In this task, you're given a passage that represents a legal contract or clause between multiple parties, followed by a question that needs to be answered. Based on the paragraph, you must write unambiguous answers to the questions and your answer must refer a specific phrase from the paragraph. If multiple answers seem to exist, write the answer that is the most plausible.

[Q]: Exhibit 4.46     6 rue Adolphe Fischer L-1520 Luxembourg Luxembourg





CO-BRANDING AGREEMENT

THIS CO-BRANDING AGREEMENT (this Agreement), entered into on the 22nd day of August 2005 and effective as of the 22nd day of August 2005 (Effective Date), by and among (a) Skype Communications, S.A. (Skype), a limited company (société anonyme) incorporated in Luxembourg, with its principal place of business at 6 rue Adolphe Fischer, L-1520 Luxembourg, Luxembourg, (b) Skype Technologies, S.A. (Skype Holding), a limited company (société anonyme) incorporated in Luxembourg, with its principal place of business at 6 rue Adolphe Fischer, L-1520 Luxembourg; (c) TOM Online (BVI) Limited (Online BVI), a company incorporated in the British Virgin Islands with limited liability, whose correspondence address is at 8th Floor, Tower W3, Oriental Plaza No.1 Dong Changan Avenue, Dong Chang District, Beijing 100738, PRC; (d) TOM Online Inc. (Tom Holding), a company incorporated in the Cayman Islands with limited liability and listed on the NASDAQ National Market in the United States of America and the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited, whose correspondence address is at 8th Floor, Tower W3, Oriental Plaza No.1 Dong Changan Avenue, Dong Chang District, Beijing 100738, PRC; and (e) Tel-Online Limited (Company), a company incorporated in the Cayman Islands, whose correspondence address is at 8th Floor, Tower W3, Oriental Plaza No.1 Dong Changan Avenue, Dong Chang District, Beijing 100738, PRC. Skype, Online BVI and the Company may be referred to individually as Party and collectively as Parties. Skype, Online BVI, the Company, Skype Holding and Tom Holding may be referred to individually as party to this Agreement and collectively as parties to this Agreement.

RECITALS   A. Each of Skype, Skype Holding, Online BVI, and Tom Holding are parties to that certain Memorandum of Terms dated October 12, 2004 (Memorandum), pursuant to which Skype and Online BVI have, among other things, agreed to (i) create, market and distribute a co- branded, customized version of the Skype Software (as defined below) to be distributed in the PRC (as defined below) by incorporating certain brand features of the Online Group (as defined below), and, (ii) develop and host a co-branded web site or web site content featuring the Online Group's and Skype's brand features as related to the customized version of the Skype Software to be distributed in the PRC;

B. The parties to this Agreement are parties to that certain Shareholders' Deed dated as of the date hereof (Deed), and Skype and Online BVI are the shareholders of the Company, a newly formed company formed for the purpose of marketing and distributing the Company-Skype Branded Application (as defined below) on the terms of this Agreement;

C. Skype is a developer, distributor and supporter of the Skype Software, and is the owner and operator of a web site located at the URL www.skype.com (Skype Site); and

D. The parties to this Agreement wish to terminate the Memorandum and enter into this Agreement pursuant to which the parties to this Agreement will, inter alia, (i) grant the Company (or Online BVI, to act on behalf of the Company) certain rights to provide co-marketing and co-branding activities, and (ii) expand the business relationship among the parties to this Agreement as they may mutually agree from time to time.   1

Source: TOM ONLINE INC, 20-F, 5/1/2006





AGREEMENT

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties to this Agreement agree as follows:

1. DEFINITIONS

In addition to the capitalized terms defined elsewhere in this Agreement, the following terms shall have the meanings set forth below:

  1.1 Adjusted Net Revenue means Gross Revenue less Direct Expenses.

  1.2 Affiliate means in relation to any Person, any Subsidiary or Holding Company, and any company in which such Person or any such Holding Company holds or Controls directly or indirectly not less than 30% of the issued share capital.



1.3 Affiliate Program means a marketing and/or advertising affiliate program made generally available from time to time to third parties on non-negotiated and generally available terms by (i) Skype or (ii) any third party that contracts with Skype which (a) is not a Primarily PRC Based Service Provider and (b) operates in multiple international markets (which may include the PRC) (Third Party Affiliate Partner), in each case whereby other third parties are permitted to (x) in the case of a program made available by Skype, advertise the Skype Software and/or link to the Skype Site from Web Sites hosted and operated by such third parties, or (y) in the case of a program made available by a Third Party Affiliate Partner, (1) advertise the Skype Software together with such Third Party Affiliate Partner's software and/or (2) link to Web Sites hosted and operated by such Third Party Affiliate Partner, provided that, in each case, the arrangement with the Third Party Affiliate Partner applies to multiple territories (which may include the PRC).

  1.4 Code means the existing proprietary computer software of any Party or any Affiliate of any Party (as the case may be).



1.5 Company-Skype Branded Application means a customized version of the Skype Software which includes both Skype Brand Features and Online BVI Brand Features (and with the prior approval of Skype, which approval may be withheld in its sole discretion, newly created brand features and/or brand features licensed from third parties), and which includes SkypeOut, SkypeIn and Skype Plus (except for the Skype Toolbar).



1.6 Company-Skype Branded Content means the combined content and branding of both the Online Group and Skype (and with the prior approval of Skype, which approval may be withheld in its sole discretion, (i) newly created content and/or branding, and/or (ii) content and/or branding licensed from third parties) in a specified Look and Feel format subject to the Skype Policies. Company-Skype Branded Content shall be comprised of both Online BVI Intellectual Property and Skype Intellectual Property.



1.7 Company-Skype Branded Customer means all subscribers, users or other customers of the Company-Skype Branded Application, the Company-Skype Toolbar, the Company-Skype Branded Web Site and/or the Company-Skype Branded Content including, without limitation, those procured by the Online Group, as principal or as agent or through agents, distributors or resellers, through any distribution or marketing channels.   2

Source: TOM ONLINE INC, 20-F, 5/1/2006





  1.8 Company-Skype Branded Web Site means the set of Web Pages, initially located and hosted on skype.tom.com, containing, inter alia, the Company-Skype Branded Content.

  1.9 Company-Skype Toolbar means the Skype Toolbar made available and/or distributed through or in connection with the Company- Skype Branded Application, the Company-Skype Branded Web Site and/or the Online BVI Web Site (and any other Web Site mutually agreed by the Parties in accordance with Section 2.2).

  1.10 Confidential Information shall have the meaning set forth in Section 11 herein.

  1.11 Consumer means, in relation to a product or service or market for a product or service, an individual who takes the product or service for primarily non-business and non-work purposes (even if, for the avoidance of doubt, that individual sometimes, as a secondary purpose, uses the product or service for their work or business).



1.12 Control means, with respect to any Person, the possession, directly or indirectly, of the affirmative power to direct or cause the direction of the management and policies of such Person, whether through the ownership of securities, partnership interests or other ownership interests, by contract, by membership or involvement in the board of directors or other management structure of such Person, or otherwise. For purposes hereof, the holding, directly or indirectly, of 30% or more of the issued share capital of a Person shall be deemed the Control of such Person.



1.13 Customers means all subscribers, users or other customers procured by the Online Group or the Group, as principal or as agent or through agents, distributors or resellers, through any distribution or marketing channels, of the Company-Skype Branded Application, the Company-Skype Toolbar, the Company-Skype Branded Web Site and/or the Company-Skype Branded Content and the Online Group's and the Group's internet services, value-added services and other products and services in the Territory.

  1.14 Deliverable means an item specified in the Deliverables portion of any Statement of Work.

  1.15 Direct Expenses means only those direct expenses set forth below that are incurred by a Party in connection with the Company- Skype Branded Application from a non-affiliated third party:

  •   Transmission fees

  •   CODEC fees (or other similar fees or royalties, including all interconnection and delivery fees)

  •   Sales taxes or other regulatory charges

  •   Telecommunications network operators' fees, including transmission fees, call termination fees and collection charges

  •   Alliance fees payable to handset manufacturers and/or mobile operators

  •   Fees payable to payment agencies such as online-banking charges and charges of collection agents and banks for payment collection

  •   Technology license fees approved by Skype and Online BVI in writing

  •   Other costs approved by Skype and Online BVI in writing.   3

Source: TOM ONLINE INC, 20-F, 5/1/2006







1.16 Gross Revenue means any and all revenue actually received and collected by a Party, or any Subsidiary or other Affiliate, licensee, distributor or reseller thereof, from (i) any SkypeOut, SkypeIn or Skype Plus services (or other products or services similar to Skype Plus developed under this Agreement by the Parties) provided through or in connection with the Company-Skype Branded Application, Company-Skype Branded Content or Company-Skype Branded Web Site, and (ii) any advertising, licensing, distribution or other exploitation of the Company-Skype Branded Application, Company-Skype Branded Content or Company-Skype Branded Web Site. For purposes of clarity, save as otherwise provided in this Agreement, no development (including, without limitation, any development, updating, upgrading and improvement of software or other technology), sales, promotional, operating, customer support or marketing costs incurred by any Party, including, without limitation, of any third party, in connection with the Company- Skype Branded Application, Company-Skype Branded Content or Company-Skype Branded Web Site, shall be deducted from Gross Revenue.

  1.17 Group means the Company and its Subsidiaries.

  1.18 HTML means the series of commands for formatting Web Pages known as HyperText Markup Language, and shall include any current and future extensions thereto, whether or not the extensions are commonly viewed as official.



1.19 Improvement means any invention, modification, addition, derivative work, enhancement, revision, translation, abridgment, condensation or expansion to or arising from the Skype Intellectual Property or the Online BVI Intellectual Property (as the case may be), or any other form in which the Skype Intellectual Property or the Online BVI Intellectual Property (as the case may be) or any part thereof, may be recast, transformed, or adapted.

  1.20 Indemnified Party means the Party claiming indemnification under Section 13.

  1.21 Indemnifying Party means the Party liable to indemnify the Indemnified Party under Section 13.

  1.22 Intellectual Property means, in the case of Skype, the Skype Intellectual Property, and in the case of Online BVI, the Online BVI Intellectual Property.

  1.23 Internet means the world-wide network of computers commonly understood to provide features and functions, including, without limitation, electronic mail, file transfers, electronic commerce, and World Wide Web access.

  1.24 Link means a hypertext link directly between Web Pages on the World Wide Web which may be initiated by clicking an icon, logo, button, image or text.

  1.25 Look and Feel means the general appearance and functionality of any Company-Skype Branded Content mutually agreed upon by the Parties, displayed in the Company-Skype Branded Application or made available by the Online Group or the Group on the Company-Skype Branded Web Site.

  1.26 Online BVI Brand Features means the trade marks, trade names, service marks, service names and logos proprietary or licensed to the Online Group (exclusive of the Skype Intellectual Property), and any additions, modifications or Improvements to the foregoing that may be made from time to time.   4

Source: TOM ONLINE INC, 20-F, 5/1/2006







1.27 Online BVI Intellectual Property means all Online BVI Brand Features, the Online BVI Web Site, the Company-Skype Branded Web Site (exclusive of any Skype Intellectual Property contained therein), the Online Group's software and Code, databases of the Online Group, including, without limitation, customer information databases and account information related to Customers (other than, and not including, the databases and account information related specifically to user names and user profiles within the Company- Skype Branded Application and the Skype Software (as set forth in Section 4.2.3.2.1)), text, pictures, sound, graphics, video and all other intellectual property owned or licensed to the Online Group (exclusive of the Skype Intellectual Property) and all copyrights, patents, trade marks, service marks, right of publicity, authors' rights, contract and licensing rights, goodwill and all other intellectual property rights therein and thereto as may exist now and/or hereafter come into existence and all renewals and extensions thereof, regardless of whether such rights arise under the laws of the PRC, the United States, European Union, or any other state, country or jurisdiction.

  1.28 Online BVI Web Site means www.tom.com and any other *.tom.com Web Site (excluding the Company-Skype Branded Web Site).

  1.29 Online Group means Tom Holding and its Subsidiaries (other than the Group).

  1.30 Person means any individual, company (whether general or limited), limited liability company, corporation, trust, estate, association, nominee or other entity.

  1.31 PRC or Territory means the People's Republic of China (excluding the Hong Kong Special Administrative Region of the PRC, the Macau Special Administrative Region of the PRC and Taiwan).

  1.32 Primarily PRC Based Service Provider means a service provider having all or substantially all of its revenue and operations generated from, and conducted in, respectively, the PRC.

  1.33 Services means those services specified in the General Description of Services portion of any Statement of Work.

  1.34 Skype API means application program interface consisting of the set of routines utilized by the Skype Software to provide the Skype Software functionality for a given platform or operating system, Skype API being included in or linked to the Skype Software.

  1.35 Skype Brand Features means the trade marks, trade names, service marks, service names and logos proprietary or licensed to Skype (exclusive of the Online BVI Intellectual Property), and any additions, modifications or Improvements to the foregoing that may be made by Skype from time to time.

  1.36 Skype Group means Skype Holding and its subsidiaries.



1.37 Skype Intellectual Property means all Skype Brand Features, Skype Software, Skype Toolbar, Skype's Code (including, without limitation, that contained within the Skype Software and Skype Toolbar), databases and account information related to any member of the Skype Group and the Skype Software (other than, and not including, the databases and account information related to the Customers and not otherwise related specifically to user names and user profiles within the Company-Skype Branded Application and the Skype Software (as set forth in Section 4.2.3.2.1)), text, pictures, sound, graphics, video and all other intellectual property owned or licensed to Skype (exclusive of the Online BVI Intellectual Property) and all copyrights, patents, trade marks, service marks, right of publicity, authors' rights, contract and licensing rights, goodwill and all other intellectual property rights therein and thereto as may exist now and/or hereafter come into existence and all renewals and extensions thereof, regardless of whether such rights arise under the laws of the PRC, United States, European Union, or any other state, country or jurisdiction.   5

Source: TOM ONLINE INC, 20-F, 5/1/2006





  1.38 Skype Parties means Skype and Skype Holding and Skype Party means any one of them.



1.39 Skype Plus means any Skype Toolbar (or similar Skype product), if any, and any paid service or product offering accessible through the Skype Software or a feature of the Skype Software, including, without limitation, mobile and/or wireless functionality, the pricing for which shall be as set forth by Skype from time to time and for which pricing for the Company-Skype Branded Application will be the same as pricing set by Skype for customers using Skype Software subject to such modifications as are reasonably necessary to take into account the effect of applicable taxation, currency fluctuations and to comply with PRC regulations and provided that Skype shall be permitted from time to time to set prices which provide for the same gross margin as the prices set forth from time to time for non co-branded versions of Skype Plus.

  1.40 Skype Policies means the guidelines and policies provided by Skype to its branding partners for the use of Skype Brand Features and co-branding with Skype, which guidelines and policies Skype may modify from time to time in its sole discretion.

  1.41 Skype Software means the proprietary communication software product entitled Skype, distributed by Skype and which Skype may update or upgrade from time to time, in its sole discretion, and which includes SkypeOut, SkypeIn and Skype Plus.

  1.42 Skype Toolbar means a proprietary software product, distributed by Skype and which Skype may update or upgrade from time to time, in its sole discretion, which enables the Skype Software to be activated directly from a toolbar appearing in another software application such as, without limitation, a Web Browser and/or an e-mail manager.

  1.43 Skype Zones means the proprietary software product entitled Skype Zones distributed by Skype as of the Effective Date which enables the Skype Software to be accessed through Wi-Fi hot spots but for the avoidance of doubt does not include any updated or upgraded versions thereof.



1.44 SkypeIn means a feature of the Skype Software which allows a user of the Skype Software to receive calls from telephone numbers through the public switched telephone network (PSTN), the pricing for which shall be as set forth by Skype from time to time and for which pricing for the Company-Skype Branded Application will be the same as pricing set by Skype for customers using Skype Software subject to such modifications as are reasonably necessary to take into account the effect of applicable taxation, currency fluctuations and to comply with PRC regulations and provided that Skype shall be permitted from time to time to set prices which provide for the same gross margin as the prices set forth from time to time for non co-branded versions of SkypeIn.   6

Source: TOM ONLINE INC, 20-F, 5/1/2006







1.45 SkypeOut means a feature of the Skype Software which allows a user of the Skype Software to place calls from the Skype Software to telephone numbers through the PSTN , the pricing for which shall be as set forth by Skype from time to time and for which pricing for the Company-Skype Branded Application will be the same as pricing set by Skype for customers using Skype Software subject to such modifications as are reasonably necessary to take into account the effect of applicable taxation, currency fluctuations and to comply with PRC regulations and provided that Skype shall be permitted from time to time to set prices which provide for the same gross margin as the prices set forth from time to time for non co-branded versions of SkypeOut.

  1.46 Statement shall have the meaning set forth in Section 5.3.1 herein.



1.47 Statement of Work means each sequentially numbered document executed by the Parties from time to time following the execution of this Agreement, the form of which is attached hereto as Exhibit A, describing the Services to be performed by the applicable Party, the Deliverables, applicable fees, scope of work and appropriate project timelines, as well as any requirements, considerations, or objectives which differ from the general provisions of this Agreement. If any provision of a Statement of Work conflicts with any of the terms and conditions of this Agreement, the provisions of this Agreement shall take precedence.

  1.48 Subsidiary and Holding Company each have the meaning set out in Section 736 of the Companies Act 1985 of the United Kingdom.

  1.49 Term shall have the meaning set forth in Section 6.1 herein.

  1.50 Third Party Affiliate Partner shall have the meaning set forth in Section 1.3 herein.

  1.51 Tom Parties means Online BVI and Tom Holding and Tom Party means any one of them.

  1.52 Transaction Documents means this Agreement, the Deed and any other agreement or arrangement entered into by a Tom Party (or its Affiliate) and a Skype Party (or its Affiliate) in respect of the subject matter of this Agreement or the Deed.

  1.53 Web Browser means third party software designed to allow interactive access to the World Wide Web (and in some cases to other Internet resources as well).

  1.54 Web Page means a document or file that is formatted using HTML, Java, Active-X, CGI Scripting, and/or any other Internet programming and formatting language developed now or in the future, and that is intended to be accessible by Internet users with a Web Browser.

  1.55 Web Site means a group of related HTML documents and associated files, scripts, and data bases that are made available on the World Wide Web through a server.   7

Source: TOM ONLINE INC, 20-F, 5/1/2006





  1.56 World Wide Web means all of the Web Pages that are accessible to a typical computer user with appropriate access to the Internet and a Web Browser.   2. COMPANY-SKYPE BRANDED APPLICATION, COMPANY-SKYPE BRANDED WEB SITE and COMPANY-SKYPE BRANDED CONTENT

2.1. Company-Skype Branded Application. At its sole cost, Skype shall design and produce the Company-Skype Branded Application in accordance with the terms and conditions of this Agreement. Skype shall provide updates and upgrades of the Company-Skype Branded Application and/or the Company-Skype Toolbar at or about the same times as updates and upgrades to the Skype Software and/or the Skype Toolbar, respectively, are generally provided by Skype to other users of the Skype Software and/or the Skype Toolbar, as applicable, to the extent commercially practicable, it being understood that localisation will take place after the generally distributable versions of the update or upgrades to the Skype Software and/or the Skype Toolbar, as applicable, have been generally released. Notwithstanding the foregoing, Skype agrees to take under advisement and consider the Company's recommendations (or the recommendations of Online BVI on behalf of the Company) on the timing and suitability of any updated or upgraded Company-Skype Branded Application and/or the Company-Skype Toolbar. For the purposes of this Agreement, any reference to the Company-Skype Branded Application and/or the Company-Skype Toolbar shall include any updates and/or upgrades thereto. Without limiting the generality of the foregoing, Skype agrees that as soon as practicable after such time as the technology that would allow the Skype Software to be distributed to and used on mobile communication devices (for purposes hereof, the Mobile Technology) is made available by Skype or any of its Affiliates to users of the Skype Software, Skype will update or upgrade the Company-Skype Branded Application to include such technology therein. Skype further agrees that in the event that, prior to such time as the Company-Skype Branded Application is updated or upgraded to include the Mobile Technology, Skype or any of its Affiliates makes available to Skype users a new software product which allows access to services available through the Skype Software but on or through mobile communication devices (but in any event excluding Skype Zones), it will license that software product to the Company and Online BVI on the terms and conditions set forth in this Agreement with respect to the Skype Software and the Company-Skype Branded Application customized therefrom, and references to the Skype Software in this Agreement shall be deemed to include such software product.

2.2. Company-Skype Branded Web Site. The Company will, and Online BVI will cause the Company to, design, produce, host, and maintain the structure, appearance, and content mutually agreed by the Parties, as described below, comprising the Company-Skype Branded Web Site and the Company-Skype Branded Content located therein, including, without limitation, by providing any necessary and suitable hardware and any other equipment or facilities necessary to fulfil such requirements. Except with respect to the Skype Brand Features and the Online BVI Brand Features located on the Company-Skype Branded Web Site, the Online BVI Web Site and/or in the Company-Skype Branded Content, which Skype and Online BVI, respectively, may approve or reject in its sole discretion, the design, production, hosting, and maintenance of the structure, appearance, and content comprising the Company-Skype Branded Web Site and the Company-Skype Branded Content shall be mutually agreed by the Parties. Skype shall provide the Company-Skype Branded Application to the Company, and the Company will, and Online BVI will cause the Company to, make the Company-Skype Branded Application available for download by Customers through the Online BVI Web Site and/or the Company-Skype Branded Web Site and any other Web Site mutually agreed by the Parties, and once the technology is made available by Skype for it to do so, through mobile phones and other distribution channels.   8

Source: TOM ONLINE INC, 20-F, 5/1/2006





2.3. Promotions.

2.3.1. The Company will, and Online BVI will cause the Company to, use its commercially reasonable efforts to promote the Company- Skype Branded Application and the Company-Skype Branded Web Site to all of Online BVI's customers in the Territory, as each is agreed by the Parties in accordance with Section 2.2 above. Subject to Section 2.3.2, all decisions relating to the specific promotional activities of the Company and the Online Group hereunder, including, without limitation, any advertising, licensing, distribution or other exploitation of the Company-Skype Branded Application, Company-Skype Toolbar, Company-Skype Branded Content or Company-Skype Branded Web Site, shall be mutually agreed upon, provided, however, that the Online Group shall at a minimum (i) promote the availability of the Company-Skype Branded Application to all visitors of the Online BVI Web Site, (ii) promote the availability of the Company-Skype Branded Application to all its existing customers and/or users, provided that this obligation shall not require the Online Group to communicate with those customers and/or users by SMS or e-mail where prohibited by contract, applicable laws, regulations and/or policies of telecommunications operators, and (iii) place each of the following in a reasonably conspicuous position within a prominent home or next level Web Page, the preferred partners area, and any other area or other Web Pages within the Online BVI Web Site as the Parties may mutually agree to from time to time: (x) links to the Company-Skype Branded Application and a mutually-agreeable short profile of Skype; and (y) promotional material for the Company-Skype Branded Application and links to the Company-Skype Branded Web Site.

2.3.2. Notwithstanding anything herein to the contrary, the Parties agree that they shall in the first quarter of each calendar year and the third quarter of each calendar year reach an agreement on the respective semi-annual promotional plan prepared by the Company, or by Online BVI for and on behalf of the Company, in each case in consultation with Skype (Semi-Annual Promotions Plan). In the event the Parties are unable to agree at any time with respect to such Semi-Annual Promotions Plan, the Semi-Annual Promotions Plan for the immediately prior period shall apply. So long as the Company does not materially deviate from the Semi-Annual Promotions Plan for that relevant year, neither Online BVI nor the Company, as applicable, need to seek a separate approval from Skype under Section 2.3.1 prior to undertaking a promotional activity during that year.

2.4. Customer Support.

2.4.1. During the Term, each of Online BVI and the Company, on the one hand, and Skype, on the other hand, shall provide to the other, at no cost, technical support, documentation and co-ordination reasonably requested to assist in the optimal offering of the Company-Skype Branded Application in the PRC.

2.4.2. The Company shall be responsible for, and Online BVI shall cause the Company to provide, all first level support to the Company- Skype Branded Customers, which shall be its standard customer support—twenty four hours a day, seven days a week, provided that Skype shall provide the Online Group with reasonably prompt back-end support and network connection support, in each case to the extent such support is within the control of Skype, on a twenty four hours a day and seven days a week basis, as may be reasonably required from time to time. In this connection, Skype shall provide assistance and give a reply to the Company on each back-end and network connection service request in no less than twelve (12) hours after the receipt of such request from the Company. Skype shall also maintain and provide access to the customer support forum on the Skype Site, in the English language only.

2.4.3. In the event any Party has a major service fault, they will inform the other Party and make commercially reasonable efforts to resolve such issue as soon as practicable, and will not be in breach so long as such Party is exercising its commercially reasonable efforts to resolve such service fault.   9

Source: TOM ONLINE INC, 20-F, 5/1/2006





2.5. Payment Methods. The Company will, and Online BVI will cause the Company to, use its commercially reasonable efforts to make available and promote the Online Group's existing payment processing and customer billing and payment gateway methods for the purchase of Skype premium features by Company-Skype Branded Customers, including, without limitation, prepaid card distribution networks, vouchers and mobile payment methods, provided, that all payment processing and customer billing and payment gateway charges for such payment methods are on terms that are as or more favourable than the most favourable pricing and terms for such services otherwise provided at the applicable time by any member of the Online Group, and provided further that such pricing and terms have first been mutually approved in writing by the Parties.

2.6. Support Information. Should Online BVI or Company at any time develop support information for end users regarding the Company- Skype Branded Application (Support Information), all such Support Information must receive the prior written approval of Skype, which approval shall not be unreasonably withheld. Should Online BVI, or the Company, at any point during the Term, remove such Support Information from the Company-Skype Branded Web Site, the Company will, and Online BVI will cause the Company to, provide a link to the relevant Skype Software customer support page on the Skype Site in a prominent position on the Company-Skype Branded Web Site.

2.7. Look and Feel. Subject to the express terms contained in any Statement of Work, the Company will, and Online BVI will cause the Company to, work together with Skype to develop an acceptable Look and Feel for projects developed under this Agreement, including, without limitation, the Company-Skype Branded Application, Company-Skype Toolbar, the Company-Skype Branded Web Site and the Company-Skype Branded Content, as applicable. Notwithstanding anything in this Agreement to the contrary, all such projects shall be subject to, and comply with, the Skype Policies, a copy of the most recent version of which shall be provided by Skype to Company prior to the execution of this Agreement.

2.8. Skype EULA. Each of Online BVI and the Company acknowledges and agrees that each Company-Skype Branded Customer who installs the Company-Skype Branded Application and/or the Company-Skype Toolbar must agree (by electronically acknowledging acceptance or any other means) to Skype's then standard End User License Agreement for the Skype Software and/or the Skype Toolbar (as the case may be) which Skype may modify from time to time at its sole discretion (EULA). To the extent practicable and otherwise not adversely affecting the rights of Skype therein, Skype shall cause the provisions of the EULA to comply with the applicable laws and regulations of the PRC and/or policies/practices of the telecommunications operators and handset manufacturers in the PRC that are requested in writing by Online BVI and/or the Company and delivered to Skype in advance, and which are agreeable to both parties. If Skype is unwilling to modify its EULA and counsel for the Company or Skype provides Skype with a legal opinion that unless modifications are made to the EULA the Company will thereafter be in material violation of applicable laws of the PRC and Skype nevertheless elects not to make such modifications as are necessary to comply with the laws of the PRC, the Company, Online BVI or Skype may thereafter terminate this Agreement by delivery to the other parties 30 days written notice of termination. Upon any such termination, the Parties will comply with the other provisions surviving termination hereunder, including, without limitation, Section 6.3.

2.9. Compliance with Laws. To the extent practicable and not otherwise adversely affecting the rights of any party to this Agreement, the Parties shall use their commercially reasonable efforts to ensure that the Company-Skype Branded Content and Company-Skype Branded Web Site complies with the applicable laws and regulations of the PRC that are identified in writing by Online BVI and/or the Company and delivered to Skype in advance.   10

Source: TOM ONLINE INC, 20-F, 5/1/2006





3. PUBLIC ANNOUNCEMENTS

The Parties agree to participate in a joint press announcement regarding this Agreement, the Company-Skype Branded Application and the Company-Skype Branded Web Site, which will take place on a mutually agreed upon date. The form and content of any joint press release shall be mutually agreed upon by the Parties in writing prior to the public transmittal, display, distribution or publication thereof. In any press release regarding the Company-Skype Branded Application, both Skype's and Tom Holding's name and logo shall be included in the press release, and shall appear with equal prominence.

4. PROPRIETARY RIGHTS & LICENSE GRANTS

4.1 Licenses.

4.1.1 Skype License. Subject to the terms and conditions of this Agreement, Online BVI hereby grants to Skype and the Company a limited, non-exclusive, non-sublicensable (except as set forth herein), non-transferable, non-assignable (except as provided in Section 14.4), royalty- free (but subject to the provisions of Section 5), license during the Term to use, market, provide access to, promote, reproduce and display the Online BVI Intellectual Property solely as incorporated in, and for the development of and for transmission pursuant to this Agreement of the Company-Skype Branded Application, the Company-Skype Branded Content and the Company-Skype Branded Web Site. Notwithstanding the foregoing, upon the prior written approval of Online BVI, which approval may be withheld in its sole discretion, the Company shall be permitted to sublicense its rights hereunder to a wholly-owned Subsidiary of the Company or a majority-owned Subsidiary of Tom Holding, for the same purpose and under the same terms and conditions as the license set forth herein.

4.1.2 Company License. Subject to the terms and conditions of this Agreement:

4.1.2.1 Skype hereby grants to Online BVI and the Company a limited, non-exclusive, non-sublicensable (except as set forth herein), non-transferable, non-assignable (except as provided in Section 14.4), royalty-free (but subject to the provisions of Section 5), license during the Term to use, market, provide access to, promote, reproduce and display the Skype Intellectual Property solely (i) as incorporated in the Company-Skype Branded Application and/or the Company-Skype Toolbar, and (ii) as incorporated in, for the development of, and for transmission pursuant to this Agreement of, the Company-Skype Branded Content and the Company-Skype Branded Web Site, in each case for the sole purposes (unless otherwise mutually agreed by the Parties) of promoting and distributing, pursuant to this Agreement, the Company-Skype Branded Application, the Company-Skype Toolbar, the Company-Skype Branded Content and the Company-Skype Branded Web Site in the Territory; (a) provided, that it is understood that the Company-Skype Branded Customers will have the right under the EULA to use the Company- Skype Branded Application and the Company-Skype Toolbar and will have the right to access the Company-Skype Branded Content, the Company-Skype Branded Web Site and the Online BVI Web Site through the Internet and to otherwise receive support from the Company anywhere in the world, and that the Company shall be permitted to provide access to and reproduce and display the Skype Intellectual Property through the Internet anywhere in the world, and (b) provided further, that Online BVI and the Company shall ensure that no Company-Skype Branded Customer (or potential Company-Skype Branded Customer) shall be permitted to access, using the Company-Skype Branded Application or the Company-Skype Toolbar or through the Company-Skype Branded Web Site, any Skype premium features requiring payment by the Company-Skype Branded Customer (or potential Company-Skype Branded Customer), including, but not limited to, SkypeIn, SkypeOut, or Skype Plus, unless such Company-Skype Branded Customer (or potential Company-Skype Branded Customer) uses the payment methods made available by the Company pursuant to Section 2.5 for the purchase of such premium features.   11

Source: TOM ONLINE INC, 20-F, 5/1/2006





4.1.2.2 Notwithstanding the foregoing, upon the prior written approval of Skype, which approval may be withheld in its sole discretion, the Company shall be permitted to sublicense its rights hereunder to a wholly-owned Subsidiary, a majority-owned Subsidiary of Tom Holding, or to an unaffiliated third party distributor or reseller, for the same purpose and under the same terms and conditions as the license set forth herein. In connection with approval of any unaffiliated third party distributor, or reseller the Company will discuss the manner of collection of revenue by, the audit provisions to be obtained from, and the creditworthiness of the proposed unaffiliated third party distributor or reseller, and, if agreed by Skype, with respect to such unaffiliated third party distributor or reseller only, Skype may, in its sole discretion notwithstanding the provisions of Section 5, agree that Gross Revenue to the extent generated by that unaffiliated third party distributor or reseller will arise on the date payment with respect to that revenue is due from the unaffiliated third party distributor or reseller to the Company as opposed to the date upon which the applicable revenue is actually collected by the third party distributor or reseller and the operation of the provisions of Section 5 in respect of the revenue due from that unaffiliated third party distributor or reseller shall be amended accordingly.

4.1.3 Restrictions. Each Party may only use the Intellectual Property of the other Party as expressly set forth in the licenses provided in this Section 4.

4.1.3.1 Except as provided herein, no member of the Online Group or the Group may in any manner (i) modify the Skype Software, Skype Toolbar, Company-Skype Toolbar and/or Company-Skype Branded Application or any Improvement thereof; (ii) distribute, sell, transfer, encumber, sublicense, rent, loan, lend or lease the Skype Software and/or the Skype Toolbar, and/or any component thereof to any third party; or (iii) reverse engineer, decompile, disassemble or otherwise attempt to discover or directly access the source code of the Skype Software, Skype Toolbar and/or Company-Skype Branded Application, and/or any component thereof. For purposes of clarity, the rights granted to Online BVI pursuant to this Section 4 exist solely for the purposes of performance of this Agreement.

4.1.3.2 Except as provided herein, no member of the Skype Group or the Group may in any manner (i) modify any of the Online BVI Intellectual Property or any Improvements thereof; or (ii) distribute, sell, transfer, encumber, sublicense, rent, loan, lend or lease any Online BVI Intellectual Property, and/or any component thereof to any third party. For purposes of clarity, the rights granted to Skype pursuant to this Section 4 exist solely for the purposes of performance of this Agreement.

4.1.4 Reservation of Rights. Each Party does not grant, and hereby expressly reserves unto itself, all rights not granted in this Agreement. Nothing in this Agreement shall be construed to prevent either party from using or from granting any other licenses and rights to other Persons to use the Intellectual Property licensed under this Section 4 in any manner whatsoever in the Territory.

4.2 Ownership.

4.2.1 Skype Intellectual Property. Each of Online BVI and the Company acknowledges and agrees that Skype shall, at all times, exclusively own all rights, title, and interest in the Skype Intellectual Property, and all Improvements and translations thereof (Skype Rights). Neither Online BVI nor the Company will grant, nor claim for itself or other affiliated entities, independent contractors, or employees, either expressly or impliedly, any rights, title, interest, or licenses to the Skype Rights. For purposes of clarity, any and all language translations to the Company-Skype Branded Application or Company-Skype Toolbar created by or on behalf of Skype, or the Company, or Online BVI, on behalf of the Company (other than translations to any Online BVI Intellectual Property or any Improvements thereof made by the Group or the Online Group), shall be deemed Improvements of the Skype Intellectual Property and shall be subject to Skype's approval, which shall not be unreasonably withheld or delayed. The Company and Online BVI each assign to Skype, with full title guarantee, all copyrights, patents, trade marks, service marks, rights of publicity, authors' rights, contract and licensing rights, goodwill and all other intellectual property rights in and to the foregoing translations as may exist now and/or hereafter come into existence and arising under the laws of any jurisdiction for the entire term of such rights and all renewals, revivals and extensions thereof.   12

Source: TOM ONLINE INC, 20-F, 5/1/2006





4.2.2 Online BVI Intellectual Property. Each of Skype and the Company acknowledges and agrees that the Online Group shall, at all times, exclusively own all rights, title, and interest in the Online BVI Intellectual Property, and all Improvements and translations thereto (Group Rights). Neither Skype nor the Company will grant, nor claim for itself or other affiliated entities, independent contractors, or employees, either expressly or impliedly, any rights, title, interest, or licenses to the Group Rights.

4.2.3 Improvements; Jointly Created Intellectual Property.

4.2.3.1. Each of Online BVI and the Company acknowledges and agrees that Skype shall, at all times, exclusively own all right, title, and interest in the Company-Skype Branded Application and the Company-Skype Toolbar, save and except for the Group Rights (including, without limitation, any Improvement to the Group Rights) to the extent included therein, and that Skype will exclusively own any Improvement to any Skype Rights. Each of Skype and the Company acknowledges and agrees that the Online Group shall, at all times, exclusively own all right, title, and interest in the Company-Skype Branded Web Site, save and except for the Skype Rights (including, without limitation, any Improvement to the Skype Rights) to the extent included therein, and that Online BVI will exclusively own any Improvement to any Group Rights. The right, title and interest in and to the Company-Skype Branded Content shall be owned by Skype to the extent made up of the Skype Rights which have been integrated into the Company-Skype Branded Content, and by the Online Group to the extent made up of the Group Rights which have been integrated into the Company-Skype Branded Content.

4.2.3.2. If any intellectual property rights that are subject to legal protection are created or developed jointly by the Parties as a result of the collaboration under this Agreement, such intellectual property rights shall be owned as follows:

4.2.3.2.1. if such rights comprise (i) intellectual property that constitutes predominantly communication software or related communication hardware or other technology, including without limitation, any upgrades and Improvements thereof, or (ii) any user names, and other user profile information included within the Company-Skype Branded Application (i.e., dates of birth, addresses, languages spoken, etc.), of Company-Skype Branded Customers collected as part of the registration process for the Company-Skype Branded Application (it being understood that Skype will make such user information available to Online BVI and the Company for use consistent with the applicable privacy policies and the EULA) and any database incorporating the same, then such rights shall be owned exclusively by Skype and neither Online BVI nor the Company will grant, nor claim for itself or its affiliated entities, independent contractors, or employees, either expressly or impliedly, any rights, title, interest, or licenses to such rights and each assigns to Skype, with full title guarantee, all copyrights, patents, trade marks, service marks, rights of publicity, authors' rights, contract and licensing rights, goodwill and all other intellectual property rights in and to the same as may exist now and/or hereafter come into existence and arising under the laws of any jurisdiction for the entire term of such rights and all renewals, revivals and extensions thereof.   13

Source: TOM ONLINE INC, 20-F, 5/1/2006





4.2.3.2.2. if such rights comprise any data specifically provided to the Group by Customers during the billing process (Billing Data), then such rights shall be owned exclusively by the Online Group and neither Skype nor the Company will grant, nor claim for itself or its affiliated entities, independent contractors, or employees, either expressly or impliedly, any rights, title, interest, or licenses to such rights and each assigns to Online BVI, with full title guarantee, all copyrights, patents, trade marks, service marks, rights of publicity, authors' rights, contract and licensing rights, goodwill and all other intellectual property rights in and to the same as may exist now and/or hereafter come into existence and arising under the laws of any jurisdiction for the entire term of such rights and all renewals, revivals and extensions thereof.

4.2.3.2.3. if such rights comprise (i) analysis prepared for or on behalf of the Parties as participants in the Company-Skype Branded Application, or (ii) any intellectual property right co-developed by the Parties, or (iii) of any Support Information, or (iv) any data as specifically provided to Skype or the Online Group by Company-Skype Branded Customers (Joint Data), other than that set forth in Sections 4.2.3.2.1 and 4.2.3.2.2 above and other than any Group Rights or Skype Rights, then such rights shall be jointly owned by the Parties, and may be exploited by any Party in accordance with this Agreement, and outside of this Agreement to the extent such exploitation would not, (x) in the case of Online BVI, violate or infringe upon the Skype Rights, (y) in the case of Skype, violate or infringe upon the Group Rights, or (z) in the case of the Company, violate or infringe upon the Group Rights or the Skype Rights.

4.2.3.2.4. Notwithstanding the foregoing, the Company may use the Skype API for the sole purpose of developing applications that connect with the Company-Skype Branded Application (Add-On Applications), and provided that such use is at all times in compliance with the terms of the API provisions of the EULA as released by Skype from time to time, such Add-On Applications shall be owned by the Company as set forth in the EULA.

5. PAYMENTS AND REPORTING

5.1 Other Revenue. The Company-Skype Branded Application will permit Company-Skype Branded Customers to access basic features at no charge to the Company-Skype Branded Customers. It is hereby acknowledged and agreed that the rights granted by the Online Group hereunder are not exclusive (save as provided herein) and the Online Group will offer its own products and services through various channels and may receive subscription and other fees (Separate Fees) for such services (Separate Services), other than and not in any manner relating to the Company-Skype Branded Application, the Company-Skype Toolbar, the Company-Skype Branded Web Site or the Company-Skype Branded Content, offered by the Online Group from time to time and accessible separate from, and entirely independent of, the Company-Skype Branded Application, the Company-Skype Toolbar, Company-Skype Branded Web Site and/or the Company-Skype Branded Content. No portion of the Separate Fees shall be payable to or shared in by Skype or the Group. Notwithstanding the foregoing, if approved in writing by Skype, which approval may be withheld in its sole discretion, the Online Group may (i) charge any additional or separate fees to access the Company-Skype Branded Web Site, Company-Skype Branded Content, Company-Skype Branded Application or Company-Skype Toolbar, or (ii) offer any Separate Services or charge any Separate Fees by or through the Company-Skype Branded Web Site, Company-Skype Branded Content, Company-Skype Branded Application or Company-Skype Toolbar. It is hereby acknowledged and agreed that the rights granted by Skype hereunder are not exclusive (save as provided herein) and Skype will offer its own products and services, other than and not in any manner relating to the Company- Skype Branded Application, Company-Skype Toolbar, Company-Skype Branded Web Site or Company-Skype Branded Content, through various channels accessible separate from, and entirely independent of, the Company-Skype Branded Application, Company-Skype Toolbar, Company- Skype Branded Web Site and/or the Company-Skype Branded Content, and that no portion of the revenue derived from such products and services shall be payable to or shared with the Online Group or the Group.   14

Source: TOM ONLINE INC, 20-F, 5/1/2006





5.2 Revenue Sharing. In consideration of the licenses and other agreements set forth herein, Skype shall be entitled to receive 50% of all Adjusted Net Revenue, and the Company shall be entitled to receive 50% of all Adjusted Net Revenue. Notwithstanding the foregoing, Online BVI shall be entitled to receive 50% of all Adjusted Net Revenue, in lieu of the Company's right to be paid hereunder, in the event that (A) this Agreement remains in effect, (B) Online BVI assumes the obligations of the Company hereunder, and (C) (i) the Deed is terminated pursuant to the terms thereof, or (ii)) the Company is being or has been wound up, liquidated or dissolved. Unless otherwise mutually agreed by the Parties in writing, the Company and Online BVI shall provide for, or make available, the payment methods, fraud prevention mechanisms, and other services related to the receipt of payments in connection with SkypeOut, SkypeIn or Skype Plus services provided through the Company-Skype Branded Application or Company-Skype Branded Web Site (Payment Services), in each case as shall be previously approved in writing by Skype, which approval may be withheld in its sole discretion. The Company and Online BVI shall provide the Payment Services directly, or make available, or, to the extent previously approved in writing by Skype, which approval may be withheld in its sole discretion, through a respective Subsidiary or other Affiliate (including, without limitation, a Subsidiary or other Affiliate of the Online Group), licensee, distributor or reseller thereof. For purposes of clarity, Company will, and Online BVI will cause the Company to, pay directly any and all Direct Expenses, including, without limitation, Direct Expenses incurred by Skype, promptly upon invoice. In the event that Skype provides any Payment Services, Skype shall provide the Payment Services directly, or, to the extent previously approved in writing by Online BVI, which approval may be withheld in its sole discretion, through a respective Subsidiary or other Affiliate (including, without limitation, a Subsidiary or other Affiliate of the Skype Group), licensee, distributor or reseller thereof. For purposes of clarity, in the event Skype provides any Payment Services, Skype will pay directly any and all Direct Expenses incurred in order for the Payment Services to be provided by Skype promptly upon invoice, and will be entitled to receive reimbursement of such Direct Expenses from the Company upon invoice.

5.3 Statements; Payments.

5.3.1 Within thirty (30) days of the end of each calendar quarter during the Term, the Company will, and Online BVI will cause the Company to, furnish to Skype complete and accurate statements (each, a Statement) in a form acceptable to Skype, certified to be accurate by an officer of the Company or Online BVI, as applicable, showing with reasonable detail (i) the Gross Revenue actually received and collected by the Company or Online BVI, or if applicable, any Subsidiary or other Affiliate (including, without limitation, a Subsidiary or other Affiliate of Tom Holding), licensee, distributor or reseller thereof, during the preceding calendar quarter and on a cumulative basis, (ii) the Direct Expenses incurred thereby, during the preceding calendar quarter and on a cumulative basis, and (iii) the calculation of Adjusted Net Revenue. In the event that Skype provides any Payment Services hereunder, within thirty (30) days of the end of each calendar quarter during the Term, Skype shall furnish to the Company complete and accurate Statements in a form acceptable to Online BVI, certified to be accurate by an officer of Skype, showing with reasonable detail (i) the Gross Revenue actually received and collected by Skype, or if applicable, its Subsidiaries or other Affiliates (including, without limitation, a Subsidiary or other Affiliate of Skype Holding), licensee, distributor or reseller thereof, during the preceding calendar quarter and on a cumulative basis, (ii) the Direct Expenses incurred thereby, during the preceding calendar quarter and on a cumulative basis, and (iii) the calculation of Adjusted Net Revenue. The respective Parties shall use their best efforts to accompany each respective Statement with payment, to Skype, if provided by the Company or Online BVI (or their associated third parties set forth above), or to the Company (or Online BVI, as applicable), if provided by Skype (or its associated third parties set forth above), as applicable, of 50% of the Adjusted Net Revenue shown on the respective Statements. Provided that the respective Parties utilize their best efforts to provide such payments together with the respective Statements, no Party shall be deemed in breach hereof for delivering late payment until the date which is sixty (60) days following the last day of the respective applicable calendar quarter. All payments shall be paid in Euros, and in the event revenue is earned by a Party (or its associated third parties set forth above) in currencies other than in Euros, then such Party shall convert said amounts each month into Euros based upon the exchange rate published by the Wall Street Journal as of the fifteenth day of such month or if such day shall fall on a non-business day then as of the first business day following said fifteenth day.   15

Source: TOM ONLINE INC, 20-F, 5/1/2006





5.3.2 Interest shall be payable on any amounts paid later than the date due hereunder at the prime rate as reported by the New York edition of the Wall Street Journal on the day the amount is due calculated from the date any amount is due until the date of receipt of the relevant sum by the applicable Party.

5.3.3 The Parties agree to provide such further information relating to Adjusted Net Revenue as may be reasonably available and as may be reasonably requested by the other Parties by giving 14 days' prior written notice to the relevant Party from time to time.

5.3.4 All sums payable to a Party under this Agreement shall be made to such Party by bank wire transfer to the account set forth in accordance with details given by such Party from time to time and shall only be treated as received when credited to such Party's account by its bank.

5.3.5 All payments will be made without deduction, withholding, counterclaim or set-off of any kind or nature. The Parties will supply each other with all appropriate forms required to be submitted to avoid withholding taxes insofar as local laws allow and shall give each other reasonable help in completing and filing these forms and shall give each other a certificate for any such tax which is withheld. In the event that the law requires deduction or withholding from any payments due to a receiving Party under this Agreement, the paying Party shall increase the applicable gross amounts payable to the extent necessary to ensure that the amount received by the receiving Party is not less than the stated amounts due hereunder. If the receiving Party receives the benefit of a tax credit or an allowance resulting from a payment which includes such an additional amount, the receiving Party shall pay to the paying Party such part of that benefit as in its opinion will leave it (after such payments) in no more and no less favourable a position then it would have been in if no deduction or withholding had been made.

5.3.6 All payments to be made to a receiving Party hereunder shall be exclusive of any applicable Value Added Tax or sales or similar tax, duty, or levy which shall be paid by the paying Party (where applicable) upon submission of the appropriate invoice for them.

5.4 Audit Rights. The Parties (including Online BVI on behalf of the Online Group) agree to maintain records (i) of all information reasonably necessary to verify all calculations to be made under Section 8.3.2, and (ii) supporting, verifying and necessary to demonstrate the calculation and collection of fees and/or revenue, as well as any deductions thereto, and payments made hereunder, including, without limitation, budgets, purchase orders, expense records, invoices, correspondence, banking and financial and other records pertaining to the determination of Gross Revenue, Direct Expenses and Adjusted Net Revenue, during the term of this Agreement and for a period of two (2) years following the expiration or termination hereof. Not more than once per calendar quarter, each Party or its independent auditor (who shall be a certified public accountant) shall have the right, on not less than fifteen (15) calendar days prior notice and not during the first twenty (20) days after the close of any fiscal quarter of the other Parties, or within sixty (60) day of the close of such Parties' respective fiscal years, to audit the books of account and records of any and all such Parties. Such audit shall be conducted at the premises where the audited Party maintains consolidated books of account; provided however, that the auditing Party may conduct all or any part of such audit at any of the audited Party's premises where any relevant books of account and/or records are located. During such audits, the auditing Party shall have the right to take extracts and/or make copies of the audited Party's records as it deems necessary. Such audits shall be at the auditing Party's cost, except that, subject to Section 5.5, if an audit by an independent accounting firm establishes a deficiency of more than three percent (3%) between the amount shown to be due to the auditing Party and the amount actually paid for the period being audited, all actual and reasonable costs and expenses incurred by the auditing Party in connection with such audit shall be paid by the audited Party, along with the amount of any deficiency, within five (5) business days.   16

Source: TOM ONLINE INC, 20-F, 5/1/2006





The exercise by any Party in whole or in part, at any time of the right to inspect and/or audit records and accounts or of any other right herein granted, or the acceptance by such Party of any statement or statements or the receipt and/or deposit by such Party, of any payment tendered by or on behalf of an audited Party shall be without prejudice to any rights or remedies of the accepting Party and such acceptance, receipt and/or deposit shall not preclude or prevent such accepting Party from thereafter disputing the accuracy of any such statement or payment.

Each Party shall cause any Subsidiary or other Affiliate (including, without limitation, a Subsidiary or other Affiliate of the Online Group or Skype Group, as applicable) to grant to the other Party the audit rights granted hereunder with respect to such other Party.

5.5 Notwithstanding any other provision in this Agreement, in the event of a discrepancy between the records of any Party with that of a third party billing agent that is not an Affiliate of such Party (including, without limitation, records of telecommunications network operators), in the absence of manifest error, the revenue statement or other records provided by such third party billing agent shall prevail and be conclusive for the purposes of this Agreement, including, without limitation, the determination of the amounts of Gross Revenue under this Agreement; provided, however, that the Company shall use commercially reasonable efforts to verify the reporting of, and collect payment from, all third party billing agents..

6. TERM AND TERMINATION

6.1 Term. The term of this Agreement shall continue for a period of five years following the initial date of execution of the Memorandum, unless terminated earlier pursuant to Section 6.2 or Section 2.8 (Initial Term). This Agreement shall automatically continue following the Initial Term, for an additional period of three (3) years, unless a party to this Agreement provides written notice of termination to the other parties at least sixty (60) days prior to the expiration of the Initial Term or this Agreement (Extended Term and, with the Initial Term, Term).

6.2 Termination for Cause. Any party to this Agreement shall have the right to terminate this Agreement during the Term by giving notice to another party to this Agreement or to any party that is not an Affiliate of the terminating party (collectively, Defaulter): (i) if a petition is presented or a proceeding is commenced or an order is made or an effective resolution is passed for the winding-up, insolvency, administration, reorganisation, reconstruction, dissolution or bankruptcy of the Defaulter or for the appointment of a liquidator, receiver, administrator, trustee or similar officer of the Defaulter or of all or any part of its business or assets; (ii) if the Defaulter is unable or admits its inability to pay its debts as they fall due or enters into any composition or other arrangement with its creditors or is declared or becomes bankrupt or insolvent; (iii) if a creditor takes possession of all or any part of the business or assets of the Defaulter or any execution or other legal process is enforced against the business or any substantial asset of the Defaulter and is not discharged within 90 days (iv) any procedure or step is taken in any jurisdiction analogous to any of the matters referred to in this clause; (v) if the Defaulter ceases to carry on its business or any substantial part thereof or if the Defaulter disposes of or threatens to dispose of or any governmental or other authority expropriates or threatens to expropriate all or any substantial part of its business or assets or displaces or threatens to displace the management of the Defaulter; (vi) if the Defaulter or any Affiliate of the Defaulter is in material breach of its obligations hereunder or under any Transaction Document and such breach, if capable of remedy, has not been remedied at the expiry of 30 days following written notice to that effect having been served on the Defaulter by the other Shareholder indicating the steps required to be taken to remedy the failure; (vii) if the Defaulter or any Affiliate of the Defaulter repeats or continues (after written warning) to breach its obligations hereunder or under any Transaction Document (such breach, having not been remedied within 30 days following written notice to that effect having been served on the Defaulter by the other Shareholder indicating the steps required to be taken to remedy the failure); and/or (viii) if the Parties have consummated a transaction whereby Skype has purchased all of the Shares (as defined in the Deed) of Company held by Online BVI or its Affiliates pursuant to the terms of the Deed.   17

Source: TOM ONLINE INC, 20-F, 5/1/2006





6.3 Duties Upon Termination. Subject to Section 6.5 and to the extent required for the Parties to give effect to Section 6.4, upon termination or expiration of this Agreement, the following shall occur:

6.3.1 Each Party shall (i) immediately stop displaying, featuring, linking or in any other manner using the Company-Skype Branded Application (provided in the case of Skype, other than the Skype Software in the Company-Skype Branded Application), Company-Skype Toolbar, Company-Skype Branded Web Site, Company-Skype Branded Content, any co-branded materials or any other Intellectual Property of the other Parties (including, without limitation, Intellectual Property deemed to be owned by the other Parties under Section 4.2.3.2); (ii) return such materials directly to the other Parties, or delete and overwrite any electronically stored copies of such materials within thirty (30) days from the date of termination of this Agreement; (iii) within such thirty (30) day period, deliver to the other Parties a certificate duly executed by its authorised officer certifying its compliance with the foregoing, and (iv) provide the other Parties with such information and access to data and databases as may be necessary to permit such other Parties to fulfil any contractual obligations by them to users of the Company-Skype Branded Application undertaken by such other Parties prior to the time of termination.

6.3.2 The Parties agree that upon termination of this Agreement, all Links, if any, between the Skype Site and the Online BVI Web Site or the Company-Skype Branded Web Site shall be removed.

6.3.3 The termination or expiration of this Agreement shall not act as a waiver of any breach of this Agreement and shall not act as a release of either party for any liability or obligation, including, without limitation, any payment due pursuant to Section 5.3, incurred under this Agreement.

6.4 The Parties agree that notwithstanding any termination or expiration of this Agreement, the rights and licenses granted to any Company- Skype Branded Customers prior to termination or expiration of this Agreement pursuant to any EULA shall continue during the 24 months after such termination or expiration for the sole purpose of permitting such users to continue to access and utilize the Company-Skype Branded Application and the Company-Skype Toolbar, and so long as any Gross Revenue is received with respect to the Company-Skype Branded Application and/or the Company-Skype Toolbar, the provisions of Section 5 shall continue to be applicable after any termination or expiration.

6.5 Except as otherwise set forth in Section 4.2.3.2.3 and this Section 6, upon termination or expiration of this Agreement all rights and licenses granted hereunder shall immediately terminate.

7. REPRESENTATIONS AND WARRANTIES

7.1 Mutual Representations and Warranties. Each of the parties to this Agreement warrant and represent that it has the full right and power to enter into this Agreement and that no contractual right of any third party will be violated, breached or negatively impacted by entering into this Agreement. Skype further warrants and represents that the Skype Rights will not contain any libelous or otherwise unlawful material or violate any copyright, trade mark, or personal or proprietary right of any Person, regardless of whether such rights arise under the laws of the PRC, the United States, European Union, or any other state, country or jurisdiction. Online BVI further warrants and represents that the Group Rights will not contain any libelous or otherwise unlawful material or violate any copyright, trade mark, or personal or proprietary right of any Person, regardless of whether such rights arise under the laws of the PRC, the United States, European Union, or any other state, country or jurisdiction.   18

Source: TOM ONLINE INC, 20-F, 5/1/2006





7.2 No Representation as to Number of Users, Capabilities or Revenue Hereunder. For the avoidance of doubt, and notwithstanding any portion of this Agreement to the contrary, no party to this Agreement has made and no party to this Agreement does hereby make any representation or warranty with respect to the quantity of Company-Skype Branded Customers (if any) that shall arise hereunder, the commercial success of the Company-Skype Branded Application, Company-Skype Toolbar or Company-Skype Branded Web Site, the future features or functionality of the Company-Skype Branded Application, Company-Skype Toolbar or the aggregate revenues to be received by the parties to this Agreement.

8. NON-COMPETITION

8.1 Non-Competition.

8.1.1 Each Party agrees that, for a period of five years (Non-Competition Period) from the Effective Date (End Date), no Party, nor any of their respective Affiliates, will enter into an agreement with any third party, or otherwise carry on any business, directly or indirectly, which is focused on, and targets, primarily Consumers within the PRC, and (i) in the case of Skype and Skype Holding, which provides for a co-branded Internet-based application in simplified Chinese similar in functionality and features as the Company-Skype Branded Application (as may be updated or upgraded from time to time) (and for the avoidance of doubt, a co-branded Internet-based application in simplified Chinese shall be similar in functionality and features as the Company-Skype Branded Application only in the event such application is a customized co-branded version of the Skype Software having one or more functionality or features contained in the Company-Skype Branded Application), or provides for distribution in the PRC of the Skype Software in simplified Chinese by a Primarily PRC Based Service Provider; and (ii) in the case of Online BVI, Tom Holding and the Company, which provides for any voice over internet protocol and/or instant messaging products or services that compete or are likely to compete with the Skype Software.

8.1.2 Each Party agrees that, from the Effective Date and through the three (3) month period (Enterprise Non-Competition Period) immediately following the date (Enterprise Launch Date) that Skype launches an enterprise version of the Skype Software primarily targeted for non-Consumer customers (Enterprise Skype Software), no Party, nor any of their respective Subsidiaries, will (i) discuss, negotiate or enter into (whether verbal or in writing) with any third Person or other third party (Other Party) any understanding, arrangement, or memorandum of understanding, letter of intent, agreement or any other documents (whether or not legally binding); and/or (ii) voluntarily accept or solicit any offer made by any Other Party in respect of or in relation to, (a) in the case of Skype, an enterprise co-branded Internet-based application in simplified Chinese that is focused on, and targeted primarily at, non-Consumers within the PRC, and that is substantially similar in functionality and features as the Enterprise Skype Software, and (b) in the case of Online BVI, Tom Holding and the Company, any voice over internet protocol and/or instant messaging products or services that compete or are likely to compete with the Enterprise Skype Software. During the Enterprise Non-Competition Period, the Parties agree to use their commercially reasonable efforts to discuss mutually agreeable terms pursuant to which the Company would, and Online BVI would cause the Company to, promote, market and distribute in the PRC an enterprise co-branded Internet-based application in simplified Chinese that is focused on, and targeted primarily at, non-Consumers within the PRC, and that is substantially similar in functionality and features as the Enterprise Skype Software.   19

Source: TOM ONLINE INC, 20-F, 5/1/2006





8.2 Skype Exception. In the case of Skype and its Affiliates, the foregoing restrictions shall not apply:

8.2.1 (a) (i) for the avoidance of doubt, to the operations of Skype as existing now or hereafter undertaken with respect to any non co- branded version of the Skype Software distributed by Skype except where those operations provide for distribution in the PRC of the Skype Software in simplified Chinese by a Primarily PRC Based Service Provider, or (ii) the operations of Skype customers and Affiliates under any agreement existing as of the date hereof (e.g., with HGC), or (b) to any agreement now existing or hereafter entered into with an entity that operates in multiple international markets, which may include the PRC, so long as such agreement applies to multiple territories, which may include the PRC in addition to other territories, and does not, directly or indirectly, allow or provide for distribution in the PRC of the Skype Software in simplified Chinese by a Primarily PRC Based Service Provider (other than any service provider formed for the sole purpose of performing such agreement and not operating in the PRC prior to the date of such agreement), or (c) to any (i) Affiliate Program or (ii) any agreement or activity under the Affiliate Program by or with any third party, except in the case where the Affiliate Program, directly or indirectly, allows or provides for distribution in the PRC of the Skype Software in simplified Chinese by a Primarily PRC Based Service Provider (other than any service provider formed for the sole purpose of performing such agreement and not operating in the PRC prior to the date of such agreement); or

8.2.2 with respect to the provisions of Section 8.1.2, during any period following the expiration of the Enterprise Non-Competition Period.

8.3 Termination of Non-Competition Period. Notwithstanding any portion of the foregoing to the contrary, the Non-Competition Period shall terminate prior to the End Date, and for the avoidance of doubt, no party shall be obligated to comply with the restrictions set out in Section 8.1 after the termination of the Non-Competition Period:

8.3.1 within thirty (30) days of the end of the Type One Cure Period (defined below) where:

8.3.1.1 Skype or Online BVI has delivered a notice (Type One Notice) to (i) the Company and Online BVI (in the case of Skype), or (ii) the Company and Skype (in the case of Online BVI), in the event that:

  (A) the SkypeOut or SkypeIn service has been available for use in the PRC for at least forty-five (45) days; and



(B) neither the Company nor Online BVI are providing services themselves or making available services for the SkypeOut or SkypeIn service, which in each case are reasonably accessible to all Company-Skype Branded Customers, which allow the Company-Skype Branded Customers to make payment for the Company-Skype Branded Application, including, without limitation, by at least one of the following methods: prepaid cards or mobile phone billing or online payment gateway or telephone company billing; and   20

Source: TOM ONLINE INC, 20-F, 5/1/2006





8.3.1.2 the circumstances under Section 8.3.1.1(B) have not been cured by the end of the full calendar month following the delivery of the Type One Notice (Type One Cure Period); and

8.3.1.3 the Party who delivers the Type One Notice gives notice to the other Parties of its intention to exercise its right to end the Non-Competition Period within 30 days of the expiry of the Type One Cure Period.; or   8.3.2 within thirty (30) days of the end of the Type Two Cure Period (defined below) where:

8.3.2.1 Skype or Online BVI has delivered a notice (Type Two Notice) to (i) the Company and Online BVI (in the case of Skype), or (ii) the Company and Skype (in the case of Online BVI), in the event that, either:



(A) in any calendar quarter (measured as of the last day of the applicable calendar quarter) during the Non-Competition Period (Quarter), the total number of Customers utilizing the Company-Skype Branded Application does not increase at a growth rate (i.e., the number of new registered users as of the last day of the Quarter divided by the total number of registered users on the first day of the same Quarter ) that is equal to or better than 50% of the growth rate of the number of Skype customers using the non-co-branded versions of the Skype Software for the same period (determined by excluding from the denominator and the numerator any Skype customers obtained by Skype by corporate merger or acquisition of another VOIP business, and through any other co-branding relationships); or



(B) in any two consecutive calendar quarters (measured as of the last day of each applicable calendar quarter) during the Non- Competition Period (Consecutive Quarters), the total number of Customers utilizing the Company-Skype Branded Application does not increase at a growth rate in either one of the Consecutive Quarters (i.e., the number of new registered users as of the last day of each of the Consecutive Quarters divided by the total number of registered users on the first day of the same quarter) that is equal to or better than 70% of the growth rate of the number of Skype customers using the non-co-branded versions of the Skype Software in the same two quarter period (determined by excluding from the denominator and the numerator any Skype customers obtained by Skype by corporate merger or acquisition of another VOIP business, and through any other co-branding customers),

provided that where there is any period (Affected Period) during a Quarter (in the case of Section 8.3.2.1(A)) or any one of the Consecutive Quarters (in the case of Section 8.3.2.1(B)) in which there is any act or embargo of governmental, quasi-governmental or regulatory authorities or any regulations or restrictions imposed, whether by such authorities, by law or by court action (Regulatory Event), directly or indirectly affecting the performance by any Party of any obligation hereunder or otherwise affecting the number of Customers utilizing the Company-Skype Branded Application and a notice of such Regulatory Event has been given by a Party to the other Parties, the Quarter and/or Consecutive Quarters (as the case may be) for calculating any growth rate under Section 8.3.2.1(A) and/or Section 8.3.2.1(B) (as the case may be) shall be deemed to commence on the first day of the full calendar month immediately after the end of the Affected Period (provided that where a Regulatory Event continues for more than three months, the Affected Period in respect of such Regulatory Event shall be deemed to have ended at the end of the third month following the delivery of notice of such Regulatory Event by the applicable Party and the applicable Party shall not be entitled to deliver another notice for such Regulatory Event which was so deemed to have ended) and any period between the end of the previous Quarter and/or Consecutive Quarters (as the case may be) and the start of the Affected Period shall be disregarded for the purposes of calculating the growth rate under Section 8.3.2.1(A) and Section 8.3.2.1(B); and   21

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8.3.2.2 the growth rate specified in Section 8.3.2.1(A) or Section 8.3.2.1(B) (as the case may be) has not been met when calculated for the applicable Quarter or Consecutive Quarters (as the case may be), and the required growth rate fails to have been met when calculated for the period beginning on the first day of the applicable Quarter or Consecutive Quarters (as the case may be) specified in the Type Two Notice (as the Quarter or Consecutive Quarters in which the relevant growth rate was not met) and ending on the last day of the full calendar month immediately following the date of delivery of the Type Two Notice (or where such calendar month is affected by a Regulatory Event, the last day of the full calendar month immediately after the end of the Affected Period) (such cure period shall be referred to herein as Type Two Cure Period); and

8.3.2.3 the Party who delivers the Type Two Notice gives notice to the other Parties of its intention to exercise its right to end the Non-Competition Period within 30 days of the expiry of the Type Two Cure Period.

9. LICENSES

9.1 The Group shall, and Online BVI shall cause the Group to, use its reasonable endeavours to obtain from the applicable PRC regulatory authorities such licenses as are necessary for the operation of their respective businesses in the PRC (Operating Licenses).

9.2 The parties to this Agreement agree that, during the Term and prior to the obtaining by the Group of the Operating Licenses, the Online Group will act as agent for the Group in carrying out such distribution of the Company-Skype Branded Application or other activities as are restricted under PRC laws and regulations to holders of the relevant licenses which activities are represented by the Online Group to be permitted under the licenses held by the Online Group.

10. DEPENDENCY

10.1 In the event that a Tom Party, a Skype Party, the Company or any other member of the Group (Affected Party) is prevented from performing an obligation or undertaking or complying with any provision under this Agreement as a direct result of a breach of any of the terms of this Agreement or the Deed (Breach) by:

  10.1.1 in the case of a Tom Party, a Skype Party;

  10.1.2 in the case of a Skype Party, a Tom Party; and

  10.1.3 in the case of the Company or any member of the Group, a Skype Party or a Tom Party,

and the Affected Party provides written notice to the breaching party detailing the Breach and requiring the breaching party to cure the Breach within thirty (30) days of the date of the notice, the Affected Party shall not be obligated to perform the relevant obligation or undertaking affected by the Breach so long as such Breach continues uncured where such non-performance or non-compliance would be deemed a material breach of this Agreement or the Deed, and shall not be liable for such material breach. For the avoidance of doubt, the withholding by any Party of consent as a Shareholder under the Deed, as such consent may be required in the Deed from time to time (including, without limitation, pursuant to clause 6 thereof), shall not be deemed a Breach.   22

Source: TOM ONLINE INC, 20-F, 5/1/2006





11. CONFIDENTIAL INFORMATION

11.1 Each party to this Agreement acknowledges and agrees that by reason of its relationship to the other parties to this Agreement it will have access to and acquire knowledge from, material, data, systems and other information concerning the operation, business, financial affairs, products, customers and intellectual property of the other parties to this Agreement that may not be accessible or known to the general public, including, but not limited to the terms of this Agreement (Confidential Information). The parties to this Agreement agree that Confidential Information shall remain the sole and exclusive property of the disclosing party (Disclosing Party), and the receiving party (Receiving Party) agrees to maintain the Confidential Information in strict confidence and to use Confidential Information solely for the purposes set forth in this Agreement. The parties to this Agreement further acknowledge and agree for the purposes of this Section 11, Confidential Information shall be deemed to include all Skype Intellectual Property and all Online BVI Intellectual Property, as applicable.

11.2 The Receiving Party agrees: (i) that it will maintain and preserve the confidentiality of all Confidential Information, including, but without limitation, taking such steps to protect and preserve the confidentiality of the Confidential Information as it takes to preserve and protect the confidentiality of its own confidential information; (ii) that it will disclose such Confidential Information only to its own Affiliates and employees on a need-to-know basis only, and only to those Affiliates and employees who have entered into a confidentiality agreement, the obligations of which are at least as stringent as those contained in this Section 11; (iii) that if software is involved, it will not disassemble, reverse engineer, reverse compile or analyze the inputs and outputs of any software or hardware provided under this Agreement for any purpose, including but not limited to, attempting to ascertain or deduce the functionality or workings of the software or hardware; and (iv) that it will not disclose such Confidential Information to any third party (including subcontractors and consultants) without the express written consent of the Disclosing Party, provided, however, that the Receiving Party may disclose the financial terms of this Agreement and/or any Statement of Work to its legal and business advisors and to potential investors, so long as such third parties have entered into a confidentiality agreement with the Receiving Party, the obligations of which are at least as stringent as those contained in this Section 11.

11.3 The Receiving Party agrees (i) not to alter or remove any identification of any copyright, trade mark or other proprietary rights notice which indicates the ownership of any part of the Confidential Information, and (ii) to notify the Disclosing Party of the circumstances surrounding any possession, use or knowledge of the Confidential Information by any Person other than those authorized by this Agreement.

11.4 Confidential Information shall exclude any information that (i) has been or is obtained by the Receiving Party from a source independent of the Disclosing Party and not receiving such information from the Disclosing Party, (ii) is or becomes generally available to the public other than as a result of an unauthorized disclosure by the Disclosing Party or its personnel, (iii) is independently developed by the Receiving Party without reliance in any way on the Confidential Information provided by the Disclosing Party, (iv) the Receiving Party is required to disclose under judicial order, regulatory requirement, or statutory requirement, provided that the Receiving Party provides written notice and an opportunity for the Disclosing Party to take any available protective action prior to such disclosure, or (v) is owned by the Disclosing Party pursuant to the terms hereof or provided on a non-confidential basis under the terms hereof.   23

Source: TOM ONLINE INC, 20-F, 5/1/2006





12. DISCLAIMER & LIMITATION OF LIABILITY

12.1 Disclaimer of Warranties. THE WARRANTIES SET FORTH HEREIN ARE LIMITED WARRANTIES AND ARE THE ONLY WARRANTIES MADE BY THE RESPECTIVE PARTIES TO THIS AGREEMENT. THE PARTIES TO THIS AGREEMENT EXPRESSLY DISCLAIM, AND HEREBY EXPRESSLY WAIVE, ALL OTHER WARRANTIES AND ALL OTHER CONDITIONS, TERMS AND UNDERTAKINGS WHATSOEVER, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY, PERFORMANCE, QUALITY AND FITNESS FOR A PARTICULAR PURPOSE AND SUCH WARRANTIES, CONDITIONS, TERMS AND UNDERTAKINGS ARE EXCLUDED TO THE FULLEST EXTENT PERMITTED BY LAW. EXCEPT AS MAY BE SET FORTH HEREIN, THE SKYPE SOFTWARE IS LICENSED AS IS WITHOUT WARRANTY OF ANY KIND. IN ADDITION, NO PARTY TO THIS AGREEMENT MAKES ANY REPRESENTATION THAT THE OPERATION OF ITS RESPECTIVE PRODUCTS, SERVICES OR WEB SITES WILL BE UNINTERRUPTED OR ERROR-FREE, THAT DEFECTS WILL BE CORRECTED, AND THAT THE PRODUCTS, SERVICES OR WEB SITE WILL BE FREE OF VIRUSES OR OTHER HARMFUL COMPONENTS.

12.2 Limitation of Liability.

12.2.1 TO THE MAXIMUM EXTENT PERMISSIBLE UNDER APPLICABLE LAW, EXCEPT FOR THE WILFUL MISAPPROPRIATION OR INFRINGEMENT OF THE INTELLECTUAL PROPERTY OF A PARTY TO THIS AGREEMENT, OR THE OBLIGATIONS OF THE PARTIES TO THIS AGREEMENT PURSUANT TO SECTION 13, (A) THE LIABILITY OF ANY PARTY TO THIS AGREEMENT, IF ANY, FOR DAMAGES FOR ANY CLAIM OF ANY KIND WHATSOEVER AND REGARDLESS OF THE LEGAL THEORY, WITH REGARD TO THE RIGHTS GRANTED HEREUNDER OR THE SERVICES PERFORMED HEREUNDER, SHALL NOT INCLUDE COMPENSATION, REIMBURSEMENT OR DAMAGES ON ACCOUNT OF THE LOSS OF PRESENT OR PROSPECTIVE PROFITS, EXPENDITURES, DATA, OPPORTUNITY, ANTICIPATED SAVINGS, INVESTMENTS OR COMMITMENTS, WHETHER MADE IN ESTABLISHMENT, DEVELOPMENT OR MAINTENANCE OF REPUTATION OR GOODWILL OR FOR ANY OTHER REASON WHATSOEVER; AND (B) IN NO EVENT SHALL ANY PARTY TO THIS AGREEMENT BE LIABLE TO THE OTHER PARTIES TO THIS AGREEMENT FOR SPECIAL, INDIRECT, CONSEQUENTIAL, INCIDENTAL, PUNITIVE OR CONSEQUENTIAL DAMAGES. THE PARTIES ACKNOWLEDGE AND AGREE THAT NOTHING IN THIS SECTION 12.2 SHALL LIMIT A PARTY'S OBLIGATION TO PAY ANY AMOUNTS DUE AND OWING TO THE OTHER PARTY UNDER SECTION 5 ON OR BEFORE ANY DATE OF EXPIRATION OR TERMINATION HEREOF.

13. INDEMNIFICATION

13.1 Company Indemnification. Tom Holding unconditionally guarantees the timely performance of all of the obligations of Online BVI, the Group and the Online Group hereunder, and agrees to defend, indemnify, and hold harmless Skype, Skype Holding, their affiliated companies and Subsidiaries and their respective officers, directors, employees and agents from and against any loss, claim, cost, expense, liability or damage, including reasonable attorney's fees and costs resulting from a third-party claim that directly arises from: (i) a claim that the Group Rights infringe the intellectual property or other proprietary rights of any third party; (ii) a breach of the Online Group's and the Group's representations and warranties hereunder made; (iii) the performance of the Online Group's and the Group's obligations hereunder; or (iv) the Online Group's and the Group's, or their respective employees' negligence, misrepresentations or other tortious, illegal or unauthorized conduct in the promotion of the Company-Skype Branded Application or any other act or omission arising out of or relating to this Agreement. Such indemnification obligation of Tom Holding is conditioned upon Skype promptly notifying Tom Holding in writing setting forth with specificity the claim or action to which such indemnification obligation applies, and reasonable cooperation, information, and assistance in connection therewith. Tom Holding will have the right to control the defense of each such claim and any lawsuit or proceeding arising therefrom. In no event will Skype settle any such claim or lawsuit or proceeding arising therefrom without the prior written approval of Tom Holding. In defending against such claim or action, Tom Holding may (i) contest; (ii) settle; (iii) and in the case of any claim that the Group Rights infringe the intellectual property or other proprietary rights of a third party, (a) procure for Skype and its customers the right to continue using the Group Rights, as applicable, or (b) modify or replace the Group Rights, as applicable, so that it they longer infringe.   24

Source: TOM ONLINE INC, 20-F, 5/1/2006





13.2 Skype Indemnification. Skype Holding unconditionally guarantees the timely performance of all of the obligations of Skype hereunder, and agrees to defend, indemnify, and hold harmless Online BVI, Tom Holding, the Company and any member of the Online Group and the Group, its affiliated companies and Subsidiaries and their respective officers, directors, employees and agents from and against any loss, claim, cost, expense, liability or damage, including reasonable attorney's fees and costs resulting from a third-party claim that directly arises from: (i) a claim that the Skype Rights infringe the intellectual property or other proprietary rights of any third party; (ii) a breach of Skype's representations and warranties hereunder made; (iii) the performance of its obligations hereunder; or (iv) its or its employees' negligence, misrepresentations or other tortious, illegal or unauthorized conduct in the promotion of the Company-Skype Branded Application or any other act or omission arising out of or relating to this Agreement. Such indemnification obligation of Skype is conditioned upon Tom Holding promptly notifying Skype Holding in writing setting forth with specificity the claim or action to which such indemnification obligation applies, and reasonable cooperation, information, and assistance in connection therewith. Skype Holding will have the right to control the defense of each such claim and any lawsuit or proceeding arising therefrom. In no event will the Online Group or the Group settle any such claim or lawsuit or proceeding arising therefrom without the prior written approval of Skype Holding. In defending against such claim or action, Skype Holding may (i) contest; (ii) settle; (iii) and in the case of any claim that the Skype Rights infringe the intellectual property or other proprietary rights of a third party, (a) procure for Online Group and its customers, or the Group, the right to continue using the Skype Rights, as applicable, or (b) modify or replace the Skype Rights, as applicable, so that it they longer infringe.

13.3 Guarantor. The guarantees in the foregoing clauses are to be continuing guarantees and accordingly to remain in force until all the obligations or liabilities of the relevant parties shall have been performed or satisfied in full. Subject to any other provisions of this Agreement, the guarantees are in addition to and without prejudice to and not in substitution for any rights or security which parties may now or hereafter have or hold for the performance and observance of the obligations, commitments, undertakings and warranties of the parties under this Agreement.

13.4 Notice; Participation. The party claiming indemnification pursuant to this Section 13 (Indemnified Party) shall promptly notify the other party (Indemnifying Party) of any such claim of which it becomes aware and shall: (i) at the Indemnifying Party's expense, provide reasonable cooperation to the Indemnifying Party in connection with the defense or settlement of any such claim, and (ii) at the Indemnified Party's expense, be entitled to participate in the defense of any such claim.

13.5 Infringement Remedy. If a claim, action, suit or proceeding is brought against the Skype Group under Section 13.1(i), or against the Online Group or the Group under Section 13.2(i), resulting from any party's respective use of the other party's Intellectual Property, then the Indemnifying Party may at its own election (and at its own expense) (i) replace substantially equivalent Intellectual Property for the infringing item, (ii) modify or fix the infringing item so that it no longer infringes but remains functionally equivalent, (iii) obtain for the benefit of the other party the right to continue using such item in accordance with this Agreement, or (iv) immediately terminate this Agreement. THE FOREGOING PROVISIONS OF THIS SECTION 13.5 STATE THE ENTIRE LIABILITY AND THE EXCLUSIVE REMEDY OF THE PARTIES TO THIS AGREEMENT WITH RESPECT TO INFRINGEMENT OR ALLEGED INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS.   25

Source: TOM ONLINE INC, 20-F, 5/1/2006





13.6 Settlement. The Indemnified Party agrees that the Indemnifying Party shall have sole and exclusive control over the defense and settlement of any such third party claim. However, the Indemnifying Party shall not acquiesce to any judgment or enter into any settlement that adversely affects the Indemnified Party's rights or interests without prior written consent of the Indemnified Party.

14. GENERAL

14.1 Effect of Termination of Deed; References to Company. In the event that, while this Agreement remains in effect, (i) the Deed is terminated pursuant to the terms thereof, or (ii) the Company is being or has been wound up, liquidated or dissolved, Online BVI shall assume the rights and obligations of the Company hereunder.

14.2 Governing Law. This Agreement will be governed by and construed in accordance with the laws of England and Wales, without regard to conflict of laws principles. Subject to the parties' rights to seek injunctive relief or other right in equity by any court of competent jurisdiction, the parties to this Agreement expressly understand and agree that any dispute arising under this Agreement will be brought exclusively in the courts located in England and Wales and the parties to this Agreement hereby consent to the exclusive personal jurisdiction and venue therein. The foregoing shall not preclude the parties to this Agreement from seeking injunctive relief permitted hereunder in courts with such jurisdiction as may be needed to grant injunctive relief for protection of that party's intellectual property rights. Each of the parties to this Agreement hereby irrevocably appoints the following persons as its agent to receive and acknowledge on its behalf service of any writ, summons, order, judgment or other notice of legal process in England:

For Online BVI and Tom Holding:

Simmons & Simmons Citypoint One Ropemaker Street London EC2Y 9SS United Kingdom

For Skype and Skype Holding:

S Technologies 2nd Floor, 7-11 Lexington Street London W1F 9AF United Kingdom

For the Company:

Simmons & Simmons Citypoint One Ropemaker Street London EC2Y 9SS United Kingdom   26

Source: TOM ONLINE INC, 20-F, 5/1/2006





If for any reason the relevant agent named above (or its successor) refuses to serve or no longer serves as agent of the Company or Online BVI/Tom Holding or, as the case may be, Skype/Skype Holding for this purpose, the Company or Online BVI/Tom Holding or, as the case may be, Skype/Skype Holding` shall promptly appoint a successor agent, notify each of the other parties thereof and deliver to each of the other parties a copy of the new process agent's acceptance of appointment, provided that until each of the other parties receive such notification, the party or parties not having received such notification shall be entitled to treat the agent named above (or its said successor) as the agent of such party for the purposes of this Section 14.2. Each of the parties to this Agreement agrees that any such legal process shall be sufficiently served on it if delivered to such agent for service at its address set forth above whether or not such agent gives notice thereof to it.

14.3 Entire Agreement; Termination of Memorandum. This Agreement, including the Exhibits attached hereto, and the Deed, constitute the entire Agreement and understanding between the parties to this Agreement and integrates and supersedes all prior discussions, agreements or arrangements between them related to its subject matter. No modification of any of the terms of this Agreement shall be valid unless in writing and signed by an authorized representative of each party to this Agreement. Upon execution of this Agreement by all parties to this Agreement, the Memorandum shall be deemed terminated and cancelled. Each party acknowledges that in entering into this Agreement, it does not rely on, has not relied on, and shall have no remedy in respect of, any statement, representation, warranty or other provision (in any case whether oral or written, express or implied and whether negligently or innocently made) of any Person (whether a party to this Agreement or not) which is not expressly set out in this Agreement and the only remedy available in respect of any misrepresentation or untrue statement made to such party shall be a claim for breach of contract under this Agreement except to the extent that the misrepresentation or untrue statement is repeated in this Agreement in which case any remedies for misrepresentation shall be unaffected and nothing in this clause shall operate to limit or exclude any liability arising from any fraudulent or dishonest statement, act or omission.

14.4 Assignment. This Agreement may not be assigned by a party to this Agreement to any other Person without the express written approval of the other parties to this Agreement and any attempt at assignment in violation of this section shall be null and void. Notwithstanding the foregoing, Skype or Skype Holding may assign this Agreement to a third party without such consent in the event of a merger, reorganization or sale of all or substantially all of Skype's or Skype Holding's assets or voting securities, provided that written notice of such assignment is delivered to Online BVI and the Company and the assignee assumes all the responsibilities and obligations provided herein.

14.5 Notices. All legal notices required or permitted hereunder shall be given in writing addressed to the respective parties to this Agreement as set forth below and shall either be (i) personally delivered, (ii) transmitted by postage prepaid certified mail, return receipt requested, or (iii) transmitted by nationally recognized private express courier, and shall be deemed to have been given on the date of receipt if delivered personally, or three (7) days after deposit in mail or three (3) days if delivered by express courier. A party to this Agreement may change its address for purposes hereof by written notice to the other in accordance with the provisions of this Section 14.5. The addresses for the parties to this Agreement are as set forth in the preamble hereof, with attention in each case to the respective Chief Executive Officer.

14.6 Rights to Injunctive Relief. The parties to this Agreement acknowledge that remedies at law or damages may be inadequate to the other parties to this Agreement to provide full compensation in the event of a material breach relating to the other parties' obligations, representations, and warranties hereunder, and each party to this Agreement shall therefore be entitled to seek injunctive relief or specific performance in the event of any actual or threatened material breach by a party to this Agreement.   27

Source: TOM ONLINE INC, 20-F, 5/1/2006





14.7 Waiver. The waiver, express or implied, by a party to this Agreement of any breach of this Agreement by another party to this Agreement will not waive any subsequent breach by such party of the same or a different kind. A failure to exercise or delay in exercising any right, remedy or power provided under this Agreement or by law does not constitute a waiver of the right, remedy or power or a waiver of any other right, remedy or power. No single or partial exercise of any right, remedy or power prevents any further exercise of it or the exercise of any other right, remedy or power. Except where this Agreement provides otherwise, the rights, remedies and powers provided by this Agreement are cumulative and not exclusive of any rights, remedies or powers provided by law.

14.8 Headings. The headings to the Sections and Exhibits of this Agreement are included merely for convenience of reference and shall not affect the meaning of the language included therein.

14.9 Independent Contractors. The parties to this Agreement acknowledge and agree that they are dealing with each other hereunder as independent contractors. Nothing contained in this Agreement shall be interpreted as constituting any party the joint venturer, employee or partner of the other party or as conferring upon any party the power of authority to bind another party in any transaction with third parties.

14.10 Severability. In the event any provision of this Agreement is held by a court or other tribunal of competent jurisdiction to be unenforceable, such provision shall be reformed only to the extent necessary to make it enforceable, and the other provisions of this Agreement will remain in full force and effect.

14.11 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. For purposes hereof, a facsimile copy of this Agreement, including the signature pages hereto, shall be deemed to be an original. Notwithstanding the foregoing, the parties to this Agreement shall deliver original execution copies of this Agreement to one another as soon as practicable following execution thereof.

14.12 Attorney's Fees. Should a party hereto initiate a legal or administrative action or proceeding (Action) to enforce any of the terms or conditions of this Agreement, the prevailing party (as determined by the court or other fact-finder) shall (to the extent permitted by English law) be entitled to recover from the losing party or parties all reasonable costs of the Action, including without limitation attorneys' fees and costs.

14.13 Further Assurances. Each Party shall promptly execute and deliver all such documents, and do all such things, as the other Party may from time to time reasonably require for the purpose of giving full effect to the provisions of this Agreement.

14.14 Governing Language. This Agreement is in the English language only, and all communications between the parties relative to this Agreement shall be conducted in the English language only.

14.15 Survival. Sections 1, 4.2 (but not 4.2.3.2.4), 5.4, 6.3, 6.4, 6.5, 7, 11, 12, 13, and 14 and the obligation to pay any amount accrued but not yet paid shall survive termination or expiration of this Agreement.

14.16 The parties agree that the provisions of this Agreement are personal to them and are not intended to confer any rights of enforcement on any third party. The Contracts (Rights of Third Parties) Act 1999 shall not apply to this Agreement or to any of its provisions.   28

Source: TOM ONLINE INC, 20-F, 5/1/2006





IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Effective Date.   SKYPE COMMUNICATIONS, S.A.

By:     Its:  Chief Executive Officer

SKYPE TECHNOLOGIES , S.A.

By:     Its:  Chief Executive Officer

TOM ONLINE (BVI) LIMITED

By:     Its:  Chief Executive Officer

TOM ONLINE INC.

By:     Its:  Chief Executive Officer

TEL-ONLINE LIMITED

By:     Its:  Director   29

Source: TOM ONLINE INC, 20-F, 5/1/2006





EXHIBIT A

FORM OF STATEMENT OF WORK   1. Introduction:

The following is Statement of Work No.   (Statement of Work), made as of    , 200 , to the Co-Branding Agreement (Agreement) executed on August 22, 2005, by and among (a) Skype Communications, S.A., a Luxembourg limited company (société anonyme) (Skype), with its principal place of business at 6 rue Adophe Fischer, L-1520 Luxembourg, Luxembourg, (b) Skype Technologies, S.A., a Luxembourg limited company (société anonyme) (Skype Holding), with its principal place of business at 6 rue Adolphe Fischer, L-1520 Luxembourg; (c) Tom Online (BVI) Limited, a company formed under the laws of the British Virgin Islands (Online BVI), whose correspondence address is at 8th Floor, Tower W3, Oriental Plaza No.1 Dong Changan Avenue, Dong Chang District, Beijing 100738, PRC; (d) Tom Online Inc., a Cayman Islands corporation (Tom Holding), a company listed on GEM Board of The Stock Exchange of Hong Kong and NASDAQ, with its correspondence address at 8th Floor, Tower W3, Oriental Plaza No.1 Dong Changan Avenue, Dong Chang District, Beijing 100738, PRC; and Tel-Online Limited, a company formed under the laws of the Cayman Islands (Company), whose correspondence address is at 8th Floor, Tower W3, Oriental Plaza No.1 Dong Changan Avenue, Dong Chang District, Beijing 100738, PRC. Except as specifically stated herein, each capitalized term used in this Statement shall have the same meaning as is assigned to it in the Agreement. The effective date (Effective Date) of this Statement is  ,  , 200 .   2. General Description of Services:

[TO BE ADDED]   3. Deliverables:

[TO BE ADDED]   4. Completion Dates:

[TO BE ADDED]   5. Fees:

[TO BE ADDED]   6. Term:

[TO BE ADDED]   7. Contributor's Agreement:

The Company will, and Online BVI will cause the Company to, require any employee or independent contractor who works on or provides materials or services pursuant to Paragraph 3 above to execute a Contributor's Agreement in a form reasonably acceptable to Skype. Upon Skype's request, the Company will, and Online BVI will cause the Company to, provide Skype copies of all executed Contributor's Agreements.

Source: TOM ONLINE INC, 20-F, 5/1/2006





Online BVI and the Company agree that the Project Manager listed below as Company Project Manager has full authority to direct and provide feedback relating to the Services described in this Statement. Any party may change its Project Manager from time to time, upon notice to the other parties and subject to the qualifications set forth in the preceding sentence.   Company Project Manager:   Skype Project Manager: ____________________________________________________   ____________________________________________________

____________________________________________________   ____________________________________________________ Phone:_______________________________________________   Phone: _______________________________________________ Fax: ________________________________________________   Fax: ________________________________________________ E-mail: ______________________________________________   E-mail: ______________________________________________

IN WITNESS WHEREOF, the parties hereto have agreed to this Statement of Work as of the Effective Date written above.   SKYPE COMMUNICATIONS, S.A.

By:     Its:  Chief Executive Officer

SKYPE TECHNOLOGIES , S.A.

By:     Its:  Chief Executive Officer

TOM ONLINE (BVI) LIMITED

By:     Its:  Chief Executive Officer

TOM ONLINE INC.

By:     Its:  Chief Executive Officer

TEL-ONLINE LIMITED

By:     Its:  Director

Source: TOM ONLINE INC, 20-F, 5/1/2006 
Question: Highlight the parts (if any) of this contract related to Cap On Liability that should be reviewed by a lawyer. Details: Does the contract include a cap on liability upon the breach of a party’s obligation? This includes time limitation for the counterparty to bring claims or maximum amount for recovery.
[A]: TO THE MAXIMUM EXTENT PERMISSIBLE UNDER APPLICABLE LAW, EXCEPT FOR THE WILFUL MISAPPROPRIATION OR INFRINGEMENT OF THE INTELLECTUAL PROPERTY OF A PARTY TO THIS AGREEMENT, OR THE OBLIGATIONS OF THE PARTIES TO THIS AGREEMENT PURSUANT TO SECTION 13, (A) THE LIABILITY OF ANY PARTY TO THIS AGREEMENT, IF ANY, FOR DAMAGES FOR ANY CLAIM OF ANY KIND WHATSOEVER AND REGARDLESS OF THE LEGAL THEORY, WITH REGARD TO THE RIGHTS GRANTED HEREUNDER OR THE SERVICES PERFORMED HEREUNDER, SHALL NOT INCLUDE COMPENSATION, REIMBURSEMENT OR DAMAGES ON ACCOUNT OF THE LOSS OF PRESENT OR PROSPECTIVE PROFITS, EXPENDITURES, DATA, OPPORTUNITY, ANTICIPATED SAVINGS, INVESTMENTS OR COMMITMENTS, WHETHER MADE IN ESTABLISHMENT, DEVELOPMENT OR MAINTENANCE OF REPUTATION OR GOODWILL OR FOR ANY OTHER REASON WHATSOEVER; AND (B) IN NO EVENT SHALL ANY PARTY TO THIS AGREEMENT BE LIABLE TO THE OTHER PARTIES TO THIS AGREEMENT FOR SPECIAL, INDIRECT, CONSEQUENTIAL, INCIDENTAL, PUNITIVE OR CONSEQUENTIAL DAMAGES.


[Q]: Exhibit 10.22



                      1

                   Strategic Alliance Agreement                     Intricon Corporation  1260 Red Fox Road  Arden Hills, Minnesota 55112  United States                   and                   Dynamic Hearing Pty Ltd  2 Chapel Street, Richmond, VIC 3121  AUSTRALIA





      AGREEMENT     This Agreement is entered into and is effective as of the 1st day of October, 2008 (Commencement Date) by and between IntriCon  Corporation, a Pennsylvania Corporation having a place of business at 1260 Red Fox Road, Arden Hills, Minnesota 55112 USA (hereinafter  IntriCon) and Dynamic Hearing Pty Ltd a Corporation organized under the laws of Victoria, Australia and having a place of business at 2 Chapel  Street, Richmond, Victoria 3121, Australia (hereinafter Dynamic Hearing) agree to collaborate with each other as a Strategic Alliance. As such, this  Strategic Alliance Agreement (SAA) outlines the principles and the understanding of the parties and defines related terms and conditions.     WHEREAS, Dynamic Hearing has developed technology useful for products in the Hearing Health (HH) Assisted Listening Device  (ALD) and Professional Communications (PADA) markets and DSP platforms which are hereinafter defined.     WHEREAS, IntriCon has also developed technology for the HH, ALD and PADA markets and DSP platforms.

   1.1 The purpose of this alliance is to exploit the parties' complimentary capabilities for producing DSP Technology products for the HH,  ALD, and PADA markets.

   The following terms in the context of this SAA shall have the following meanings:

   An Assisted Listening Device (ALD) is a



   Hearing Aids are amplification devices primarily designed to compensate for hearing loss, designed for listening only (through a  microphone, telecoil, Direct Audio Input or other similar audio pathways and run on a low power hybrid circuit. Hearing Aids may include in-the- ear Hearing Aids (ITE), behind-the-ear Hearing Aids (BTE), or completely-in-the-canal Hearing Aids (CIC).

   Professional Audio/Communication Devices (PADA)  are wired or wireless headsets or other devices used for one-way or two-way  communications in professional or industrial settings such as law enforcement, sport events, professional performances, search and rescue, and  military operations.     2

  1.0    Purpose

  2.0    Definitions

       2.1    Assisted Listening Devices

       1.    One way communications device           2.    Used for hearing protection or listening in challenging environments, and           3.    Contains Ultra Low Power (ULP) DSP and or ULP Wireless technology

       2.2    Hearing Aids:

       2.3    Professional Audio/Communication Devices







   DSP means digital signal processing. More specifically, for the purposes of this SAA, DSP Technology shall mean ON Semiconductor  hardware and firmware algorithms used for the HH, PADA and ALD markets. Hardware shall include the ON Semiconductor Ezairo DSP, and the  Single Chip Hearing Amplifier (SCHA) from ON Semiconductor.

   IntriCon Technology is that technology:







   Dynamic Hearing Technology is that technology:







   K/S HIMPP (hereinafter HIMPP) is a Danish partnership that owns numerous patents relating to Hearing Aids and associated  technologies.

   HIMSA otherwise known as Hearing Instruments Manufacturers'  Software Association is a privately owned company that has  developed a standardized hearing care software system.     3

       2.4    DSP Technology:

       2.5    IntriCon Technology:

       (i)    for which a patent(s) has been granted and all fees relating to the grant including any associated maintenance  or annuity fees have been paid. A granted patent does not include pending applications including those  pending applications which are associated with a granted patent through a claim of priority;

       (ii)    or has a patent pending, or

       (iii)    is Technology under record of invention.

       2.6    Dynamic Hearing Technology:

       (i)    for which a patent(s) has been granted and all fees relating to the grant including any associated maintenance  or annuity fees have been paid. A granted patent does not include pending applications including those  pending applications which are associated with a granted patent through a claim of priority; or

       (ii)    has a patent application pending, or

       (iii)    is Technology under record of invention.

       2.7    K/S HIMPP:

       2.8    HIMSA:







   Base Product means the DSP Technology including the ON Semiconductor Ezairo or SCHA chips, the EEPROM and the firmware loaded  onto the EEPROM and the minimum printed circuit board package necessary to connect and house these items. The Base Product does not  include additional PCB or flex circuits necessary to connect to other components of an Enhanced Product.

   Enhanced Product means a value added assembly or completed Hearing Aid or Assistive Listening Device which includes the Base  Product as one of the component devices. The Enhanced Product may include other electronic components, flex circuitry, microphones, a receiver,  plastic housings, volume controls, trimmer potentiometers, push button switches, programming connectors and other components.

   Contact Center means a group of people who use Contact Center Products and provide telemarketing, mail ordering, customer care,  technical support and similar functions either directly for an enterprise or on an outsourced basis by using automatic call directors for inbound  centers and predictive dialers for outbound centers. A Contact Center may also use software-based systems rather than physical equipment.

   Contact Center Products means any product, including without limitation, headsets (cordless or corded), amplifiers, telephones, soft  phones, and software-based systems that are used in Contact Centers. For purposes of clarification, no product shall be deemed a Contact Center  Product unless it is used in a Contact Center, including, without limitation, Bluetooth Products.











     4

       2.9    Base Product

       2.10    Enhanced Product

       2.11    Contact Center

       2.12    Contact Center Products

       2.13    Miscellaneous Definitions:

       (a)    headings are for convenience only and do not affect interpretation;

       (b)    the singular includes the plural and conversely;

       (c)    the meaning of general words introduced by including, or for example, or similar expressions is not limited by specific  examples;

       (d)    a reference to a person, corporation, trust, partnership, unincorporated body or other entity includes any of them;

       (e)    a reference to a clause or Exhibit is a reference to a clause of, or an Exhibit to, this Agreement;















   unless the context requires otherwise terms in bold italics have the meaning given below:     Business Day means a day other than a Saturday, Sunday or public holiday in Victoria, Australia;     Confidential Information means information in relation to a party, including its business activities that

   in connection with this Agreement whether the information is in oral, visual or written form or is recorded or embodied in any other  medium and includes all such information disclosed to, or accessed by, the other party before this Agreement commences;     Exclusivity Date means October 1, 2008, the date Intricon makes its first quarterly payment of the Minimum Payment;     Identified Party means a party identified in Exhibit C before January 1, 2009 and all other parties are unidentified parties;     Improvements mean any modification, improvement, enhancement or development to the Licensed Subject Matter excluding always a  development, modification, improvement or enhancement that is patentable in its own right or which is proprietary information of  IntriCon.     Key Personnel means Elaine Saunders and Anthony Shilton;     5

       (f)    a reference to an agreement or document (including a reference to this Agreement) is to the agreement or document as  amended, varied, supplemented, novated or replaced, except to the extent prohibited by this Agreement or that other  agreement or document;

       (g)    a reference to a party to this Agreement includes the party's successors, permitted substitutes and permitted assigns  (and, where applicable, the party's legal personal representatives);

       (h)    a reference to legislation or to a provision of legislation includes a modification or re-enactment of it, a legislative  provision substituted for it and a regulation or statutory instrument issued under it;

       (i)    if a translation of this Agreement into any other language is produced, the original English version is to be the  definitive version of this Agreement;

       (j)    the term Related Body Corporate has the meaning given in the Corporations Act 2001 (C'th); and

       (a)    is disclosed to the other party by or on behalf of the first party;           (b)    is acquired by the other party directly or indirectly from the first party; or           (c)    otherwise comes to the knowledge of the other party,





      Licensed Subject Matter means Dynamic Hearing's Technology, Software, and Documentation as described in Exhibit A and Exhibit B, in  respect of which IntriCon is granted a license under this Agreement;     Product means a Base Product Unit or an Enhanced Product Unit;     For purposes of computing Royalty Payments, a sale shall occur when IntriCon receives payment from a customer for a Base Product  Unit., or an Enhanced Product containing a Base Product;     Services means technology transfer and other support provided to IntriCon by Dynamic Hearing;     Base Product Unit means a single Base Product item;     Territory means the world; and     Use means, in relation to:

   2.14 Additional definitions are provided in Exhibits A and B attached here to which are considered to be part of this Agreement.

   3.1 Term: The initial term of this Agreement shall be five (5) years from the date of execution and may be extended subject to satisfactory  agreement on ongoing commercial terms, to be agreed two (2) months prior to the expiration of this Agreement.     3.2 Dynamic Hearing grants to IntriCon in accordance with this Agreement, for the Term, a license, to Use Dynamic Hearing's  Technology, Software and Documentation developed as of the Commencement Date to manufacture, import, sell and offer for sale throughout the  Territory, Products containing Dynamic Hearing's Technology and Software. This grant specifically excludes products for Contact Centers, and  the use of ADRO Technology in electrical stimulation of the auditory system.     3.3 IntriCon accepts that Dynamic Hearing owns all rights in relation to the Licensed Subject Matter except for those rights being  specifically granted hereunder, and that Dynamic Hearing is under no obligation to provide the source code of any software.     3.4 Commencing on the Exclusivity Date, and continuing for so long as IntriCon continues to make such payments, the license granted to  IntriCon under this Agreement will, subject to the terms and conditions of this Agreement, be exclusive for Hearing Aids. The exclusivity shall not  prevent Dynamic Hearing entering into agreements with any Identified Party subject to the terms herein. On or before January 1, 2009, Dynamic  Hearing will provide IntriCon with an updated version of Exhibit C which will include a complete list of identified parties. After January 1, 2009, no  additions to Exhibit C are allowed unless agreed to by IntriCon in writing.     6

       (a)    the Technology, make, hire, sell or otherwise dispose of the product, offer to make, sell, hire or otherwise dispose of it, use or  import it; and           (b)    the Software and Documentation to reproduce any copyright works subsisting in such software or documentation.

  3.0    License Grant





      3.5 IntriCon acknowledges that Dynamic Hearing's rights to license technology and software to companies manufacturing implantable  devices is not restricted in any way.     IntriCon acknowledges that Dynamic Hearing's rights to license any Dynamic Hearing Technology or Software to Identified Parties, and  provide support as agreed with Identified Parties, is in no way restricted.     3.6 No further design support will be given to Sound Design Technologies, Ltd (hereinafter Sound Design) which includes the recent  purchase of Gennum Corporation's hearing instrument business after 30 October 2009, if all conditions of IntriCon's exclusivity are met.     3.7 Intricon acknowledges that Dynamic Hearing is negotiating with several third parties regarding licensing Dynamic Hearing  Technology and Software, relating to its Hearing Aid Designer™ and other products and services. The rights granted under such agreements shall  be included as exceptions to the exclusivity of IntriCon's License Grant, if such agreements are executed by Dynamic Hearing and the third party  before January 1, 2009. Such third parties and their relevant subsidiaries will be Identified Parties and added to the Exhibit C. Agreements with  identified parties are allowed exceptions and no Agreements are allowed with unidentified parties.     3.8 Commencing on October 1, 2008, and continuing for so long as IntriCon continues to make minimum payments as defined in 4.3,  Dynamic Hearing agrees that it will not license any Dynamic Hearing Technology for Hearing Aids, subject to Clause 3.5.     3.9 If any Identified Party, (with the exception of Sound Design) purchases DSP product sold or made by IntriCon with Dynamic  Hearing's Hearing Aid Designer™ software and requests assistance to achieve HIMPP compliance for products using such DSP chips, IntriCon  will use its best efforts to comply with the request for HIMPP compliance.     3.10 Where IntriCon supplies Products to a third party, IntriCon will, at its cost:



   7

       (a)    obtain and maintain all governmental and regulatory approvals necessary for it to exercise, and comply with all laws and  regulations applicable to the exercise of, its license rights under this Agreement; and

       (b)    comply, and ensure that all Products comply, at all times with any technical standards as may reasonably be required  by law, and any licensing requirements, standards, or protocols established by the Hearing Instrument Manufacturers'  Software Association (HIMSA) and the Hearing Instrument Manufacturers'  Patent Partnership (HIMPP), it being  acknowledged that Dynamic Hearing makes no representation or warranty that the exercise of the rights granted under  this Agreement will not infringe any rights held by HIMSA, HIMPP or any other third party.





      3.11 Where Dynamic Hearing supplies Dynamic Hearing Technology directly to a customer on DSP chips supplied by IntriCon, then,  IntriCon will use its best efforts to comply with the request for HIMPP compliance or notify the third party customer of the customers obligations,  as per 3.10 (a) and (b).     3.12 Dynamic Hearing may continue indefinitely selling products and services to new customers using the ON Semiconductor DSP  hybrid chip. For the absence of doubt, the Exclusivity grant of 3.2 does not restrict Dynamic Hearing from licensing Dynamic Hearing Technology  and DSP Software on any ON Semiconductor platform, purchased by a third party or by Dynamic Hearing, from IntriCon. With the exception of the  Identified Parties, Dynamic Hearing agrees that it will not sell the Dynamic Hearing DSP Software for Hearing Aids configured to run on any  hardware other than that provided by ON Semiconductor, except in circumstances as described in this Agreement. Dynamic Hearing may continue  to sell products and services to non-Hearing Aid Customers using the ON Semiconductor DSP hybrid chips including the Bela Signa.     3.13 Dynamic Hearing and IntriCon shall undertake a mutual roadmap review and agree whether or not the current ON Semiconductor  chips will meet market requirements. If the Parties agree that the ON Semiconductor chips will not meet market requirements, IntriCon shall have six  (6) months to correct the material deficiency. Material deficiency means that ON Semiconductors must have a chip that is within 10% of the best in  class performance on each one of these characteristics: physical size, power supply current, computational capability and cost. If IntriCon is  unable or unwilling to remedy such deficiency, IntriCon will lose its exclusivity under this license.     3.14 IntriCon agrees that nothing in this Agreement precludes Dynamic Hearing from licensing Dynamic Hearing Technology, including  the ADRO™ Algorithm to manufacturers, including Siemens AG, Sonova Holdings AG, GN Resound Group, William Demant Holding A/S, Widex  A/S, Starkey Laboratories Inc, and Cochlear Ltd.     3.15 Nothing herein shall preclude Dynamic Hearing from making and selling its own Hearing Aids. Nothing in this agreement prevents  Dynamic Hearing from selling Hearing Aids manufactured by third parties in Dynamic Hearing's own clinics.     3.16 No other exception to IntriCon's exclusive license being granted herein shall exist unless such exception is specifically identified by  a supplemental agreement between IntriCon and Dynamic Hearing.

   4.1 IntriCon's payments to Dynamic Hearing will comprise two payment components. A first payment component (minimum payment) will  be a technology access fee for access to Dynamic Hearing Technology on a non-exclusive basis. A second payment component hereinafter  (Second Component) will be for exclusive rights to Dynamic Hearing Technology as such exclusive rights are defined herein. The second  component may comprise a combination of a royalty payment and fees for services.     8

  4.0    Payments





      4.2 IntriCon will pay to Dynamic Hearing a fixed technology access fee of US$300,000 annually (hereinafter Access Fee), the payment  of the technology access fee to be paid on a quarterly basis at the beginning of each calendar quarter. Payment of the technology Access Fee will  maintain IntriCon's non-exclusive rights to Dynamic Hearing Technology.     4.3 To maintain exclusive rights to Dynamic Hearing Technology for Hearing Aids IntriCon will make minimum annual payments to  Dynamic Hearing as set out in the Minimum Payment Schedule. The Minimum Payment consists of the Access Fee of US$300,000 per annum and  the Second Component that increases from year to year.     Minimum Payment Schedule (All amounts are in US Dollars):

   The Minimum Payments will be paid quarterly in advance in equal installments at the beginning of each royalty quarter, as defined in 4.7.  The first quarterly Minimum Payment (for the quarter beginning 1st October, 2008) shall be made at the date of signing of this Agreement and the  second quarterly minimum payment shall be made at January 1, 2009 with all further quarterly Minimum Payments following the schedule as  defined in 4.7.     4.4 Intricon is entitled to credit for any amounts payable to Dynamic Hearing arising from per unit royalties and fees for services up to the  value of the corresponding quarterly Second Component. In quarters where the per unit royalties and fees for services are less than the  corresponding quarterly Second Component, IntriCon may carry forward the remaining credit to be offset against future quarters per unit royalties  and fees for services.     Any amounts due from per unit royalties and fees for services that exceed the value of the corresponding quarterly payment of the  Second Component, net of any carried forward credit, will be paid within 30 days of the end of that royalty quarter.     4.5 Once IntriCon has paid the minimum payments in 4.3, no further minimum payments, both Access Fee and Second Component, are  required for access to Dynamic Hearing Technology or to maintain exclusivity over the term of this Agreement. IntriCon will continue to have the  obligation to pay royalty payments under 4.9 and fees for services under 4.8.     4.6 In the event IntriCon has not yet paid the minimum payments and should IntriCon choose not to continue access to Dynamic Hearing  Technology on an exclusive basis as referred to in 4.3, the following amounts will be payable:

   9

            PAYMENT  YEAR

MINIMUM PAYMENT    ACCESS FEE    SECOND COMPONENT

Year 1    $400,000    $300,000    $100,000    Year 2    $700,000    $300,000    $400,000    Year 3    $1,100,000    $300,000    $800,000    Year 4    $1,600,000    $300,000    $1,300,000    Year 5    $2,100,000    $300,000    $1,800,000

       (1)    the technology Access Fee payable quarterly in advance in equal installments at the beginning of each royalty quarter  and;







   4.7 Payment year 1 of this agreement shall start at the commencement date and the first royalty quarter will be completed at the end of the  calendar quarter. Subsequent royalty quarters will correspond with the calendar quarters ending on the last days of March, June, September and  December respectively.     4.8 Dynamic Hearing shall provide engineering and other services (hereinafter Fees For Services)  to IntriCon on a timetable to be  agreed upon in writing forming part of this agreement as an exhibit. Dynamic Hearing will invoice IntriCon on a quarterly basis 30 days from the  end of the quarter for engineering and services that exceed 260 hours in a single month at the rate of $150 per hour. Payments for such services  shall be due and payable within 30 days of the end of that royalty quarter. There will be no charge by Dynamic Hearing to IntriCon for the first 260  hours of engineering and services provided each month, however, any unused hours will not be carried forward as credit to subsequent months or  be entitled to be offset against any future monthly amounts payable for engineering and services. IntriCon is entitled to utilize such engineering  services for the HH, ALD or PADA markets.     Other service support (e.g. marketing or audiology) may be contracted at the same rates. If Dynamic Hearing staff are required by IntriCon  to travel to meetings, all airfares, ground transportation, hotel bills and other out of pocket expenses will be paid by IntriCon.     4.9 Royalty Payments will be made only on the Base Product Unit, or on the Base Product portion of an Enhanced Product for any Base  Product included in an Enhanced Product. The initial base rate of royalty shall include the use of the DSP Framework. In no case shall IntriCon pay  Royalty Payments on any product or portion of any product other than for revenue received for Base Product Unit or for the Base Product portion  of an Enhanced Product, and in the case a Base Product portion of an Enhanced Product such Base Product portion shall not be given a value that  is influenced by its inclusion in the Enhanced Product. Royalty Payment for HH, ALD and PADA units that incorporate Dynamic Hearing  Technology shall be paid according to the table set forth below:

   The maximum royalty rate identified in the table herein includes an initial base rate of 3% for each Ezairo DSP platform and 1% for each  Single Chip Hearing Aid (SCHA) sold. A 2% royalty rate per Base Product Unit shall be added to the initial base rate for each DSP feature/module  that is based on Dynamic Hearing Technology and that is added to a Base Product Unit. However, such additional Royalty Payments when added  to the initial base rate shall not exceed in total the stated maximum rates specified in the table herein.     10

       (2)    any monthly fees for services and royalties are payable in accordance with clause 4.8 and royalty payments under 4.4  and 4.9.

                Cumulative annual HH & ALD  Volume that use the Framework

Ezairo Maximum Royalty Rate    SCHA Maximum Royalty Rate

Less Than 20,000 Units    10%    8%    20,000-50,000 units    9%    7%    50,000-100,000 units    8%    6%    100,000-200,000 units    7%    5%    200,000-500,000 units    6%    4%    500,000 to 1,000,000 units    5%    3%    Over 1,000,000    5%    1.5%





      4.10 All amounts payable by IntriCon under this Agreement must be paid free and clear of and without any deduction or withholding for  or on account of any present or future withholding tax, including any interest or penalties in relation to such tax (Withholding Taxes). If IntriCon is  required to make any deduction or withholding for any Withholding Tax, then IntriCon must pay to Dynamic Hearing such additional amount to  ensure that Dynamic Hearing receives such amount that would have been received by it as if no such withholding or deduction had been required.







   5.1 Within thirty (30) days of the end of each payment quarter IntriCon must provide to Dynamic Hearing a statement of the actual  number and value of Base Product Units Sold along with the number and value of DSP features/models sold with those Base Product Units by it  or any Related Body Corporate. The statement must also include calculations of the per unit royalty in accordance with clause 4.9. Any royalty  due for payment by IntriCon to Dynamic Hearing is payable at the same time the statement is provided.     5.2 A Royalty Payment will be due only once in respect of each Base Product Unit Sold, and the Royalty Payment will be due on the first  Sale of the Base Product Unit by IntriCon or a Related Body Corporate.     5.3 Where, in any payment quarter, a Base Product Unit is, in good faith, returned to IntriCon, IntriCon is not required to pay any  Royalty Payment on the Sale of that Base Product Unit. If IntriCon has paid a Royalty Payment on that Base Product Unit in a previous payment  quarter, IntriCon may reduce the Royalty Payment due for the payment quarter in which the Base Product Unit is returned by the amount of any  such Royalty paid.



       1)    IntriCon must bear all stamp duty that may be levied on this Agreement. IntriCon must bear any other taxes, levies,  imposts, charges, rates and duties that may be levied or imposed by a governmental authority on any person (including  fines, penalties and interest) in connection with this Agreement (other than income tax payable to the Commonwealth of  Australia by Dynamic Hearing).

       2)    Each party must bear its own costs arising out of the negotiation, preparation and execution of this Agreement.

       3)    All amounts payable to Dynamic Hearing under this Agreement must be made without set-off, counterclaim or  deduction.

  5.0    Reports

  6.0    Records and Audit


   6.1 IntriCon must keep accurate and complete records of orders received, Base Product Units / DSP Features/Modules Sold and  returned and all other records reasonably necessary to substantiate all Royalty Payments to be made to Dynamic Hearing under this Agreement.     11


      6.2 IntriCon must make all such records available for inspection, copying and audit by an independent auditor appointed by Dynamic  Hearing (and to which IntriCon has no reasonable objection) during ordinary business hours at any time during the Term and for a period of one  year following the expiration or earlier termination of this Agreement, provided that:







   6.3 If in any audit, the auditor finds an underpayment or an overpayment of fees due under this Agreement, the party who has received  the overpayment or has underpaid will within 7 days repay the excess or pay the shortfall (as the case may be) to the other party.

   7.1 Each party must:









   7.2 This Agreement is confidential and each party must not disclose any part of this Agreement to any person without the prior written  consent of the other party.     12

       (a)    such inspection, copying or audit must only be made after at least one Business Day's written notice;

       (b)    such audit must not unreasonably interfere with the day to day operations of IntriCon; and

       (c)    such audit must be at Dynamic Hearing's expense unless the auditor finds an underpayment royalty due under this  Agreement in excess of 5% in which case IntriCon must reimburse Dynamic Hearing's reasonable cost of such audit;  and

       (d)    Audits will be limited to one audit in any calendar year.

  7.0    Confidentiality

       (a)    not disclose any Confidential Information to any person, except in confidence as permitted by this Agreement;

       (b)    not use any Confidential Information except as reasonably necessary for the purpose of putting this Agreement into  effect (Permitted Purpose);

       (c)    restrict access to Confidential Information to those of its employees and officers for whom such access is not  reasonably necessary for the Permitted Purpose;

       (d)    ensure that its employees and officers comply with this Agreement; and

       (e)    not reproduce or record, or permit or cause any reproduction or recording of, any Confidential Information except to  the extent reasonably necessary for the Permitted Purpose.





      7.3 This clause 7.0 does not apply where the party receiving the Confidential Information can prove that:















   8.1 Dynamic Hearing will be solely responsible at its cost and at its discretion for applying for, obtaining, maintaining, defending and  enforcing all aspects of all rights in respect of the Licensed Subject Matter and IntriCon must:



   8.2 IntriCon must notify Dynamic Hearing immediately upon becoming aware of:

   13

       (a)    the information has become generally available to the public other than because of a breach of this Agreement, or any  obligation of confidence owed to the disclosing party;

       (b)    it has received the information from a third person, legally entitled to possess the information and provide it to that  party, if that information is used, disclosed or otherwise dealt with in accordance with the rights or permission lawfully  granted to that party by that third person; or

       (c)    the disclosure of information is necessary to comply with any applicable law or legally binding order of any court,  government, semi-government authority or administrative or judicial body or the applicable rules of any stock  exchange, provided that before any such disclosure, the receiving party must, at its cost:

       (i)    immediately notify the other party giving full details of the circumstances of the proposed disclosure and of  the relevant information to be disclosed;

       (ii)    give the other party a reasonable opportunity to protect or preserve the confidentiality of the relevant  information;

       (iii)    co-operate with the other party in any action taken under this paragraph (c); and

       (iv)    in any event, take all reasonable steps to preserve the confidentiality of the information being disclosed.

  8.0    Maintenance, Infringement and Third Party Proceedings

       (a)    provide all reasonable assistance to Dynamic Hearing in any action which Dynamic Hearing may take in relation to any  such matters; and

       (b)    not take any action in relation to any such matters without the prior written consent of Dynamic Hearing, to be given at  Dynamic Hearing's absolute discretion.

       (a)    any claim or allegation that the exercise of the rights under this Agreement constitutes an infringement of the rights of  any third party; and









   9.1 Dynamic Hearing hereby represents that, as at the Commencement Date none of the Key Personnel has any actual knowledge that,  save for any rights claimed to be owned or held by the HIMPP, any rights of any third person may be infringed by the exercise, in accordance with  this Agreement of the rights licensed under clause 3.     9.2 IntriCon accepts that neither Dynamic Hearing nor any person acting on its behalf has made any representation that (a) any patent  applications comprised in the Technology will be granted in any part of the Territory or (b) any registered rights arising should any such  applications be granted, will be, or any registered rights comprised in the Technology are, valid or enforceable.     9.3 Dynamic Hearing will not be responsible for:





   10.1 IntriCon must indemnify Dynamic Hearing and its Related Bodies Corporate and their respective directors, officers, employees and  agents from and against any claims, losses, liabilities, costs, expenses (including investigative costs, court costs, legal fees, penalties, fines and  interest) and damages of any kind (including those which are prospective or contingent) whatsoever and howsoever, directly or indirectly arising  out of or in connection with this Agreement, including liability arising in connection with:





   14

       (b)    any third party's infringement or threatened infringement of any rights subsisting in the Licensed Subject Matter.

  9.0    Representations and Warranties

       (a)    the delivery, installation, or support of the Software to end-users of any Product or any other third party; or

       (b)    the supply, service, installation, and maintenance of any product (including any Product) or any ancillary software  required for communication with any other software or device used by IntriCon in relation to the Applications Software  Platform or the DSP Platform (including those known as the HiPro interface, the MicroCONNECT interface, the NOAH  Hearing Aid fitting database and the NOAH link interface).

  10.0    Indemnity and Limitation of Liability

       (a)    any infringement of third party rights but only to the extent that such third party infringement results from the use of  IntriCon Technology;

       (b)    injury to any person (including death) or loss of or damage to property which may arise from or as a result of  manufacture, importation, sale, offer for sale or use of any Product by IntriCon; or

       (c)    any breach of this Agreement by IntriCon or its Related Bodies Corporate and their respective directors, officers,  employees and agents or any unlawful or negligent act or omission of any of them but subject to the provisions of 10.3.





      10.2 Dynamic Hearing must indemnify IntriCon and its Related Bodies Corporate and their respective directors, officers, employees and  agents from and against any claims, losses, liabilities, costs, expenses (including investigative costs, court costs, legal fees, penalties, fines and  interest) and damages of any kind (including those which are prospective or contingent) whatsoever and howsoever, directly or indirectly arising  out of or in connection with this Agreement, including liability arising in connection with:



   10.3 To the maximum extent permitted by law and notwithstanding anything to the contrary in this Agreement:

   (a)    any infringement of third party rights that arise out of the exercise of the rights licensed under this Agreement; or

   (b)    any breach of this Agreement by Dynamic Hearing or its Related Bodies Corporate and their respective directors,  officers, employees and agents or any unlawful or negligent act or omission of any of them but subject to the  provisions of 10.3.

   (a)    all terms and warranties expressed or implied by any legislation, the common law, equity, trade, custom or usage or  otherwise in relation to this Agreement are expressly excluded;

   (b)    Dynamic Hearing is not liable in any way to IntriCon for any indirect, consequential, third party, special or incidental  harm, liability, expense, cost, loss or damage, loss of profits, loss of data, exemplary damages or any other indirect  commercial or economic loss of any kind whatsoever incurred by IntriCon whether in negligence, tort, equity, contract  or otherwise, arising in connection with this Agreement;

   (c)    IntriCon is not liable in any way to Dynamic Hearing for any indirect, consequential, third party, special or incidental  harm, liability, expense, cost, loss or damage, loss of profits, loss of data, exemplary damages or any other indirect  commercial or economic loss of any kind whatsoever incurred by Dynamic Hearing whether in negligence, tort, equity,  contract or otherwise, arising in connection with this Agreement;

   (d)    Dynamic Hearing's aggregate liability to IntriCon for direct loss and damages and all other liability not described herein  arising in connection with this Agreement whether in negligence, tort, equity, contract or otherwise, is limited to  payment of damages recoverable at law or equity up to a maximum of (and, for the sake of clarity must not exceed) $5m;  and

   (e)    if any legislation implies in this Agreement any term or warranty which cannot be excluded or modified, the liability of  Dynamic Hearing for a breach of any such term or warranty is limited, at the option of Dynamic Hearing, to any one or  more of the following:



   15


          (i)    if the breach relates to goods:

          (A)    the replacement of goods or the supply of equivalent goods; or

          (B)    the repair of such goods; and

          (ii)    if the breach relates to services: the supplying of the services again.

  11.0    Termination
   11.1 Notwithstanding any provision to the contrary in this Agreement, this Agreement may not be terminated by either party prior to two  years from the commencement date other than for the failure to pay the first and second yearly minimum payments as defined in section 4.3.     11.2 Subject to the provisions of 11.1, either party may terminate this Agreement immediately by written notice to the other party if:

   11.3 Dynamic Hearing may terminate this Agreement immediately by written notice to IntriCon if IntriCon:












       (a)    the other party breaches a material term of this Agreement (unless the breach is capable of remedy, in which case if the  other party fails to remedy the breach within 30 days after being required by written notice to do so)

       (a)    enters into any form of insolvency or administration including the following:

       (i)    stops or suspends or threatens to stop or suspend payment of all or a class of its debts; or

       (ii)    becomes insolvent, has an application or order made, proceedings commenced, a resolution passed or  proposed in a notice of meeting, an application to a court made or other steps taken against or in respect of it  for its winding up, deregistration or dissolution or for it to enter an arrangement, compromise or composition  with or assignment for the benefit of its creditors, a class of them or any of them;

       (b)    sells a significant portion of its assets or undertaking.









   11.4 IntriCon may terminate this Agreement immediately by written notice to Dynamic Hearing if Dynamic Hearing:       16
   (a)    enters into any form of insolvency or administration including the following:

   (i)    stops or suspends or threatens to stop or suspend payment of all or a class of its debts; or

   (ii)    becomes insolvent, has an application or order made, proceedings commenced, a resolution passed or  proposed in a notice of meeting, an application to a court made or other steps taken against or in respect of it  for its winding up, deregistration or dissolution or for it to enter an arrangement, compromise or composition  with or assignment for the benefit of its creditors, a class of them or any of them;

   (b)    sells a significant portion of its assets or undertaking.


   11.5 (a) Subject to the provisions of 11.1, IntriCon may terminate this Agreement upon three (3) months written notice to Dynamic  Hearing, such notice stating that IntriCon will cease making payments, either minimum or second component payments or both, and such  termination shall not be considered a breach of this Agreement.













     17



       (b)    Subject to the provisions of 11.1, Dynamic Hearing may terminate this Agreement upon three (3) months written notice  to IntriCon of such termination.

       11.6    Termination or expiry of this Agreement will not affect:

       (a)    any rights or remedies of the parties which may have accrued before the date of termination;

       (b)    the rights and obligations of the parties which by their nature survive termination, including clauses 6, 7, 8, 9, and 10.

       11.7    Upon the effective date of expiry or termination of this Agreement for any reason whatsoever:

       (a)    IntriCon must return all original media and documentation and all copies thereof relating to the Licensed Subject  Matter and Confidential Information and all associated documents supplied under this Agreement or otherwise in  IntriCon's possession, custody or control except for such media and documentation necessary to continue selling  existing products;

       (b)    On Dynamic Hearing's request, IntriCon must procure one of its executive officers to certify (by way of statutory  declaration) that it has complied with its obligations under clause 11.7(a).







   provided that IntriCon may







   11.8 Upon the Effective Date of expiry or termination of this Agreement for any reason whatsoever:



   11.9 Nothing in this clause 11.0 is intended to prevent end-users of Products continuing to use the Products or to require such end-users  to return or destroy any Product.       18

       (c)    All rights granted under this Agreement in relation to the Licensed Subject Matter will cease except as otherwise  provided herein as to existing products;

       (i)    retain one copy of the Software until the fifth anniversary of such effective date; and

       (ii)    Use such Software until the fifth anniversary of such effective date solely as reasonably necessary to repair  and maintain any Base Product Units Sold under this Agreement on or before such effective date, for the  period (if any, until such anniversary) while such Base Product Unit is covered by a warranty granted by  IntriCon and as otherwise provided herein as to existing products.

       (d)    Notwithstanding anything herein to the contrary, IntriCon shall have a right after termination to continue selling  existing products that include the Dynamic Hearing Technology as long as IntriCon pays the appropriate royalties in  accordance with the payment clauses in section 4.9 and, for the avoidance of doubt, such other clauses of this  Agreement (including 4.3, 4.10, 5, 6 and 10.1 will continue to apply in respect of such sales. Existing products are those  products that IntriCon is selling at the date of termination of this Agreement.

       (e)    IntriCon is not obligated to pay any royalties, Minimum Payments or technology Access Fee after termination of this  agreement if IntriCon stops selling Base Product Units, and/or Basic Product Units incorporated into Enhanced  Products.

       (a)    Dynamic Hearing must return all original media and documentation and all copies thereof relating to IntriCon's  Technology and Confidential Information provided to Dynamic Hearing from IntriCon and all associated documents  supplied under this Agreement to Dynamic Hearing from IntriCon under Dynamic Hearing's possession, custody  control;

       (b)    on IntriCon's request, Dynamic Hearing must procure one of its directors to certify (by way of statutory declaration)  that it has complied with its obligations under clause 11.7(a).







   12.1 Any notice, demand, consent or other communication (Notice) given or made under this Agreement:













   12.2 This Agreement contains the entire agreement between the parties with respect to its subject matter and supersedes all prior  agreements and understandings between the parties in connection with such subject matter.     12.3 No amendment or variation of this Agreement is valid or binding on either party unless made in writing and executed by both parties.     19

12.0 General Provisions

       (a)    must be in writing and signed by a person duly authorized by the sender;

       (b)    must be delivered to the intended recipient by prepaid post (or, if posted to an address in another country, by  registered airmail or private air courier) or by hand or fax to the address or fax number below or the address or fax  number last notified by the intended recipient to the sender:

      (i) to Dynamic Hearing:    Chief Executive Officer  2 Chapel Street, Richmond, VIC 3121  AUSTRALIA  Fax :+613 8420 8599              (ii) to IntriCon:    President  1260 Red Fox Road  Arden Hills, Minnesota 55112  United States  Fax: +651 636 9503

       (c)    will be taken to be duly given or made:

       (i)    in the case of delivery in person, when delivered;

       (ii)    in the case of delivery by post, two Business Days after the date of posting (if posted to an address in the  same country) or seven Business Days after the date of posting (if posted to an address in another country);  and

       (iii)    in the case of fax, on receipt by the sender of a transmission control report from the dispatching machine  showing the relevant number of pages and the correct destination fax machine number or name of recipient  and indicating that the transmission has been made without error, but if the result is that a Notice would be  taken to be given on a day that is not a Business Day in the place to which the Notice is sent or is later than  4:00pm (local time) it will be taken to have been duly given or made at the commencement of business on the  next Business Day in that place.





      12.4 Any provision of this Agreement which is unenforceable or partly unenforceable is, where possible, to be severed to the extent  necessary to make this Agreement enforceable, unless this would materially change the intended effect of this Agreement.     12.5 No failure to exercise or any delay in exercising any right, power or remedy by a party operates as a waiver. A single or partial  exercise of any right, power or remedy does not preclude any other or further exercise of that or any other right, power or remedy. A waiver is not  valid or binding on the party granting that waiver unless made in writing.     12.6 IntriCon may not assign or transfer any of its rights or obligations under this Agreement without the prior written consent of  Dynamic Hearing. Likewise, Dynamic Hearing may not assign or transfer any of its rights or obligations under this Agreement without the prior  written consent of IntriCon.     12.7 This Agreement may be executed in any number of counterparts. All counterparts together will be taken to constitute one  instrument.     12.8 This Agreement is governed by the laws of Victoria, Australia and the parties submit to the jurisdiction of the courts of Victoria,  Australia. The 1980 United Nations Convention on Contracts for the International Sale of Goods does not apply to this Agreement.

            20

            DYNAMIC HEARING PTY LTD         INTRICON CORPORATION                   /s/ Elaine Saunders         /s/ Mark S. Gorder    Printed Name:     Elaine Saunders         Printed Name:     Mark S. Gorder    Title:     CEO         Title:     President & CEO    Dated:     July 20, 2008         Dated:     July 16, 2008





      EXHIBIT A

      21

                          Technology    DSP FrameWorkTM means DSP software implementing program switching, volume control, reading and  writing programs, program beeps, and battery monitoring.                   ADRO® Technology means the invention described in patent application PCT/AU99/00076 which is the  subject of the following patents and patent applications:  AU761865  EP11172020  US 6,731,767  CA 2,361,544  JP 2000-597976         and 32 channel ultra-low-delay ADRO ® amplification the subject of Patent application US11/283540.

                 Note that Dynamic Hearing does not have rights to ADRO for electrical stimulation of the auditory system  and that the rights to ADRO for electrical stimulation are thus explicitly excluded from this Agreement.                   Wide Dynamic Range Compression Technology means digital signal processing technology that provides  level-dependent amplification of the input signal in multiple frequency bands.                   Adaptive Directional Microphone Technology means the technology that is the subject of Australian Patent  Application 2004310722 entitled Adaptive Directional Systems.                   Fixed Directional Microphone Technology means digital signal processing technology that implements a  preferential fixed response to sound from a forward direction.







        22

     Omni-Directional Microphone Technology means digital signal processing technology that implements a  fixed response to sound from all directions.

                 The  Adaptive Directional Microphone Technology, Fixed Directional Microphone Technology and  Omni-Directional Microphone Technology are collectively known as the Microphone Technology.

                 Single-channel Noise Reduction Technology means digital signal processing technology that reduces the  output signal level by an amount related to the internal noise level in multiple frequency bands.

                 Multi-channel Noise Reduction Technology means digital signal processing technology that reduces the  output signal level by an amount related to the internal noise level in multiple frequency bands.

                 Active Feedback Cancellation Technology means the technology of the subject of US patent 6876751.                       Oscillation Detection Technology means the technology of the subject of United States Patent 7302070.                       Oscillation Suppression Technology means digital signal processing technology that reduces the maximum  gain temporarily, in an individual frequency band, when a sustained oscillation is detected in that band as  more particularly described in European Patent Application 04734786.9 entitled Oscillation Suppression.

                 (The Active Feedback Cancellation Technology, Oscillation Detection Technology a n d  Oscillation  Suppression Technology are collectively known as the Feedback Technology).

                 Datalogging Technology means software that allows recording of events occurring during use of the device  to non-volatile memory.

                 Dynamic Display is a feature that allows parameters of each DSP module to be accessed and displayed in  real time without interrupting normal operation of the device.

                 Environmental Noise Reduction means digital signal processing that suppresses environmental noise.





      EXHIBIT B  HEARING AID DESIGNER SOFTWARE

          23

                          Software    The Hearing Aid DesignerTM is software comprising the DSP Software, the Manufacturers'  Toolkit, the  designCOMTM applications programming interface, and source code sufficient to enable the development and  integration of new DSP modules by the Licensee.                   (DSP Software means the embedded software that implements the Technology on the DSP Platform.)                   Library Software means the designCOM software that runs on the Applications Software Platform to  communicate with, and configure, the DSP Software on the DSP Platform, and the ADROpredict software  that provides initial estimates of the ADRO fittings for a given audiogram and comfortable level measures.                   Manufacturers'  Toolkit means the manufacturing software that allows configuration and calibration of  Products.                   Unless expressly specified in this Exhibit, Dynamic Hearing will have no obligation to provide updates or  revisions to, or new versions of, any software.                   (Collectively, the above software is known as the Hearing Aid Designer SoftwareTM).              Applications  Software Platform

The Applications Software Platform for Library Software is:  Windows 2000, Windows XP, or Windows Vista operating system running on a Personal Computer  connected to the Hearing Aid via a HiPro, or NOAHLink interface device.





      EXHIBIT C  Dynamic Hearing's Identified Customers                                                              GN RESOUND GROUP and INTERTON ELECTRONIC HÖRGERÄTE GMBH    Existing License Agreement         RION CO. LTD.    Existing License Agreement         SONIC INNOVATIONS INC.    Existing License Agreement         AUDIO CONTROLE INC.    Existing License Agreement         EARLENS CORPORATION    Existing License Agreement         AUSTRALIA HEARS PTY LTD    Existing License Agreement





         24

       AMERICA HEARS INC.    Existing License Agreement         VITASOUND AUDIO INC.    Existing License Agreement         SONOMAX HEARING HEALTH INC.    Existing License Agreement         PANASONIC    Commercial negotiations underway 
Question: Highlight the parts (if any) of this contract related to Cap On Liability that should be reviewed by a lawyer. Details: Does the contract include a cap on liability upon the breach of a party’s obligation? This includes time limitation for the counterparty to bring claims or maximum amount for recovery.
[A]: Dynamic Hearing is not liable in any way to IntriCon for any indirect, consequential, third party, special or incidental  harm, liability, expense, cost, loss or damage, loss of profits, loss of data, exemplary damages or any other indirect  commercial or economic loss of any kind whatsoever incurred by IntriCon whether in negligence, tort, equity, contract  or otherwise, arising in connection with this Agreement;


[Q]: Exhibit 10.07 [*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.

Manufacturing Agreement

Between

Sonos, Inc.

And

IAC





TABLE OF CONTENTS 1.0 DEFINITIONS 3 2.0 SCOPE OF RELATIONSHIP 8 3.0 OWNERSHIP; GRANT OF RIGHTS; TRADEMARKS USAGE 8 4.0 MANUFACTURING OPERATIONS; COMPLIANCE 9 5.0 FORECASTS, PURCHASE ORDERS AND DELIVERY 12 6.0 PRODUCT ACCEPTANCE, INVOICING, QUARTERLY PRICING UPDATES, AND SHIPPING TERM 13 7.0 PRICES; PAYMENT TERMS 14 8.0 NPI; FUTURE PRODUCTS 18 9.0 REPAIR SERVICES; PROVISION FOR EXTENDED WARRANTY 18 10.0 REPRESENTATIONS AND WARRANTIES 19 11.0 INDEMNITY 19 12.0 CONFIDENTIALITY 20 13.0 USE OF CONTRACTORS; COMPLIANCE WITH LABOR LAWS 22 14.0 LIMITATION OF LIABILITY 22 15.0 TERM AND TERMINATION 23 16.0 MISCELLANEOUS 24 Exhibit Exhibit Description A Statements of Work B Program Managers C Flexibility and Cancellation Guidelines D NPI Process E RMA and Repair Procedures F Sonos Supplier Performance Review G Product Pricing Formula H ERS Statement of Work I Engineering Change Process Page 2 of 38





Manufacturing Agreement

This Manufacturing Agreement, including the Exhibits (Agreement), effective as of September 4, 2014 (Effective Date), is by and between Sonos, Inc., a Delaware corporation, having its principal offices at 223 E. De La Guerra Street, Santa Barbara, CA, 93101, USA (Sonos), and Inventec Appliances Corporation, having principal offices at 37, Wugong 5t h Road, Wugu District, New Taipei City, 24890, Taiwan, R.O.C. (IAC).

RECITALS

A. Sonos is in the business of designing, developing and selling consumer electronics products for use in the distribution and playback of digital content.

B. IAC is in the business of, among other things, manufacturing products such as those developed by Sonos on an OEM basis.

C. Sonos and IAC desire to enter into a relationship pursuant to which IAC and its Affiliates will manufacture for Sonos and its Affiliates the Sonos Products on the terms and conditions set forth herein.

AGREEMENT

In consideration of the foregoing and the mutual promises and covenants contained herein, the parties agree as follows: 1.0 DEFINITIONS.

1.1. Affiliate means any entity controlled by, controlling, or under common control with Sonos or IAC, as the case may be, now or in the future (control shall be deemed to mean having a right to 50% of the entity's profits or ownership of at least 50% of the voting rights in the entity).

1.2. Arena means the BOM management IT system used by Sonos, and will be used by IAC to access BOM and other Component information required by IAC to manufacture Products.

1.3. AVL means the Approved Vendor List, which is a list representing those suppliers and vendors of Third Party Components that are approved by Sonos for use by IAC in the manufacture of Products, or those suppliers and vendors that are approved by Sonos for the procurement by IAC of tooling, equipment, fixtures, etc required for the manufacture or test of Products.

1.4. BOM means the bill of materials for a given Product.

1.5. Build Start Date means the date that a Product Build is scheduled to begin.

1.6. Build Complete Date means the date that a Product Build is scheduled to be completed with respect to all Product Units in such Product Build.

1.7. Component(s) means Sonos Sourced Components and IAC Sourced Components. Components shall be identified by Sonos' part numbers as defined in Arena.

1.8. Component Defect means a Component that is not in compliance with the published specification for such Component or is causing a Product to not conform with the Statement of Work for such Product. Page 3 of 38





1.9. Component Lead Time means the time between the date IAC places a purchase order with a Component supplier for a Component and the date that Component arrives to IAC's factory.

1.10. Defective Product means any Product that does not comply with the Specifications, the Purchase Order, Statement of Work or other provisions of this Agreement.

1.11. Deliverables shall mean any tangible or intangible items to be delivered by one party to the other party.

1.12. Delivery Date means the date that a Product Build (or portion thereof) is delivered by IAC to the Destination Port.

1.13. Designated Carrier means any entity that has been designated in writing by Sonos to perform or procure the transport of Product Units by rail, road, air, sea, inland waterway or by combination of such modes.

1.14. Destination Port means the port (which may be a shipping port or airport) where a given Product Build (or portion thereof) is designated for delivery by Sonos.

1.15. Documentation means any user and technical materials that Sonos makes available for the Products.

1.16. Effective Date means the date this Agreement is executed by the Parties.

1.17. Engineering Change, Engineering Change Order or ECO means a change to the design of a Product after Mass Production has begun. ECOs may be initiated by either party, but must be approved by Sonos prior to implementation.

1.18. Epidemic Failure shall have the meaning set forth in Exhibit E.

1.19. Excess Component(s) means any Third Party Component for which IAC has taken delivery and incurred a payment obligation that (i) is (a) a Unique Component, (b) an Obsolete Component, or (c) were to be consumed for Products that were rescheduled or cancelled in accordance with Exhibit C, and (ii) has not subsequently been consumed for Products within [*] after IAC takes physical delivery of the Component.

1.20. Future Product means any product in development by Sonos that may become a Product under the terms of this Agreement. A Future Product is not considered a Product until (i) NPI is complete, (ii) a Statement of Work has been signed by both parties with respect to such Future Product, and (iii) Mass Production commences on such Future Product.

1.21. IAC Contributions means the Technology made or otherwise provided by IAC under this Agreement.

1.22. IAC Manufacturing Facility means the IAC facility where Product Units are manufactured. The initial IAC Manufacturing Facility is [*]. Production of Product Units shall not be moved to a different IAC Manufacturing Facility without Sonos' prior written consent.

1.23. IAC Property shall mean (i) any and all Technology developed by IAC and/or its Affiliates prior to the Effective Date or outside of the scope and independent of its performance of this Agreement, (ii) any modifications, derivatives or improvements to the items in (i) made solely by IAC or its Affiliates that constitute manufacturing processes and (iii) all Intellectual Property Rights in the items in (i) and (ii).. Page 4 of 38 *Confidential Treatment Requested





1.24. IAC Subcontractor shall mean any third party subcontractor selected by IAC to perform services on behalf of IAC under this Agreement.

1.25. Hardware Quality Test Plan shall mean all required reliability testing of a Product throughout the NPI process. A Hardware Quality Test Plan will be provided by Sonos to IAC for each Product, and included in the relevant Statement of Work.

1.26. Intellectual Property Rights means with respect to a given piece of Technology, all current and future worldwide patents and other patent rights, utility models, copyrights, mask work rights, trade secrets, and all other intellectual property rights and the related documentation or other tangible expression thereof.

1.27. Lead Time means the time between the date a Purchase Order is acknowledged by IAC and the shipment ex-factory date. The default Lead Time is agreed to be [*], unless a shorter Lead Time is specified in the applicable Statement of Work for the Product.

1.28. Manufacturing Date means the date a Product Unit is manufactured, packaged and ready for shipment.

1.29. Marks means the trademarks, service marks, trademark and service mark applications, trade names, logos, insignia, symbols, designs or other marks identifying a party or its products.

1.30. Mass Production means production line manufacturing in quantity of a Product for commercial release to Sonos customers.

1.31. New Product Introduction or NPI means the process by which IAC and Sonos bring a Product or Future Product to the IAC Manufacturing Facility for the purpose of commencing Mass Production of such Product. The standard NPI process is outlined in Exhibit D hereto.

1.32. NRE Services means the development and related engineering services provided by IAC during the NPI process. The services shall not include non-engineering related activities, such as facility costs, materials costs, direct labor costs, etc.

1.33. Obsolete Component means a Third Party Component that is rendered obsolete by an ECO or a Product end of life, and cannot be used in any other Sonos Product.

1.34. Parties means Sonos and IAC.

1.35. Product means each product (including any hardware, software, technology, and Components) identified in detail in an applicable Statement of Work, attached hereto from time to time, to be manufactured by IAC for Sonos pursuant to the terms of this Agreement.

1.36. Product Build means a Mass Production manufacturing build for a specified number of Product Units designated in a Purchase Order. A Product Build is not complete until all Product Units specified in the Purchase Order are complete. Page 5 of 38 *Confidential Treatment Requested





1.37. Product Customizations shall mean any derivatives, improvements or modifications to any Product made by either party (or a subcontractor of such party) in the course of performance of this Agreement. Product Customizations does not mean the manufacturing processes utilized by IAC or an IAC Subcontractor to make such derivatives, improvements, or modifications to a Product. Any Product Customizations made by IAC or an IAC Subcontractor shall be on a work for hire (using the meaning given to such term under United States copyright law) basis to the maximum extent permissible under applicable law, and all Intellectual Property Rights therein shall be owned solely by Sonos.

1.38. Product Unit means a single, individual Mass Production unit for any given Product.

1.39. Production Process Change Order means a proposed change by either party to the Mass Production manufacturing process for a given Product. Production Process Change Orders may include proposed modifications, among other things, to printed circuit board assembly and test, Product sub-assemblies, Product final assembly, Product test or quality assurance procedures.

1.40. Purchase Order or PO means a written or electronic purchase order issued by Sonos to IAC for purchase of a Product.

1.41. Purchase Price Variance or PPV means the difference between the price for a Product Unit specified on an IAC invoice and the actual cost that should have applied for such Product Unit according to the terms of this Agreement and as determined at a later date.

1.42. Quality Plan means for any given Product the series of tests and inspections that must be performed by IAC during the manufacturing process to ensure that the Product meets the applicable Specifications. Each Product shall have a separate Quality Plan that is set forth in the applicable Statement of Work. While each Quality Plan shall be jointly developed and determined between and by Sonos and IAC, Sonos owns the Quality Plan and reserves the final decision-making regarding its contents.

1.43. Rolling Forecast means a forecast of Sonos' estimated future requirements for any Product to be manufactured by IAC for Sonos, [*]. Other than the Sonos obligations described under this Agreement, a Rolling Forecast is a non-binding projection of Sonos' future requirements for a Product.

1.44. Semi-Monthly Invoice Date means the middle and final business day, respectively, of a given month. On such date, IAC is entitled to send an invoice to Sonos for the Product Units that have shipped during the first half or second half of the month, as applicable.

1.45. Shipping Term means the default shipping term as set forth in Section 6.5. Such Shipping Term shall govern any Product manufactured by IAC for Sonos under this Agreement, unless otherwise agreed in writing by Sonos, or instructed in writing by Sonos, and expressly stated in an applicable Purchase Order and confirmed in the corresponding invoice.

1.46. Software shall mean software developed by Sonos or licensed from a third party by Sonos that is used in the operation of a Product, whether embedded in a Component or otherwise.

1.47. Sonos Destination means a Sonos Fulfillment Center (as defined below) or the delivery location of a Sonos customer.

1.48. Sonos Fulfillment Center means a designated warehouse location run by or for Sonos from which Sonos warehouses or assembles Product Units, fulfills its customers' orders and/or processes returns. Sonos Fulfillment Centers may be located anywhere in the world. Page 6 of 38 *Confidential Treatment Requested





1.49. Sonos Sourced Component(s) means all Third Party Components required for the manufacture of Products that the pricing and supply contract, including all terms and conditions, are negotiated and controlled by Sonos. IAC shall procure Sonos Sourced Components at the pricing, terms and conditions as directed by Sonos, unless otherwise agreed in writing between the Parties. Sonos Sourced Components are listed in the attached Statement of Works, and may be updated from time to time in writing by Sonos to IAC.

1.50. IAC Sourced Component(s) means all Third Party Components required for the manufacture of Products that the pricing and supply contract, including all terms and conditions, are negotiated and controlled by IAC. IAC Sourced Components are listed in the attached Statement of Works, and may be updated from time to time in writing by Sonos to IAC.

1.51. Sonos Property shall mean (i) all items provided by Sonos or its Affiliates, (ii) any and all Technology developed by Sonos and/or its Affiliates prior to the Effective Date, independent of performance of this Agreement or in the course of performance of this Agreement, (iii) the Products and Product Customizations (including software as further described in the Statement of Work), and (iv) all Intellectual Property Rights related to any of the foregoing.

1.52. Sonos Tool means a custom tool, piece of equipment, fixture, jig or similar item either provided by Sonos or created by IAC or an IAC Subcontractor solely for the manufacture of a Product or Future Product, which Sonos Tool cannot be used for any other purpose or repurposed for future use by a different IAC customer. Sonos Tools shall be considered Sonos Property and be used solely on Sonos Product.

1.53. Specifications shall mean the technical and other specifications for a Product set forth in an applicable Statement of Work.

1.54. Standard Components shall mean Third Party Components which are not Unique Components. Standard Components can typically be used by IAC for another of its customers, or can be reallocated by the Component supplier for use by a customer other than IAC. Unless a Component is designated as a Unique Component in the applicable Statement of Work, it is assumed to be a Standard Component.

1.55. Statement of Work means the document, attached hereto as an Exhibit A, that describes a Product, its specifications and all other related information and requirements necessary to produce such Product in a manner consistent with Sonos' expectations.

1.56. Technology means all inventions, processes, tools, devices, prototypes, schematics, designs, documentation, methodologies, software and hardware.

1.57. Third Party Components means all hardware, technology, software or materials that IAC incorporates into the Products that are procured by IAC or an IAC Affiliate. For the purpose of this Agreement, hardware, software, technology and materials supplied to IAC by an IAC Affiliate for IAC's manufacture of Products shall be considered a Third Party Component. Additionally, any hardware or other materials (but excluding Sonos or third party software) that are provided, consigned, or sold to IAC by Sonos shall be considered a Third Party Component.

1.58. Third Party Finished Goods shall mean finished products that are produced for Sonos by an entity other than IAC. A Third Party Finished Good is typically complete except for being placed into consumer packaging. For the purpose of this Agreement, a finished product produced by an IAC Affiliate, or a finished product provided, consigned, or sold to IAC by Sonos, shall be considered a Third Party Finished Good. Page 7 of 38





1.59. Third Party Property shall mean equipment, designs, materials and other property embodied in Third Party Components that are procured by IAC or Sonos (as designated in the applicable Statement of Work) and incorporated into the Product.

1.60. Transfer Product means a Sonos product that is commercially available prior to IAC commencing NPI for such product.

1.61. Unique Components shall mean Third Party Components which must be ordered, designed and customized specifically for a given Product and cannot be used by IAC for its other customers. Unique Components, if any, for a given Product are designated in the applicable Statement of Work.

1.62. ERS SOW shall mean a statement of work that describes the processes agreed by the Parties regarding the settlement of evaluated receipts and the management and acknowledgement of Purchase Orders. The ERS SOW is attached to this Agreement as Exhibit H, and may be updated periodically as mutually agreed by the Parties and in accordance with Section 16.7 of this Agreement.

2.0 SCOPE OF RELATIONSHIP.

2.1. Manufacturing of Products. Subject to the terms and conditions of this Agreement, IAC shall procure, directly or indirectly, certain Third Party Components (as identified on the Statement of Work and maintained in Arena), manufacture, assemble, and test Products which Sonos and/or its Affiliates may order from IAC, respectively. The various Products shall be manufactured by IAC according to the respective Statement of Work, as set forth in an applicable Exhibit A. IAC agrees to supply Product(s) in conformance with the applicable Statement of Work for the duration of this Agreement. IAC agrees to build and ship Product Units directly to a Sonos Destination. IAC will handle all necessary fulfillment, external packaging, customs clearance and shipping procedures necessary to deliver the Product Unit(s) directly to the designated Sonos Destination, anywhere in the world, in accordance with the shipping terms specified in Section 6.5, or any other terms that may be mutually agreed upon between the Parties in writing.

2.2. Product Bundling. If requested by Sonos, IAC agrees that it will perform final consolidation, packaging and related activities, at Sonos' expense, for Third Party Finished Goods that require bundling with Sonos Products manufactured by IAC. Such Third Party Finished Goods will be delivered fully assembled and may be in temporary or sub-packaging. For the avoidance of doubt, the BOM for any Third Party Finished Good shall be excluded from the pricing formula in Section 7.1.

3.0 OWNERSHIP; GRANT OF RIGHTS; TRADEMARKS USAGE.

3.1. Ownership by IAC. IAC shall own, and hereby retains, all right, title, and interest in and to the IAC Property.

3.2. Ownership by Sonos. Sonos shall own, and hereby retains, all right, title, and interest in and to the Sonos Property. Except for preexisting IAC Property and any third party's Intellectual Property, IAC shall and does hereby irrevocably assign, and shall and does cause IAC Affiliates and IAC Subcontractors to irrevocably assign, to Sonos all of IAC's, IAC Affiliates' or IAC Subcontractors' worldwide right title and interest in and to the Sonos Property , if any, whether developed solely by Sonos or jointly between Sonos or a Sonos Affiliate and IAC, an IAC Affiliate, or an IAC Subcontractor, that Page 8 of 38





may arise through the performance of its obligations under this Agreement. IAC shall cooperate fully with Sonos and execute such further instruments, documents and agreements and give such further written assurances, as may be reasonably requested by Sonos, at Sonos' expense, to perfect the foregoing assignment and obtain and enforce assigned Intellectual Property Rights.

3.3. Licenses by Sonos to IAC.

3.3.1. License to Manufacture. Subject to all terms and conditions of this Agreement, Sonos hereby grants to IAC and its Affiliates a non-exclusive, worldwide, nontransferable, royalty free right and license under Sonos' Intellectual Property Rights, to manufacture the Products solely for Sonos.

3.3.2. Software License. Subject to all terms and conditions of this Agreement, Sonos hereby grants to IAC and its Affiliates a non- exclusive, worldwide, nontransferable, royalty-free right and license to make copies of the software specified in the applicable Statement of Work solely as necessary to install and embed such software in the Product. IAC shall: (i) ensure that all copies are exact copies and conform in all respects to the original master copy provided by Sonos; (ii) make only one (1) copy of such software per each Product manufactured; (iii) reproduce any proprietary notices contained in such software and not remove, alter or obfuscate any such proprietary notices; (iv) not modify or create derivative works of such software; and (v) not reverse engineer, decompile or otherwise attempt to derive the source code of such software.

3.3.3. Necessary Export Permissions. The above license grants shall be deemed to include all necessary rights and licenses, if any, to permit IAC to export the Products to Sonos or Sonos' designee.

3.4. Third Party Property. Each party shall be responsible for the payment of any royalties or other fees for any Third Party Property associated with a Third Party Component procured by such party (as set forth in the applicable Statement of Work), including any required rights to use, manufacture, copy, sell, offer for sell, distribution and export or import the Product.

3.5. Trademarks License. Sonos hereby authorizes IAC to use and to cause its Affiliates to use, the Marks as specified by Sonos on the Products and relevant documents solely for the purpose of this Agreement. Except for the limited rights granted in this Section 3.5, nothing in this Agreement grants, or should be construed to grant, any right, title, or interest in or to the Sonos Marks to IAC. At no time shall IAC challenge or assist others to challenge the Sonos Marks, or registrations thereof, or attempt to register any trademarks, service marks, trade names or other marks confusingly similar to the Sonos Marks. All goodwill associated with the Sonos Marks shall inure solely to the benefit of Sonos.

4.0 MANUFACTURING OPERATIONS; COMPLIANCE.

4.1. Program Managers. Sonos and IAC will each appoint at least one Program Manager (Program Manager). The names, addresses, email IDs, and telephone numbers of the Program Managers are attached to this Agreement as Exhibit B. The Program Managers shall act as liaisons and principal points of contact between the parties with respect to their respective performances of this Agreement. All communications between the Parties with respect to development of Products shall be directed to the Program Managers. The Program Managers may provide the Parties from time to time with the names and telephone numbers of additional specific contact persons (e.g., to communicate specific information regarding support, enhancements, etc.) when such direct contact is preferable. In the event that either party appoints a new Program Manager, such party shall promptly notify the other in writing, provided that Sonos reserves the right to request that IAC replace any Program Manager that is not performing at a satisfactory level, and such requests shall not be unreasonably refused by IAC. Page 9 of 38





4.2. Production Process Change Order Request. IAC shall not make any changes to any manufacturing process with respect to any Product without first obtaining in writing from Sonos approval for a Production Process Change Order. IAC shall submit a request to make a change containing sufficient engineering data in support of the request. Within [*] of receiving such request, Sonos shall respond to IAC's request and shall either approve or disapprove the change, request more information, request samples built using the new manufacturing process for testing purposes, or the parties may mutually agree to extend the deadline for implementation of the proposed change. The foregoing request/approval process shall also apply during NPI for any Transfer Product or Future Product.

4.3. Sonos' Engineering Change Order (ECO) Request. When an Engineering Change is required by either party, the requesting party shall provide the other party with all applicable and sufficient documentation, specifications, and the requested effective date of such engineering change. IAC shall respond initially within [*] or any other longer period agreed between the Parties, advising Sonos as to (i) implementation and the effective date of such change, (ii) associated costs and effect to on-hand materials, on-order materials and work in process which shall be borne by Sonos, (iii) the impact of the change upon existing Product pricing and shipment schedules for the entire period for which Purchase Orders are outstanding, and (iv) the costs and expenses of obsolete materials caused by implementing such engineering change which shall be borne by Sonos, subject to the provisions of Section 7.9. Costs associated with Engineering Change Orders shall be agreed in writing between the Parties prior to implementation. The foregoing request/approval process shall also apply during NPI for any Transfer Product or Future Product. The Engineering Change process agreed upon between the Parties is described in detail in Exhibit I attached to this Agreement.

4.4. Notification Requirement. If at any time either party discovers an error, bug or other problem that such party believes will require a Production Process Change Order or Engineering Change Order, the discovering party will notify the other immediately and begin the process of fixing the issue in accordance with either Section 4.2 or 4.3, as appropriate. Sonos reserves the right to halt Mass Production of a given Product if Sonos determines, in its reasonable and good faith judgment, that there is a problem in manufacturing such Product that requires immediate remedial action. [*]. Unless otherwise authorized by Sonos in writing, the Mass Production line will remain stopped until the cause of the failure is understood, a solution is implemented and thoroughly tested and Sonos approves in writing to resume Mass Production.

4.5. Quality Programs; Disaster Recovery Plan. IAC shall maintain various quality control programs consistent with best practices for the industry, each of which will be provided to Sonos if requested. When applicable, any additional or substitute quality requirements agreed to by the Parties shall be made to such programs and plans. IAC shall also have a disaster recovery plan in place detailing IAC's plans, procedures, and designated resources for timely response to and recovery from potential civil, natural, and physical plant disasters that could reasonably be expected to disrupt production and delivery to Sonos. The plan shall be approved by Sonos for each Product to ensure the supply of such Products to Sonos is not interrupted. Such plans may include multiple sources of supply for each Component and back-up manufacturing facilities. Any changes to the disaster recovery plan shall be subject to Sonos' prior written concurrence.

4.6. Inspection of IAC Plants; Subcontractors. Upon [*] prior written notice from Sonos, Sonos or its representatives will have the right to inspect and audit, at Sonos' expense, IAC's factory, purchasing processes, manufacturing processes, quality program, physical inventory count and supporting documentation, including reports, quality test data and training documents and certificates of Page 10 of 38 *Confidential Treatment Requested





conformance as related to Products at any time during the term of this Agreement. For information stored electronically and where IAC cannot give Sonos access to its systems, IAC will provide printouts of any requested documentation. If such an inspection is requested, IAC will reasonably furnish all relevant supporting documentation to verify compliance with its stated manufacturing and quality processes. Inspections shall be conducted at a reasonable time and during normal hours of operation. Such inspections and audits by Sonos or a Sonos authorized audit firm will be limited to [*], except for any case of an identified quality issue whereby Sonos will have the right to inspect IAC's facility and to review applicable documentation and processes at any time, provided Sonos provides IAC with written notice [*] in advance of the Sonos inspection. Subject to the prior written approval of IAC's vendor or IAC Subcontractor, Sonos or its representatives may also inspect such vendor or subcontractor.

4.7. Safety Standard Changes. IAC shall promptly notify Sonos if, to its knowledge, any upgrade, substitution or other change to any Third Party Component is required to make the Component meet applicable safety standards or other governmental statutes, rules, orders or regulations. Sonos and IAC will discuss the costs of any subsequent upgrade, substitution or other required change in an equitable manner based on good faith discussions between the parties.

4.8. Compliance with Laws and Regulations for Manufacturing; Fair Labor Practices. IAC shall comply with all applicable laws and regulations related to the manufacturing and/or production of the Products in jurisdictions in which IAC manufactures the Products, including labor and employment, environmental, safety, tax and other similar regulations. In addition, IAC currently complies and will continue to comply with any applicable regulations regarding foreign child labor laws and other abusive labor practices.

4.9. EICC Membership. IAC shall maintain a membership in good standing with the Electronic Industry Citizenship Coalition (EICC) throughout the term of this Agreement. If IAC presently does not have an EICC membership, then after SONOS joins the EICC and unless otherwise agreed in writing between the Parties, one shall be obtained within six (6) months from the Effective Date. In the event IAC loses or discontinues their EICC membership during the term of this Agreement, Sonos must be notified in writing within three (3) business days, including the reason or reasons the membership has been disrupted. IAC shall cure any membership disruption within six (6) weeks time from the date of its occurrence.

4.10. Compliance with Product Requirements. Sonos is responsible for identifying and securing approvals from regulatory, safety and/or standards organizations agencies in the various jurisdictions in which it sells or intends to sell the Products. IAC shall use commercially reasonable efforts to provide any and all assistance requested by Sonos to obtain such approvals from the relevant agencies and organizations, of which will be at Sonos' cost. IAC shall mark the Products and, as applicable, the Components, with regulatory, safety and standards organizations marks which signify compliance with the requirements of those organizations that Sonos has specified. IAC has the responsibility for obtaining any required regulatory, safety or other approvals for Components, provided that Sonos shall provide reasonable assistance in obtaining such approvals from any Sonos-appointed vendors.

4.11. Origin Certification; Marking; HTS. Upon Sonos' request, IAC will provide Sonos with an appropriate certificate stating the country of origin for the Products and Components, provided that IAC can obtain such certification from the Components vendor. IAC shall mark the container or pallet with the country of origin in compliance with customs' requirements. IAC agrees that it will follow Sonos' guidelines for Harmonized Tariff Schedule (HTS) classifications that may be required for either export or import of the Products. Page 11 of 38 *Confidential Treatment Requested





4.12. Manufacturing Test Information. IAC shall provide Sonos with electronic tracking of Product assembly data (sub and final assemblies), Product test results, quality audits (dates, scope, findings, actions), packaging, shipping and ECO implementation details. [*].

4.13. On Site Presence. Sonos always has the right to have its employees or authorized representatives on IAC's manufacturing floor for the general purpose of overseeing and collecting manufacturing information related to the Mass Production, repair, or rework of Products.

4.14. Performance Expectations. Sonos and IAC agree to work together to develop and achieve the supplier performance expectation as outlined by the Sonos Supplier Performance Review described in Exhibit F. [*]. IAC agrees to discuss and document in the performance review meetings any productivity improvement accomplishments and future plans relating thereto. Each party shall be responsible for its own costs associated with participating in these activities.

5.0 FORECASTS, PURCHASE ORDERS AND DELIVERY.

5.1. End of Life. If Sonos elects to discontinue the sale of any Product (End of Life or EOL), Sonos shall notify IAC in writing at least [*] prior to the approximate date on which Sonos intends to EOL the product, including the date and quantity of the last Product Build and any additional requirements for future, anticipated returns.

5.2. Purchase Orders. From time to time [*], an authorized Sonos Planning Manager defined in Exhibit B shall send to IAC a binding Purchase Order in accordance with the Lead Time for a given Product. Sonos' Purchase Orders shall be submitted to IAC in writing or by any reasonable means, including but not limited to EDI, postal delivery, courier delivery, facsimile transmission or electronic mail. Each Purchase Order shall include:

(a) Identification of Product ordered by Sonos part number;

(b) Quantity to be purchased;

(c) Requested Product ex-factory date; and

(d) Sonos Destination and other specific instructions.

5.3. Placement of Purchase Orders; Rolling Forecasts. All Purchase Orders under this Agreement shall be subject only to the terms and conditions hereof. IAC shall not be bound by any term or condition on a Purchase Order that is inconsistent with this Agreement or any of its exhibits except to the extent mutually agreed in writing by the Parties. In the event the terms of any such Purchase Order, confirmation or similar document conflict with or are additional to the terms of this Agreement, the terms of this Agreement alone shall apply and shall govern regardless of execution of such document by one or both parties. [*]. Unless requested by Sonos more frequently, IAC shall update Sonos [*] with current lead times and cancellation terms, as applicable, for all Components required to manufacture Products. Upon Sonos' request, IAC will provide documentation from the manufacturer of any Component proving the accuracy of applicable Component lead-times and cancellation terms, as applicable.

5.4. Acknowledgment of Purchase Orders by IAC. The process describing Purchase Order acknowledgment is found in Exhibit H. If a Purchase Order shortens the Lead Time or Sonos requests an adjustment to a Purchase Order, IAC will use commercially reasonable efforts to adjust the Purchase Order or accommodate such shorter Lead Time. Any reasonable and actual costs incurred by IAC to accommodate a shorter Lead Time shall be borne by Sonos, provided that Sonos has approved such costs in advance in writing. If Sonos does not approve such costs, the Products shall be shipped no later than the originally scheduled shipment date. Page 12 of 38 *Confidential Treatment Requested





5.5. Flexibility Guidelines. [*].

5.6. Delays. If IAC knows it cannot meet the ex-factory date for a given Purchase Order, IAC shall immediately notify Sonos in writing of such event. In such event, both parties will jointly develop alternatives to resolve any late delivery of Product in order to minimize adverse consequences resulting from such late delivery. If only a portion of the Product Build is available for shipment to meet the ex-factory date, IAC will notify Sonos and ship the available Products unless otherwise directed by Sonos. In the event that such delay is solely caused by IAC (an IAC Delay), IAC shall notify Sonos in writing [*] in advance of the change and provide a recovery plan within [*]. If the IAC Delay causes Products to ship more than [*] from the original ex-factory date, IAC shall pay for any resulting increase in the freight cost over that which Sonos would have been required to pay by the standard shipment method.

5.7. Allocation. In the event of a reduced allocation, whether due to a Force Majeure event or otherwise, IAC shall provide Sonos and its Affiliates with written notice if it anticipates or has reason to believe that IAC's output of the Product shall not be sufficient to meet all of Sonos' and/or its Affiliates' requirements for any period. Sonos shall receive at least the same priority, with respect to IAC's allocation of production capacity and Components, as any other IAC customer.

5.8. Duty to Fulfill Purchase Orders. IAC agrees to fulfill all Purchase Orders in accordance with the terms of this Agreement prior to the termination or cancellation of this Agreement, even if the Delivery Dates of Products under such Purchase Orders occur after the date of expiration or termination.

5.9. Delivery. All Product Units specified in a Purchase Order shall be shipped complete, both as to quantity and overall Product contents, in accordance with the applicable Statement of Work.

5.10. [*].

6.0 PRODUCT ACCEPTANCE ,INVOICING, QUARTERLY PRICING UPDATES, AND SHIPPING TERM.

6.1. Production Line Testing and Acceptance. Acceptance for a given Product is typically governed by adherence to the applicable Quality Plan. Any Product that passes the Quality Plan is deemed accepted by Sonos, unless Sonos has indicated that it wishes to perform a separate acceptance inspection to verify compliance with the Quality Plan, in which case acceptance will be deemed to take place after satisfactory completion of such inspection. Transfer of title of Product to Sonos does not indicate acceptance by Sonos of that Product. Such acceptance, however, does not modify or otherwise limit in any respect the product warranty provided by IAC to Sonos under Section 10.2 hereof.

6.2. Rejection. Any Product that does not meet the various tests specified in the applicable Sonos Quality Plan shall be deemed rejected. If rejected, IAC shall have the option, at its sole expense and cost, to either (i) take such remedial measures as shall be necessary to enable the Product to comply with the Sonos Quality Plan, or (ii) scrap the Product and build a replacement Product Unit that conforms to the Quality Plan. IAC shall make such decision in a timely manner, but in no event take longer than five (5) working days to reach such decision, so that the overall progress of the Product Build is not delayed. Under no circumstances will Sonos be obligated to pay for any Product (or any Components incorporated therein) that has not passed the applicable Quality Plan.

6.3. Invoicing. Upon transfer of title of Product to Sonos and compliance with the process described by Exhibit H, IAC shall invoice Sonos with reference to the governing Purchase Order and Sonos shall pay such invoice in accordance with the payment terms described in Section 7.5. Page 13 of 38 *Confidential Treatment Requested





Concurrent with the submission of the invoice, IAC shall transmit to Sonos the executed bill of lading and/or other shipping documents or statement for the Products. All invoices under this Agreement shall be subject only to the terms and conditions hereof. Sonos shall not be bound by any term or condition on an invoice that is inconsistent with this Agreement or any of its exhibits except to the extent mutually agreed in writing by the parties. In the event the terms of any such invoice or similar document conflict with or are additional to the terms of this Agreement, the terms of this Agreement alone shall apply and shall govern regardless of execution of such document by one or both parties.

6.4. [*] Pricing Updates. [*], Sonos and IAC shall apply the cost model formula described in Exhibit G to determine a price for each Product that will be applied to invoices [*]. [*]. In order to capture the latest prices for Components [*], IAC shall provide Sonos with the BOM cost for each Product no later than [*]. Sonos will review the BOM cost data and the Parties will work in good faith to resolve any discrepancies and update their respective systems with the agreed upon Product pricing [*].

6.5. Shipping Term; Title and Risk of Loss. Unless otherwise specified to the contrary on a Purchase Order (and subsequently acknowledged in writing by IAC), shipping terms are [*] and include all elements of the INCOTERMS 2010 definition with the following modifications:

[*]

7.0 PRICES; PAYMENT TERMS.

7.1. Product Prices. Unless otherwise mutually agreed, the price to be paid by Sonos for any Product manufactured by IAC hereunder will be quoted based on the calculation of the pricing formula described in Exhibit G and the Shipping Term described by Section 6.5. Subject to Section 7.6, the Price for any given Product shall be governed by the pricing formula set forth in Exhibit G and based on pricing formula inputs that are applicable on the date a Product is manufactured by IAC. In cases where a Product's price paid by Sonos is not equal to the applicable pricing formula calculation, the difference will be settled by the PPV process described herein. [*].

7.1.1. Items Specifically Excluded from Price and/or Pricing Formula. The parties agree that the following items shall not be charged to Sonos in the Price of any Product, whether separately itemized or amortized into an item of the Pricing Formula:

(a) [*]

(b) [*]

(c) [*]

(d) [*]

7.2. Component, Tooling and Labor Pricing Provisions.

7.2.1. Component and Sonos Tools Pricing. [*].

7.2.2. Component and Sonos Tools Shipping Costs. [*].

7.2.3. Production Line Labor Pricing. Labor pricing for IAC operators shall be competitive in the region IAC is operating in. Actual labor pricing shall be applied by IAC in calculating Product pricing using the cost model described in Exhibit G.

7.2.4. First Pass Yield Costs. For each Product, the Statement of Work will establish a mutually agreed upon first pass yield rate. [*] allocation of costs shall be as follows: Page 14 of 38 *Confidential Treatment Requested





Cause of Yield Loss Responsible Party [*] [*] [*] [*] [*] [*] [*] [*]

7.3. Sonos Tools. To the extent that Sonos requires the creation or procurement of a Sonos Tool, Sonos shall pay IAC by [*] upon acceptance of the invoice provided by IAC in accordance with Exhibit H and/or other applicable SOW, which acceptance may not be unreasonably withheld. [*]. Upon payment to IAC, Sonos shall take full title and ownership of the applicable Sonos Tool, including any specifications associated with the Sonos Tool. IAC will execute any documents necessary to document or perfect Sonos' ownership of the Sonos Tool. If the Sonos Tool is created by an IAC Subcontractor, IAC shall secure such ownership rights in accordance with its responsibilities specified in Section 13.1 of the Agreement. [*]. IAC will hold the Sonos Tools as a bailee only and will not permit any lien or other encumbrance to be placed against it when in IAC's care, custody and control. IAC will apply Sonos asset tags provided by Sonos to all Sonos Tools. Under no circumstances will IAC move Sonos Tools from the location designated by Sonos, without Sonos' prior written consent, or deny Sonos access to the Sonos Tools. Immediately upon Sonos' request or termination of this Agreement, IAC will deliver the Sonos Tools to [*]. IAC agrees to return the Sonos Tools in the same condition it was provided to IAC, except for normal wear and tear. IAC agrees to use Sonos Tools solely for Sonos' benefit. IAC will not use Sonos Tools for any other purpose or permit a third party to use the Sonos Tools except as set forth in this Agreement. The Sonos Tools provided by Sonos is provided to IAC as is and Sonos disclaims all warranties, express or implied, including the implied warranties of merchantability and fitness for a particular purpose. Sonos reserves the right to inspect any Sonos Tools in IAC's control at any time, provided it gives IAC at least forty-eight (48) hours advance notice. Sonos shall not be required to pay for any tool, equipment, fixture, jig or similar item that is not a Sonos Tool.

7.3.1. Sonos Tool Maintenance; Damaged Sonos Tool. IAC agrees to use commercially reasonable efforts to maintain Sonos Tools in good, satisfactory working condition and to keep Sonos Tools fully covered under IAC's property insurance at all times and without expense to Sonos. IAC will be responsible for physical loss of or damage to the Sonos Tools while in the possession or control of IAC. IAC is solely responsible for installing, testing, and maintaining Sonos Tools in its control in good working condition and in compliance with applicable manufacturing specifications, for purchasing and maintaining spare parts to repair such Sonos Tools with a minimum of downtime, and for any risk of loss in connection with the Sonos Tools. Normal maintenance of Sonos Tools will be at Sonos' expense. In the event that a Sonos Tool is damaged beyond what is considered normal wear and tear, it shall be the responsibility of IAC or its designated suppliers to notify Sonos within one (1) working day. It shall be the [*] responsibility of [*] to bear the full repair or replacement cost of a damaged Sonos Tool, [*]. All Sonos Tool repairs shall be made to the satisfaction of applicable manufacturing specifications.

7.4. Taxes. All Prices are in U.S. dollars and do not include withholding taxes and the like. [*]. All other items of tax based in whole or in part on the income of a party shall be the sole responsibility of such party. [*].

7.5. Product Payment Terms. Payment terms are [*] from the date of acceptance by Sonos of an applicable invoice from IAC in accordance with Exhibit H and/or other applicable SOW, which acceptance may not be unreasonably withheld. IAC may not submit an invoice for a Product prior to Page 15 of 38 *Confidential Treatment Requested





that Product's transfer of title to Sonos. All payments shall be made in U.S. currency, unless otherwise agreed in writing by the parties, by check or wire transfer (as may be agreed upon by the parties) to an account designated by IAC. Invoices for shall be remitted to: Sonos, Inc., Attn: Accounts Payable, 223 E. De La Guerra Street, Santa Barbara, CA, 93101, USA, and shall also sent by electronic mail on the date of the invoice to: [*]. Any alteration to the payment terms must be mutually agreed in writing by the Parties.

7.6. On-Going Cost Reductions. [*] shall use commercially reasonable efforts to achieve on-going reductions in the costs of the BOM for each Product. [*].

7.6.1. [*].

7.7. Cost Calculation Process and Review. [*], IAC and Sonos shall meet to review any changes that have occurred in the total cost for each Product since the prior review and according to the cost model formula described in Exhibit G. [*].

7.8. Purchase Price Variance (PPV). Consistent with Section 6.4 of this Agreement, Sonos and IAC shall compare the cost model formula results between the invoiced pricing for Products [*] and the actual cost data that applied to the formula for the period. [*] Additionally, IAC and Sonos may agree to settle other costs that are incurred [*] in the next PPV calculation. Based on the results of the PPV calculation, the Parties will execute a credit or debit (positive or negative) memo for the entire Purchase Price Variance amount to be applied against the next payment(s) made by Sonos. IAC agrees to provide Sonos with any requested documentation relevant to the PPV calculation, including but not limited to copies of invoices from Components suppliers.

7.9. Component Procurement, Supply Management, Component Buffer Inventory, and Excess Components. Sonos desires to empower IAC to place Component purchase orders and otherwise manage the Component supply chain necessary to execute the on-time manufacture and shipment of Products. IAC shall be responsible to maintain accurate and up to date Component Lead Times and cancellation terms for all Components required to manufacture Products, and to place purchase orders for all Components according to Component Lead Times and the most recent Sonos Purchase Orders and Rolling Forecast. For Components that more than one supplier is qualified for usage in Products (multi-sourced Components), IAC shall execute Component purchase orders according to the volume share instruction given by Sonos. For such multi-sourced Components, IAC and Sonos shall agree to a process to, on [*], review and revise according to Sonos' instruction the purchase order volume share to be placed by IAC between qualified Component suppliers. In the event of a change in quantities of Products in a Sonos Purchase Order or Rolling Forecast, IAC shall respond quickly to adjust its purchase orders for all Components and to confirm revised supply plans with all Component suppliers. Within [*] of receiving a new Sonos Rolling Forecast, IAC shall review Product manufacturing capacity and Component availability and provide Sonos a written shipment commitment plan (including shipment quantities by date). This plan should meet Sonos' latest Rolling Forecast unless Product manufacturing capacity or Component availability does not support the Rolling Forecast, in which case the Parties will work together to resolve such issues. Unless Sonos otherwise instructs IAC in writing, IAC shall not reduce or cancel purchase orders on any other Components due to such Component shortage. In the event that IAC notifies Sonos that it is in possession of Excess Components, (and subject to the maximum liability parameters set forth in Exhibit C), IAC will use commercially reasonable efforts to reduce its inventory of Excess Components, including, without limitation, returning such Excess Components to the supplier, using such Components for IAC's support and repair obligations, selling the Excess Components (subject to the limitations in this section) and/or using the Excess Components for other Products or the products of other customers of IAC or an IAC Affiliate. [*]. If IAC can only sell an Excess Component at a loss, it must obtain prior written authorization from Sonos for such sale, Page 16 of 38 *Confidential Treatment Requested





unless the aggregate amount of the loss Sonos would incur is [*]. Unless otherwise instructed by Sonos in writing, IAC is not authorized at any time to sell Custom Components to any third party or IAC Affiliate. [*], IAC shall send to Sonos a written report detailing any remaining Excess Components. If requested by Sonos, IAC agrees to provide all documentation (purchase order date, quantity ordered, Component lead-time, etc.) supporting IAC's determination that the inventory is considered Excess Components. [*]. In the event Sonos instructs IAC to scrap any Components, IAC shall notify Sonos at least twenty-four (24) hours in advance of scrapping the Components and Sonos reserves the right to witness such scrap.

7.9.1. Component Buffer Inventory. IAC agrees to maintain [*] of buffer inventory for Components to support possible short lead time increases in Product quantities. The [*] of Component inventory is IAC's responsibility to manage, and can be achieved through any one of the following methods: 1) [*] 2) [*] 3) [*]

The Component buffer inventory amount shall be calculated by [*]. As this [*] increases or decreases, IAC will manage the Component buffer inventory up or down as required. All Component inventories will be utilized by IAC for the manufacture of Products on a [*] basis. For Component buffer inventory stored at a Component supplier factory, Sonos and IAC shall develop a process to regularly validate that the correct levels of Component buffer inventory are in fact in place. [*]. As a Product approaches end of life, Sonos will instruct IAC in writing to reduce or eliminate all Component buffer inventories in order to minimize the risk of an Excess Component occurrence.

7.9.2. Clear to Build Reporting. On a [*] basis and covering at least [*] of the then-current Sonos Rolling Forecast, IAC shall provide Sonos with a written Clear to Build report for each Product. This report shall include each Component required for that Product and incorporate each Component supplier's supply commitment to IAC. The report shall compare the supplier supply commitments to IAC's Component requirements in order to meet the current Rolling Forecast. While the detailed format of the report will be agreed between Sonos and IAC, the intent of the Clear to Build report is to proactively highlight potential Component supply shortages so that they can be resolved in advance of becoming an impact to IAC's manufacture of Products. IAC agrees, if requested by Sonos, to publish an updated Clear to Build report more frequently than [*] during periods where significant Component shortage risks are present.

7.9.3. Component Discontinuance Purchase. In the event IAC or Sonos receives a manufacture discontinuance or end of life notice for a Component and the Component being discontinued does not have a replacement or substitute approved by Sonos prior to the last time buy date from the manufacturer, IAC agrees to purchase and store such discontinued Component during the term of this Agreement at a quantity specified in writing by Sonos and a Sonos PO is placed on IAC for the specified Component quantity. [*].

7.10. Audit Right. During the term of this Agreement, and for a period of [*] thereafter, IAC shall keep accurate and complete records of any items that are used in calculating a payment obligation of Sonos. No more than once per year during the Term, Sonos shall have the right, [*], to examine and audit IAC's books and records related to Sonos [*]. In the event such records are stored electronically Page 17 of 38 *Confidential Treatment Requested





on a system that IAC cannot give Sonos access to, IAC will provide print-outs of the requested documents. [*]. Any such audit will be conducted in a manner that does not unreasonably interfere with IAC's business activities. [*]. Sonos agrees that IAC may take reasonable precautions to preserve the identity of any IAC customer that might otherwise be compromised during such an audit.

8.0 NPI; FUTURE PRODUCTS

8.1. New Production Introduction. The outline of the New Product Introduction process is set forth on Exhibit D hereto, and shall be the basis for how existing Products or Future Products are prepared for Mass Production.

8.2. Statements of Work. As specified in Exhibit D, Sonos and IAC will formally add Products to this Agreement by executing a Statement of Work. Each party shall use its best reasonable effort to agree upon and sign the Statements of Work within a reasonable period of time. Unless a Statement of Work specifically refers to and amends a term of this Agreement, the terms and conditions of this Agreement will control and take precedence over any conflicting terms in a Statement of Work. If any Future Product becomes a Product prior to a Statement of Work being signed for that Product, the terms of this Agreement shall still apply to that Product.

8.3. Quality Plan. A Quality Plan will be created by the Parties for each Product and included in the applicable Statement of Work. The Quality Plan shall include in detail and where applicable: (a) All manufacturing and test process details, (b) All process variables and their control methods, (c) statistical process control methods used for monitoring and improvements, (d) quality and performance targets to be achieved as specified by Sonos, and (e) the necessary corrective actions planned. Each Quality Plan will be developed and owned jointly between the Parties, but Sonos will remain the owner of the Quality Plan and has final decision making authority of its contents.

9.0 REPAIR SERVICES; PROVISION FOR EXTENDED WARRANTY.

9.1. Technical Assistance. Each party shall make available to the other, [*], ongoing technical assistance with respect to the Product.

9.2. Repair Services. Pursuant to Exhibit E, IAC shall provide the RMA and repair services to Sonos upon request for a minimum of [*] from the date on which Sonos discontinues the sale of any Product on the terms and conditions set forth therein. Fees for such services, when required to be paid, shall be pursuant to the provisions in Exhibit E. It is expressly understood and agreed to by IAC that this Agreement does not grant IAC an exclusive privilege or right to repair or replace any or all Product purchased by Sonos under this Agreement. Sonos may perform the repairs or Sonos may elect to contract with other suppliers for the required repair or replacement services.

9.3. Extended Warranty. If requested by Sonos, IAC agrees to provide extended warranty coverage, [*]. The cost of such extended warranty coverage shall be mutually agreed upon in writing by the Parties on an individual Product basis, and included in the revised Statement of Work for each specified Product. Page 18 of 38 *Confidential Treatment Requested





10.0 REPRESENTATIONS AND WARRANTIES.

10.1. Mutual Warranty. Each party warrants and represents to the other that (i) it has the full corporate power and authority to enter into and carry out its obligations under this Agreement, and (ii) the execution and delivery of the Agreement by such party, and the performance by such party of its obligations pursuant to the Agreement, will not result in any material violation of or constitute a default under, any material agreement or obligation to which such party is currently bound.

10.2. Product Warranty by IAC. IAC hereby represents and warrants that for a period of [*] after the Manufacturing Date (the Warranty Period), a Product Unit will be free from defects in manufacturing process and defects in workmanship, will conform to general expectations of performance of wireless audio products and will conform to the Statement of Work for the applicable Product. For any Product Unit which is agreed between the Parties (such agreement to be made fairly and reasonably) to be non conforming to the above product warranty, IAC will, [*]. The warranty granted in this Section 10.2 will not apply to Product Units that have been misused, modified, damaged, abused, improperly stored (by a party other than IAC, an IAC affiliate, or an IAC subcontractor), tampered with or otherwise altered by any party other than IAC, an IAC Affiliate or an IAC Subcontractor. The above warranty is provided to Sonos as a standard warranty, [*]. If Sonos requests an extension of the Warranty Period, the parties will negotiate in good faith to determine an appropriate charge to extend the Warranty Period.

10.3. Third Party Component Warranty by IAC. IAC hereby warrants that (i) any IAC Sourced Component shall comply with the European Union Directive 2002/95/EC on the Restriction on the Use of Certain Hazardous Substances in electrical and electronic equipment or other similar environmental regulations that IAC is aware of, and (ii) any IAC Sourced Component shall be original. IAC will pass to Sonos all Component suppliers' warranties to the extent that they are transferable.

10.4. DISCLAMER. EXCEPT AS EXPRESSLY SET OUT IN THIS SECTION, EACH PARTY MAKES NO WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, REGARDING THE PRODUCT OR ANY SERVICES TO BE PROVIDED UNDER THIS AGREEMENT, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR NON-INFRINGEMENT OR FITNESS FOR A PARTICULAR PURPOSE.

11.0 INDEMNITY.

11.1. Indemnification by Sonos. Subject to Section 11.4, Sonos shall defend, indemnify and hold harmless IAC and its Affiliates, and their officers, directors, employees, shareholders, agents, successors and assigns from and against any and all loss, damages, liabilities, settlements, costs and expenses (including reasonable legal expenses and the expenses of other necessary professionals) as incurred, resulting from or arising out of breach of :

(i) any representation or warranty provided by Sonos under this Agreement.

(ii) the gross negligence or willful misconduct of Sonos, or its employees, directors, representatives, or agents;

(iii) Sonos's failure to observe any applicable laws, regulations and/or statutory requirements

(iv) any product liability claim with respect to [*] other than [*].

11.2. Indemnification by IAC. Subject to Section 11.4, IAC agrees to defend, indemnify and hold harmless Sonos and its Affiliates, and their officers, directors, employees, shareholders, agents, successors and assigns from and against any and all loss, damages, liabilities, settlements, costs and expenses (including reasonable legal expenses and the expenses of other necessary professionals) as incurred, resulting from or arising out of (i) a manufacturing defect or any product liability claim caused by workmanship [*], or (ii) a breach of any representation or warranty provided by IAC under this Agreement. Page 19 of 38 *Confidential Treatment Requested





11.3. Intellectual Property Infringement.

11.3.1. Subject to Section 11.4, Sonos shall defend, indemnify and/or settle and hold harmless IAC and its Affiliates, and their officers, directors, employees, shareholders, agents, successors and assigns from and against any and all loss, damages, liabilities, settlements, costs and expenses (including reasonable legal expenses and the expenses of other necessary professionals) as incurred, resulting from or arising out of any third party claim, action, suit or proceeding (collectively and individually, a Claim) alleging that the Product (excluding any IAC Property) infringes any third party Intellectual Property Right, and shall pay all damages or settlement amounts finally awarded to the extent based upon such a Claim.

11.3.2. Subject to Section 11.4, IAC shall defend, indemnify and/or settle and hold harmless Sonos and its Affiliates, and their officers, directors, employees, shareholders, agents, successors and assigns from and against any and all loss, damages, liabilities, settlements, costs and expenses (including reasonable legal expenses and the expenses of other necessary professionals) as incurred, resulting from or arising out of any Claim alleging that the IAC Property or use thereof infringe any third party Intellectual Property Right, and shall pay all damages or settlement amounts finally awarded to the extent based upon such a Claim.

11.4. Procedure. The party seeking relief under this Section 11 (Indemnitee) shall: (i) promptly notify the other party (Indemnitor) in writing of any Claim; (ii) provide Indemnitor with sole control of the defense and/or settlement thereof; and (iii) provide Indemnitor, at Indemnitor's request and expense, with reasonable assistance and full information with respect thereto. Indemnitee shall have the right to participate, at its own expense, with counsel of its own choosing in the defense and/or settlement of such Claim. The indemnification obligations of the parties in this Section 11 shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the consent of Indemnitor, which consent shall not be unreasonably withheld or delayed. The failure to deliver written notice to Indemnitor within a reasonable time after the commencement of any Claim, if prejudicial to its ability to defend such Claim, shall relieve Indemnitor of any liability to Indemnitee under this Section 11.

11.5. Pass-Through of Indemnities. If a party becomes the subject of a Claim of infringement with respect to a Third Party Component, to the extent the other party has the right to pass through an indemnity with respect to such Third Party Component, such other party shall pass through the indemnity to the party that is the subject of the Claim.

12.0 CONFIDENTIALITY.

12.1. Definition. Confidential Information shall mean any information that is transmitted or otherwise provided by or on behalf of the disclosing party, whether orally or in writing, to the receiving party during the course of its performance under this Agreement which is identified as Confidential at the time of disclosure or that should reasonably have been understood by the receiving party because of legends or other markings, the circumstances of disclosure or the nature of the information itself, to be proprietary and/or confidential to the disclosing party. All IAC Property, Sonos Property and Future Products, and any information related to such Future Products, shall always be deemed to be Confidential Information of the respective party providing such information. Confidential Information may be disclosed in written or other tangible form or by oral, visual or other means, including Page 20 of 38





documents, computer code, prototypes, samples, plans and equipment. Confidential Information may also include information of a third party that is in the possession of one of the parties and is disclosed to the other party under this Agreement. Confidential Information shall not, however, include any information that (i) was publicly known and made generally available in the public domain prior to the time of disclosure by the disclosing party through no faults of the receiving party; (ii) becomes publicly known and made generally available after disclosure by the disclosing party to the receiving party through no faults of the receiving party; (iii) is already in the possession of the receiving party at the time of disclosure by the disclosing party as shown by the receiving party's files and/or records; or (iv) is obtained by the receiving party from a third party lawfully in possession of such information and without a breach of such third party's obligations of confidentiality.

12.2. Agreement as Confidential Information. The parties shall treat the terms and conditions and the existence of this Agreement as Confidential Information. Each party shall obtain the other's consent prior to any publication, presentation, public announcement or press release concerning the existence or terms and conditions of this Agreement. Notwithstanding the foregoing, Sonos may disclose that IAC is manufacturing its Products to potential investors, partners and customers. The Parties specifically acknowledge that disclosure of this Agreement or the relationship contemplated hereby, without the prior written consent of the other party, would have a material, adverse impact on the other party's relationship with its existing manufacturing partner.

12.3. Non-use and Non-disclosure. Each party agrees not to use any Confidential Information of the other party for any purpose except as necessary to perform its obligations under this Agreement. Each party agrees not to disclose any Confidential Information of the other party to any third party, except that, a receiving party may disclose the other party's Confidential Information to those employees of the receiving party who are required to have the information in order to perform under this Agreement and who have agreed in writing to confidentiality obligations at least as protective of the disclosing party as those set forth herein. If a receiving party is required by a final authorized order from a recognized and applicable government body or from a court with competent jurisdiction to make any disclosure that is prohibited or otherwise constrained by this Agreement, the receiving party will provide the disclosing party with prompt written notice of such requirement so that the disclosing party may seek a protective order or other appropriate relief. Subject to the foregoing sentence, such receiving party may furnish that portion (and only that portion) of the Confidential Information that the receiving party is legally compelled or is otherwise legally required to disclose; provided, however, that the receiving party provides such assistance as the disclosing party may reasonably request in obtaining such order or other relief. Neither party shall reverse engineer, disassemble or decompile any prototypes, software or other tangible objects that embody the other party's Confidential Information and that are provided to the party under this Agreement.

12.4. Maintenance of Confidentiality. Each party agrees that it shall take reasonable measures to protect the secrecy of and avoid disclosure and unauthorized use of the Confidential Information of the other party. Without limiting the foregoing, each party shall take at least those measures that it takes to protect its own confidential information of a similar nature, but in no case less than reasonable care (including, without limitation, all precautions the receiving party employs with respect to its own confidential materials). No party shall make any copies of the other party's Confidential Information except upon the other party's prior written approval. Each party shall reproduce the other party's proprietary rights notices on any such authorized copies, in the same manner in which such notices were set forth in or on the original or otherwise that can clearly express the other party's proprietary rights. A party receiving Confidential Information shall promptly notify the party disclosing such Confidential Information of any use or disclosure of such Confidential Information in violation of this Agreement of which the receiving party becomes aware. Confidentiality shall be maintained for a period of [*] after expiration of this Agreement. Page 21 of 38 *Confidential Treatment Requested





12.5. IAC's Manufacturing Lines Building Sonos Products. With the exception of authorized contractors approved by the Parties required to perform equipment maintenance or other required work on IAC's manufacturing lines that are assembling and testing Sonos Products, no third party personnel will be allowed access to (including a walk-through or tour) IAC's lines that are manufacturing Products. Any exceptions to this must be approved in advance and in writing between a Sonos Program Manager and IAC Program Manager listed in Exhibit B.

13.0 USE OF CONTRACTORS; COMPLIANCE WITH LABOR LAWS.

13.1. IAC may retain IAC Subcontractors to furnish services to it in connection with the performance of its obligations hereunder and, if required, permit such IAC Subcontractors to have access to Sonos' Confidential Information, provided that such IAC Subcontractors have signed agreements with IAC with restrictions on the use and dissemination of such information at least as restrictive as the confidentiality provisions contained herein. Before engaging any IAC Subcontractor, IAC shall first notify and get written approval from Sonos for the use of such IAC Subcontractor. Sonos shall not unreasonably delay or withhold such approval. IAC represents and warrants that the quality of the services and/or work product of any IAC Subcontractor shall be of at least the same quality as the services and/or work product delivered by IAC hereunder. In addition, IAC shall secure any and all Intellectual Property Rights that may pertain to the Sonos Products that are created by such IAC Subcontractor, and hereby transfers and assigns all such Intellectual Property Rights. IAC agrees that it will not prohibit Sonos from purchasing Components or Sonos Tools directly from any IAC Subcontractor, using existing terms or on terms established between Sonos and such IAC Subcontractor.

13.2. No Product will be (i) produced, manufactured, assembled, tested, or packaged by forced, prison, or child (defined as age 14 or below or the minimum working age within the applicable jurisdiction, whichever is older) labor, or (ii) transshipped for the purpose of mislabeling, evading quota or country of origin restrictions, or avoiding compliance with labor laws.

13.3. IAC and all persons furnished by IAC shall comply at their own expense with all applicable Environmental, Occupational Health and Safety laws, ordinances, regulations and codes, including the identification and procurement of required permits, certificates, licenses, insurance, approvals and inspections in performance under this Agreement.

14.0 LIMITATION OF LIABILITY.

EXCEPT IN THE EVENT OF A VIOLATION OF SECTION 3 (OWNERSHIP; GRANT OF RIGHTS: TRADEMARKS USAGE), OR FOR EACH PARTY'S OBLIGATIONS UNDER SECTION 11 (INDEMNITY), OR BREACH OF SECTION 12 (CONFIDENTIALITY), UNDER NO CIRCUMSTANCES WILL EITHER PARTY BE LIABLE TO THE OTHER UNDER ANY CONTRACT, STRICT LIABILITY, NEGLIGENCE OR OTHER LEGAL OR EQUITABLE THEORY, FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES OR LOST PROFITS IN CONNECTION WITH THE SUBJECT MATTER OF THIS AGREEMENT. EXCEPT IN THE EVENT OF A VIOLATION OF SECTION 3 (OWNERSHIP; GRANT OF RIGHTS: TRADEMARKS USAGE), OR FOR EACH PARTY'S OBLIGATIONS UNDER SECTION 11 (INDEMNITY), OR BREACH OF SECTION 12 (CONFIDENTIALITY), IN NO EVENT SHALL EITHER PARTY'S TOTAL LIABILITY ARISING OUT OF OR RELATED TO THIS AGREEMENT EXCEED THE AMOUNTS PAID BY SONOS FOR THE PRODUCTS IN THE [*] PERIOD IMMEDIATELY PRECEDING THE EVENT GIVING RISE TO THE LIABILITY. THIS SECTION DOES NOT LIMIT EITHER PARTY'S LIABILITY FOR PERSONAL INJURY, DEATH, OR DAMAGE TO TANGIBLE PROPERTY. Page 22 of 38 *Confidential Treatment Requested





15.0 TERM AND TERMINATION.

15.1. Term. Unless terminated earlier as provided herein, this Agreement shall terminate on the date three (3) years from the Effective Date. This Agreement shall be automatically renewed for additional successive one (1) year periods, unless written notice of non-renewal is received no later than six (6) months prior to the expiration of the then current term.

15.2. Termination for Cause. This Agreement may be terminated by a party for cause immediately upon the occurrence of and in accordance with the following:

15.2.1. Insolvency Event. Either party may terminate this Agreement by delivering written notice to the other party upon the occurrence of any of the following events: (i) a receiver is appointed for any party or its property; (ii) any party makes a general assignment for the benefit of its creditors; (iii) any party commences, or has commenced against it, proceedings under any bankruptcy, insolvency or debtor's relief law, which proceedings are not dismissed within sixty (60) days; or (iv) any party is liquidated or dissolved.

15.2.2. Default. Either party may terminate this Agreement effective upon written notice to the other if the other party violates any material covenant, agreement, representation or warranty contained herein in any significant respect or defaults or fails to perform any of its obligations or agreements hereunder in any material respect, which violation, default or failure is not cured within thirty (30) days after notice thereof from the non-defaulting party stating its intention to terminate this Agreement by reason thereof.

15.3. Termination for Convenience. Either Party may terminate this Agreement hereunder for any reason at its convenience upon one hundred eighty (180) days prior written notice. In such case, Sonos' sole liability shall be limited to payment of the amount due under this Agreement, all the Component(s) procured by IAC, and any finished and work-in-process Products provided such Components and Products liabilities were incurred in compliance with this Agreement.

15.4. Termination or Expiration of Agreement. For the avoidance of doubt, the termination or expiration of this Agreement shall be without prejudice to any rights or obligations which have already arisen under this Agreement, its Exhibits or any Purchase Order prior to such termination or expiration.

15.5. Transfer. If a termination notice is delivered pursuant to 15.2, 15.3, 15.4 or if Sonos decides to transfer the manufacturing of a Product from IAC during the Term of the Agreement, IAC shall cooperate fully with Sonos to effect the transfer of the manufacturing of the Products (without any obligation that IAC transfers IAC Property from IAC to Sonos, or a third party designated by Sonos, in order to help minimize any potential disruption in the continuity of supply. In the event that such transfer is the result of a termination notice pursuant to 15.2, 15.3 or 15.4 and such transfer is not completed by the termination date pursuant to 15.2, 15.3 or 15.4, the parties shall, acting reasonably and in good faith, agree to continue to cooperate fully to effect the transfer and extend the Term of this Agreement on such appropriate terms as the parties may agree for one or more ninety (90) day periods (the succession of which must be notified to IAC in writing within thirty (30) days of the expiration of the first ninety (90) day period and within the same timeframe for each period thereafter), until such time as the transfer is completed.

15.6. Survival of Rights and Obligations Upon Termination. Sections 1, 3.1, 3.2, 3.4, 7.10, 9.2, 9.3, 10, 11, 12, 13, 14, 15.4, 15.5, 15.6, 16 and Exhibit E shall survive termination or expiration of this Agreement. Page 23 of 38





16.0 MISCELLANEOUS.

16.1. Force Majeure. Except for the obligation to make payments herein, neither party shall be liable for delays in delivery or performance of its obligations, or for failure to deliver or perform its obligations under this Agreement due to a cause or circumstances beyond its reasonable control, including, without limitation, an act of nature, act of civil, government, or military authority, act of terrorism, governmental priority, strike or other labor disturbance, flood, fire, explosion, epidemic, other hostilities, or failure of the Internet (not resulting from the actions or inactions of such party). For clarification purposes, an industry wide inability to obtain a Third Party Component is a force majeure event; however, all other material shortages shall not be considered force majeure events. The party claiming excuse because of force majeure shall use its commercially reasonable efforts to promptly correct such failure or delay in performance and shall promptly notify the other party to this Agreement of any delay or failure to perform which may be excused by this provision, which notification will also specify the expected date of resumption of performance. In the event of any such delay, the date of performance shall be extended for a period equal to the time lost by reason of the delay. If, however, either party is unable to perform its obligations under this Agreement for reasons excused by this provision for a period in excess of ninety (90) consecutive days, the other party may terminate this Agreement without penalty upon written notice to the other Party.

16.2. No Third Party Beneficiaries. Unless otherwise expressly provided, no provisions of this Agreement are intended or shall be construed to confer upon or give to any person or entity other than Sonos and IAC any rights, remedies or other benefits under or by reason of this Agreement.

16.3. Attorneys Fees. In addition to any other relief awarded, the prevailing party in any action arising out of this Agreement shall be entitled to its reasonable attorneys' fees and costs.

16.4. Relationship of parties. The parties hereto are independent contractors. Neither party has any express or implied right or authority to assume or create any obligations on behalf of the other or to bind the other to any contract, agreement or undertaking with any third party. Nothing in this Agreement shall be construed to create a partnership, joint venture, employment or agency relationship between Sonos and IAC.

16.5. Notices. Any notice required or permitted to be given by any party under this Agreement shall be in writing and shall be personally delivered or sent by a reputable overnight mail service (e.g., Federal Express), or by first class mail (certified or registered), or by facsimile confirmed by first class mail (registered or certified), to the Program Manager of the other party. Notices will be deemed effective (i) five (5) working days after deposit, postage prepaid, if mailed, (ii) the next day if sent by overnight mail, or (iii) the same day if sent by facsimile and confirmed as set forth above. A copy of any notice shall be sent to the following:

Sonos, Inc. 223 E. De La Guerra Street Santa Barbara, CA, 93101, USA Attn: [*] Email: [*] Fax: [*]

16.6. Assignment. No party may assign its rights or delegate its obligations hereunder, either in whole or in part, without the prior written consent of the other party, other than an assignment by Sonos or IAC of its rights and obligations hereunder to a wholly-owned subsidiary. Notwithstanding the foregoing, either party may assign, without the other's express written approval, all its rights and Page 24 of 38 *Confidential Treatment Requested





delegate all its obligations as part of a merger, reorganization or sale of all or substantially all its assets other than to a direct competitor of the non- assigning Party. Any attempted assignment or delegation in violation of this section by either party without the prior written consent of the other will be void. The rights and liabilities of the parties under this Agreement will bind and inure to the benefit of the parties' respective successors and permitted assigns.

16.7. Waiver and Modification. Failure by any party to enforce any provision of this Agreement will not be deemed a waiver of future enforcement of that or any other provision. Any waiver, amendment or other modification of any provision of this Agreement will be effective only if in writing and signed by the parties.

16.8. Construction. The Parties agree that any principle of construction or rule of law that provides that an agreement shall be construed against the drafter of the agreement in the event of any inconsistency or ambiguity in such agreement shall not apply to the terms and conditions of this Agreement. Titles and headings to articles and sections of this Agreement are inserted for convenience of reference only and are not intended to affect the interpretation or construction of this Agreement. The terms this Agreement, herein, hereof, hereunder and similar expressions refer to this Agreement and not to any particular section or other portion hereof. Unless otherwise specified, days means calendar days. Any use of the term including in this Agreement shall be construed as if followed by the phrase without limitation.

16.9. Severability. If for any reason a court of competent jurisdiction finds any provision of this Agreement to be unenforceable, that provision of the Agreement will be enforced to the maximum extent permissible so as to affect the intent of the parties, and the remainder of this Agreement will continue in full force and effect.

16.10. Dispute Settlement; Governing Law. Any dispute or claim arising out of or in relation to this Agreement, or the interpretation, making, performance, breach or termination thereof, shall first be referred to the responsible executives of each party, each of whom shall use their best reasonable efforts in good faith to reach a mutually agreeable solution. If the parties are unable to resolve the dispute or claim despite such efforts, the dispute or claim shall be settled by binding arbitration under the International Rules of the American Arbitration Association as presently in force (Rules) and by three (3) arbitrators appointed in accordance with such Rules. Judgment on the award rendered may be entered in any court having jurisdiction thereof. The place of arbitration shall be Los Angeles, California USA. Any monetary award shall be in U.S. dollars and the arbitration shall be conducted in the English language. The parties may apply to any court of competent jurisdiction for temporary or permanent injunctive relief, without breach of this Section 16.10 and without any abridgment of the powers of the arbitrator.

This Agreement shall be governed by the law of California, U.S.A. and the arbitrators shall apply California law to the merits of any dispute or claim, without reference to conflict of law principles. The arbitration proceedings shall be governed by federal arbitration law and by the Rules, without reference to state arbitration law. The parties hereby exclude the application of the United Nations Convention on Contracts for the International Sale of Goods

16.11. Entire Agreement. This Agreement, including all exhibits which are incorporated herein by reference, constitutes the entire agreement between the parties with respect to the subject matter hereof, and supersedes and replaces all prior and contemporaneous understandings or agreements, written or oral, regarding such subject matter.

16.12. Counterparts. This Agreement may be executed in two counterparts, each of which shall be an original and together which shall constitute one and the same instrument. Page 25 of 38





16.13. Insurance Coverage. [*] will have insurance policies with reputable insurers to provide coverage and amounts that secure its obligations and potential liabilities under this Agreement. [*] is responsible for all premiums, deductibles and retentions for such insurance. After this Agreement expires or terminates, [*] will either have an active policy or purchase an extended reporting period that has coverage for claims first made and reported to the insurer within 2 years after this Agreement expires or terminates. These insurance requirements will not limit [*] liability under this Agreement. Page 26 of 38 *Confidential Treatment Requested





IN WITNESS WHEREOF, the parties hereto have executed this Agreement by persons duly authorized as of the date and year first above written. SONOS, INC. IAC

By: /s/ Craig Shelburne By: /s/ Joyce Chang Name: Craig Shelburne Name: Joyce Chang Title: Title: Page 27 of 38





Exhibit A

Statement of Work for each transfer or future Sonos Product will be attached as part of Exhibit A. (to be added later, should not hold up contract signature)

Exhibit A-1 PLAY:1 Statement of Work

Exhibit A-2 Next transfer or future program. Page 28 of 38





Exhibit B

Program Managers

Sonos, Inc. Name Title Telephone and E-mail

[*] Senior Factory Program Manager Cell: [*] [*]

[*] Factory Program Manager Cell: [*] [*]

[*] Factory Program Manager Cell: [*] [*]

IAC: Name Title Telephone and E-mail

Planning Manager(s)

Sonos, Inc. Name Title Telephone and E-mail

[*] Senior Operation Manager Cell: [*] [*]

[*] Planning Manager Cell: [*] [*]

[*] Planning Manager Cell: [*] [*]

[*] Planning Manager Cell: [*] [*]

Address :

Suite 802, Tower A, Venture International Park, No. 2679 Hechuan Road, Minhang District, Shanghai, China 201103 Page 29 of 38 *Confidential Treatment Requested





Exhibit C

Flexibility and Cancellation Guidelines

C.1. Purchase Orders and Rolling Forecast. Upon prior written notice by a Sonos Planning Manager to IAC, Sonos may cancel or reschedule Purchase Orders or adjust the Rolling Forecast as follows: Number of Calendar Days from Scheduled Product Shipment Date Quantity Allowed to Reschedule to a Later Date Quantity Allowed to Upside Quantity Allowed to Cancellation [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*]

C.2 Maximum Liability of Sonos; Best Efforts. In the event of a cancellation by Sonos of Purchase Orders (cancellation) or a reduction in the Rolling Forecast quantities without rescheduling those quantities to a later date (reduction), IAC must [*] mitigate any losses it may suffer by reason of such cancellation or reduction. In any event, the maximum Sonos liability for such cancellation or reduction will be limited to [*], provided that [*]. Prior to payment under this section, Sonos may audit all relevant documents to ensure that actual losses reasonably approximating the Purchase Order cancellation or Rolling Forecast quantity reduction charge have been suffered by IAC as the result of the cancellation or quantity reduction. [*].

C.3 Upside Flexibility. In the event Sonos increases a Purchase Order or Rolling Forecast quantities with [*] notice to IAC, IAC agrees to [*] support the increased quantities. Consistent with Section 7.9.1, IAC agrees to maintain [*] of buffer Component inventories for each Product that can be applied to supporting any short lead-time Sonos requests for increased Product quantities. Page 30 of 38 *Confidential Treatment Requested





Exhibit D

NPI Process D.1 Future Product Specifications. [*]. D.2 Future Product Confidentiality. [*]. D.3 Development Efforts. [*].

Diagram 1: NPI Phase-Gate Process (Typical)

[*] Page 31 of 38 *Confidential Treatment Requested





Table 1: NPI Phase Description

[*] D.4 Development Samples. [*]. D.5 Design Verification Testing. [*]. D.6. IAC's NPI Responsibilities. [*].

Table 2. Contract Manufacturer NPI Responsibility

[*]

D.7. Sonos Tools. To the extent that Sonos requires the creation or procurement of a Sonos Tool, Sonos shall pay IAC for the cost of such Sonos Tool [*]. IAC shall invoice Sonos at least [*] prior to such date, or on the date the Sonos Tool is accepted by Sonos if IAC has created the Sonos Tool itself. Prior to acceptance, all specifications and assembly drawings should be provided to Sonos for review. Upon payment to IAC, Sonos shall take full title and ownership of the applicable Sonos Tool, including any specifications and final assembly drawings associated with the Sonos Tool. If the Sonos Tool is created by an IAC Subcontractor, IAC shall secure such ownership rights in accordance with its responsibilities specified in Section 13.1 of the Agreement.

D.8 Reports. As appropriate, each party shall provide the other with periodic reports detailing its work on a Product, any anticipated problems and any indication of delay in fixed or tentative schedules. At a minimum, the Program Managers shall meet once a week, in person or by telephone, as mutually agreed, for a formal progress presentation, describing in detail the status of work, including projections for time of completion, steps necessary to return to the schedule in case of any delay, and discussion of possible resolution of any problems which have arisen.

D.9 NPI for Transfer Products. For Transfer Products, portions of the foregoing NPI process will apply, depending upon the complexity of the conversion of the existing manufacturing operations for the Transfer Product over to IAC.

D.10 Charge for NPI. [*] acknowledges that unless otherwise clearly specified in this Exhibit D as being a cost that will be borne by [*], the NPI Process (for either Future Products or Transfer Products), including all services provided by IAC and/or costs incurred by IAC as set forth in this Exhibit D, are provided with reasonable charge to Sonos, if such service is not defined in an applicable SOW and/or the roles and responsibilities matrix described above in Table 2. Any such costs must be approved in advance by Sonos in writing. Page 32 of 38 *Confidential Treatment Requested





Exhibit E

RMA and Repair Procedures Table E.1 RMA Warranty Coverage Provisions

Timing1 Nature of Defect Responsible Party2 Replacement Stock3 Warranty Period Coverage [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*]

E.1 Explanation of Table Footnotes. 1. [*] 2. [*] 3. [*]

E.2 Definitions.

[*]

E.3 Repair Process. The following steps shall be followed by the parties: 1. [*] 2. [*] 3. [*] 4. [*] 5. [*] 6. [*] 7. [*] 8. [*] 9. [*] 10. [*]

E.4 High Failure and Epidemic Failure Rate Procedures. In the case of either a High Failure or an Epidemic Failure, IAC's obligations shall be, within three (3) business days, to propose an action plan to fix the failure of any affected Products and to implement this action plan upon Sonos' acceptance thereof, which action plan may include sending engineers over to designated sites to repair the Defective Products. [*].

E.5 Shipments; Determination of Responsibility. [*].

E.6 Repair Cost. The cost of any repair for which Sonos is responsible (for example, because of a design defect or outside of warranty return) shall be based upon the BOM for the Components included in the repair plus labor, with mutually agreed upon repair labor rates applied. [*].

E.7 Repair Labor Pricing. Repair labor pricing will be agreed in writing between the Parties and will be based upon market competitive labor rates for the location(s) in which IAC is performing the repairs. Page 33 of 38 *Confidential Treatment Requested





E.8 Repair Warranty.

All repair work conducted within the general product warranty period specified in Section 10.2 and is performed to repair a defect that constitutes a breach of the warranties provided by IAC in Sections 10.2 or 10.3 shall carry a warranty [*]. For clarification, this repair warranty warrants that the work corrected in all respects the identified defect and does not cover other defects unrelated to the repair work that may later occur.

All repair work conducted outside of the general product warranty period specified in Section 10.2 and all repair work conducted to correct a defect that is not covered by the warranties provided by IAC in Sections 10.2 or 10.3, shall carry a warranty of [*] that the work corrected in all respects the identified defect. For clarification, this repair warranty does not cover other defects unrelated to the repair work that may later occur.

E.9 Repair Reporting and Status. IAC shall make available to Sonos detailed repair information for each RMA unit including but not limited to repair work performed on the unit, SA and FA test results, packaging, and shipping. The information shall be linked to the manufacturing data of the Product Unit electronically through its serial number. In addition, a summary report shall be provided to Sonos for approval of responsible party determination. The report should include, but not necessarily be limited to, Product type, Serial Number, Defect Symptoms, Analysis, Corrective actions, Suggested responsible party and status. Page 34 of 38 *Confidential Treatment Requested





Exhibit F

Sonos Supplier Performance Review F.1 Introduction.

Sonos supplier management strategy is based on developing strong working relationships with its suppliers. The results Sonos seek will not occur from random sourcing or selecting suppliers solely on competitive quotations. It will result from working closely with the best existing suppliers to improve quality, productivity, cost, and all other elements of supplier performance.

The basic strategy entails establishing mutual performance expectations and metrics, providing supplier performance feedback, initiating corrective actions to ensure continuous improvements, and rewarding the best suppliers with the opportunity for future new business. The Sonos Supplier Performance Review program provides a framework for effective communication between Sonos and its suppliers regarding the specific elements of supplier performance. The result of establishing our expectations and supplier performance feedback will ensure maximum customer satisfaction and increased profitability for all contributors to the system. To accomplish these objectives, Sonos aims to: • Establish and strengthen long-term partnerships that result in mutual success between the Parties • Set expectations and metrics that are aggressive yet realistic and achievable • Utilize a team approach to achieve performance improvements • Be open to 2-way feedback and commit ourselves to continuous improvement, just as we expect from our supply and manufacturing partners

Successful supplier performance in the areas of Quality, Business, Engineering, Supply Chain & Operational Excellence is expected and necessary for both parties to achieve repeat business, increased sales and profitable growth. F.2 Supplier Performance Review Metrics.

IAC must maintain a competitive advantage by providing products of the highest quality and a competitive total cost, with operations that demonstrate best in class manufacturing, quality, engineering and supply chain innovation and execution. The Parties will mutually agree in good faith upon valid performance metrics, goals, and a relevant scoring template and process.

The Parties agree to meet [*] to review IAC's performance and scoring for the period. It is targeted to alternate meeting locations between Sonos' USA HQ office and IAC's factory. Dates and locations for such reviews will be agreed between the Parties with reasonable notice. Page 35 of 38 *Confidential Treatment Requested





Exhibit G

Product Pricing Formula Item Code Calculation [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] G.1 Pricing Formula Definitions:

[*]

All inputs to the Pricing Formula should be based upon validated actual data. Sonos reserves the right to audit and measure any manufacturing or test process or cycle time, as well as review any relevant IAC documentation to verify that Product pricing is calculated accurately. Consistent with Section 6.4 of this Agreement, Sonos and IAC will review all inputs to the above Pricing Formula for each Product on a quarterly basis, and adjust Product pricing as necessary to become effective in the next quarter. Page 36 of 38 *Confidential Treatment Requested





Exhibit H

ERS Statement of Work

ERS SOW to be added later Page 37 of 38





Exhibit I

Engineering Change Process

Engineering Change Process to be added later Page 38 of 38





[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.

SONOS, INC.

AMENDMENT TO MANUFACTURING AGREEMENT

September 24, 2014

WHEREAS, Sonos, Inc. (hereinafter Sonos) and Inventec Appliances Corporation (hereinafter IAC) have entered into a certain Manufacturing Agreement dated September 4, 2014 (the Agreement); and

WHEREAS, both Sonos and IAC desire to modify certain terms of the Agreement as specified below.

NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein and for other good and valuable consideration the sufficiency of which is hereby acknowledged by both parties hereto, the parties agree to amend and modify the Agreement as set forth below: 1. Section 6.5 of the Agreement is hereby replaced in its entirety with the following:

6.5 Shipping Term; Title and Risk of Loss. Unless otherwise specified to the contrary on a Purchase Order (and subsequently acknowledged in writing by IAC), shipping terms are [*] and include all elements of the INCOTERMS 2010 definition with the following modifications:

[*] 2. Exhibit D of the Agreement is hereby replaced in its entirety with Exhibit D attached hereto. 3. Except for terms amended, replaced or added herein, all of the provisions of the Agreement shall remain unchanged, in full force and effect.

[Signature Page Follows] *Confidential Treatment Requested





IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first set forth above. INVENTEC APPLIANCES CORPORATION

By: Name: Title:

SONOS, INC.

By: /s/ Craig A. Shelburne Craig A. Shelburne





Exhibit D

NPI Process

D.1 Future Product Specifications. [*].

D.2 Future Product Confidentiality. [*].

D.3 Development Efforts. [*].

Diagram 1: NPI Phase-Gate Process (Typical)

[*] *Confidential Treatment Requested





Table 1: NPI Phase Description

[*]

D.4 Development Samples. [*].

D.5 Design Verification Testing. [*].

D.6. IAC's NPI Responsibilities. [*].

Table 2. Contract Manufacturer NPI Responsibility

[*]

D.7. Sonos Tools. To the extent that Sonos requires the creation or procurement of a Sonos Tool, Sonos shall pay IAC for the cost of such Sonos Tool [*]. IAC shall invoice Sonos at least [*] prior to such date, or on the date the Sonos Tool is accepted by Sonos if IAC has created the Sonos Tool itself. Prior to acceptance, all specifications and assembly drawings should be provided to Sonos for review. Upon payment to IAC, Sonos shall take full title and ownership of the applicable Sonos Tool, including any specifications and final assembly drawings associated with the Sonos Tool. If the Sonos Tool is created by an IAC Subcontractor, IAC shall secure such ownership rights in accordance with its responsibilities specified in Section 13.1 of the Agreement.

D.8 Reports. As appropriate, each party shall provide the other with periodic reports detailing its work on a Product, any anticipated problems and any indication of delay in fixed or tentative schedules. At a minimum, the Program Managers shall meet once a week, in person or by telephone, as mutually agreed, for a formal progress presentation, describing in detail the status of work, including projections for time of completion, steps necessary to return to the schedule in case of any delay, and discussion of possible resolution of any problems which have arisen.

D.9 NPI for Transfer Products. For Transfer Products, portions of the foregoing NPI process will apply, depending upon the complexity of the conversion of the existing manufacturing operations for the Transfer Product over to IAC.

D.10 Charge for NPI. [*] acknowledges that unless otherwise clearly specified in this Exhibit D as being a cost that will be borne by [*], the NPI Process (for either Future Products or Transfer Products), including all services provided by IAC and/or costs incurred by IAC as set forth in this Exhibit D, are provided with reasonable charge to Sonos, if such service is not defined in an applicable SOW and/or the roles and responsibilities matrix described above in Table 2. Any such costs must be approved in advance by Sonos in writing. *Confidential Treatment Requested





[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.

SONOS, INC.

AMENDMENT TO MANUFACTURING AGREEMENT

November 1, 2015

WHEREAS, Sonos, Inc. (hereinafter Sonos) and Inventec Appliances Corporation (hereinafter IAC) have entered into a certain Manufacturing Agreement dated September 4, 2014 (the Agreement); and

WHEREAS, both Sonos and IAC desire to modify certain terms of the Agreement as specified below.

NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein and for other good and valuable consideration the sufficiency of which is hereby acknowledged by both parties hereto, the parties agree to amend and modify the Agreement as set forth below: 1. Section 4.15 set forth below is hereby added to the Agreement following Section 4.14: 4.15 Locking Procedures. IAC represents and warrants that it shall comply with all locking and unlocking procedures communicated to IAC by Sonos for any Sonos Product. Sonos may update these procedures at any time by providing IAC with written notice of the revised procedures, and the original and revised procedures are hereby incorporated into this Agreement. The testing of Product Units shall be managed to ensure that a dev unlocked unit is relocked in preparation for storage when it is no longer actively in use, or is destroyed. No dev unlocked units shall be removed from the IAC manufacturing facility without the specific written consent of Sonos in each instance. In the event that a dev unlocked Product Unit is required to be transported outside of the IAC manufacturing facility, IAC hereby agrees that it will ensure that the Product Unit is dev relocked prior to transport. IAC shall never use a Product Unit for production if, at any point, IAC or Sonos has dev unlocked the Product Unit. 2. Section 4.16 set forth below is hereby added to the Agreement following Section 4.15: 4.16 Scrapping Procedures. IAC represents and warrants that it shall comply with all scrapping procedures communicated to IAC by Sonos for any Sonos Product. Sonos may update these procedures at any time by providing IAC with written notice of the revised procedures, and the original and revised procedures are hereby incorporated into this Agreement. 3. For purposes of Section 10.4 and 11 of the Agreement, the additional representations and warranties outlined herein shall be treated as if they are a part of Section 10 of the Agreement.





4. Except for terms amended, replaced or added herein, all of the provisions of the Agreement shall remain unchanged, in full force and effect.

[Signature Page Follows]





IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first set forth above. INVENTEC APPLIANCES CORPORATION

By: Name: Title:

SONOS, INC.

By: /s/ Craig A. Shelburne Craig A. Shelburne





[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.

SONOS, INC.

AMENDMENT TO MANUFACTURING AGREEMENT

October 1, 2017

WHEREAS, Sonos, Inc. (hereinafter Sonos) and Inventec Appliances Corporation (hereinafter IAC) have entered into a certain Manufacturing Agreement dated September 4, 2014, as amended (the Agreement); and

WHEREAS, both Sonos and IAC desire to modify certain terms of the Agreement as specified below.

NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein and for other good and valuable consideration the sufficiency of which is hereby acknowledged by both parties hereto, the parties agree to amend and modify the Agreement as set forth below: 1. Section 1.12 is hereby replaced in its entirety with the following: 1.12 Delivery Date means the date that a Product Build (or portion thereof) is presented for acceptance by a Designated Carrier at the IAC Manufacturing Facility. 2. Section 6.5 of the Agreement is hereby replaced in its entirety with the following:

6.5 Shipping Term; Title and Risk of Loss. Unless otherwise specified to the contrary on a Purchase Order (and subsequently acknowledged in writing by IAC), shipping terms are [*], and include all elements of the INCOTERMS 2010 definition, subject to the specifics outlined in the table presented below.

[*]

Upon completion of its responsibilities above and delivery to the Designated Carrier, title will transfer to Sonos and IAC may submit an invoice for payment in accordance with Section 7.5. 3. Section 7.5 of the Agreement is hereby replaced in its entirety with the following:

7.5. Product Payment Terms. Payment terms are [*] from the date of acceptance by Sonos of an applicable invoice from IAC, which acceptance may not be unreasonably withheld. IAC may not submit an invoice for a Product prior to that Product's transfer of title to Sonos. All payments shall be made in U.S. currency, unless otherwise agreed in writing by the parties, by check or wire transfer (as may be agreed upon by the parties) to an account designated by IAC. Invoices for shall be remitted to: Sonos, Inc., Attn: Accounts Payable, 614 Chapala St., Santa Barbara, CA, 93101, USA, and shall also sent by electronic mail on the date of the invoice to: [*]. Any alteration to the payment terms must be mutually agreed in writing by the Parties. *Confidential Treatment Requested





4. Except for terms amended, replaced or added herein, all of the provisions of the Agreement shall remain unchanged, in full force and effect.

[Signature Page Follows]





IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first set forth above. INVENTEC APPLIANCES CORPORATION

By: Name: Title:

SONOS, INC.

By: /s/ Craig A. Shelburne Craig A. Shelburne Secretary 
Question: Highlight the parts (if any) of this contract related to Covenant Not To Sue that should be reviewed by a lawyer. Details: Is a party restricted from contesting the validity of the counterparty’s ownership of intellectual property or otherwise bringing a claim against the counterparty for matters unrelated to the contract?
[A]:
At no time shall IAC challenge or assist others to challenge the Sonos Marks, or registrations thereof, or attempt to register any trademarks, service marks, trade names or other marks confusingly similar to the Sonos Marks.