___________________________________________________________
Slide 32
Treatment of “consequential” damages____________________________________________
Slide 36
IP cap in excess of escrow in acquisitions of tech companies____________________
Slide 39
Buyer’s contractual obligation to mitigate losses_______________________________
Slide 42
Buyer’s indemnifiable losses reduced by tax benefits____________________________
Slide 45
APPENDIX 1: METHODOLOGY FOR MERGING ABA STUDIES_________________________________
Slide 48

  

  
 
Slide 3

ABOUT THIS STUDY AND THE “BUYER POWER RATIO”

This Study is a product of the joint efforts of the Mergers & Acquisitions Committee
of the ABA’s Business Law Section (the “M&A Committee”) and SRS Acquiom Inc.
To compile the sample set for this Study, we utilized SRS Acquioms’s database of
acquisition agreements relating to purchases of privately held U.S. companies by
publicly traded buyers. Many of the acquisition agreements in this database have not
been filed with the SEC and are not publicly accessible.
This Study is built around a newly developed metric, which we refer to as “Buyer
Power Ratio” or, simply, “BPR.” Buyer Power Ratio has two components:
1. The market capitalization (market cap) of the buyer; and
2. The purchase price paid by the buyer in the acquisition.

The Buyer Power Ratio for a particular acquisition is determined by dividing the
buyer’s market cap by the applicable purchase price, i.e.:

Buyer Market Cap

Buyer Power Ratio =
Purchase Price

  

  
 
Slide 4

ABOUT THIS STUDY AND THE “BUYER POWER RATIO”(cont’d)
This Study demonstrates that the Buyer Power Ratio for a particular transaction
generally correlates with the level of the buyer’s negotiating strength in that
transaction, as measured by the buyer’s ability to obtain buyer-favorable deal terms.
For example, a large buyer with a $100 billion market cap buying a relatively small
company for $50 million (BPR = 2,000) would ordinarily be expected to have a higher
degree of negotiating leverage than a smaller buyer with a $500 million market cap
buying a company for $250 million (BPR = 2). That is, all other things being equal, a
buyer should be able to obtain deal terms that are more buyer-favorable in a
transaction with a BPR of 2,000 than in a transaction with a BPR of 2.

Of course, BPR is not the only factor that can affect a buyer’s negotiating leverage.
Among the other factors that may come into play are: the price the buyer is willing and
able to pay; the importance of the transaction to the buyer relative to its importance to
the seller; and the presence of competing bidders for the target company. This Study
does not attempt to measure the effect of these other factors on buyers’ ability to
obtain favorable deal terms.

This Study shows, for each deal point featured, the correlation between BPR and a
buyer-favorable resolution of that deal point. Therefore, this Study, unlike other deal
points surveys, allows a prospective buyer and seller to calculate the BPR for their

  

  
 
Slide 5

ABOUT THIS STUDY AND THE “BUYER POWER RATIO”(cont’d)

proposed transaction and then focus specifically on the particular statistics relevant to
other transactions with similar BPRs. In most cases, this Study shows that the
frequency of buyer-favorable outcomes increases as BPR increases.

For comparison purposes, this Study also shows, for each deal point featured, the
relevant statistics presented in the studies prepared by the M&A Committee in 2013
and 2015, for which the sample set consists exclusively of deals with acquisition
agreements filed with the U.S. Securities and Exchange Commission (“SEC”). The
average BPR for the transactions surveyed by the M&A Committee in 2013 and 2015
is significantly lower than the average BPR for the transactions surveyed in this Study.
This is not surprising, given that transactions with high BPRs are unlikely to be
sufficiently material to the buyer to require the filing of information on the transaction
with the SEC.

For completeness of presentation, we have looked separately at the correlation

between deal point resolution and each of the two individual components of BPR –
buyer’s market cap and purchase price. The results of these separate analyses
appear in Appendices 2 and 3, which are available for download at both the ABA and
SRS Acquiom web sites.

  

  
 
Slide 6

DRAFT
TERMINOLOGY USED IN THIS PRESENTATION

ABA Data (2012, 2014) Data from the 2013 and 2015 Private Target Mergers &
Acquisitions Deal Points Studies prepared by the M&A Committee,
for transactions completed in 2012 (136 transactions) and 2014
(117 transactions), with acquisition agreements filed with the
SEC.* The data from these two studies was merged as described
in Appendix 1.
SRSA Data (2012 – 2016) Data on private target M&A transactions completed in 2012
through 2016 in which SRS Acquiom served as the shareholder
representative, where the buyer’s equity securities were, as of the
date of the acquisition agreement, publicly listed on a U.S. stock
exchange, so that the buyer’s US$ market capitalization could be
calculated (457 transactions)
Buyer Market Cap The buyer’s market capitalization (as reported by YCharts**) as of
the date of the acquisition agreement
Buyer Power Ratio Buyer Market Cap divided by aggregate purchase price (with
aggregate purchase price including amounts held back in escrow
but excluding potential earn-out payments)

* ABA Data only includes transactions with SEC-filed agreements, as analyzed by the M&A Committee studies. U.S. buyers are generally not
required to file with the SEC agreements for transactions that, in light of the buyer’s size and other factors, are not material.
** Approximately 10% of market cap values were not available in YCharts. These market cap values were determined using Wolfram Alpha or
manual SRS Acquiom calculations.

  

  
 
Slide 7

DRAFT
DISCLAIMERS

Because of SRS Acquiom’s confidentiality obligations with respect to the acquisition
agreements included in its proprietary database, the M&A Committee was not
permitted to review any of the acquisition agreements on which the Study results are
based. Those acquisition agreements were reviewed exclusively by SRS Acquiom.

The number of the transactions in the sample set varies slightly from deal point to
deal point, either because a particular deal point was not applicable to specific
transactions, or, in some situations, a clear determination of buyer- or seller-
favorability could not be made.

The acquisition agreement provisions that form the basis of this Study are drafted in
many different ways and do not always fit precisely into particular “deal point”
categories. Therefore, the Study Chairs and Advisory Group members have made
various judgment calls regarding, for example, how to categorize the nature or effect
of particular provisions. The conclusions presented in this Study should be viewed
with these caveats in mind.

Findings presented in this Study do not necessarily reflect the views of the ABA, the
M&A Committee or SRS Acquiom, or the personal views of the Study Chairs or
Advisory Group members or the views of their respective firms.

  

  
 
Slide 8

 Representations & Warranties

  

  
 
Slide 9

“No undisclosed liabilities” representation

Is the “no undisclosed liabilities” representation

drafted broadly to include all liabilities,
including contingent liabilities
(so as to favor buyers)?

How does Buyer Power Ratio

correlate with this deal point?

  

  
 
Slide 10

 “No undisclosed liabilities” representation

Sample provisions:

“no undisclosed liabilities” representation (Buyer-favorable formulation):

“Target has no liabilities of any nature (accrued, unaccrued, contingent or otherwise,
and whether or not required to be disclosed on a balance sheet), except for liabilities
reflected in the Interim Balance Sheet and current liabilities incurred in the ordinary
course of business since the date of the Interim Balance Sheet.”

“no undisclosed liabilities” representation (Seller-favorable formulation):

“Target has no liabilities of the type required to be disclosed in the liabilities column
of a balance sheet prepared in accordance with generally accepted accounting
principles (GAAP), except for...”

  

  
 
Slide 11

“No undisclosed liabilities” representation

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** Seller-Favorable = GAAP liabilities or no rep

  

  
 
Slide 12

 “No undisclosed liabilities” representation


 
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Slide 13

“10b-5” or “full disclosure” representation

Does the acquisition agreement contain a “10b-5”

or “full disclosure” representation
(so as to favor buyers)?

How does Buyer Power Ratio

correlate with this deal point?

  

  
 
Slide 14

 “10b-5” or “full disclosure” representation

Sample provisions:

“10b-5” representation (Buyer-favorable formulation): A representation to the

following effect: “No representation or warranty made by Target in this
Agreement...contains any untrue statement of material fact or omits to state a
material fact necessary to make the statements in this Agreement, in light of the
circumstances in which they were made, not misleading.”

“full disclosure” representation (Buyer-favorable formulation): A representation

to the following effect: “Target does not have knowledge of any fact that has specific
application to Target (other than general economic or industry conditions) and that
may materially adversely affect the business, financial condition or results of
operations of Target, other than facts set forth in this Agreement or the Disclosure
Schedule.”

  

  
 
Slide 15

“10b-5” or “full disclosure” representation

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** Seller-Favorable = Neither a “10b-5” nor a “full disclosure” rep is included

  

  
 
Slide 16

 “10b-5” or “full disclosure” representation


 
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** Seller-Favorable = Neither a “10b-5” nor a “full disclosure” rep is included

  

  
 
Slide 17

Closing Conditions

  

  
 
Slide 18

 “Accuracy of representations” condition –
times(s) as of which accuracy is tested

When must the sellers’/target’s reps be accurate –

at closing (seller-favorable), or both at signing and at
closing (buyer-favorable)?

How does Buyer Power Ratio

correlate with this deal point?

  

  
 
Slide 19

“Accuracy of representations” condition – timing

Sample provisions:

at closing only (Seller-favorable formulation): “The representations and warranties

made by Sellers/Target in this Agreement shall be accurate [reference to applicable
materiality standard] as of the Closing Date as if made on the Closing Date.”

at signing and closing (Buyer-favorable formulation): “The representations and

warranties made by Sellers/Target in this Agreement shall have been accurate
[reference to applicable materiality standard] as of the date of this Agreement and
shall be accurate [reference to applicable materiality standard] as of the Closing
Date as if made on the Closing Date.”

  

  
 
Slide 20

 “Accuracy of representations” condition – timing
ABA Data (2012, 2014) SRSA Data (2012 - 2016)

 

 


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Slide 21

“Accuracy of representations” condition – timing


 
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Slide 22

 “Accuracy of representations” condition –
materiality standard

What materiality standard is applied in testing the

accuracy of the sellers’/target’s general
(non-fundamental) representations?

How does Buyer Power Ratio

correlate with this deal point?

  

  
 
Slide 23

“Accuracy of representations” condition – materiality

Sample provisions:

“in all respects” or “in all material respects” standard (Buyer-favorable

formulation): “The general (i.e., non-fundamental) representations and warranties
made by Sellers/Target in this Agreement shall be accurate in all respects [or in all
material respects] [reference to timing] ...”

“MAE” standard (Seller-favorable formulation): “The general (i.e., non-

fundamental) representations and warranties made by Sellers/Target in this
Agreement shall be accurate in all respects [reference to timing], disregarding
inaccuracies that considered collectively do not have a Material Adverse Effect...”

  

  
 
Slide 24

 “Accuracy of representations” condition – materiality
ABA Data (2012, 2014) SRSA Data (2012 - 2016)

 

 


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** Seller-Favorable = “MAE”

  

  
 
Slide 25

“Accuracy of representations” condition – materiality


 
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** Seller-Favorable = “MAE”

  

  
 
Slide 26

 Indemnification and
Related Provisions

  

  
 
Slide 27

“Sandbagging”

Does the agreement contain a pro-sandbagging provision*

(so as to favor buyers)?

How does Buyer Power Ratio

correlate with this deal point?

* Also sometimes referred to as a “benefit of the bargain” provision. For the purposes of this Study, a provision that merely
states, for example, that Sellers’/Target’s representations and warranties “survive Buyer’s investigation” is not classified as a
“pro-sandbagging” provision unless it also includes an express statement that the buyer’s knowledge will have no impact on
the buyer’s post-closing indemnification rights.

  

  
 
Slide 28

 “Sandbagging”

Sample provisions:

pro-sandbagging provision (Buyer-favorable): “The right to any indemnification

or other remedy based upon any representation, warranty, covenant, or obligation
will not be affected by ... any investigation conducted or any knowledge acquired at
any time, whether before or after the execution and delivery of this Agreement or the
Closing Date, with respect to the accuracy or inaccuracy of, or compliance with,
such representation, warranty, covenant, or obligation.”

anti-sandbagging provision (Seller-favorable): “No party shall be liable under this

Section for any Losses resulting from or relating to any inaccuracy in any
representation or warranty in this Agreement if the party seeking indemnification for
such Losses had knowledge of such inaccuracy before the Closing.”

  

  
 
Slide 29

“Sandbagging”
ABA Data (2012, 2014) SRSA Data (2012 - 2016)

 

 


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* Buyer-Favorable = “pro-sandbagging” (“benefit of the bargain”) provision included

** Seller-Favorable = “anti-sandbagging” provision included, or agreement silent
(Note that in some jurisdictions, an agreement that is silent on “sandbagging” could be considered Buyer-Favorable rather than Seller-Favorable.)

  

  
 
Slide 30

 “Sandbagging”


 
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* Buyer-Favorable = “pro-sandbagging” (“benefit of the bargain”) provision included

** Seller-Favorable = “anti-sandbagging” provision included, or agreement silent
(Note that in some jurisdictions, an agreement that is silent on “sandbagging” could be considered Buyer-Favorable rather than Seller-Favorable.)

  

  
 
Slide 31

“Non-reliance” clause

Does the acquisition agreement contain an express

“non-reliance” clause* (so as to favor sellers)**?

How does Buyer Power Ratio

correlate with this deal point?
* Does not include deals with a “no other representations” provision in the absence of an express disclaimer of reliance.
** Some of the agreements that include a non-reliance clause, and are therefore categorized as Seller-Favorable for
purposes of this deal point, may also include a broad “fraud exception,” e.g.: “Nothing in this Agreement shall operate to limit
Buyer’s remedies in the event of fraud (whether or not such fraud relates to the express representations and warranties
contained in this Agreement).” The inclusion of such a fraud exception in an agreement may make the agreement Buyer-
Favorable on this deal point, notwithstanding the presence of a non-reliance clause. However, because each agreement in
the Study sample was reviewed for the purpose of determining whether a non-reliance clause is included, but not for the
additional purpose of determining whether a fraud exception is included, any agreement in the Study sample containing both
a non-reliance clause and a fraud exception is categorized as Seller-Favorable for purposes of this Study (even though it may
be more appropriate to categorize such an agreement as Buyer-Favorable).

  

  
 
Slide 32

 “Non-reliance” clause

Sample provision:

Non-reliance clause (Seller-favorable): “Buyer is not relying and has not relied on
any representations or warranties whatsoever regarding the subject matter of this
Agreement, express or implied, except for the express representations and
warranties of Sellers/Target contained in this Agreement.”

  

  
 
Slide 33

“Non-reliance” clause
ABA Data (2012, 2014) SRSA Data (2012 - 2016)

 

 


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* Buyer-Favorable = “non-reliance” clause not included

** Seller-Favorable = “non-reliance” clause included

  

  
 
Slide 34

 “Non-reliance” clause


 
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* Buyer-Favorable = “non-reliance” clause not included

** Seller-Favorable = “non-reliance” clause included

  

  
 
Slide 35

Treatment of “consequential” damages –

for indemnification purposes

Are “consequential” damages expressly excluded from

indemnifiable damages
(so as to favor sellers)?

How does Buyer Power Ratio

correlate with this deal point?

  

  
 
Slide 36

 “Consequential” damages exclusion
ABA Data (2012, 2014) SRSA Data (2012 - 2016)

 

 


#(+

 
 
 

,


 
 

 

 


$ +

#'+

 

 

 

$!+
 


 
 
 
&(+

-
!
 

 


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* Buyer-Favorable = “consequential” damages not expressly excluded

** Seller-Favorable = “consequential” damages expressly excluded

  

  
 
Slide 37

“Consequential” damages exclusion


 
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* Buyer-Favorable = “consequential” damages not expressly excluded

** Seller-Favorable = “consequential” damages expressly excluded

  

  
 
Slide 38

 IP cap in excess of escrow –
in acquisitions of tech companies

In acquisitions of technology companies, does the

cap on the sellers’ liability for inaccuracies in the IP
representations exceed the escrow amount
(so as to favor buyers)?*

How does Buyer Power Ratio

correlate with this deal point?

* Note: Because the ABA Data does not report deals by industry, no relevant comparison can be made with the SRSA Data
which, for purposes of this deal point, has been limited to only those deals involving target companies in the technology
sector. Therefore, for this deal point, there is no pie chart showing the corresponding ABA Data.

  

  
 
Slide 39

IP cap in excess of escrow in acquisitions of tech companies

SRSA Data (2012 - 2016)

 

 


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% +

 
 
 

-
!

 

 


"(+

* Buyer-Favorable = IP cap exceeds escrow amount

** Seller-Favorable = no separate IP cap / IP cap equal to escrow amount

  

  
 
Slide 40

IP cap in excess of escrow in acquisitions of tech companies


 
! !

! %

 
 

 

 
 

,

 

 


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* Buyer-Favorable = IP cap exceeds escrow amount

** Seller-Favorable = no separate IP cap / IP cap equal to escrow amount

  

  
 
Slide 41

Buyer’s contractual obligation to mitigate losses

Does the buyer have an express contractual obligation to

mitigate indemnifiable losses
(so as to favor sellers)?

How does Buyer Power Ratio

correlate with this deal point?

  

  
 
Slide 42

 Buyer’s contractual obligation to mitigate losses
ABA Data (2012, 2014) SRSA Data (2012 - 2016)

 

 


#(+

 
 
 

,


 
 

 


 

$ +

$'+

 

 

 

#!+
 


&%+

 
 
 

-
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* Buyer-Favorable = agreement is silent or disclaims obligation to mitigate losses

** Seller-Favorable = Buyer has express obligation to mitigate losses

  

  
 
Slide 43

Buyer’s contractual obligation to mitigate losses


 
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* Buyer-Favorable = agreement is silent or disclaims obligation to mitigate losses

** Seller-Favorable = Buyer has express obligation to mitigate losses

  

  
 
Slide 44

 Buyer’s indemnifiable losses reduced by tax benefits

Are the buyer’s indemnifiable losses reduced by the

amount of any tax benefits resulting from those losses
(so as to favor sellers)?

How does Buyer Power Ratio

correlate with this deal point?

  

  
 
Slide 45

Buyer’s indemnifiable losses reduced by tax benefits

ABA Data (2012, 2014) SRSA Data (2012 - 2016)

 

 


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,


 

 

 


 

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$"+

 

 

 

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* Buyer-Favorable = agreement silent

** Seller-Favorable = Buyer’s indemnifiable losses reduced by tax benefits

  

  
 
Slide 46

 Buyer’s indemnifiable losses reduced by tax benefits


 
! !

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* Buyer-Favorable = agreement silent

** Seller-Favorable = Buyer’s indemnifiable losses reduced by tax benefits

  

  
 
Slide 47

Appendix 1

Methodology
for Merging ABA Study Data
for 2012 and 2014

  

  
 
Slide 48


The number of transactions in each category for each ABA Study was
calculated by multiplying the percentage stated in the ABA Study by
the total sample size for that study year.

To create composite percentages for ABA Study Data (2012, 2014),

the number of transactions in each category (Buyer- or Seller-
Favorable) for 2012 and 2014 were added; the resulting sum was
divided by the sum of the numbers of transactions surveyed in the two
ABA studies.

In cases where a specific subset of transactions was analyzed, the

above calculations were carried out on the appropriate subsets.

  

  
 
Slide 49

TAB 17
Caveats

365
Caveats
• These materials are intended merely to provide a general introductory
overview of certain matters relating to M&A transactions. These materials
are not intended to provide a complete analysis of the matters covered, but
rather are intended to be used and referred to in conjunction with more
comprehensive oral presentations regarding those matters. Accordingly,
there are potentially important exceptions and qualifications that are not
reflected in these materials.
• The sample agreements and provisions included in these materials are
intended only to serve as examples of agreements and hypothetical
provisions. All agreements and provisions must be carefully tailored to
reflect the specific terms of the transactions to which they relate; accordingly,
it may be necessary to make substantial modifications to these sample
agreements and provisions before they can be used in the context of any
proposed transactions.
• These materials are not intended to provide legal advice or to establish an
attorney-client relationship.
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