STIPULATION AND [PROPOSED] ORDER FOR VOLUNTARY DISMISSAL WITHOUT PREJUDICE OF PLAINTIFF'S VERIFIED SHAREHOLDER DERIVATIVE COMPLAINT

CLAUDIA WILKEN, District Judge.

Defendants Hugh C. Martin, Brook Byers, William C. Ericson, Michael Hunkapiller, Randal S. Livingston, Susan Siegel, and David Singer, along with Nominal Defendant Pacific Biosciences of California, Inc. ("PacBio") (collectively, the "Defendants"), and Plaintiff Robert Burlingame ("Plaintiff") (together, the "Parties") hereby stipulate and agree as follows:

WHEREAS, purportedly acting on behalf of Nominal Defendant PacBio, Plaintiff filed his Verified Shareholder Derivative Complaint (Dkt. No. 1) on December 29, 2011, (the "Action") against certain current and former PacBio officers and directors, asserting, among other things, breach of fiduciary duty, waste of corporate assets, and unjust enrichment;

WHEREAS, on March 9, 2012, the Court approved the Parties' stipulation that Defendants shall not be required to respond to Plaintiff's allegations unless and until Plaintiff files an amended complaint following the resolution of all motions to dismiss in a related putative securities class action, captioned Primo v. Pacific Biosciences of California, Inc., et al., Case No. 4:11-CV-6599 (N.D. Cal.), which has not yet occurred;

WHEREAS, Plaintiff and Plaintiff's counsel have considered the relevant case law and the potential hurdles to successfully proceeding with this Action derivatively, and believe that given the unique facts and circumstances particular to this Action, the litigation risks of proceeding with this Action outweigh the potential benefit to Nominal Defendant PacBio and its shareholders. Accordingly, the Parties have conferred and agreed that, in the interests of PacBio and its shareholders, as well as efficiency and conservation of judicial resources, Plaintiff shall voluntarily dismiss this Action without prejudice;

WHEREAS, none of the Defendants in this action has entered into a settlement with Plaintiff in connection with this voluntary dismissal and neither Plaintiff nor his counsel have received or will receive any form of consideration from any of the Defendants in exchange for dismissing this Action;

NOW, THEREFORE, the Parties, by and through their undersigned counsel, hereby stipulate and agree, pursuant to Federal Rules of Civil Procedure 23.1(c) and 41(a), subject to the Court's approval, as follows:

1. This Action shall be dismissed without prejudice;

2. Each party shall bear its own costs, expenses, and attorneys' fees.

Because the Action is in its preliminary stages, it is respectfully submitted that no notice is required under Federal Rule of Civil Procedure 23.1 and that Nominal Defendant PacBio and its shareholders will not be prejudiced by this dismissal.

[PROPOSED] ORDER

Pursuant to the foregoing stipulation of counsel for the respective parties hereto, and good cause appearing, IT IS SO ORDERED.