Exhibit 10.1

 

Confidential

 

CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS. OMITTED INFORMATION HAS BEEN REPLACED BY [*].

 

DVD PLAYBACK TECHNOLOGY LICENSE AGREEMENT

 

This DVD Playback Technology License Agreement (“Agreement”) is entered into and
effective as of the latter of the two signature dates below (“Effective Date”)
by and between MICROSOFT CORPORATION (“Microsoft”), a Washington corporation
located at One Microsoft Way, Redmond, WA 98052 (including its majority owned
subsidiaries, successors and assigns) and INTERVIDEO, INC. (“INTERVIDEO”), a
Delaware corporation located at 46430 Fremont Boulevard, Fremont, CA 94538
(including its wholly-owned subsidiaries, successors and assigns). In this
Agreement, Microsoft and INTERVIDEO may be referred to individually as a “Party”
and collectively as the “Parties”.

 

Recitals

 

  A. WHEREAS, INTERVIDEO, among other things, develops MPEG-1/MPEG-2 decode
technology for use in the Microsoft Windows platform and other systems
(“MPEG-1/MPEG-2 Decode Technology”);

 

  B. WHEREAS, Microsoft desires to license such MPEG-1/MPEG-2 Decode Technology
for use in Microsoft products and to interoperate with Microsoft products and
INTERVIDEO is willing to license Microsoft the INTERVIDEO MPEG-1/MPEG-2 Decode
Technology on the terms set forth herein; and

 

  C. WHEREAS, Microsoft further desires, and INTERVIDEO is willing to provide,
technical support to Microsoft for such MPEG-1/MPEG-2 Decode Technology under
the terms and conditions of this Agreement.

 

NOW THEREFORE for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereby agree as follows:

 

Agreement

 

1. DEFINITIONS

 

  1.1 “INTERVIDEO MPEG-1/MPEG-2 Decode Technology” means, subject to Section
2.4, the software-based implementation of MPEG-1/MPEG-2 Decode Technology [*]
developed by or for INTERVIDEO and distributed by or for INTERVIDEO as initially
delivered to Microsoft under Section 3.1 and as further described in Exhibit A.

 

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  1.2 “Term” means the period of time commencing on the Effective Date and
ending on May 30, 2012.

 

  1.3 “Updates” means any bug fixes or error corrections to the INTERVIDEO
MPEG-1/MPEG-2 Decode Technology created by INTERVIDEO and released during the
Term of this Agreement.

 

2. LICENSE GRANT; OWNERSHIP

 

  2.1 License to Microsoft. Subject to Section 4.2, INTERVIDEO hereby grants to
Microsoft under INTERVIDEO’s rights the following perpetual, non-exclusive,
irrevocable (except as provided in Section 11.2), [*] worldwide right and
license to:

 

  (a) To use, copy and create derivative works of the INTERVIDEO MPEG-1/MPEG-2
Decode Technology;

 

  (b) publicly perform or display, import, broadcast, transmit, offer to sell,
sell, have sold, rent, lease, lend, transfer or otherwise distribute or have
distributed the INTERVIDEO MPEG-1/MPEG-2 Decode Technology;

 

  (c) Sublicense the rights set forth in Sections 2.1(b) to third parties in
connection with the licensing of the Microsoft product that includes the
INTERVIDEO MPEG-1/MPEG-2 Decode Technology.

 

  2.2 Limitation [*]. For a period of [*] from the Effective Date of this
Agreement, Microsoft shall not license, disclose or provide the [*] for the
INTERVIDEO MPEG-1/MPEG-2 Decode Technology to any of the following entities or
any of their affiliates [*]. Notwithstanding the above, during this [*] period,
Microsoft may disclose the [*] in accordance with a judicial or other
governmental order, provided that Microsoft either (i) gives INTERVIDEO
reasonable notice prior to such disclosure to allow INTERVIDEO a reasonable
opportunity to seek a protective order or equivalent, or (ii) obtains written
assurance from the applicable judicial or governmental entity that it will
afford the [*] the highest level of protection afforded under applicable law or
regulation.

 

  2.3 No Obligation. Nothing herein shall be construed as requiring Microsoft to
exercise the rights granted herein.

 

  2.4

Third Party Licensed Technology. Microsoft acknowledges and agrees that the
INTERVIDEO MPEG-1/MPEG-2 Decode Technology licensed to Microsoft hereunder by
INTERVIDEO includes or implements certain technology standards,

 

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  and, as a result, the INTERVIDEO MPEG-1/MPEG-2 Decode Technology may, absent a
license, infringe on intellectual property rights claimed to be held and/or
administered by MPEG-LA, DVD Copy Control Association, Dolby Laboratories,
Nissim Corporation, Thomson Multimedia, and Fraunhofer IIS, respectively (“Third
Party IP Holders”) and other third parties. For the purposes of this Agreement,
the intellectual property rights described above and administered by such Third
Party IP Holders with respect to the DVD Specification, MPEG-1 ISO/IEC 11172,
MPEG-2 ISO/IEC 13818, ATSC (American Television Systems Committee), ISDB
(Integrated Services Digital Broadcasting), DVB (Digital Video Broadcasting)
HD-DVD and/or Blu-Ray Disc standards shall be referred to as “Third Party
Licensed Technology”. The parties agree that, as between them, INTERVIDEO shall
not be responsible for obtaining or paying for licenses from any third party,
including the Third Party IP Holders, that may own or administer intellectual
property rights that would, absent a license, be infringed by the INTERVIDEO
MPEG-1/MPEG-2 Decode Technology. In addition, INTERVIDEO may give notices to
Microsoft pursuant to its agreements with Third Party IP Holders.

 

  2.5 Updates. Within 90 days of Microsoft’s written request, such request to be
made no more frequently than once per calendar year, INTERVIDEO shall make the
then current Updates developed by or for INTERVIDEO during the Term available to
Microsoft, free of charge.

 

  2.6 Retention of Rights. Subject to the license granted to Microsoft,
INTERVIDEO retains all right, title, and interests in and to the INTERVIDEO
MPEG-1/MPEG-2 Decode Technology. All other rights not granted by INTERVIDEO to
Microsoft in Section 2.1 hereof are reserved to INTERVIDEO and no implied
licenses are granted hereunder to Microsoft. Microsoft retains all right, title
and interest in and to any derivative technology created by or for Microsoft to
the INTERVIDEO MPEG-1/MPEG-2 Decode Technology, subject to INTERVIDEO’s
ownership of the underlying INTERVIDEO MPEG-1/MPEG-2 Decode Technology.
Microsoft shall not take or permit to be taken any action that would result in
the INTERVIDEO MPEG-1/MPEG-2 Decode Technology or any part thereof entering the
public domain, becoming subject to any open source licensing arrangement, or
subject to an Excluded License.

 

3. DELIVERY; ACCEPTANCE; TECHNICAL SUPPORT

 

  3.1 Delivery of INTERVIDEO MPEG-1/MPEG-2 Decode Technology. Within five (5)
days of the Effective Date, provided that Microsoft has paid to INTERVIDEO the
amounts set forth in Section 4.1(a), INTERVIDEO shall deliver the INTERVIDEO
MPEG-1/MPEG-2 Decode Technology as described in Exhibit A to Microsoft in a form
and format specified therein.

 

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  3.2 Acceptance of INTERVIDEO MPEG-1/MPEG-2 Decode Technology. Microsoft shall
evaluate the INTERVIDEO MPEG-1/MPEG-2 Decode Technology for its material
conformance with the definition of INTERVIDEO MPEG-1/MPEG-2 Decode Technology
listed in Section 1.1 herein and inclusion of the components listed in Exhibit A
attached hereto and shall submit a written (including without limitation by
email) acceptance or rejection to INTERVIDEO within thirty days (30) days after
receipt of the INTERVIDEO MPEG-1/MPEG-2 Decode Technology. If Microsoft does not
provide such acceptance or rejection within such timeframe, the INTERVIDEO
MPEG-1/MPEG-2 Decode Technology will be deemed accepted. In the event Microsoft
identifies a material deficiency or significant error in the INTERVIDEO
MPEG-1/MPEG-2 Decode Technology prior to acceptance, INTERVIDEO shall correct
such material deficiency or significant error as soon as practicable. If the
INTERVIDEO MPEG-1/MPEG-2 Decode Technology has not been accepted by Microsoft
within ninety (90) days of the Effective Date as a result of INTERVIDEO’s
inability to correct a material deficiency or significant error, then unless
Microsoft pays to INTERVIDEO the amount set forth in Section 4.1(b), this
Agreement shall automatically terminate as provided in Section 11.2(a).

 

  3.3 Support Services. INTERVIDEO shall make INTERVIDEO MPEG-1/MPEG-2 Decode
Technology support services available to Microsoft during the Term of the
Agreement in accordance with Exhibit C attached hereto. The first 72 man-hours
of support services provided to Microsoft within 1 year hereof (“Base Support
Services”) shall be provided at no charge to Microsoft. For any additional
support services (“Additional Support Services”), INTERVIDEO shall make support
services available to Microsoft within one year from the Effective Date of the
Agreement in accordance with Exhibit C attached hereto at a rate of [*] dollars
per hour (US$[*]). Following one year from the Effective Date, INTERVIDEO shall
have no further support obligations or liability with respect to the INTERVIDEO
MPEG-1/MPEG-2 Decode Technology. Without limiting the foregoing, following one
year from the Effective Date, upon Microsoft’s written request to INTERVIDEO and
at INTERVIDEO’s sole discretion, INTERVIDEO may provide additional technical
support services to Microsoft with respect to the INTERVIDEO MPEG-1/MPEG-2
Decode Technology. Such additional services, if any, shall be subject to the
payment of additional fees pursuant to a separate written agreement as mutually
agreed by the Parties.

 

  3.4

Additional Support Services Payment. INTERVIDEO shall invoice Microsoft for such
Additional Support Services fees via the MS Invoice online tool, in accordance
with the then-current requirements set forth at http://invoice.microsoft.com.
Without limitation, INTERVIDEO’s invoices shall set forth all amounts due from
Microsoft to INTERVIDEO, and shall

 

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  contain sufficient detail to allow Microsoft to determine the accuracy of the
amount(s) billed. Payment of an invoice without asserting a dispute is not a
waiver of any claim or right. Upon receipt of an invoice from INTERVIDEO,
Microsoft shall pay such invoice on either of the following payment terms: (a)
net sixty (60) days with no discount on the invoiced amount; or (b) net ten (10)
days less a two percent (2%) discount on the invoiced amount. If Microsoft
reasonably disputes an invoice, it shall pay such invoice without prejudice to
seek a refund for any amounts later found to be not due and payable provided it
notifies INTERVIDEO of the disputed amount at the time of payment. INTERVIDEO
shall have no obligation to provide any Additional Support Services if Microsoft
fails to pay for such services in accordance with the foregoing.

 

  3.5 Improvements to Technologies. During the Term, each Party may, but is not
obligated to, provide the other with suggestions, comments, feedback, and/or
input regarding the other Party’s products or services (collectively, “Product
Input”). Each grants the other under all of their respective intellectual
property and proprietary rights, the following worldwide, non-exclusive,
perpetual, irrevocable, royalty free, fully paid up rights: (a) to make, use,
copy, modify, and create derivative works of the Product Input, (b) to publicly
perform or display, import, broadcast, transmit, distribute, license, offer to
sell, and sell, rent, lease or lend copies of the Product Input (and derivative
works thereof), (c) solely with respect to each Party’s copyright and trade
secret rights, to sublicense to third parties the foregoing rights, including
the right to sublicense to further third parties, and (d) to sublicense to third
parties any claims of any patents owned or licensable by each Party that are
necessarily infringed by a third party product, technology or service that uses,
interfaces, interoperates or communicates with the Product Input. To the extent
this Section 3.5 conflicts with any other obligations in this Agreement, this
Section 3.5 shall be superseded by such obligations.

 

4. PAYMENT

 

  4.1 License Fees. As full consideration for the license rights granted and
Base Support Services offered under this Agreement, Microsoft shall pay
INTERVIDEO [*] as follows:

 

  (a) [*]; and

 

  (b) [*].

 

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  4.2 [*] Option. If Microsoft chooses to utilize the INTERVIDEO MPEG-1/MPEG-2
Decode Technology for a DVD Playback solution included in [*] and for which
Microsoft has paid royalties for Third Party Licensed Technologies, Microsoft
shall pay INTERVIDEO an additional [*] U.S. Dollars ($[*]) within thirty (30)
days of written notice to INTERVIDEO of Microsoft’s intention to exercise such
option.

 

5. PUBLICITY

 

Neither Party shall issue any initial press release or make any other public
disclosures or communications regarding this Agreement or its terms or nature
without the other Party’s prior written consent, not to be unreasonably
withheld, as to the specific content and timing of the release, disclosure, or
communication. For purposes of clarification, nothing in this section is
intended to prohibit any Party from complying with its legal obligations or
compliance with financial reporting or other public company disclosure
obligations or securities laws. The Parties will issue a joint press release
regarding the transaction contemplated by this Agreement.

 

6. NON-EXCLUSIVE RELATIONSHIP

 

All of the parties’ obligations under this Agreement are nonexclusive and shall
not be construed as limiting either Party’s ability to develop, deploy or
support similar or identical products or services.

 

7. CONFIDENTIALITY

 

Except as otherwise provided in Section 5, the terms and conditions of this
Agreement and parties’ performance hereunder are subject to the terms and
conditions of the Microsoft Non-Disclosure Agreement dated AUGUST 13, 2001
between the parties.

 

8. WARRANTIES

 

  8.1 INTERVIDEO warrants and represents that:

 

  (a) As of the date of release to Microsoft, and as delivered to Microsoft, the
INTERVIDEO MPEG-1/MPEG-2 Decode Technology does not infringe or misappropriate
any copyright, trade secret or trademark held by any third party;

 

  (b) The INTERVIDEO MPEG-1/MPEG-2 Decode Technology conforms to the DVD
Decoding specifications published by the DVD Forum;

 

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  (c) It has not previously granted, and shall not grant, any rights in the
INTERVIDEO MPEG-1/MPEG-2 Decode Technology to any third party that would be in
the nature of an exclusive license that would prevent Microsoft’s use of the
INTERVIDEO MPEG-1/MPEG-2 Decode Technology as contemplated herein;

 

  (d) As of the Effective Date, INTERVIDEO is not aware of any suit, claim,
action, proceeding, or investigation pending or threatened against INTERVIDEO
that could affect the validity or enforceability of INTERVIDEO’s intellectual
property and proprietary rights as it relates to any rights granted by
INTERVIDEO to the INTERVIDEO MPEG-1/MPEG-2 Decode Technology herein, Microsoft’s
rights to the INTERVIDEO MPEG-1/MPEG-2 Decode Technology, or INTERVIDEO’s
ability to perform its obligations hereunder;

 

  (e) The INTERVIDEO MPEG-1/MPEG-2 Decode Technology is not, and when delivered
to Microsoft shall not be, in whole or in part, governed by an Excluded License.
An “Excluded License” is any license that requires, as a condition of use,
modification and/or distribution of software subject to the Excluded License,
that such software and/or other software combined and/or distributed with such
software be (i) disclosed or distributed in source code form; (ii) licensed for
the purpose of making derivative works; or (iii) redistributable at no charge.

 

  (f) Disclaimer of Warranties. EXCEPT AS EXPRESSLY PROVIDED IN THIS SECTION 8,
INTERVIDEO EXPRESSLY DISLCAIMS ANY AND ALL WARRANTIES AND CONDITIONS OF ANY KIND
OR NATURE, WHETHER EXPRESS, IMPLIED OR STATUTORY, RELATING TO OR ARISING FROM
THE INTERVIDEO MPEG-1/MPEG-2 DECODE TECHNOLOGY, INCLUDING WITHOUT LIMITATION,
THE IMPLIED WARRANTIES OF TITLE, NONINFRINGEMENT, MERCHANTABILITY AND FITNESS
FOR A PARTICULAR PURPOSE.

 

  8.2 Microsoft warrants and represents that:

 

  (a) It has the right, full power and lawful authority to enter into this
Agreement for the purposes herein and to carry out its obligations under this
Agreement.

 

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  (b) Notwithstanding any other provision in this Section 8, Microsoft makes no
warranties or representations for any modification created by INTERVIDEO for
Microsoft.

 

  (c) EXCEPT AS EXPRESSLY PROVIDED IN THIS SECTION 8.2, MICROSOFT EXPRESSLY
DISCLAIMS ANY AND ALL OTHER WARRANTIES AND CONDITIONS OF ANY KIND OR NATURE,
WHETHER EXPRESS, IMPLIED OR STATUTORY.

 

9. INDEMNITY

 

  9.1 Indemnification by INTERVIDEO. INTERVIDEO will, at its sole expense and
promptly upon Microsoft’s written request, defend Microsoft, is subsidiaries,
and its respective directors, officers, employees, agents and independent
contractors (collectively “Microsoft Indemnitee”), and will pay any liabilities,
damages, losses, judgments, authorized settlements, costs and expenses awarded
to any third party, as well as Microsoft’s reasonable expenses (including
reasonable attorney’s fees) (collectively, “Microsoft Claims”), resulting from a
breach of INTERVIDEO’s warranties hereunder, but excluding any Microsoft Claim
that arises from Microsoft’s breach of its warranties or obligations hereunder.

 

  9.2 Indemnification by Microsoft. Microsoft will, at its sole expense and
promptly upon INTERVIDEO’s written request, defend INTERVIDEO, its subsidiaries,
licensees, and its respective directors, officers, employees, agents and
independent contractors (collectively “INTERVIDEO Indemnitees”), and will pay
any liabilities, damages, losses, judgments, authorized settlements, costs and
expenses awarded to any third party, as well as INTERVIDEO’s reasonable expenses
(including reasonable attorney’s fees) (collectively, “INTERVIDEO Claims”),
resulting from either (i) a breach of Microsoft’s warranties hereunder or (ii) a
claim or suit of infringement (including direct, contributory or inducement of
infringement) of Third Party Licensed Technology brought by a Third Party IP
Holder with respect to Microsoft’s exercise of the license rights granted
herein, but excluding any INTERVIDEO Claim that arises from INTERVIDEO’s breach
of its warranties or obligations hereunder.

 

  9.3

Procedures for Indemnity. In the event either Party becomes aware of any
indemnifiable Claim, (“Claim” shall include either Microsoft Claims or
INTERVIDEO Claims or both as the case may be) that Party shall: (a) reasonably
promptly notify the other Party in writing; (b) provide the other Party with
reasonable cooperation in the defense thereof; and (c) not settle any such Claim
without the other Party’s consent (unless such Claim or the defense thereof
could give rise to criminal liability, reasonably could have a

 

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  material adverse effect on Microsoft’s business in the jurisdiction of such
proceeding or involves a material risk of the sale, forfeiture or loss of, or
the creation of any material lien on, INTERVIDEO or any Microsoft property). The
other Party shall not unreasonably withhold its consent to such settlement.
Either Party shall have the right to have its own counsel participate in the
defense of any such claim at its own expense. Notwithstanding the foregoing,
either Party will be entitled (using its own counsel and without the consent of
the other Party) to control the defense of, and settle, any claim if the other
Party does not reply and take charge of such Claim within a reasonable time
after written demand under this indemnification. In such event, the other Party
shall be entitled to seek its reasonable attorney’s fees and costs and
reimbursement of any reasonable settlement or judgment actually paid.

 

  9.4 Duty to Correct. In addition to INTERVIDEO’s obligations hereunder, should
the INTERVIDEO MPEG-1/MPEG-2 Decode Technology or any portion thereof be held by
the judgment of any court of competent jurisdiction to constitute an
infringement of a third party’s copyright or trade secret rights and use as
contemplated by this Agreement as a result thereof be enjoined or be threatened
to be enjoined (but not including a mere complaint filed seeking a preliminary
injunction where the party filing does not move immediately for such remedy),
INTERVIDEO shall notify Microsoft and immediately, at INTERVIDEO’s expense and
either: (a) procure for Microsoft the right to continue use the INTERVIDEO
MPEG-1/MPEG-2 Decode Technology or portion thereof, as applicable; or (b)
replace or modify the INTERVIDEO MPEG-1/MPEG-2 Decode Technology or portion
thereof with a version that is non-infringing, provided that the replacement or
modified version is to Microsoft’s reasonable satisfaction. Under no
circumstance shall the foregoing apply to any claim by any third party with
respect to patent infringement or any claim of patent infringement.

 

10. EXCLUSION OF CERTAIN DAMAGES; LIABILITY CAP;

 

WITH THE EXCEPTION OF INTENTIONAL MISCONDUCT OR GROSS NEGLIGENCE OR EITHER
PARTY’S BREACH OF SECTION 7 (CONFIDENTIALITY), OR THE INFRINGEMENT OF EITHER
PARTY’S INTELLECTUAL PROPERTY RIGHTS BY THE OTHER, AND WITH THE EXCEPTION OF A
PARTY’S OBLIGATION TO PAY AMOUNTS TO THIRD PARTIES IN CONNECTION WITH A CLAIM
COVERED BY THE INDEMNIFICATION PROVISIONS OF THIS AGREEMENT, TO THE MAXIMUM
EXTENT PERMITTED BY APPLICABLE LAW, NEITHER PARTY SHALL BE LIABLE FOR ANY
INDIRECT, INCIDENTAL, CONSEQUENTIAL, PUNITIVE OR SPECIAL DAMAGES WHATSOEVER
ARISING OUT OF OR IN ANY WAY CONNECTED TO THE ACTIVITIES

 

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CONTEMPLATED BY THIS AGREEMENT REGARDLESS OF THE LEGAL THEORY UPON WHICH ANY
CLAIM FOR SUCH DAMAGES IS BASED, EVEN IN THE EVENT OF THE FAULT, TORT (INCLUDING
NEGLIGENCE), STRICT LIABILITY, BREACH OF CONTRACT OR BREACH OF WARRANTY OF
EITHER PARTY. THE FOREGOING EXCLUSION APPLIES EVEN IF SUCH PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES IN ADVANCE AND EVEN IF ANY AVAILABLE
REMEDY FAILS OF ITS ESSENTIAL PURPOSE. NOTWITHSTANDING THE ABOVE, WITH THE
EXCEPTION OF MICROSOFT’S OBLIGATION TO PAY AMOUNTS TO THIRD PARTIES IN
CONNECTION WITH A CLAIM COVERED BY THE INDEMNIFICATION PROVISIONS OF THIS
AGREEMENT OR INTERVIDEO’S OBLIGATIONS TO PAY AMOUNTS TO THIRD PARTIES IN
CONNECTION WITH A CLAIM COVERED BY THE INDEMNIFICATION PROVISIONS FOR
INTERVIDEO’S BREACH OF SECTION 8.1(A) HEREIN, IN NO EVENT SHALL EITHER PARTY’S
LIABILITY UNDER THIS AGREEMENT EXCEED [*] DOLLARS (US $[*]).

 

11. TERMINATION

 

  11.1 Termination.

 

  (a) This Agreement may be terminated by Microsoft if the INTERVIDEO
MPEG-1/MPEG-2 Decode Technology has not been qualified by Microsoft in
accordance with Section 3.2 upon thirty (30) days of written notice thereof.

 

  (b) In addition Microsoft may terminate this Agreement upon thirty (30) days
notice to INTERVIDEO.

 

  11.2 Effect of Termination.

 

  (a) If this Agreement is terminated pursuant to Section 3.2 or 11.1(a): (i)
INTERVIDEO shall repay to Microsoft ninety (90) percent of the amount paid to
INTERVIDEO by Microsoft pursuant to Section 4.1(a). If this Agreement is
terminated by Microsoft pursuant to either Section 3.2, 11.1(a) or (b): (i) this
Agreement shall terminate except for the provisions set forth in Section
11.2(b); (ii) Microsoft shall immediately return to INTERVIDEO all documents,
materials and software provided by INTERVIDEO to Microsoft hereunder or derived
by Microsoft from such documents, materials or software; and (iii) and all
rights and licenses granted by INTERVIDEO to Microsoft shall terminate.

 

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  (b) The following provision shall survive the termination of this Agreement:
Sections 2.1, 2.3, 2.4, 2.6, and Sections 5 through 12 inclusive.

 

12. GENERAL

 

  12.1 Notices. All notices, authorizations, and requests in connection with
this Agreement are deemed given as of the day they are received by the recipient
either by messenger, delivery service, or in the United States of America mails,
postage prepaid, certified or registered, return receipt requested, and
addressed as set forth below, or to such other address as the Party to receive
the notice, authorization or request so designates by written notice to the
other:

 

TO MICROSOFT:    TO INTERVIDEO: MICROSOFT CORPORATION    INTERVIDEO, INC. ONE
MICROSOFT WAY    46430 FREMONT BOULEVARD REDMOND, WA 98052    FREMONT, CA 94538
ATTN: LAW & CORPORATE AFFAIRS    ATTN: RANDALL BAMBROUGH PHONE: [*]    PHONE:
[*] FAX: [*]    FAX: [*]      WITH A COPY TO      WILSON SONSINI GOODRICH &
ROSATI      650 PAGE MILL RD      PALO ALTO, CA 94304      ATTN: SELWYN
GOLDBERG, ESQ.      FAX: (650) 493-6811

 

  12.2 Independent Contractors. INTERVIDEO and Microsoft are independent
contracting parties. Nothing in this Agreement should be construed as creating
an employer-employee relationship, partnership, joint venture, agency
relationship or as granting a franchise.

 

  12.3

Assignment. Microsoft may not assign this Agreement, or any rights or
obligations hereunder, whether by operation of contract, law or otherwise,
except with the express written consent of INTERVIDEO, and any attempted
assignment by Microsoft in violation of this Section is void. INTERVIDEO shall
not unreasonably withhold its consent in such

 

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  circumstances, however. For purposes of this Agreement, an “assignment” by
Microsoft under this Section is deemed to include, without limitation, each of
the following: (i) a merger of Microsoft with another party, whether or not
Microsoft is the surviving entity; (ii) the acquisition of more than fifty
percent (50%) of any class of Microsoft’s voting stock (or any class of
non-voting security convertible into voting stock) by another party (whether in
a single transaction or series of transactions); and (iii) the sale or other
transfer of more than fifty percent (50%) of Microsoft’s assets (whether in a
single transaction or series of transactions). In the event of such assignment
or attempted assignment by Microsoft, INTERVIDEO may, but is not obligated to,
immediately terminate this Agreement. INTERVIDEO may transfer or assign this
agreement without limitation provided that no such assignment shall impair
Microsoft’s rights or licenses hereunder.

 

  12.4 Dispute Resolution. This Agreement will be construed and controlled by
the laws of the State of Washington, and INTERVIDEO and Microsoft consent to
exclusive jurisdiction and venue in the federal courts sitting in the State of
Washington, unless no federal subject matter jurisdiction exists, in which case
the parties consent to exclusive jurisdiction and venue in the state courts
located in the State of New York. INTERVIDEO and Microsoft waive all defenses of
lack of personal jurisdiction and forum non-conveniens. Process may be served on
either Party in the manner authorized by applicable law or court rule. In any
action or suit to enforce any right or remedy under this Agreement or to
interpret any provision of this Agreement, the prevailing Party will be entitled
to recover its reasonable attorneys’ fees, costs, and other expenses.

 

  12.5 Waiver. Failure by either Party to enforce any provision of this
Agreement will not be deemed a waiver of future enforcement of that or any other
provision.

 

  12.6 Construction. If for any reason a court of competent jurisdiction finds
any provision of this Agreement, or portion thereof, to be unenforceable, that
provision of the Agreement will be enforced to the maximum extent permissible so
as to effect the intent of the Parties, and the remainder of this Agreement will
continue in full force and effect. Each Party acknowledges that no other party,
or any agent or attorney of any party, has made any promise, representation, or
warranty whatsoever, expressed or implied, not contained herein, concerning the
subject matter hereof, to induce it to execute this document, and each Party
acknowledges that it has not executed this document in reliance on any such
promise, representation, or warranty not contained herein. This Agreement has
been jointly drafted by the Parties following negotiations between them and
their respective counsel. It will be construed according to the fair intent of
the language as a whole, and not for or against either Party.

 

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  12.7 Entire Agreement. This Agreement does not constitute an offer by either
Party and it will not be effective until signed by both parties. This Agreement,
including the Exhibits, constitutes the entire agreement between the parties
with respect to the subject matter hereof and merges all prior and
contemporaneous communications. Notwithstanding the foregoing, the Development
and License Agreement by and between Microsoft and INTERVIDEO effective as of
June 1, 2004 shall remain in full force and effect (the “Xbox Agreement”). All
technologies licensed to Microsoft under the Xbox Agreement shall not be the
subject of this Agreement but shall remain subject to the terms of the Xbox
Agreement. Without limiting the foregoing, nothing set forth herein shall limit
Microsoft’s payment obligations under the Xbox Agreement. This Agreement may not
be modified except by a written agreement dated subsequent to the date of this
Agreement and signed on behalf of INTERVIDEO and Microsoft by their respective
duly authorized representatives.

 

In Witness Whereof, the parties have entered into this Agreement as of the
Effective Date written above.

 

MICROSOFT CORPORATION   INTERVIDEO, INC.

/s/ Will Poole

--------------------------------------------------------------------------------

 

/s/ Randall I. Bambrough

--------------------------------------------------------------------------------

By (Sign)   By (Sign)

Will Poole

--------------------------------------------------------------------------------

 

Randall I. Bambrough

--------------------------------------------------------------------------------

Name (Print)   Name (Print)

Senior VP

--------------------------------------------------------------------------------

 

CFO

--------------------------------------------------------------------------------

Title   Title

6/28/05

--------------------------------------------------------------------------------

 

6/28/05

--------------------------------------------------------------------------------

Date   Date

 

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EXHIBIT A

 

INTERVIDEO DVD PLAYBACK TECHNOLOGY COMPONENTS

 

DVD Decoder

 

The INTERVIDEO Decoder contains the following components:

 

Software Description:

 

1. [*]

2. [*]

3. [*]

4. [*]

 

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EXHIBIT B

 

INTENTIONALLY LEFT BLANK

 

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Confidential

 

EXHIBIT C

SUPPORT SERVICES

 

1. DEFINITIONS

 

Terms not defined in this Exhibit C shall have the meanings set forth in the
Agreement.

 

“Microsoft Technical Contacts” shall have the meaning set forth in Section 3.2
of this Exhibit C.

 

2. SUPPORT SERVICES

 

  2.1 Errors. Following acceptance of the INTERVIDEO MPEG-1/MPEG-2 Decode
Technology, INTERVIDEO shall correct errors in the INTERVIDEO MPEG-1/MPEG-2
Decode Technology delivered to Microsoft under this Agreement in accordance with
the response and resolution times set forth in Attachment 1.

 

  2.2 E-mail and Telephone Support. INTERVIDEO shall provide, with respect to
the INTERVIDEO MPEG-1/MPEG-2 Decode Technology, e-mail and telephone support for
Microsoft Technical Contacts during INTERVIDEO’s normal business hours, which
are currently 9:00am to 5:00pm, Pacific Time, Monday through Friday, USA
holidays excepted, and which INTERVIDEO may change from time to time. Support is
intended for Microsoft Technical Contacts only, who in turn support Microsoft’s
other development and technical support engineers, end users, distributors, and
OEMs.

 

  2.3 Escalation Process. INTERVIDEO shall provide an escalation process for
support inquiries that are not satisfactorily addressed in a reasonable
timeframe in line with the parameters set forth above. In such cases, Microsoft
shall contact the vice president responsible for the development and support of
the INTERVIDEO MPEG-1/MPEG-2 Decode Technology, providing details of the issue
including the tracking number issued when the inquiry was first submitted to
INTERVIDEO. INTERVIDEO shall, within a reasonable amount of time, respond to
Microsoft with a plan to address the inquiry, and, if appropriate, provide a
solution, work-around, or other remedy. Should the inquiry remain
unsatisfactorily resolved, Microsoft may escalate the issue to INTERVIDEO’s
executive management and/or Microsoft may take any other action permitted under
the Agreement.

 

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Confidential

 

3. MICROSOFT OBLIGATIONS

 

  3.1 End User Support. Microsoft shall have sole responsibility for providing
technical and maintenance support to Microsoft’s end users, OEMs, and
distributors.

 

  3.2 Technical Contacts. Microsoft shall designate no more than four
development engineers as points of contact for support (“Microsoft Technical
Contacts”). All contact to INTERVIDEO regarding support shall be made by
Microsoft Technical Contacts. Microsoft shall designate replacement Microsoft
Technical Contacts from time to time by notifying INTERVIDEO via e-mail sent to
an e-mail address as specified from time to time by INTERVIDEO. Microsoft may
add further contacts for the fee set forth below. The designated Microsoft
Technical Contacts at the time of execution of the Agreement are:

 

First designated contact:

 

Name:    [*] Address:    One Microsoft Way, Redmond, WA 98052 E- Mail:    [*]
Telephone    [*]

 

Second designated contact:

 

Name:    [*] Address:    One Microsoft Way, Redmond, WA 98052 E-Mail:    [*]
Telephone:    [*]

 

Third designated contact:

 

Name:    [*] Address:    One Microsoft Way, Redmond, WA 98052 E-Mail:    [*]
Telephone:    [*]

 

Fourth designated contact:

 

Name:    [*] Address:    One Microsoft Way, Redmond, WA 98052 E-Mail:    [*]
Telephone:    [*]

 

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Confidential

 

  3.3 Suspected Errors. With respect to any suspected Error in the INTERVIDEO
MPEG-1/MPEG-2 Decode Technology, Microsoft shall investigate and isolate such
error, and determine a work-around or other solution if possible. Should
Microsoft determine that the suspected error is in fact due to a problem in the
INTERVIDEO MPEG-1/MPEG-2 Decode Technology, Microsoft shall promptly report the
issue to INTERVIDEO, whether or not a work-around or other solution is
available.

 

  3.4 Initiation of Support Calls. Microsoft shall initiate all support calls by
having one of the Microsoft Technical Contacts contact INTERVIDEO. The e-mail
message or phone message shall describe the problem in detail, and include all
relevant information and the Severity of the Error. All information regarding
the Error, including its existence, shall be considered Confidential Information
as defined in the Agreement.

 

Attachment 1

 

Response and Resolution Times

 

Severity

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Definition

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   Response

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   Resolution

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1    Critical: Problem which prevents or seriously impairs the performance of
substantially all major functions.    2 hours    24 hours 2    Severe Impact:
Problem which prevents or seriously impairs the performance of a major function.
   24 hours    3 days 3    Degraded Operation: Problem which disables or impairs
the performance of a minor function.    48 hours    2 weeks

 

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