Document:

DVD Playback Technology License Agreement with Microsoft Corporation

 Exhibit 10.1 
 Confidential 
 CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION.
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. OMITTED INFORMATION HAS BEEN REPLACED BY [*]. 
 DVD
PLAYBACK TECHNOLOGY LICENSE AGREEMENT 
 This DVD Playback Technology License Agreement (“Agreement”) is entered into and effective as
of the latter of the two signature dates below (“Effective Date”) by and between MICROSOFT CORPORATION (“Microsoft”), a Washington corporation located at One Microsoft Way, Redmond, WA 98052 (including its
majority owned subsidiaries, successors and assigns) and INTERVIDEO, INC. (“INTERVIDEO”), a Delaware corporation located at 46430 Fremont Boulevard, Fremont, CA 94538 (including its wholly-owned subsidiaries, successors and
assigns). In this Agreement, Microsoft and INTERVIDEO may be referred to individually as a “Party” and collectively as the “Parties”. 
 Recitals 
  

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

  

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

  

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

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

	1.	DEFINITIONS 

  

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

  

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

  

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

  

	2.	LICENSE GRANT; OWNERSHIP 

  

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

  

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

  

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

  

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

  

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

  

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

  

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

  

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

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

  

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

  

	3.	DELIVERY; ACCEPTANCE; TECHNICAL SUPPORT 

  

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

  

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

  

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

  

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

  

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

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

  

	4.	PAYMENT 

  

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

  

	 	(a)	[*]; and 

  

	 	(b)	[*]. 

  

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

  

	5.	PUBLICITY 

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

	6.	NON-EXCLUSIVE RELATIONSHIP 

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

  

	7.	CONFIDENTIALITY 

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

  

	8.	WARRANTIES 

  

	 	8.1	INTERVIDEO warrants and represents that: 

  

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

  

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

  

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

  

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

  

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

  

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

  

	 	8.2	Microsoft warrants and represents that: 

  

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

  

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

  

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

  

	9.	INDEMNITY 

  

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

  

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

  

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

  

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

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

  

	10.	EXCLUSION OF CERTAIN DAMAGES; LIABILITYCAP; 

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

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

	11.	TERMINATION 

  

	 	11.1	Termination. 

  

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

  

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

  

	 	11.2	Effect of Termination. 

  

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

  

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

  

	12.	GENERAL 

  

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

  

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

  

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

  

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

  

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

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

  

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

  

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

  

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

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

			
	MICROSOFT CORPORATION	  	INTERVIDEO, INC.
		
	 /s/ Will Poole
	  	 /s/ Randall I. Bambrough

	 By (Sign)
	  	 By (Sign)

	 Will Poole
	  	 Randall I. Bambrough

	 Name (Print)
	  	 Name (Print)

	 Senior VP
	  	 CFO

	 Title
	  	 Title

	 6/28/05
	  	 6/28/05

	 Date
	  	 Date

  

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 EXHIBIT A 
 INTERVIDEO DVD PLAYBACK TECHNOLOGY COMPONENTS 
 DVD Decoder 
 The INTERVIDEO Decoder contains the
following components: 
 Software Description: 
 1. [*]

 2. [*] 
 3. [*] 
 4. [*] 
  

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 EXHIBIT B 
 INTENTIONALLY LEFT BLANK 
  

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 EXHIBIT C 
 SUPPORT SERVICES 
  

	1.	DEFINITIONS 

 Terms not defined in this Exhibit C
shall have the meanings set forth in the Agreement. 
 “Microsoft Technical Contacts” shall have the meaning set forth in
Section 3.2 of this Exhibit C. 
  

	2.	SUPPORT SERVICES 

  

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

  

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

  

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

  

 Page 16 of 18 

 Confidential 
 3. MICROSOFT OBLIGATIONS 
  

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

  

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

 First designated contact: 
  

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

 Second designated contact: 
  

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

 Third designated contact: 
  

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

 Fourth designated contact: 
  

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

  

 Page 17 of 18 

 Confidential 
  

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

  

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

 Attachment 1 
 Response and Resolution Times 
  

							
	Severity	  	 Definition
	  	 Response
	  	 Resolution

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

  

 Page 18 of 182002 Employee Stock Purchase Plan

 Exhibit 10.5 
 ZHONE TECHNOLOGIES, INC. 
 2002 EMPLOYEE STOCK PURCHASE PLAN 
 (as amended, effective September 1, 2005) 
 1. Establishment of Plan. Zhone Technologies, Inc., a Delaware Corporation (the “Company”), proposes to grant options for purchase of shares of the Company’s Common Stock (“Shares”) to
eligible employees of the Company and its Participating Subsidiaries (as hereinafter defined) pursuant to this Employee Stock Purchase Plan (this “Plan”). For purposes of this Plan, “Parent Corporation” and
“Subsidiary” shall have the same meanings as “parent corporation” and “subsidiary corporation” in Sections 424(e) and 424(f), respectively, of the Internal Revenue Code of 1986, as amended (the
“Code”). “Participating Subsidiaries” are Parent Corporations or Subsidiaries that the Board of Directors of the Company (the “Board”) designates from time to time as corporations that shall
participate in this Plan. The Company intends this Plan to qualify as an “employee stock purchase plan” under Section 423 of the Code (including any amendments to or replacements of such Section), and this Plan shall be so construed.
Any term not expressly defined in this Plan but defined for purposes of Section 423 of the Code shall have the same definition herein. A total of 1,000,000 Shares (as adjusted to reflect the one-for-four reverse stock split effective
November 13, 2003) is reserved for issuance under this Plan. In addition, on each January 1, the aggregate number of Shares reserved for issuance under the Plan shall be increased automatically by a number of Shares equal to 2.5% of the
total number of outstanding Shares on the immediately preceding December 31; provided that the aggregate number of Shares issued over the term of this Plan shall not exceed 1,500,000 (as adjusted to reflect the one-for-four reverse stock
split effective November 13, 2003). Such number shall be subject to adjustments effected in accordance with Section 15 of this Plan. 
 2. Purpose. The purpose of this Plan is to provide eligible employees of the Company and Participating Subsidiaries with a convenient means of acquiring an equity interest in the Company through payroll deductions, to
enhance such employees’ sense of participation in the affairs of the Company and Participating Subsidiaries, and to provide an incentive for continued employment. 
 3. Certain terms. 
 (a) ”Change in Capitalization” shall
mean any increase or reduction in the number of Shares, or any change (including, without limitation, in the case of a spin-off, dividend or other distribution in respect of Shares, a change in value) in the Shares or exchange of Shares for a
different number or kind of shares or other securities of the Company or another corporation, by reason of a reclassification, recapitalization, merger, consolidation, reorganization, spin-off, split-up, issuance of warrants or rights or debentures,
stock dividend, stock split or reverse stock split, cash dividend, property dividend, combination or exchange of shares, repurchase of shares, change in corporate structure or a substantially similar transaction. 
 (b) ”Change in Control” shall mean the occurrence of any of the following: 
 (1) An acquisition (other than directly from the Company) of any Voting Securities of the Company by any “person,” as such term
is used for purposes of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended, including, without limitation, any individual, firm, corporation, partnership, limited liability company, joint venture, association, trust, or
any group thereof (a “Person”), immediately after which such Person has ownership, within the meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as amended (“Beneficial Ownership”), of fifty percent
(50%) or more of the then outstanding Shares or the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of the Board (“Voting Securities”), provided,
however, in determining whether a Change in Control has occurred pursuant to this Section (b)(1), Shares or Voting Securities which are acquired in a “Non-Control Acquisition” (as hereinafter defined) shall not constitute an
acquisition which would cause a Change in Control. A “Non-Control Acquisition” shall mean an acquisition by (i) an employee benefit plan (or a trust forming a part thereof) maintained by (A) the Company or (B) any
corporation or other Person of which a majority of its voting power or its voting equity securities or 

  

 1 

 
equity interest is owned, directly or indirectly, by the Company (for purposes of this definition, a “Related Entity”), (ii) the
Company or any Related Entity, or (iii) any Person in connection with a “Non-Control Transaction” (as hereinafter defined); 
 (2) The individuals who, as of the date hereof, are members of the Board (the “Incumbent Board”), cease for any reason to constitute at least a majority of the members of the Board, or following
a Merger (as defined in paragraph (c)(i) below) which results in a Parent corporation, the board of directors of the ultimate Parent Corporation (as defined in paragraph (3)(i)(A) below); provided, however, that if the election, or
nomination for election by the Company’s common stockholders, of any new director was approved by a vote of at least two-thirds of the Incumbent Board, such new director shall, for purposes of this Plan, be considered as a member of the
Incumbent Board; provided further, however, that no individual shall be considered a member of the Incumbent Board if such individual initially assumed office as a result of an actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board (a “Proxy Contest”) including by reason of any agreement intended to avoid or settle a Proxy Contest; or 
 (3) The consummation of: 
 (i) A merger, consolidation or reorganization with or into the Company or in which securities of the Company are issued (a “Merger”), unless such Merger is a “Non-Control Transaction.”
A “Non-Control Transaction” shall mean a Merger where: 
 (A) the stockholders of the Company,
immediately before such Merger own directly or indirectly immediately following such Merger at least fifty percent (50%) of the combined voting power of the outstanding voting securities of (x) the corporation resulting from such Merger
(the “Surviving Corporation”) if fifty percent (50%) or more of the combined voting power of the then outstanding voting securities of the Surviving Corporation is not Beneficially Owned, directly or indirectly by another
Person (a “Parent Corporation”), or (y) if there are one or more Parent Corporations, the ultimate Parent Corporation; and 
 (B) the individuals who were members of the Incumbent Board immediately prior to the execution of the agreement providing for such Merger constitute at least a majority of the members of the board of directors of
(x) the Surviving Corporation, if there is no Parent Corporation, or (y) if there are one or more Parent Corporations, the ultimate Parent Corporation; and 
 (C) no Person other than (w) the Company, (x) any Related Entity, (y) any employee benefit plan (or any trust forming
a part thereof) that, immediately prior to such Merger was maintained by the Company or any Related Entity, or (z) any Person who, together with its Affiliates, immediately prior to such Merger, had Beneficial Ownership of fifty percent
(50%) or more of the then outstanding Voting Securities or Shares, owns, together with its Affiliates, Beneficial Ownership of fifty percent (50%) or more of the combined voting power of the outstanding voting securities or common stock of
(I) the Surviving Corporation if there is no Parent Corporation, or (II) if there are one or more Parent Corporations, the ultimate Parent Corporation. 
 (ii) A complete liquidation or dissolution of the Company; or 
 (iii) The sale or other disposition of all or substantially all of the assets of the Company to any Person (other than a transfer to
a Related Entity or under conditions that would constitute a Non-Control Transaction with the disposition of the assets being regarded as a Merger for this purpose or the distribution to the Company’s stockholders of the stock of a Related
Entity or any other assets). 
 Notwithstanding the foregoing, a Change in Control shall not be deemed to occur solely because
any Person (the “Subject Person”) acquired Beneficial Ownership of more than the permitted amount of the then outstanding Shares or Voting Securities as a result of the acquisition of Shares or Voting 

  

 2 

 
Securities by the Company which, by reducing the number of Shares or Voting Securities then outstanding, increases the proportional number of shares
Beneficially Owned by the Subject Persons, provided that if a Change in Control would occur (but for the operation of this sentence) as a result of the acquisition of Shares or Voting Securities by the Company, and (1) before such share
acquisition by the Company the Subject Person becomes the Beneficial Owner of any new or additional Shares or Voting Securities in contemplation of such share acquisition by the Company or (2) after such share acquisition by the Company the
Subject Person becomes the Beneficial Owner of any new or additional Shares or Voting Securities which in either case increases the percentage of the then outstanding Shares or Voting Securities Beneficially Owned by the Subject Person, then a
Change in Control shall occur. 
 (c) ”Fair Market Value” on any date means the closing price at the
close of the primary trading session of the Shares on such date on the principal national securities exchange on which such Shares are listed or admitted to trading, or, if such Shares are not so listed or admitted to trading, the closing price at
the close of the primary trading session on such date as quoted on the Nasdaq Stock Market or such other market in which such prices are regularly quoted, or, if there has been no such closing price with respect to Shares on such date, the Fair
Market Value shall be the value established by the Compensation Committee of the Board in good faith. 
 4. Administration. This Plan shall be administered by the Compensation Committee of the Board (the “Committee”). Subject to the provisions of this Plan and the limitations of Section 423 of the Code or
any successor provision in the Code, all questions of interpretation or application of this Plan shall be determined by the Committee and its decisions shall be final and binding upon all participants. Members of the Committee shall receive no
compensation for their services in connection with the administration of this Plan, other than standard fees as established from time to time by the Board for services rendered by Board members serving on Board committees. All expenses incurred in
connection with the administration of this Plan shall be paid by the Company. 
 5. Eligibility. Any employee of the Company
or the Participating Subsidiaries is eligible to participate in an Offering Period (as hereinafter defined) under this Plan except the following: 
 (a) employees who are not employed by the Company or a Participating Subsidiary (10) days before the beginning of such Offering Period; 
 (b) employees who are customarily employed for twenty (20) hours or less per week; 
 (c) employees who are customarily employed for five (5) months or less in a calendar year; 
 (d) employees who, together with any other person whose stock would be attributed to such employee pursuant to Section 424(d) of
the Code, own stock or hold options to purchase stock possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of the Company or any of its Subsidiaries or affiliates or who, as a result of being
granted an option under this Plan with respect to such Offering Period, would own stock or hold options to purchase stock possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of the Company or
any of its Participating Subsidiaries; and 
 (e) individuals who provide services to the Company or any of its
Participating Subsidiaries as independent contractors who are reclassified as common law employees for any reason except for federal income and employment tax purposes. 
 6. Offering Dates. The offering periods of this Plan (each, an “Offering Period”), with the exception of the First
Offering Period (the “First Offering Period”), shall be of twenty-four (24) months duration commencing on March 1 and September 1 of each year and ending on February 28 and August 31 of each year. Each
Offering Period, other than the First Offering Period, shall consist of four (4) six-month purchase periods (individually, a “Purchase Period”) during which payroll deductions of the participants are accumulated under this
Plan. The First Offering Period shall be of twenty-seven (27) months duration commencing on June 1, 2002 and ending on August 31, 2004, and shall consist of one (1) nine-month 

  

 3 

 
Purchase Period and three (3) six-month Purchase Periods. An additional Offering Period shall commence on January 1, 2004 and end on
August 31, 2005, and shall consist of one (1) Purchase Period commencing on January 1, 2004 and ending on February 29, 2004 and three (3) six-month Purchase Periods thereafter. The first business day of each Offering Period
is referred to as the “Offering Date.” The last business day of each Purchase Period is referred to as the “Purchase Date.” The Committee shall have the power to change the duration of Offering Periods with respect
to offerings without stockholder approval if such change is announced at least fifteen (15) days prior to the scheduled beginning of the first Offering Period to be affected; provided, however, that no Offering Period may be longer than
twenty-seven (27) months. Effective September 1, 2005, the following provisions shall apply. Each Offering Period shall be three (3) months duration commencing on September 1, December 1, March 1 and
June 1 of each year and ending on November 30, February 28 (or 29 in the case of a leap year), May 31 and August 31 of each year. The last business day of each Offering Period (commencing on or after September 1,
2005) shall be referred to as the “Purchase Date.” 
 7. Participation in this Plan. Eligible employees may become
participants in an Offering Period under this Plan on the first Offering Date after satisfying the eligibility requirements by delivering a subscription agreement to the Company’s stock administration department (the “Stock
Administration Department”) not later than one (1) day before such Offering Date. An eligible employee who does not deliver a subscription agreement to the Stock Administration Department by such date after becoming eligible to
participate in such Offering Period shall not participate in that Offering Period or any subsequent Offering Period unless such employee enrolls in this Plan by filing a subscription agreement with the Stock Administration Department not later than
one (1) day preceding a subsequent Offering Date. Once an employee becomes a participant in an Offering Period, such employee will automatically participate in the Offering Period commencing immediately following the last day of the prior
Offering Period unless the employee withdraws or is deemed to withdraw from this Plan or, with respect to Offering Periods commencing prior to September 1, 2005, terminates further participation in the Offering Period as set forth in
Section 12 below. Such participant is not required to file any additional subscription agreement in order to continue participation in this Plan. 
 8. Grant of Option on Enrollment. Enrollment by an eligible employee in this Plan with respect to an Offering Period will constitute the grant (as of the Offering Date) by the Company to such employee
of an option to purchase on the Purchase Date up to that number of Shares of the Company determined by dividing (a) the amount accumulated in such employee’s payroll deduction account during such Purchase Period by (b) the lower of
(i) eighty-five percent (85%) of the Fair Market Value of a Share on the Offering Date (but in no event less than the par value of a Share), or (ii) eighty-five percent (85%) of the Fair Market Value of a Share on the Purchase
Date (but in no event less than the par value of a Share), provided, however, that the number of Shares subject to any option granted pursuant to this Plan shall not exceed the maximum number of Shares set by the Committee
pursuant to Section 11(b) below with respect to the applicable Purchase Date. Effective for Offering Periods commencing on or after September 1, 2005, enrollment by an eligible employee in this Plan will constitute the grant (as of the
Offering Date) by the Company to such employee of an option to purchase on the Purchase Date up to that number of Shares of the Company determined by dividing the (a) amount accumulated in such employee’s payroll deduction account during
such Offering Period by (b) the lower of (i) eighty-five percent (85%) of the Fair Market of a Share on the Offering Date (but in no event less than par value of a Share), or (ii) eighty-five percent (85%) of the Fair Market
of a Share on the Purchase Date (but in no event less than par value of a Share), provided, however, that the number of Shares subject to any option granted pursuant to this Plan shall not exceed the maximum number of Shares set
by the Committee pursuant to Section 11(b) below with respect to the applicable Purchase Date. 
 9. Purchase
Price. The purchase price at which a Share will be sold in any Offering Period shall be eighty-five percent (85%) of the lesser of: 
 (a) The Fair Market Value on the Offering Date; or 
 (b) The Fair Market Value on the
Purchase Date. 
  

 4 

 10. Payment Of Purchase Price; Changes In Payroll Deductions; Issuance Of Shares. 

(a) The purchase price of the Shares is accumulated by regular payroll deductions made during each Offering Period. The deductions
are made as a percentage of the participant’s compensation in one percent (1%) increments not less than two percent (2%), nor greater than ten percent (10%) or such lower limit set by the Committee. Compensation shall mean all W-2
cash compensation, including, but not limited to, base salary, wages, commissions, overtime, shift premiums and bonuses, plus draws against commissions, provided, however, that for purposes of determining a participant’s compensation,
any election by such participant to reduce his or her regular cash remuneration under Sections 125 or 401(k) of the Code shall be treated as if the participant did not make such election. Payroll deductions shall commence on the first payday of the
Offering Period and shall continue to the end of the Offering Period unless sooner altered or terminated as provided in this Plan. 
 (b) A participant may increase or decrease the rate of payroll deductions during an Offering Period by filing with the Stock Administration Department a new authorization for payroll deductions, in which case the new rate shall become
effective for the next payroll period commencing more than fifteen (15) days after the Stock Administration Department’s receipt of the authorization and shall continue for the remainder of the Offering Period unless changed as described
herein. Such change in the rate of payroll deductions may be made at any time during an Offering Period, but not more than one (1) change may be made effective during any Purchase Period. Effective for any Offering Period commencing on or after
September 1, 2005, a participant may not increase or decrease the rate of payroll deductions during an Offering Period. A participant may, however, increase or decrease the rate of payroll deductions for any subsequent Offering Period by filing
with the Stock Administration Department a new authorization for payroll deductions not later than one (1) day before the beginning of such subsequent Offering Period. 
 (c) A participant may reduce his or her payroll deduction percentage to zero during an Offering Period by filing with the Stock
Administration Department a request for cessation of payroll deductions. Such reduction shall be effective beginning with the next payroll period commencing more than fifteen (15) days after the Stock Administration Department’s receipt of
the request and no further payroll deductions will be made for the duration of the Offering Period. Payroll deductions credited to the participant’s account prior to the effective date of the request shall be used to purchase Shares in
accordance with Section (e) below. A participant may not resume making payroll deductions during the Offering Period in which he or she reduced his or her payroll deductions to zero. Effective for any Offering Period commencing on or after
September 1, 2005, a participant may not reduce his or her payroll deduction percentage to zero during an Offering Period. 
 (d) All payroll deductions made for a participant are credited to his or her account under this Plan and are deposited with the general funds of the Company. No interest accrues on the payroll deductions. All payroll deductions
received or held by the Company may be used by the Company for any corporate purpose, and the Company shall not be obligated to segregate such payroll deductions. 
 (e) On each Purchase Date, so long as this Plan remains in effect, and (with respect to Offering Periods commencing prior to
September 1, 2005) provided that the participant has not submitted a signed and completed withdrawal form before that date which notifies the Company that the participant wishes to withdraw from that Offering Period under this Plan and have all
payroll deductions accumulated in the account maintained on behalf of the participant as of that date returned to the participant, the Company shall apply the funds then in the participant’s account to the purchase of whole Shares reserved
under the option granted to such participant with respect to the Offering Period to the extent that such option is exercisable on the Purchase Date. The purchase price per Share shall be as specified in Section 9 of this Plan. Any cash
remaining in a participant’s account after such purchase of Shares shall be refunded to such participant in cash, without interest; provided, however that any amount remaining in such participant’s account on a Purchase Date which is less
than the amount necessary to purchase a full Share shall be carried forward, without interest, into the next Purchase Period or Offering Period, as the case may be. In the event that this Plan has been oversubscribed, all funds not used to purchase
Shares on the Purchase Date shall be returned to the participant, without interest. No Shares shall be purchased on a Purchase Date on behalf of any employee whose participation in this Plan has terminated prior to such Purchase Date. 
  

 5 

 (f) As promptly as practicable after the Purchase Date, the Company shall issue
Shares for the participant’s benefit representing the Shares purchased upon exercise of his or her option. 
 (g) During a participant’s lifetime, his or her option to purchase Shares hereunder is exercisable only by him or her. The participant will have no interest or voting right in Shares covered by his or her option until such option
has been exercised. 
 11. Limitations on Shares to be Purchased. 
 (a) No participant shall be entitled to purchase stock under this Plan at a rate which, when aggregated with his or her rights to
purchase stock under all other employee stock purchase plans of the Company or any Subsidiary, exceeds $25,000 in fair market value, determined as of the Offering Date (or such other limit as may be imposed by the Code) for each calendar year in
which the employee participates in this Plan. The Company shall automatically suspend the payroll deductions of any participant as necessary to enforce such limit provided that when the Company automatically resumes such payroll deductions, the
Company must apply the rate of payroll deduction in effect immediately prior to such suspension. 
 (b) No participant
shall be entitled to purchase more than the Maximum Share Amount (as defined below) on any single Purchase Date. Not less than ten (10) days prior to the commencement of any Purchase Period, the Committee shall determine, in its sole
discretion, the maximum number of Shares which may be purchased by any employee at any single Purchase Date (hereinafter the “Maximum Share Amount”). Effective for Offering Periods commencing on or after September 1, 2005, the
Maximum Share Amount shall be set not less then ten (10) days prior to the commencement of any Offering Period. If a new Maximum Share Amount is set, then all participants must be notified of such Maximum Share Amount prior to the commencement
of the next Offering Period or Purchase Period. The Maximum Share Amount shall continue to apply with respect to all succeeding Purchase Dates and Offering Periods unless revised by the Committee as set forth above. 
 (c) If the number of Shares to be purchased on a Purchase Date by all employees participating in this Plan exceeds the number of
Shares then available for issuance under this Plan, then the Company will make a pro rata allocation of the remaining Shares in as uniform a manner as shall be reasonably practicable and as the Committee shall determine to be equitable. In such
event, the Company shall give written notice of such reduction of the number of Shares to be purchased under a participant’s option to each participant affected. 
 (d) Any payroll deductions accumulated in a participant’s account which are not used to purchase stock due to the limitations
in this Section 11 shall be returned to the participant as soon as practicable after the end of the applicable Offering Period or Purchase Period, without interest. 
 12. Withdrawal. 
 (a) Each participant may withdraw from an Offering Period
under this Plan by signing and delivering to the Stock Administration Department a written notice to that effect on a form provided for such purpose. Such withdrawal may be elected at any time at least fifteen (15) days prior to the end of an
Offering Period. Upon withdrawal from this Plan, the accumulated payroll deductions shall be returned to the withdrawn participant, without interest, and his or her interest in this Plan shall terminate. In the event a participant voluntarily elects
to withdraw from this Plan, he or she may not resume his or her participation in this Plan during the same Offering Period, but he or she may participate in any Offering Period under this Plan which commences on a date subsequent to such withdrawal
by filing a new authorization for payroll deductions in the same manner as set forth in Section 7 above for initial participation in this Plan. This Section 12(a) shall only apply to Offering Periods commencing prior to September 1,
2005. 
  

 6 

 (b) Effective for any Offering Period commencing on or after September 1, 2005,
a participant may not withdraw from a current Offering Period under this Plan. However, a participant may, by signing and delivering to the Stock Administration Department a written withdrawal notice one (1) day in advance of a subsequent
Offering Period, decline to participate in such subsequent Offering Period. After the Stock Administration Department’s timely receipt of such request no further payroll deductions will be made with respect to such participant during subsequent
Offering Periods until such time as the participant affirmatively elects to participate in the Plan by filing a new authorization for payroll deductions in the same manner as set forth in Section 7 above for initial participation in the Plan.

 (c) If the Fair Market Value on the first day of the current Offering Period in which a participant is enrolled is
higher than the Fair Market Value on the first day of any subsequent Offering Period, the Company will automatically enroll such participant in the subsequent Offering Period. Any funds accumulated in a participant’s account prior to the first
day of such subsequent Offering Period will be applied to the purchase of Shares on the Purchase Date immediately prior to the first day of such subsequent Offering Period, if any. 
 13. Termination of Employment. Termination of a participant’s employment for any reason, including retirement, death or the failure
of a participant to remain an eligible employee of the Company or of a Participating Subsidiary, immediately terminates his or her participation in this Plan. In such event, the payroll deductions credited to the participant’s account will be
returned to him or her or, in the case of his or her death, to his or her legal representative, without interest. For purposes of this Section 13, an employee will not be deemed to have terminated employment or failed to remain in the
continuous employ of the Company or of a Participating Subsidiary in the case of sick leave, military leave, or any other leave of absence approved by the Board; provided that such leave is for a period of not more than ninety (90) days
or reemployment upon the expiration of such leave is guaranteed by contract or statute. 
 14. Return of Payroll
Deductions. In the event a participant’s interest in this Plan is terminated by withdrawal, termination of employment or otherwise, or in the event this Plan is terminated by the Board, the Company shall deliver to the participant all
payroll deductions credited to such participant’s account. No interest shall accrue on the payroll deductions of a participant in this Plan. 
 15. Change in Capitalization and Change in Control. 
 (a) Subject to any required action by the
stockholders of the Company, in the event of a Change in Capitalization, the number of Shares covered by each option under this Plan which has not yet been exercised and the number of Shares which have been authorized for issuance under this Plan
but have not yet been placed under option (collectively, the “Reserves”), as well as the price per Share covered by each option under this Plan which has not yet been exercised, shall be proportionately adjusted for any increase or
decrease in the number of issued and outstanding Shares resulting from a stock split or the payment of a stock dividend (but only on the Common Stock) or any other increase or decrease in the number of issued and outstanding Shares effected without
receipt of any consideration by the Company; provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been “effected without receipt of consideration.” Such adjustment shall be made
by the Committee, whose determination shall be final, binding and conclusive. Except as expressly provided herein, no issue by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect,
and no adjustment by reason thereof shall be made with respect to, the number or price of Shares subject to an option. 
 (b)
In the event of a Change in Control due to the dissolution or liquidation of the Company, all rights to purchase Shares under the Plan shall terminate and all amounts credited to employee accounts which have not been applied to the purchase of
Shares shall be refunded; provided, however, that the Committee may, in the exercise of its sole 

  

 7 

 
discretion in such instances, declare that this Plan shall terminate as of a date fixed by the Committee and give each participant the right to purchase
Shares under this Plan prior to such termination. In the event of a Change in Control for any other reason and after which the Company is not the Surviving Corporation, the Committee may determine in its sole discretion that: (1) a date
established by the Board on or up to 10 days before the date of consummation of such Change in Control shall be treated as the last day of any Offering Periods then in progress and shall also be a Purchase Date, and there shall be no further
Offering Periods under this Plan; (2) all rights to purchase Shares under the Plan shall terminate and all amounts credited to employee accounts which have not been applied to the purchase of Shares shall be refunded; or (3) the Plan will
continue with regard to Offering Periods that commenced prior to the closing of the proposed transaction and shares of the Surviving Corporation will be purchased based on the Fair Market Value of the Surviving Corporation’s stock on each
Purchase Date. 
 (c) The Committee may, if it so determines in the exercise of its sole discretion, in the event of a
Change in Capitalization or a Change in Control, also make provision for adjusting the Reserves, as well as the price per Share covered by each outstanding option. 
 16. Nonassignability. Neither payroll deductions credited to a participant’s account nor any rights with regard to the exercise of an option or to receive Shares under this Plan may be assigned,
transferred, pledged or otherwise disposed of in any way (other than by will, the laws of descent and distribution or as provided in Section 23 below) by the participant. Any such attempt at assignment, transfer, pledge or other disposition
shall be void and without effect. 
 17. Reports. Individual accounts will be maintained for each participant in this Plan.
Each participant shall receive promptly after the end of each Purchase Period a report of his or her account setting forth the total payroll deductions accumulated, the number of Shares purchased, the per share price thereof and the remaining cash
balance, if any, carried forward to the next Purchase Period or Offering Period, as the case may be. 
 18. Notice of
Disposition. Each participant shall notify the Company in writing if the participant disposes of any of the Shares purchased in any Offering Period pursuant to this Plan if such disposition occurs within two (2) years from the Offering
Date or within one (1) year from the Purchase Date on which such Shares were purchased (the “Notice Period”). The Company may, at any time during the Notice Period, place a legend or legends on any certificate representing
Shares acquired pursuant to this Plan requesting the Company’s transfer agent to notify the Company of any transfer of the Shares. The obligation of the participant to provide such notice shall continue notwithstanding the placement of any such
legend on the certificates. 
 19. No Rights to Continued Employment. Neither this Plan nor the grant of any option
hereunder shall confer any right on any employee to remain in the employ of the Company or any Participating Subsidiary, or restrict the right of the Company or any Participating Subsidiary to terminate such employee’s employment. 

20. Equal Rights And Privileges. All eligible employees shall have equal rights and privileges with respect to this Plan so that this
Plan qualifies as an “employee stock purchase plan” within the meaning of Section 423 or any successor provision of the Code and the related regulations. Any provision of this Plan which is inconsistent with Section 423 or any
successor provision of the Code shall, without further act or amendment by the Company, the Committee or the Board, be reformed to comply with the requirements of Section 423. This Section 20 shall take precedence over all other provisions
in this Plan. 
 21. Notices. All notices or other communications by a participant to the Company under or in connection
with this Plan shall be deemed to have been duly given when received in the form specified by the Company at the location, or by the person, designated by the Company for the receipt thereof. 
 22. Term; Stockholder Approval. After this Plan is adopted by the Board, this Plan will become effective on the First Offering Date (as
defined above). This Plan shall be approved by the stockholders of 

  

 8 

 
the Company, in any manner permitted by applicable corporate law, within twelve (12) months before or after the date this Plan is adopted by the Board.
No purchase of Shares pursuant to this Plan shall occur prior to such stockholder approval. This Plan shall continue until the earlier to occur of (a) termination of this Plan by the Board (which termination may be effected by the Board at any
time), (b) issuance of all of the Shares reserved for issuance under this Plan, or (c) ten (10) years from the adoption of this Plan by the Board. 
 23. Designation of Beneficiary. 
 (a) A participant may file a written
designation of a beneficiary who is to receive any Shares and cash, if any, from the participant’s account under this Plan in the event of such participant’s death subsequent to the end of an Purchase Period but prior to delivery to him of
such Shares and cash. In addition, a participant may file a written designation of a beneficiary who is to receive any cash from the participant’s account under this Plan in the event of such participant’s death prior to a Purchase Date.

 (b) Such designation of beneficiary may be changed by the participant at any time by written notice. In the event of
the death of a participant and in the absence of a beneficiary validly designated under this Plan who is living at the time of such participant’s death, the Company shall deliver such Shares or cash to the executor or administrator of the
estate of the participant, or if no such executor or administrator has been appointed (to the knowledge of the Company), the Company, in its discretion, may deliver such Shares or cash to the spouse or to any one or more dependents or relatives of
the participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate. 
 24. Conditions Upon Issuance of Shares; Limitation on Sale of Shares. Shares shall not be issued with respect to an option unless the exercise of such option and the issuance and delivery of such Shares pursuant thereto
shall comply with all applicable provisions of law, domestic or foreign, including, without limitation, the Securities Act, the Securities Exchange Act of 1934, as amended, the rules and regulations promulgated thereunder, and the requirements of
any stock exchange or automated quotation system upon which the Shares may then be listed, and shall be further subject to the approval of counsel for the Company with respect to such compliance. 
 25. Applicable Law. The Plan shall be governed by the substantive laws (excluding the conflict of laws rules) of the State of Delaware.

 26. Amendment or Termination of this Plan. The Board may at any time amend, terminate or extend the term of this Plan,
except that, any such termination cannot affect options previously granted under this Plan, nor may any amendment make any change in an option previously granted which would adversely affect the right of any participant; provided however that
no action taken under Section 15 shall be considered to adversely affect the right of any participant within the meaning of this sentence, nor may any amendment be made without approval of the stockholders of the Company obtained in accordance
with Section 22 above within twelve (12) months of the adoption of such amendment (or earlier if required by Section 22) if such amendment would: 
 (a) increase the number of Shares that may be issued under this Plan; or 
 (b) change the
designation of the employees (or class of employees) eligible for participation in this Plan. 
 Notwithstanding the foregoing, the Board may make such
amendments to the Plan as the Board determines to be advisable, if the continuation of the Plan or any Offering Period would result in financial accounting treatment for the Plan that is different from the financial accounting treatment in effect on
the date this Plan is adopted by the Board. 
  

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