Underwriting Agreement – Pixelworks Inc.

3,650,000 Shares

PIXELWORKS, INC.

Common Stock

UNDERWRITING AGREEMENT

May 6, 2011

Roth Capital Partners, LLC

24 Corporate Plaza

Newport Beach, CA 92660

Ladies and Gentlemen:

Pixelworks, Inc., an Oregon corporation (the “Company“), proposes,
subject to the terms and conditions stated herein, to issue and sell to Roth
Capital Partners, LLC (the “Underwriter“) an aggregate of 3,650,000
authorized but unissued shares (the “Firm Shares“) of Common Stock, par
value $0.001 per share (the “Common Stock“), of the Company. The Company
also proposes, subject to the terms and conditions stated herein, to issue and
sell to the Underwriter an aggregate of up to 547,500 additional shares of
Common Stock (the “Additional Shares“), if and to the extent that the
Underwriter shall have determined to exercise the right to purchase such shares
granted to the Underwriter in Section 4(b) hereof. The Firm Shares and
Additional Shares are collectively referred to as the “Shares.”

The Company and the Underwriter hereby agree as follows:

1. Registration Statement and Prospectus. The
Company has prepared and filed with the Securities and Exchange Commission (the
“Commission“) a registration statement on Form S-3 (File No. 333-170768)
under the Securities Act of 1933, as amended (the “Securities Act“) and
the rules and regulations of the Commission thereunder (the “Rules and
Regulations“). Such registration statement has been declared effective by
the Commission. Such registration statement, including any amendments thereto
(including post effective amendments thereto), the exhibits and any schedules
thereto, the documents incorporated by reference therein pursuant to Form S-3
under the Securities Act and the Rules and Regulations, and the documents and
information otherwise deemed to be a part thereof or included therein by Rule
430B under the Securities Act or otherwise pursuant to the Rules and
Regulations, is herein called the “Registration Statement.” If the
Company has filed or files an abbreviated registration statement pursuant to
Rule 462(b) under the Securities Act (the “Rule 462 Registration
Statement“), then any reference herein to the term Registration Statement
shall include such Rule 462 Registration Statement. The prospectus included in
the Registration Statement at the time it was declared effective by the
Commission is herein called the “Base Prospectus.”

The Company has filed or proposes to file with the Commission pursuant to
Rule 424 under the Securities Act a preliminary prospectus supplement relating
to the Shares (the “Preliminary Prospectus Supplement“) and a final
prospectus supplement relating to the Shares (the “Final Prospectus
Supplement“). The Final Prospectus Supplement together with the Base
Prospectus is hereinafter called the “Final Prospectus.” The Final
Prospectus together with the Preliminary Prospectus Supplement is hereinafter
called the “Prospectus.” Any reference herein to the Base Prospectus, the
Preliminary Prospectus Supplement, the Final Prospectus Supplement, the Final
Prospectus or a Prospectus shall be deemed to include the documents incorporated
by reference therein pursuant to the Rules and Regulations.

For purposes of this Agreement, all references to the Registration Statement,
the Base Prospectus, the Preliminary Prospectus Supplement, the Final Prospectus
Supplement, the Final Prospectus, the Prospectus or any amendment or supplement
to any of the foregoing shall be deemed to include the copy filed with the
Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
System (“EDGAR“). All references in this Agreement to financial
statements and schedules and other information which is “described,”
“contained,” “included” or “stated” in the Registration Statement, the Base
Prospectus, the Preliminary Prospectus Supplement, the Final Prospectus
Supplement, the Final Prospectus or the Prospectus (or other references of like
import) shall be deemed to mean and include all such financial statements, pro
forma financial information and schedules and other information which is
incorporated by reference in or otherwise deemed by the Rules and Regulations to
be a part of or included in the Registration Statement, the Base Prospectus, the
Preliminary Prospectus Supplement, the Final Prospectus Supplement, the Final
Prospectus or the Prospectus, as the case may be; and all references in this
Agreement to amendments or supplements to the Registration Statement, the Base
Prospectus, the Preliminary Prospectus Supplement, the Final Prospectus
Supplement, the Final Prospectus or the Prospectus shall be deemed to mean and
include the subsequent filing of any document under the Securities Exchange Act
of 1934, as amended (the “Exchange Act“), that is deemed to be
incorporated therein by reference therein or otherwise deemed by the Rules and
Regulations to be a part thereof.

2. Representations and Warranties of the Company Regarding the
Offering.

(a) The Company represents and warrants to, and agrees with, the Underwriter,
as of the date hereof and as of the Closing Date (as defined in Section 4(c)
below), except as otherwise indicated, as follows:

(i) At the date hereof and at the Closing Date, the Registration Statement
and any post-effective amendment thereto conforms or will conform in all
material respects with the requirements of the Securities Act and the Rules and
Regulations and did not or will not, as the case may be, contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading. The
Time of Sale Disclosure Package (as defined in Section 2(a)(iii) below) as of
the date hereof, and the Final Prospectus, as amended or supplemented, at the
time of filing pursuant to Rule 424(b) under the Securities Act and at the
Closing Date, did not and will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which
they were

made, not misleading. The representations and warranties set forth in the two
immediately preceding sentences shall not apply to statements in or omissions
from the Registration Statement, the Base Prospectus, the Preliminary Prospectus
Supplement, the Final Prospectus Supplement, the Final Prospectus or the
Prospectus in reliance upon, and in conformity with, written information
furnished to the Company by the Underwriter specifically for use in the
preparation thereof. The Registration Statement contains all exhibits and
schedules required to be filed by the Securities Act or the Rules and
Regulations. No stop order preventing or suspending the effectiveness or use of
the Registration Statement or any Prospectus is in effect and no proceedings for
such purpose have been instituted or are pending, or, to the knowledge of the
Company, are contemplated or threatened by the Commission.

(ii) The documents incorporated by reference in the Registration Statement,
the Time of Sale Disclosure Package and any Prospectus, when they became
effective or were filed with the Commission, as the case may be, conformed in
all material respects to the requirements of the Securities Act or the Exchange
Act, as applicable, were filed on a timely basis with the Commission and none of
such documents, when they were filed (or, if amendments to such documents were
filed, when such amendments were filed), contained an untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. Any further documents so filed and incorporated by
reference in the Registration Statement, the Time of Sale Disclosure Package or
the Final Prospectus, when such documents are filed with the Commission, will
conform in all material respects to the requirements of the Exchange Act, and
will not contain an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.

(iii) (A) The Company has provided a copy to the Underwriter of each Issuer
Free Writing Prospectus (as defined below) used in the sale of Shares. The
Company has filed all Issuer Free Writing Prospectuses required to be so filed
with the Commission, and no stop order preventing or suspending the
effectiveness or use of any Issuer Free Writing Prospectus is in effect and no
proceedings for such purpose have been instituted or are pending, or, to the
knowledge of the Company, are contemplated or threatened by the Commission. No
Issuer Free Writing Prospectus, as of its issue date and at all subsequent times
through the completion of the public offer and sale of the Shares, has, does or
will include information that conflicted, conflicts or will conflict with the
information contained in the Registration Statement or the Final Prospectus. The
representations and warranties set forth in the immediately preceding sentence
shall not apply to statements in or omissions from any Issuer Free Writing
Prospectus in reliance upon, and in conformity with, written information
furnished to the Company by the Underwriter specifically for use in the
preparation thereof. As used in this paragraph and elsewhere in this Agreement:

(1) “Time of Sale Disclosure Package” means the Base Prospectus, the
Preliminary Prospectus Supplement, and the description of the transaction
provided by the Underwriter included on Schedule I.

(2) “Issuer Free Writing Prospectus” means any “issuer free writing
prospectus,” as defined in Rule 433 under the Securities Act, relating to the
Shares that (A) is required to be filed with the Commission by the Company, or
(B) is exempt from filing pursuant to Rule 433(d)(5)(i) or (d)(8) under the
Securities Act, in each case in the form filed or required to be filed with the
Commission or, if not required to be filed, in the form retained in the
Company153s records pursuant to Rule 433(g) under the Securities Act. For the
avoidance of doubt, the term “Issuer Free Writing Prospectus” shall not include
any “free writing prospectus” (as defined in Rule 405 under the Securities Act)
that was prepared by the Underwriter or provided to any person by the
Underwriter without the knowledge and consent of the Company.

(B) At the time of filing of the Registration Statement and at the date
hereof, the Company was not and is not an “ineligible issuer,” as defined in
Rule 405 under the Securities Act or an “excluded issuer” as defined in Rule 164
under the Securities Act.

(C) Each Issuer Free Writing Prospectus satisfied, as of its issue date, all
other conditions as may be applicable to its use as set forth in Rules 164 and
433 under the Securities Act, including any legend, record-keeping or other
requirements.

(iv) The financial statements of the Company, together with the related
notes, included or incorporated by reference in the Registration Statement, the
Time of Sale Disclosure Package and the Final Prospectus comply in all material
respects with the applicable requirements of the Securities Act and the Exchange
Act and fairly present the financial condition of the Company as of the dates
indicated and the results of operations and changes in cash flows for the
periods therein specified in conformity with generally accepted accounting
principles consistently applied throughout the periods involved; and the
supporting schedules included in or incorporated by reference into the
Registration Statement present fairly the information required to be stated
therein. No other financial statements, pro forma financial information or
schedules are required under the Securities Act to be included or incorporated
by reference in the Registration Statement, the Time of Sale Disclosure Package
or the Final Prospectus. To the Company153s knowledge, KPMG LLP, which has
expressed its opinion with respect to the audited financial statements and
schedules filed as a part of the Registration Statement and included in or
incorporated by reference into the Registration Statement, the Time of Sale
Disclosure Package and the Final Prospectus, is an independent public accounting
firm with respect to the Company within the meaning of the Securities Act and
the Rules and Regulations.

(v) The Company had a reasonable basis for, and made in good faith, each
“forward-looking statement” (within the meaning of Section 27A of the Act or
Section 21E of the Exchange Act) contained or incorporated by reference in the
Registration Statement, the Time of Sale Disclosure Package or the Final
Prospectus.

(vi) Any statistical or market-related data included or incorporated by
reference in the Registration Statement, the Time of Sale Disclosure Package or
the Final Prospectus are based on or derived from sources that the Company
reasonably believes to be reliable and accurate in all material respects, and
the Company has obtained the written consent to the use of such data from such
sources, to the extent required.

(vii) The Common Stock is registered pursuant to Section 12(b) of the
Exchange Act and is listed or approved for listing on The NASDAQ Global Market
(“NASDAQ“). There is no action pending by the Company or, to the
Company153s knowledge, NASDAQ to delist the Common Stock from NASDAQ, nor has the
Company received any notification that NASDAQ is contemplating terminating such
listing. As of the Closing Date, the Shares will have been duly authorized for
listing on NASDAQ, subject to official notice of issuance.

(viii) The Company has not taken, directly or indirectly, any action that is
designed to or that has constituted or that would reasonably be expected to
cause or result in the unlawful stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the Shares.

(ix) [Intentionally omitted.]

(x) The Company is not required to, and, after giving effect to the offering
and sale of the Shares, will not be required to, register as an “investment
company,” as such term is defined in the Investment Company Act of 1940, as
amended.

(xi) The Company was at the time of filing the Registration Statement, and at
the date hereof, remains eligible to use Form S-3 under the Securities Act.

(b) Any certificate that is, and is required by the terms of this Agreement
to be, signed by any officer of the Company and delivered to the Underwriter
shall be deemed a representation and warranty by the Company to the Underwriter
as to the matters covered thereby.

3. Representations and Warranties Regarding the
Company.

(a) The Company represents and warrants to and agrees with, the Underwriter,
except as set forth in the Registration Statement, the Time of Sale Disclosure
Package and the Prospectus, as follows:

(i) Each of the Company and its subsidiaries has been duly organized and is
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation. Each of the Company and its subsidiaries has the
corporate power and authority to own its properties and conduct its business as
currently being carried on and as described in the Registration Statement, the
Time of Sale Disclosure Package and the Prospectus, and is duly qualified to do
business as a foreign corporation in good standing in each jurisdiction in which
it owns or leases real property or in which the conduct of its business makes
such qualification necessary, except in each case, where the failure to be so
qualified would not have or be reasonably likely to result in a material adverse
effect upon the business, financial condition or results of operations of the
Company and its subsidiaries, taken as a whole, or in the Company153s ability to
perform its obligations under this Agreement (“Material Adverse
Effect“).

(ii) The Company has the corporate power and authority to enter into this
Agreement and to issue and sell the Shares as contemplated by this Agreement.
This Agreement has been duly authorized, executed and delivered by the Company,
and constitutes a valid, legal and binding obligation of the Company,
enforceable in accordance with its terms, except as rights to indemnity and
contribution hereunder may be limited by federal or state law and except as such
enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting the rights of creditors generally and subject to general
principles of equity.

(iii) The execution, delivery and performance of this Agreement and the
consummation of the transactions herein contemplated will not (A) result in a
breach or violation of any of the terms and provisions of, or constitute a
default under, any law, rule or regulation to which the Company or any
subsidiary is subject, or by which any property or asset of the Company or any
subsidiary is bound or affected, (B) conflict with, result in any violation or
breach of, or constitute a default (or an event that with notice or lapse of
time or both would become a default) under, or give to others any right of
termination, amendment, acceleration or cancellation (with or without notice,
lapse of time or both) of, any agreement, lease, credit facility, debt, note,
bond, mortgage, indenture or other instrument (the “Contracts“) or
obligation or other understanding to which the Company or any subsidiary is a
party of by which any property or asset of the Company or any subsidiary is
bound or affected, or (C) result in a breach or violation of any of the terms
and provisions of, or constitute a default under, the Company153s articles of
incorporation or by-laws, each as amended, except in the case of clauses (A) and
(B), to the extent not reasonably likely to result in a Material Adverse Effect.

(iv) Neither the Company nor any of its subsidiaries is in violation, breach
or default under its articles of incorporation, by-laws or other equivalent
organizational or governing documents, each as amended, except, in the case of a
subsidiary of the Company, to the extent the violation, breach or default is not
reasonably likely to result in a Material Adverse Effect.

(v) All consents, approvals, orders, authorizations and filings required on
the part of the Company and its subsidiaries in connection with the execution,
delivery or performance of this Agreement have been obtained or made, other than
(A) any such consents, approvals, orders, authorizations and filings to be
obtained or made after the date of this Agreement under the Securities Act, the
Exchange Act, the Rules and Regulations and applicable state and foreign
securities laws in connection with the offer and sale of the Shares, (B) the
listing of the Shares on NASDAQ, and (C) such consents, approvals, orders and
authorizations the failure of which to make or obtain is not reasonably likely
to result in a Material Adverse Effect.

(vi) All of the issued and outstanding shares of capital stock of the Company
are duly authorized and validly issued, fully paid and nonassessable, and have
been issued in material compliance with all applicable securities laws, and
conform in all material respects to the description thereof in the Registration
Statement, the Time of Sale Disclosure Package and the Prospectus. Except for
the issuances of options or restricted stock in the ordinary course of business,
since the respective dates as of which information is provided in the
Registration Statement, the Time of Sale Disclosure Package or the Prospectus,
the Company has not entered into or granted any convertible or exchangeable
securities, options, warrants, agreements, contracts or other rights in
existence to purchase or acquire from the Company any shares of the capital
stock of the Company. The Shares, when issued and duly paid for as provided
herein, will be duly authorized and validly issued, fully paid and
nonassessable, and will be free of preemptive, registration or similar rights.

(vii) Each of the Company and its subsidiaries has (i) filed all returns (as
hereinafter defined) required to be filed with taxing authorities prior to the
date hereof or has duly obtained extensions of time for the filing thereof, and
(ii) paid all taxes (as hereinafter defined) shown as due and payable on such
returns that were filed, in each of cases (i) and (ii), except (A) with respect
to any taxes that are being contested in good faith and (B) to the extent not
reasonably likely to result in a Material Adverse Effect. Except as disclosed to
the Underwriter or its legal counsel, (i) no material issues have been raised
(and are currently pending) by any taxing authority in connection with any of
the returns or taxes asserted as due from the Company or its subsidiaries, and
(ii) no waivers of statutes of limitation with respect to the returns or
collection of taxes have been given by or requested from the Company or its
subsidiaries. The term “taxes” mean all federal, state, local, foreign,
and other net income, gross income, gross receipts, sales, use, ad valorem,
transfer, franchise, profits, license, lease, service, service use, withholding,
payroll, employment, excise, severance, stamp, occupation, premium, property,
windfall profits, customs, duties or other taxes, fees, assessments, or charges
of any kind whatever, together with any interest and any penalties, additions to
tax, or additional amounts with respect thereto. The term “returns” means
all returns, declarations, reports, statements, and other documents required to
be filed in respect to taxes.

(viii) Since the respective dates as of which information is given in the
Registration Statement, the Time of Sale Disclosure Package or the Prospectus,
(a) neither the Company nor any of its subsidiaries has incurred any material
liabilities or obligations, direct or contingent, or entered into any material
transactions other than in the ordinary course of business, (b) the Company has
not declared or paid any dividends or made any distribution of any kind with
respect to its capital stock; (c) there has not been any material change in the
number of outstanding shares of the capital stock of the Company or any of its
subsidiaries (other than a change in the number of outstanding shares of Common
Stock due to the issuance of shares upon the exercise of outstanding options or
warrants or the issuance, repurchase or forfeiture of restricted stock awards or
restricted stock units under the Company153s existing stock awards plans, or any
new grants thereof in the ordinary course of business), (d) there has not been
any material change in the outstanding principal amount of the Company153s
long-term or short-term debt (except for any changes that have resulted or may
result from any repurchase made in connection with the Company153s offer to
repurchase (the “Tender Offer“) its 1.75% Convertible Subordinated
Debentures due 2024 (the “Convertible Debentures“), which offer was
disclosed by the Company on its Form TO, filed with the Commission on April 13,
2011), and (e) there has not been any Material Adverse Effect.

(ix) There is not pending or, to the knowledge of the Company, threatened,
any action, suit or proceeding to which the Company or any of its subsidiaries
is a party or of which any property or assets of the Company is the subject
before or by any court or governmental agency, authority or body, or any
arbitrator or mediator, in each case, which is reasonably likely to result in a
Material Adverse Effect.

(x) The Company and each of its subsidiaries holds, and is in compliance
with, all franchises, grants, authorizations, licenses, permits, easements,
consents, certificates and orders (“Permits“) of any governmental or
self-regulatory agency, authority or body required for the conduct of its
business, and all such Permits are in full force and effect, in each case except
where the failure to hold, or comply with, any of them is not reasonably likely
to result in a Material Adverse Effect.

(xi) The Company and its subsidiaries have good and marketable title to all
property (whether real or personal) described in the Registration Statement, the
Time of Sale Disclosure Package and the Prospectus as being owned by them that
are material to the business of the Company, in each case free and clear of all
liens, claims, security interests, other encumbrances or defects, except those
that are not reasonably likely to result in a Material Adverse Effect. The
property held under lease by the Company and its subsidiaries is held by them
under valid, subsisting and enforceable leases with only such exceptions with
respect to any particular lease as do not interfere in any material respect with
the conduct of the business of the Company and its subsidiaries.

(xii) The Company and each of its subsidiaries owns or possesses or has valid
right to use all patents, patent applications, trademarks, service marks, trade
names, trademark registrations, service mark registrations, copyrights,
licenses, inventions, trade secrets and similar rights (“Intellectual
Property“) that are material to the business of the Company and its
subsidiaries as currently carried on and as described in the Registration
Statement, the Time of Sale Disclosure Package and the Prospectus. To the
knowledge of the Company, no action or use by the Company or any of its
subsidiaries will involve or give rise to any infringement of, or license or
similar fees for, any Intellectual Property of others, except where such action,
use, license or fee is not reasonably likely to result in a Material Adverse
Effect. Neither the Company nor any of its subsidiaries has received any notice
alleging any such infringement or fee.

(xiii) The Company and each of its subsidiaries has complied with, is not in
violation of, and has not received any notice of violation relating to any law,
rule or regulation relating to the conduct of its business, or the ownership or
operation of its property and assets, including, without limitation, (A) the
Currency and Foreign Transactions Reporting Act of 1970, as amended, or any
money laundering laws, rules or regulations, (B) any laws, rules or regulations
related to health, safety or the environment, including those relating to the
regulation of hazardous substances, (C) the Sarbanes-Oxley Act and the rules and
regulations of the Commission thereunder, (D) the Foreign Corrupt Practices Act
of 1977 and the rules and regulations thereunder, and (E) the Employment
Retirement Income Security Act of 1974 and the rules and regulations thereunder,
in each case except where the failure to be in compliance is not reasonably
likely to result in a Material Adverse Effect.

(xiv) Neither the Company nor any of its subsidiaries nor, to the knowledge
of the Company, any director, officer, employee, representative, agent or
affiliate of the Company or any of its subsidiaries is currently subject to any
U.S. sanctions administered by the Office of Foreign Assets Control of the U.S.
Treasury Department (“OFAC“); and the Company will not knowingly directly
or indirectly use the proceeds of the offering of the Shares contemplated
hereby, or lend, contribute or otherwise make available such proceeds to any
person or entity, for the purpose of financing the activities of any person
currently subject to any U.S. sanctions administered by OFAC.

(xv) The Company carries, or is covered by, insurance in such amounts and
covering such risks as the Company believes is reasonable for the conduct of its
business and the value of its properties.

(xvi) No labor dispute with the employees of the Company or any of its
subsidiaries exists or, to the knowledge of the Company, is imminent, except for
any such dispute that is not reasonably likely to result in a Material Adverse
Effect.

(xvii) Neither the Company nor, to its knowledge, any other party is in
violation, breach or default of any Contract that is reasonably likely to result
in a Material Adverse Effect.

(xviii) No supplier, customer, distributor or sales agent of the Company has
notified the Company that it intends to discontinue or decrease the rate of
business done with the Company, except where such decrease is not reasonably
likely to result in a Material Adverse Effect.

(xix) Except for this Agreement and the engagement letter, dated March 28,
2011, neither the Company nor any of its subsidiaries is party to any
arrangements or understandings for services in the nature of a finder153s,
consulting, underwriting or origination fee for the offer and sale of the Shares
hereunder, and neither the Company nor any of its subsidiaries has paid any such
fee with respect to the introduction of the Company to the Underwriter or for
the offer and sale of the Shares hereunder.

(xx) [Intentionally omitted.]

(xxi) To the knowledge of the Company, based on the Company153s review of
Schedules 13D and 13G filed with the Commission with respect to the outstanding
Common Stock of the Company, there are no beneficial owners of 5% or more of the
Company153s Common Stock, except for Renaissance Technologies LLC; provided,
however, that the Company hereby informs the Underwriter that on February 14,
2011 Shannon River Fund Management Co., LLC filed with the Commission a Form
13-F with respect to 844,383 shares of Common Stock. The Company will advise the
Underwriter and its counsel if it becomes aware, prior to the Closing Date, that
any beneficial owner of 5% or more of the Company153s Common Stock (other than
Renaissance Technologies LLC) is or becomes a member of FINRA or an affiliate or
associated person of a FINRA member.

(xxii) The Company has not issued any unregistered equity securities to any
person during the 180-day period immediately preceding the date that the Company
filed the Registration Statement with the Commission.

(xxiii) The Company does not have any current intention to direct any
proceeds of the offering and sale of the Shares to a member of FINRA, except as
provided herein.

(xxiv) Other than the Underwriter, the Company has not appointed or granted
any right to any person to act as an underwriter or financial advisor to the
Company with respect to the offer and sale of the Shares.

4. Purchase, Sale and Delivery of Shares.

(a) On the basis of the representations, warranties and agreements herein
contained, but subject to the terms and conditions herein set forth, the Company
agrees to issue and sell the Firm Shares to the Underwriter, and the Underwriter
agrees to purchase the Firm Shares. The purchase price to be paid by the
Underwriter to the Company for the Firm Shares shall be $2.1112 per share (the
“Per Share Price“).

(b) On the basis of the representations, warranties and agreements herein
contained, but subject to the terms and conditions herein set forth, the Company
hereby grants to the Underwriter an option to purchase some or all of the
Additional Shares, and the Underwriter shall have the right to purchase all or
any portion of the Additional Shares at the price per share equal to the Per
Share Price, as may be necessary to cover over-allotments made in connection
with the transactions contemplated hereby. This option may be exercised by the
Underwriter at any time (but not more than once) on or before the thirtieth
(30th) day following the date hereof, upon one (1) day written notice to the
Company (the “Option Notice“). The Option Notice shall set forth the
aggregate number of Additional Shares as to which the option is being exercised,
and the date and time when the Additional Shares are to be delivered (such date
and time being herein referred to as the “Option Closing Date“);
provided, however, that, unless the Company and the
Underwriter otherwise agree, the Option Closing Date shall not be earlier than
the Closing Date (as defined below) with respect to the Firm Shares, nor earlier
than the third business day after the date on which the option shall have been
exercised, nor later than the fifth business day after the date on which the
option shall have been exercised.

Payment of the purchase price for and delivery of the Additional Shares shall
be made on the Option Closing Date in the same manner and at the same office as
the payment for the Firm Shares as set forth in subparagraph (c) below.

(c) The Firm Shares will be delivered by the Company to the Underwriter
against payment of the purchase price therefor by wire transfer of immediately
available funds payable to the order of the Company, at 7:00 a.m. PDT on
Wednesday, May 11, 2011, or at such other time and date as the Underwriter and
the Company may agree in writing, or, in the case of

the Additional Shares, at such date and time set forth in the Option Notice.
The time and date of delivery of the Firm Shares or the Additional Shares, as
applicable, is referred to herein as the “Closing Date.” Delivery of the
Firm Shares and Additional Shares shall be made in book-entry form through the
facilities of The Depository Trust Company to the account of the Underwriter
designated by the Underwriter.

5. Covenants and Other Agreements.

(a) The Company covenants and agrees with the Underwriter as follows:

(i) During the period beginning on the date hereof and ending on the later of
the Closing Date or such date, as reasonably determined by the Underwriter, the
Prospectus is no longer required by law to be delivered in connection with sales
by an underwriter or dealer (the “Prospectus Delivery Period“), prior to
amending or supplementing the Registration Statement, the Time of Sale
Disclosure Package or the Prospectus, the Company shall furnish to the
Underwriter for review and comment a copy of each such proposed amendment or
supplement, and the Company shall not file any such proposed amendment or
supplement to which the Underwriter reasonably objects; provided that no report
or other document reasonably determined by the Company or its counsel to be
required to be filed or furnished by the Company under the Exchange Act after
the date of this Agreement shall be considered an amendment or supplement to the
Registration Statement, Time of Sale Disclosure Package or the Prospectus for
purposes of this subsection (i).

(ii) From the date of this Agreement until the end of the Prospectus Delivery
Period, the Company shall promptly advise the Underwriter in writing (A) of the
receipt of any comments of, or requests for additional or supplemental
information from, the Commission, (B) of the time and date of any filing of any
post-effective amendment to the Registration Statement or any amendment or
supplement to the Time of Sale Disclosure Package, the Prospectus or any Issuer
Free Writing Prospectus, (C) of the time and date that any post-effective
amendment to the Registration Statement becomes effective and (D) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending its use or the
use of the Time of Sale Disclosure Package, the Prospectus or any Issuer Free
Writing Prospectus, or of any proceedings to remove, suspend or terminate from
listing or quotation the Common Stock from any securities exchange upon which it
is listed for trading or included or designated for quotation, or of the
threatening or initiation of any proceedings for any of such purposes. If the
Commission shall enter any such stop order at any time during the Prospectus
Delivery Period, the Company will use its reasonable efforts to obtain the
lifting of such order at the earliest possible moment. Additionally, the Company
agrees that it shall comply with the provisions of Rules 424(b), 430A and 430B,
as applicable, under the Securities Act and will use its reasonable efforts to
confirm that any filings made by the Company under Rule 424(b) or Rule 433 were
received in a timely manner by the Commission (without reliance on Rule
424(b)(8) or 164(b) of the Securities Act).

(iii) (A) During the Prospectus Delivery Period, the Company will comply with
all requirements imposed upon it by the Securities Act, as now and hereafter
amended, and by the Rules and Regulations, as from time to time in force, and by
the Exchange Act, as now and hereafter amended, so far as necessary to permit
the continuance of sales of the Shares as contemplated by the provisions hereof,
the Time of Sale Disclosure Package, the Registration Statement and the
Prospectus. If during such period any event occurs as a result of which the
Prospectus (or if the Prospectus is not yet available to prospective purchasers,
the Time of Sale Disclosure Package) includes an untrue statement of a material
fact or omits to state a material fact necessary to make the statements therein,
in the light of the circumstances then existing, not misleading, or if during
such period it is necessary or appropriate in the opinion of the Company or its
counsel or the Underwriter or its counsel to amend the Registration Statement or
supplement the Prospectus (or if the Prospectus is not yet available to
prospective purchasers, the Time of Sale Disclosure Package) to comply with the
Securities Act or to file under the Exchange Act any document that would be
deemed to be incorporated by reference in the Prospectus in order to comply with
the Securities Act or the Exchange Act, the Company will, promptly following the
time it becomes aware of such opinion, notify the Underwriter and amend the
Registration Statement or supplement the Prospectus (or if the Prospectus is not
yet available to prospective purchasers, the Time of Sale Disclosure Package) or
file such document (at the expense of the Company) so as to correct such
statement or omission or effect such compliance.

(B) If at any time following the issuance of an Issuer Free Writing
Prospectus there occurs an event or development as a result of which such Issuer
Free Writing Prospectus conflicts with the information contained in the
Registration Statement or any Prospectus, the Company will promptly notify the
Underwriter and will promptly amend or supplement, at its own expense, such
Issuer Free Writing Prospectus to eliminate or correct such conflict.

(iv) The Company shall use reasonable efforts to qualify the Shares for sale
under the securities laws of such jurisdictions as the Underwriter reasonably
requests and to continue such qualifications in effect so long as required for
the distribution of the Shares, except that the Company shall not be required in
connection therewith to (A) qualify in any such jurisdiction as a foreign
corporation or as a dealer in securities in any jurisdiction in which it is not
so qualified, (B) to execute a general consent to service of process in any
jurisdiction, (C) to subject itself to taxation in respect of doing business in
any jurisdiction in which it is not otherwise subject or (D) qualify the Shares
for sale under the laws of any non-U.S. jurisdictions.

(v) The Company will furnish to the Underwriter and counsel for the
Underwriter copies of the Registration Statement, each Prospectus, any Issuer
Free Writing Prospectus, and all amendments and supplements to such documents,
in each case promptly after they become available and in such quantities as the
Underwriter may from time to time reasonably request.

(vi) The Company will make generally available to its security holders as
soon as practicable, but in any event not later than 15 months after the end of
the Company153s current fiscal quarter, an earnings statement (which need not be
audited) covering a 12-month period that shall satisfy the provisions of Section
11(a) of the Securities Act and Rule 158 of the Rules and Regulations.

(vii) The Company will pay or cause to be paid: (A) all expenses (including
transfer taxes allocated to the respective transferees) incurred in connection
with the delivery to the Underwriter of the Shares, (B) all expenses and fees
incurred by the Company (including, without limitation, fees and expenses of the
Company153s counsel) in connection with the preparation, printing, filing,
delivery, and shipping of the Registration Statement (including the financial
statements therein and all amendments, schedules, and exhibits thereto), the
Shares, the Time of Sale Disclosure Package, the Prospectus, any Issuer Free
Writing Prospectus and any amendment thereof or supplement thereto, (C) all
reasonable filing fees and reasonable fees and disbursements of the
Underwriter153s counsel incurred in connection with the qualification of the
Shares for offering and sale by the Underwriter or by dealers under the
securities or blue sky laws of the states and other jurisdictions that the
Underwriter shall reasonably request, (D) the fees and expenses of any transfer
agent or registrar of the Shares, (E) NASDAQ listing fees, if any, and (F) all
other costs and expenses incident to the performance of its obligations
hereunder that are not otherwise specifically provided for herein. In addition
to the foregoing, the Company will pay the Underwriter, on the Closing Date, an
amount equal to 1.25% of the gross proceeds received by the Company from the
sale of the Firm Shares and the Additional Shares, as applicable, as a
non-accountable reimbursement of the Underwriter153s other expenses (the
“Non-Accountable Underwriter153s Expenses“). If this Agreement is
terminated by the Underwriter in accordance with the provisions of Section 6 or
Section 9, the Company will reimburse the Underwriter for all out-of-pocket
disbursements (including, but not limited to, reasonable fees and disbursements
of counsel, travel expenses, postage, facsimile and telephone charges) incurred
by the Underwriter in connection with its investigation, preparing to market and
marketing the Shares or in contemplation of performing its obligations
hereunder. Notwithstanding anything contained herein, the maximum amount payable
by the Company for all fees, expenses, costs, disbursements and out-of-pocket
expenses of the Underwriter (excluding the Non-Accountable Underwriter153s
Expenses, but including, without limitation, any such other fees, expenses,
costs, disbursements and out-of-pocket expenses listed above and any fees and
disbursements of Underwriter153s counsel pursuant to this Section 5(a)(vii)) shall
be $30,000.

(viii) [Intentionally omitted.]

(ix) The Company has not taken and will not take, directly or indirectly,
during the Prospectus Delivery Period, any action designed to or which might
reasonably be expected to cause or result in, or that has constituted, the
unlawful stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares.

(x) [Intentionally omitted.]

(xi) The Company hereby agrees that, without the prior written consent of the
Underwriter, it will not, during the period ending ninety (90) days after the
date hereof (“Lock-Up Period“), (i) offer, pledge, issue, sell, contract
to sell, lend, or otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock; or (ii) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences
of ownership of the Common Stock, whether any such transaction described in
clause (i) or (ii) above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise; or (iii) file any registration statement
with the Commission relating to the offering of any shares of Common Stock or
any securities convertible into or exercisable or exchangeable for Common Stock.
The restrictions contained in the preceding sentence shall not apply to (1) the
Shares to be sold hereunder, (2) the issuance of Common Stock upon the exercise
of options or warrants and the vesting of restricted stock awards or units, (3)
the issuance of employee stock options and the grant, redemption or forfeiture
of restricted stock awards or restricted stock units pursuant to equity
incentive plans described in the Registration Statement and the Prospectus and
(4) the issuance of Common Stock pursuant to an employee stock purchase plan of
the Company. Notwithstanding the foregoing, if (x) the Company issues an
earnings release or material news, or a material event relating to the Company
occurs, during the last 17 days of the Lock-Up Period, or (y) prior to the
expiration of the Lock-Up Period, the Company announces that it will release
earnings results during the 16-day period beginning on the last day of the
Lock-Up Period, the restrictions imposed by this clause shall continue to apply
until the expiration of the 18-day period beginning on the issuance of the
earnings release or the occurrence of the material news or material event,
unless the Underwriter waives such extension in writing.

(b) The Underwriter represents, warrants and agrees with the Company that:

(i) the Underwriter has complied with all of its obligations under that
certain letter agreement, dated April 25, 2011, by and between the Company and
the Underwriter and that it will continue to so comply with each such obligation
for as long as such obligation is applicable to it; and

(ii) with respect to any offers and sales of Shares in the United Kingdom and
the European Economic Area, the Underwriter will comply with the offering and
selling restrictions set forth in the Time of Sale Disclosure Package under the
captions “Underwriting:United Kingdom” and “Underwriting:European Economic Area”
and the Underwriter hereby makes the representations, warranties and agreements
described thereunder as being made by it.

(c) The Company represents and agrees that, unless it obtains the prior
written consent of the Underwriter, and the Underwriter represents and agrees
that, unless it obtains the prior written consent of the Company, it has not
made and will not make any offer relating to the Shares that would constitute an
Issuer Free Writing Prospectus; provided that the prior written consent of the
parties hereto shall be deemed to have been given in respect of the free writing
prospectus included in Schedule I. Any such free writing
prospectus consented to by the Company and the Underwriter is hereinafter
referred to as a “Permitted Free Writing

Prospectus.” The Company represents that it has treated or agrees that
it will treat each Permitted Free Writing Prospectus as an “issuer free writing
prospectus,” as defined in Rule 433, and has complied or will comply with the
requirements of Rule 433 applicable to any Permitted Free Writing Prospectus,
including timely Commission filing where required, legending and record-keeping.

6. Conditions of the Underwriter153s Obligations. The
obligations of the Underwriter hereunder to purchase the Shares are subject to
the accuracy, as of the date hereof and at the Closing Date (as if made at the
Closing Date), of and compliance with all representations, warranties and
agreements of the Company contained herein, the performance by the Company of
its obligations hereunder and the following additional conditions:

(a) If filing of the Prospectus, or any amendment or supplement thereto, or
any Issuer Free Writing Prospectus, is required under the Securities Act or the
Rules and Regulations, the Company shall have filed the Prospectus (or such
amendment or supplement) or such Issuer Free Writing Prospectus with the
Commission in the manner and within the time period so required (without
reliance on Rule 424(b)(8) or 164(b) under the Securities Act); the Registration
Statement shall remain effective; no stop order suspending the effectiveness of
the Registration Statement or any part thereof, nor suspending or preventing the
use of the Time of Sale Disclosure Package, the Final Prospectus or any Issuer
Free Writing Prospectus shall have been issued; and no proceedings for the
issuance of such an order shall have been initiated or threatened by the
Commission.

(b) On or after the date hereof (i) no downgrading shall have occurred in the
rating accorded any of the Company153s securities by any “nationally recognized
statistical organization,” as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the Securities Act, and (ii) no such
organization shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of any of the Company153s
securities.

(c) On the Closing Date, there shall have been furnished to the Underwriter
(i) an opinion of Ater Wynne LLP, dated the Closing Date, addressed to the
Underwriter, in substantially the form attached hereto as Exhibit
A, (ii) a disclosure letter of Gibson, Dunn & Crutcher LLP, dated
the Closing Date, addressed to the Underwriter, in substantially the form
attached hereto as Exhibit B and (iii) a disclosure letter of
K&L Gates LLP, dated the Closing Date, addressed to the Underwriter, in form
and substance reasonably satisfactory to the Underwriter, provided that, with
respect to any Closing Date for any Additional Shares occurring following the
Closing Date for the Firm Shares, each of Gibson, Dunn & Crutcher LLP and
K&L Gates LLP, at its election, may instead deliver a bring down letter
re-affirming, as of such Closing Date for the Additional Shares, the statements
in its disclosure letter delivered on the Closing Date for the Firm Shares, and
the delivery of such bring down letter shall be deemed to satisfy the conditions
set forth in clause (ii) or clause (iii) above, as the case may be.

(d) On the Closing Date, the Underwriter shall have received a letter of KPMG
LLP, dated the Closing Date and addressed to the Underwriter, confirming that
they are independent public accountants within the meaning of the Securities Act
and are in compliance with the applicable requirements relating to the
qualifications of accountants under Rule 2-01 of

Regulation S-X of the Commission, and confirming, as of the date of such
letter (or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in the
Time of Sale Disclosure Package, as of a date not prior to the date hereof or
more than five days prior to the date of such letter), the conclusions and
findings of said firm with respect to the financial information and other
matters covered by its letter delivered to the Underwriter concurrently with the
execution of this Agreement.

(e) On the Closing Date, there shall have been furnished to the Underwriter a
certificate, dated the Closing Date and addressed to the Underwriter, signed by
either the chief executive officer or the chief financial officer of the
Company, in their capacity as such on behalf of the Company, to the effect that:
(i) the representations and warranties of the Company in this Agreement are true
and correct, in all material respects, as if made at and as of the Closing Date,
and (ii) the Company has complied in all material respects with all the
agreements and satisfied all the conditions on its part required to be performed
or satisfied at or prior to the Closing Date.

(f) On the Closing Date, or the Option Closing Date, as applicable, the
Company shall have furnished to the Underwriter a certificate signed by the
Company153s secretary including copies of (i) all resolutions of the Company153s
Board of Directors or committees thereof relating to the Registration Statement
and the offer and sale of the Shares and (ii) the Company153s articles of
incorporation and bylaws, each as amended and in effect on the Closing Date.

(g) The Company shall have prepared and filed with the Commission a Current
Report on Form 8-K with respect to the offer and sale of the Shares, including
as an exhibit thereto this Agreement.

(h) Each of the Company153s executive officers and directors shall have
executed and delivered to the Underwriter a Lock-up Agreement, substantially in
the form attached hereto as Exhibit C.

If any condition specified in this Section 6 shall not have been fulfilled in
all material respects as of the Closing Date, this Agreement may be terminated
by the Underwriter by written notice to the Company specifying in reasonable
detail the reason for such termination, and such termination shall be without
liability of any party to any other party, except that Section 5(a)(vii),
Section 7 and Section 8 shall survive any such termination and remain in full
force and effect.

7. Indemnification and Contribution.

(a) The Company agrees to indemnify, defend and hold harmless the
Underwriter, its affiliates, directors and officers and each person, if any, who
controls the Underwriter within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, from and against any losses, claims, damages
or liabilities to which the Underwriter or such person may become subject, under
the Securities Act or otherwise (including in settlement of any litigation if
such settlement is effected with the written consent of the Company), insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact

contained in the Registration Statement, the Time of Sale Disclosure Package,
the Final Prospectus, or any Issuer Free Writing Prospectus, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, and will
reimburse the Underwriter for any legal or other expenses reasonably incurred by
it in connection with evaluating, investigating or defending against such loss,
claim, damage, liability or action; provided, however, that the Company
shall not be liable in any such case to the extent that any such loss, claim,
damage, liability or action (or any legal or other expense reasonably incurred
in connection with the evaluation, investigation or defense thereof) arises out
of or is based upon an untrue statement or alleged untrue statement or omission
or alleged omission made in the Registration Statement, the Time of Sale
Disclosure Package, the Final Prospectus, or any Issuer Free Writing Prospectus,
in reliance upon and in conformity with written information furnished to the
Company by the Underwriter specifically for use in the preparation thereof.

(b) The Underwriter will indemnify and hold harmless the Company, its
affiliates, directors and officers and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, from and against any losses, claims, damages or liabilities to
which the Company or such person may become subject, under the Securities Act or
otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of such Underwriter), insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, the Time of Sale Disclosure
Package, the Final Prospectus, or any Issuer Free Writing Prospectus, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in the Registration Statement, the Time of Sale Disclosure
Package, the Final Prospectus, or any Issuer Free Writing Prospectus in reliance
upon and in conformity with written information furnished to the Company by the
Underwriter specifically for use in the preparation thereof, and will reimburse
the Company for any legal or other expenses reasonably incurred by the Company
in connection with evaluating, investigating or defending against any such loss,
claim, damage, liability or action.

(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the failure to notify the indemnifying party shall not
relieve the indemnifying party from any liability that it may have to any
indemnified party except to the extent such indemnifying party has been
prejudiced by such failure. In case any such action shall be brought against any
indemnified party, and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
in, and, to the extent that it shall wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of the indemnifying party153s election so to
assume the defense thereof, the indemnifying party

shall not be liable to such indemnified party for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof; provided, however, that if (i) the indemnified party
has reasonably concluded (based on advice of counsel) that a conflict or
potential conflict exists (based on advice of counsel to the indemnified party)
between the indemnified party and the indemnifying party (in which case the
indemnifying party will not have the right to direct the defense of such action
on behalf of the indemnified party), or (ii) the indemnifying party has not in
fact employed counsel reasonably satisfactory to the indemnified party to assume
the defense of such action within a reasonable time after receiving notice of
the commencement of the action, the indemnified party or parties shall have the
right to employ a single counsel to represent it in any claim in respect of
which indemnity may be sought under subsection (a) or (b) of this Section 7, in
which event the reasonable fees and expenses of such separate counsel shall be
borne by the indemnifying party and reimbursed to the indemnified party or
parties as incurred; it being understood, however, that the indemnifying party
shall not be liable for the expenses of more than one separate counsel (plus
local counsel).

The indemnifying party under this Section 7 shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party against any loss,
claim, damage, liability or expense by reason of such settlement or judgment. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement, compromise or consent to the entry of judgment in
any pending or threatened action, suit or proceeding in respect of which any
indemnified party is a party or could be named and indemnity was or would be
sought hereunder by such indemnified party, unless such settlement, compromise
or consent (a) includes an unconditional release of such indemnified party from
all liability for claims that are the subject matter of such action, suit or
proceeding and (b) does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of any indemnified party.

(d) If the indemnification provided for in this Section 7 is unavailable or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above, then the indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above, (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company on
the one hand and the Underwriter on the other from the offering and sale of the
Shares or (ii) if the allocation provided by clause (i) above is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and the Underwriter on the other in connection with
the statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriter on
the other shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions and non-accountable expense
reimbursement received by the Underwriter, in each case as set forth in the
table on the cover page of the Final Prospectus. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or the
Underwriter and the parties153 relevant intent, knowledge, access to information
and opportunity to

correct or prevent such untrue statement or omission. The Company and the
Underwriter agree that it would not be just and equitable if contributions
pursuant to this subsection (d) were to be determined by pro rata allocation or
by any other method of allocation that does not take account of the equitable
considerations referred to in the first sentence of this subsection (d). The
amount paid by an indemnified party as a result of the losses, claims, damages
or liabilities referred to in the first sentence of this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending against any
action or claim that is the subject of this subsection (d). Notwithstanding the
provisions of this subsection (d), the Underwriter shall not be required to
contribute any amount in excess of the amount of the Underwriter153s discounts and
commissions and non-accountable expense reimbursement actually received by the
Underwriter pursuant to this Agreement. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.

(e) The obligations of the Company under this Section 7 shall be in addition
to any liability that the Company may otherwise have and the benefits of such
obligations shall extend, upon the same terms and conditions, to each person, if
any, who controls the Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act; and the obligations of the
Underwriter under this Section 7 shall be in addition to any liability that the
Underwriter may otherwise have and the benefits of such obligations shall
extend, upon the same terms and conditions, to the Company, and officers,
directors and each person who controls the Company within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act.

(f) For purposes of this Agreement, the Underwriter confirms, and the Company
acknowledges, that there is no information concerning the Underwriter furnished
in writing to the Company by the Underwriter specifically for preparation of or
inclusion in the Registration Statement, the Time of Sale Disclosure Package,
the Final Prospectus or any Issuer Free Writing Prospectus, other than the
statements set forth in the last paragraph on the cover page of the Prospectus,
the marketing and legal names of the Underwriter, and the statements set forth
in the “Underwriting” section of the Final Prospectus and Time of Sale
Disclosure Package, only insofar as such statements relate to the amount of
selling concession and re-allowance or to over-allotment, stabilization and
related activities that may be undertaken by the Underwriter.

8. Representations and Agreements to Survive
Delivery. All representations, warranties, and agreements
contained herein or in certificates delivered pursuant hereto, including, but
not limited to, the agreements of the Underwriter and the Company contained in
Section 5(a)(vii), Section 5(b), Section 5(c) and Section 7 hereof, shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of the Underwriter or any controlling person thereof, or the
Company or any of its officers, directors, or controlling persons, and shall
survive delivery of, and payment for, the Shares to and by the Underwriter
hereunder.

9. Termination of this Agreement.

(a) The Underwriter shall have the right to terminate this Agreement by
giving notice to the Company as hereinafter specified at any time at or prior to
the Closing Date, if (i) trading in the Company153s Common Stock shall have been
suspended by the Commission or NASDAQ or trading in securities generally on
NASDAQ shall have been suspended, (ii) minimum or maximum prices for trading
shall have been fixed, or maximum ranges for prices for securities shall have
been required, on NASDAQ, by such exchange or by order of the Commission or any
other governmental authority having jurisdiction, (iii) a general banking
moratorium shall have been declared by federal, New York or California state
authorities, or (iv) there shall have occurred any material outbreak or material
escalation of hostilities involving the United States, any declaration by the
United States of a national emergency or war, any material adverse change in
financial markets, any material adverse change in United States or international
political, financial or economic conditions or any other material calamity or
material crisis, including an act of terrorism, the effect of any of which, in
each case described in this subsection (a), is such as to make it, in the
reasonable judgment of the Underwriters, impracticable or inadvisable to proceed
with the offering, sale or delivery of the Shares on the terms and in the manner
contemplated by the Prospectus, the Time of Sale Disclosure Package and this
Agreement. Any such termination shall be without liability of any party to any
other party except that the provisions of Section 5(a)(vii), Section 5(b)(i) and
Section 7 hereof shall at all times be effective and shall survive such
termination.

(b) If the Underwriter elects to terminate this Agreement as provided in this
Section, the Company shall be notified promptly by the Underwriter by telephone,
confirmed promptly thereafter by letter.

10. Notices. Except as otherwise provided herein,
all communications hereunder shall be in writing and, if to Roth, shall be
mailed, delivered or telecopied to Roth Capital Partners, LLC, 24 Corporate
Plaza, Newport Beach, CA 92660, telecopy number: (949) 720-7227, Attention:
Managing Director; and if to the Company, shall be mailed, delivered or
telecopied to it at Pixelworks, Inc., 224 Airport Parkway, Suite 400, San Jose,
CA 95110, telecopy number: (408) 200-9299, Attention: Steven Moore, with a copy
(which shall not constitute notice) to Gibson, Dunn & Crutcher LLP, 555
Mission Street, San Francisco, CA 94105, telecopy number: (415) 374-8459,
Attention: Michael L. Reed; or in each case to such other address as the person
to be notified may have requested in writing. Any party to this Agreement may
change such address for notices by sending to the parties to this Agreement
written notice of a new address for such purpose.

11. Persons Entitled to Benefit of Agreement. This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective successors and assigns and, with respect to Section 7, the
controlling persons referred to in Section 7. Nothing in this Agreement is
intended or shall be construed to give to any other person, firm or corporation
any legal or equitable remedy or claim under or in respect of this Agreement or
any provision herein contained. The term “successors and assigns” as herein used
shall not include any purchaser, as such purchaser, of any of the Shares from
the Underwriter.

12. Absence of Fiduciary Relationship. The Company
acknowledges and agrees that: (a) the Underwriter has been retained solely to
act as underwriter in connection with the sale of the Shares and that no
fiduciary, advisory or agency relationship between the Company and the
Underwriter has been created in respect of any of the transactions contemplated
by this Agreement, irrespective of whether the Underwriter has advised or is
advising the Company on other matters; (b) the price and other terms of the
Shares set forth in this Agreement were established by the Company following
discussions and arms-length negotiations with the Underwriter and the Company is
capable of evaluating and understanding and understands and accepts the terms,
risks and conditions of the transactions contemplated by this Agreement; (c) it
has been advised that the Underwriter and its affiliates are engaged in a broad
range of transactions that may involve interests that differ from those of the
Company and that the Underwriter has no obligation to disclose such interest and
transactions to the Company by virtue of any fiduciary, advisory or agency
relationship; (d) it has been advised that the Underwriter is acting, in respect
of the transactions contemplated by this Agreement, solely for the benefit of
the Underwriter, and not on behalf of the Company.

13. Amendments and Waivers. No supplement,
modification or waiver of this Agreement shall be binding unless executed in
writing by the party to be bound thereby. The failure of a party to exercise any
right or remedy shall not be deemed or constitute a waiver of such right or
remedy in the future. No waiver of any of the provisions of this Agreement shall
be deemed or shall constitute a waiver of any other provision hereof (regardless
of whether similar), nor shall any such waiver be deemed or constitute a
continuing waiver unless otherwise expressly provided.

14. Partial Unenforceability. The invalidity or
unenforceability of any section, paragraph, clause or provision of this
Agreement shall not affect the validity or enforceability of any other section,
paragraph, clause or provision.

15. Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of California.

16. Counterparts. This Agreement may be executed in
one or more counterparts and, if executed in more than one counterpart, the
executed counterparts shall each be deemed to be an original and all such
counterparts shall together constitute one and the same instrument.

Please sign and return to the Company the enclosed duplicates of this letter
whereupon this letter will become a binding agreement between the Company and
the Underwriter in accordance with its terms.


Very truly yours,

PIXELWORKS, INC.

By:		/s/ Bruce A. Walicek
Name:		Bruce A. Walicek
Title:		President and CEO

Confirmed as of the date first above-

mentioned by the Underwriter.


ROTH CAPITAL PARTNERS, LLC

By:		/s/ Aaron M. Gurewitz
Name:		Aaron M. Gurewitz
Title:		Head of Equity Capital Markets

[Signature page to Underwriting Agreement]

SCHEDULE I

ISSUER FREE WRITING PROSPECTUS

Filed Pursuant to Rule 433

Registration No. 333-170768

Dated May 6, 2011

PIXELWORKS, INC.

3,650,000 Shares of Common Stock

Final Term Sheet


Issuer:		Pixelworks, Inc. (the “Company”)

Symbol:		PXLW

Security:		Common stock, par value $0.001 per share

Size:		3,650,000 shares of common stock

Over-allotment option:		547,500 additional shares of common stock

Public offering price:		$2.24 per share

Underwriting discounts and commissions:		$0.1288 per share

Non-accountable expense reimbursement:		$0.028 per share

Net proceeds (excluding the over-allotment):		$7,287,680 (after deducting the underwriter153s discounts and commissions, the non-accountable expense reimbursement and estimated offering expenses payable by the Company)

Trade date:		May 6, 2011

Settlement date:		May 11, 2011

CUSIP:		72581M305

Underwriter:		Roth Capital Partners, LLC

The issuer has filed a registration statement (including a prospectus) with
the SEC for the offering to which this communication relates. Before you invest,
you should read the prospectus in that registration statement and other
documents the issuer has filed with the SEC for more complete information about
the issuer and this offering. You may get these documents for free by visiting
EDGAR on the SEC Web site at www.sec.gov. Alternatively, the issuer,
any underwriter or any dealer participating in the offering will arrange to send
you the prospectus if you request it from Roth Capital Partners, LLC, Attention:
Equity Capital Markets, 24 Corporate Plaza Drive, Newport Beach, CA, 92660, by
telephone at 1-800-678-9147, by e-mail to rothecm@roth.com, or by fax to (949)
720-7227.

Was this helpful?

Why was this helpful?

Easy to understand

Solved my problem

Other

Why was this not helpful?

Missing the information I need

Too complicated / too many steps

Out of date

Other

Stay Up-to-Date With How the Law Affects Your Life

Enter your email address to subscribe:

Learn more about FindLaw’s newsletters, including our terms of use and privacy policy.