Document:

Exhibit 10.34

 

5 June 2006

 

WEST END CAPITAL MANAGEMENT (BERMUDA) LIMITED

 

DISCRETIONARY INVESTMENT MANAGEMENT

 

AGREEMENT

 

FOR

 

MONT FORT
RE LTD. ILW CELL

 

 

DISCRETIONARY INVESTMENT MANAGEMENT

 

THIS AGREEMENT is made as of 5
June 2006, between

 

(1)           MONT
FORT ILW CELL whose registered office is at
Crawford House, 23 Church Street, Hamilton HM 11, Bermuda, ( the “Client”); and

 

(2)           WEST
END CAPITAL MANAGEMENT (BERMUDA) LIMITED whose
registered office is at Crawford House, 23 Church Street, Hamilton HM 11, Bermuda
(the “Investment Manager”).

 

WHEREBY IT IS AGREED:

 

1.             Appointment
of the Investment Manager

 

1.1           The
Client hereby appoints the Investment Manager as discretionary investment
manager of such of the Client’s cash, securities and other assets as may be
placed with the Investment Manager for such purposes (the “Portfolio”).

 

1.2           This
Agreement will come into effect on the commencement date hereof.

 

2.             The
Portfolio

 

The Client will provide details
of the initial Portfolio to the Investment Manager.

 

3.             Representations by the Investment Manager

 

The Investment Manager
represents, warrants and undertakes to the Client on a continuing basis that:

 

(i)             The
Investment Manager has all necessary powers and qualifications to manage the
investment of the Portfolio.

 

(ii)            The
Investment Manager is a registered Investment Manager under the Investment
Business Act 2003.

 

4.             Representations by the Client

 

The Client represents, warrants and
undertakes to the Investment Manager on a continuing basis that:

 

(i)            it
has authority to enter into this Agreement and that it has taken all steps
necessary to appoint the Investment Manager to perform the services envisaged
in this Agreement;

 

 

 

 

(ii)           it is
duly authorised and empowered to perform its duties and obligations hereunder
and that the terms of this Agreement do not constitute a breach of any
obligations by which the Client is bound whether arising by contract, operation
of law or otherwise;

 

(iii)          the
assets comprising the Portfolio are and will remain free of all liens, charges
and other encumbrances, and that the Client is the beneficial owner of
Portfolio assets;

 

(iv)         it will
provide the Investment Manager with such declarations or other documentation
with respect to the Client’s tax status as the Investment Manager may
reasonably request;

 

(v)          it will
advise the Investment Manager promptly of any changes to the Client’s tax
status;

 

(vi)         as a
condition of the provision of services by the Investment Manager hereunder, it
will produce to the Investment Manager such documents as the Investment Manager
may require as evidence of the Client’s authority to enter into this Agreement,
and will forthwith advise the Investment Manager of any variation of or
supplements to such documents; and

 

5.             Discretionary Authority and Investment Guidelines

 

5.1          Subject
to the objectives, guidelines and restrictions set out in the investment
guidelines comprising Appendix II (the “Investment Guidelines”), the Client
hereby delegates to the Investment Manager, during the period of this Agreement,
full discretionary authority to manage the Portfolio, and for that purpose, as
agent for the Client:

 

(i)            to
take all investment decisions in respect of the portfolio including any
delegation to another investment manager for the partial management of the
portfolio including but not limited to an Affiliate as defined in the Bermuda
Companies Act;

 

(ii)           to
subscribe for, purchase, sell, exchange, convert or otherwise effect
transactions in Portfolio assets and to sign any documentation required in connection
with such transactions;

 

(iii)          to
place orders for the execution of Portfolio transactions with or through such
brokers, dealers, agents, market makers or issuers as the Investment Manager
may select, subject to terms of business agreed with the Investment Manager or
implied by market practice; and

 

5.2          The
Client hereby consents to the sub-delegation by the Investment Manager of any
or all of the services hereunder to other Affiliates and to the employment of
agents and sub-custodians who reasonably

 

 

appear to the Investment Manager to be duly
qualified to perform any or all of the services on behalf of the Client for the
purposes of this Agreement.

 

5.3          The
Investment Guidelines may be amended at any time either by agreement or by the
Client on written notice to the Investment Manager.

 

6.             Dealing

 

6.1          Best
Execution

 

In dealing with or for the Client, the
Investment Manager will take reasonable care to ascertain the price which is
the best available at the time for transactions of the kind and size concerned
and will, unless it determines that the circumstances require it to do
otherwise in the Client’s interest, deal at a price no less advantageous to the
Client. The Client agrees that all transactions will be effected in accordance
with the rules and regulations of the relevant market or exchange, if
applicable.

 

6.2          Aggregation

 

The Investment Manager may only aggregate
orders or transactions with its own, with those of other Affiliates or those of
its clients where it is in the overall best interests of all the clients
concerned. All allocations will be done fairly by the Manager.

 

6.3          Material
Interests

 

The Investment Manager will avoid conflicts
of interest where possible, but Affiliates are involved in many different
commercial activities and the Investment Manager acts for other clients, some
of which may have similar objectives to those of the Client.

 

When the Investment Manager takes an
investment decision or effects a transaction on behalf of the Client, certain Affiliates
or some other connected person may have an interest, relationship or
arrangement that is material or a conflict of interest in relation to the
transaction or investment concerned. Neither the Investment Manager nor any of
the Affiliates or other connected person shall be liable to account to the
Client for any profit, commission or remuneration received as a result of any
such transactions.

 

7.             Bank
and Custody Accounts

 

The Client will maintain, in the name of the
Client, an interest bearing Call Deposit Account (being one or more accounts as
the Client may direct or the Investment Manager considers appropriate), and a
Custody Account through which Portfolio transactions will be settled and on
which call balances available for investment will be maintained. The Investment
Manager will, on

 

 

request, give details of any interest payable
on such accounts. The two accounts will be in a major bank (“the Custodian”) as
may be agreed between the Client and the Investment Manager.

 

8.             Settlement and Collection

 

8.1          The
Investment Manager will make reasonable efforts to ensure that the Custodian
shall settle all transactions subject to it holding or receiving all necessary
documents or funds, and will normally do so on such basis as is usual for the
market concerned. Delivery or payment by the other party to any such
transaction shall be at the Client’s risk, and the Investment Manager’s
obligation to account to the Client for any investment or the proceeds of any
investment shall be conditional upon receipt by the Custodian of the relevant
documents or sale proceeds from the other party.

 

8.2          The Custodian
may operate a settlement system whereby the Client is debited with the purchase
cost or credited with the proceeds of sale on the usual settlement (or
subscription) days for the market concerned, conditionally upon settlement
being ultimately effected. This may result in either a benefit or loss to the Custodian
where such settlement is effected at other times

 

8.3          The
Investment Manager will make reasonable efforts to ensure that the Custodian
will promptly collect all income receivable in respect of the Portfolio.

 

9.             Reporting

 

9.1          The
Investment Manager will provide the Client with reports in respect of the
Portfolio as may be mutually agreed from time to time.

 

10.          Records

 

10.1       The
Investment Manager will maintain records of all transactions effected for the
Portfolio.

 

10.2       The
Investment Manager reserves the right to record telephone conversations. Access
to such records is highly restricted.

 

11.          Fees and Charges

 

The Investment Manager’s remuneration for its
services under this Agreement is set out in Appendix IV.

 

12.          Confidentiality

 

The Investment Manager will respect and
protect the confidentiality of all information concerning the Portfolio and
will not, without the Client’s prior consent, disclose any such information to
a third party except: (i) in connection with its performance under this
Agreement (which may include, without limitation, disclosure of the name of the
Client to any broker, dealer or market

 

 

maker); or (ii) as required or permitted by
law or competent authority; or (iii) on the Client’s default either under this
Agreement or under any other agreement which the Investment Manager has entered
into on the Client’s behalf pursuant to this Agreement, whereupon the
Investment Manager may disclose to a third party the Client’s name, addresses
and such other information either as the Investment Manager deems necessary or
as any counterparty reasonably requires.

 

13.          Money Laundering Legislation

 

In common with all properly regulated
offshore jurisdictions, Bermuda has certain statutory provisions which, in
summary, make money laundering a criminal offence. Where the Investment Manager
knows or suspects that a client has engaged in criminal conduct, it may be
obliged to report such knowledge or suspicion to the appropriate authorities in
Bermuda.

 

14.          Liability and Insurance

 

14.1        In
performing its obligations under this Agreement, the Investment Manager will
act with all due care, skill and diligence. Except as provided in Clause 14.2:

 

(i)            the
Investment Manager will not be responsible for any loss attributable to any
act, omission or default of any broker, dealer, market maker, deposit-taker,
sub-custodian or agent selected by the Investment Manager provided that the
Investment Manager has not acted with gross negligence in selecting or
utilising the services of such broker, dealer, market maker, deposit-taker, sub
custodian or agent; and

 

(ii)           the
Investment Manager will not have any liability to the Client except in the
event of the gross negligence, wilful default or fraud of its employees.

 

14.2        The
Investment Manager accepts responsibility for any losses attributable to acts,
omissions or defaults for which its agents or sub-custodians are legally liable
where such agents or sub- custodians are Affiliates.

 

14.3        Insurance
cover is maintained for the Investment Manager in respect of professional
negligence.

 

14.4        The
Client shall indemnify the Investment Manager against all claims by third
parties which may be made against either the Client or the Investment Manager
in connection with the services under this Agreement and all reasonable costs
and expenses properly incurred by the Investment Manager in connection with
such claims, except to the extent that any claim is due to the gross negligence,
wilful default or fraud of their employees. The Investment Manager will inform
the Client of any such claims in respect of which an indemnity is sought under
this Agreement.

 

 

14.5        The
Investment Manager will not in any event have any liability to the Client to
the extent that performance of its obligations is prevented or impeded as a
consequence of any circumstances beyond its reasonable control, including
(without limitation) nationalisation, currency restrictions, acts of war, acts
of God, breakdown or failure of transmission or communications or computer
facilities, postal or other strikes or industrial action, Government action, or
the failure or disruption of any stock exchange, clearing house, settlements system
or market.

 

14.6        No
warranty is given by the Investment Manager as to the performance or
profitability of the Portfolio or any part of it.

 

14.7        The
Investment Manager will not be responsible for the tax consequences of any
investment decision taken or transaction effected for the Client.

 

15.          Complaints

 

The Investment Manager maintains procedures
for the effective consideration and handling of customer complaints. Complaints
will be considered promptly by the Compliance Officer of the Investment Manager.

 

16.          Termination

 

16.1        This
Agreement may be terminated by the Client at any time on 90 days written notice
to the Investment Manager or by the Investment Manager on not less than ninety
days’ prior written notice to the Client.

 

16.2        On notice
of termination, the Investment Manager will, unless directed otherwise by the
Client, continue to manage the Portfolio until the termination date, and is
authorised in any event to arrange for the retention and/or realisation of such
assets as may be required to settle transactions entered into prior to the
actual date of termination, and to pay any outstanding liabilities of the
Client.

 

16.3        In the
event of termination of this Agreement, the Client will promptly give the
Investment Manager all necessary instructions concerning the liquidation or
transfer of the assets comprising the Portfolio, and (subject to Clause 19.5)
the Investment Manager will act in accordance with such instructions.
Termination will not affect accrued rights, existing commitments or any
contractual provision intended to survive termination.

 

16.4        The
Client will not be required to make any additional payment to the Investment
Manager in respect of termination but will be responsible for any additional
expenses necessarily incurred by the Investment Manager in giving effect to the
Client’s instructions with regard to the realisation or transfer of Portfolio
assets on termination (including any losses necessarily realised in settling or
concluding outstanding obligations).

 

 

 

17.           Client’s Authorised Signatories

 

17.1        The
persons identified in the Schedule to Appendix I (the “Authorised Signatories”)
are authorised, on the Client’s behalf, to issue instructions, acknowledgements
and notices to the Investment Manager.

 

17.2        Amendments
to the current list of the Authorised Signatories may be made at any time, on
written notice, signed by the relevant number of current Authorised Signatories
as detailed in the Schedule to Appendix 1.

 

17.3        The
Investment Manager shall be entitled to act, in accordance with Clause 19, on
instructions given by Authorised Signatories as identified in the Schedule to
Appendix I or as subsequently amended pursuant to Clause 18.2. The Investment
Manager shall incur no liability for any action taken on such instructions, in
the absence of express written notice of any change in the Authorised
Signatories.

 

18.          Instructions, Communications and Notices

 

18.1        Subject
to Clauses 19.2 and 19.3, all instructions, acknowledgements and notices will
be given by letter which may be either delivered personally, posted or sent by
facsimile transmission or email with digital signature to the intended
recipient at the addresses set out in Appendix I.

 

18.2        Subject
to Clause 19.3, the Investment Manager will not act upon any instructions or
notices received by facsimile transmission until confirmed by letter delivered
personally or by post, or confirmed orally by any one of the Authorised
Signatories as detailed in the Schedule to Appendix I.

 

18.3        In cases
of emergency, instructions for withdrawals of cash or other assets from the
Portfolio may be given orally by any one of the Authorised Signatories or by
facsimile transmission not confirmed orally; provided that the assets are to be
transferred to the bank account in the name of the Client shown in Appendix I
or to another account subsequently nominated by the Authorised Signatories in
accordance with Clauses 19.1 and 19.2.

 

18.4        The
Investment Manager may in good faith rely on an instruction, acknowledgement or
notice which is reasonably believed to have been issued by an Authorised
Signatory of the Client.

 

18.5        The
Investment Manager may decline to accept or act upon any instruction or other
communication which it reasonably believes not to have been issued in
accordance with the provisions of this Agreement, or if it reasonably considers
that compliance with such instruction would be impracticable or would give rise
to a breach of any applicable law or regulation, and in any such circumstances
the Investment Manager will notify the Client accordingly.

 

19.          Amendments

 

19.1        Subject
to Clauses 5.3 and 20.2, this Agreement may be amended at any time by written
agreement between the Investment Manager and the Client.

 

 

19.2        The
Investment Manager may amend this Agreement by at least 30 days prior notice in
writing to the Client (unless circumstances dictate a shorter period) where
such amendment is necessary to comply with any law or the requirements of any
relevant regulatory or supervisory authority.

 

20.          Entire Agreement

 

This Agreement, together with the Appendices,
Schedules and any Supplements will constitute the entire agreement between the
parties hereto, superseding all prior representations, proposals, agreements or
understandings (whether written or oral) made by any party relating to the
subject matter of this Agreement. No party shall have any liability in respect
of any such representations, proposals, agreements or understandings (unless
fraudulently made) which are not expressly set out or referred to in this
Agreement.

 

21.          Governing Law

 

This Agreement will be subject to and
construed in accordance with Bermuda law and the parties irrevocably submit,
for the exclusive benefit of the Investment Manager, to the non-exclusive
jurisdiction of the Courts of Bermuda.

 

IN WITNESS WHEREOF, the parties have duly executed
this Investment Management Agreement as of the date first written above by
their respective officers thereunto duly authorized.

 

 

Signed by:

David Brown

Director

For and on behalf of

MONT FORT ILW CELL

 

 

Signed by

Mark Byrne

Director

For and on behalf of

WEST END CAPITAL MANAGEMENT (BERMUDA) LIMITED

 

 

APPENDIX I

COMMUNICATIONS AND OTHER PARTICULARS

 

1.             The
Client:           Mont Fort Re Limited High
Layer Cell

 

2.             Commencement
Date: Upon 3 business days notice from Client to Investment Manager but not
later than 30 June 2006. If service not commenced before that date this
contract shall be null and void and no payments due from either party to the
other.

 

3.             The
Initial Portfolio: As notified by the Client in
writing to the Investment Manager.

 

4.             Client’s
Authorised Signatories: See Schedule attached.

 

5.             Communications
Addresses:

 

The Client:

 

Box 223

12 Church Street Suite 224

Hamilton HM11

Bermuda

	
  Attention:

  	
   

  	
  Brenton Slade

  
	
  Telephone No.

  	
   

  	
  +1(441) 278 4303

  
	
  Facsimile No.

  	
   

  	
  +1(441) 296 9879

  

 

The Investment Manager:

 

West End Capital Management (Bermuda) Limited

Crawford House

23 Church Street

Hamilton, HM 11

Bermuda

	
  Attention:

  	
   

  	
  Lesley Cox

  
	
  Telephone No.

  	
   

  	
  +1(441) 278 4334

  
	
  Facsimile No.

  	
   

  	
  +1 (441) 295 4927

  

 

6.             The Client’s Bank Account:

 

	
  Name of Account:

  	
   

  	
  Mont Fort Re Ltd.

  
	
  Bank Name and Address:

  	
   

  	
  HSBC – Bank of Bermuda

  
	
   

  	
   

  	
  6 Front Street

  
	
   

  	
   

  	
  Hamilton, Bermuda

  
	
  Account No.:

  	
   

  	
  1510 847797

  

 

7.             The
Client’s name may be included in promotional
literature or similar publications issued by the Investment Manager.

 

 

SCHEDULE TO APPENDIX I

CLIENT’S AUTHORISED SIGNATORIES

With effect from [Date]

 

 

	
  Name

  	
   

  	
  Position

  	
   

  	
  Signature

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Brenton Slade

  	
   

  	
  Director

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Patrick Boisvert

  	
   

  	
  Treasurer

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  James Oshaughnessy

  	
   

  	
  Authorized Signatory

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

 

	
  Authority:

  	
   

  	
  Any one to sign

  	
   

  	
  o

  	
   

  	
  Any two to sign

  	
  x

  	
   

  

 

 

Note:      Amendments
to the current list of Authorised Signatories may be made at any time on
written notice to the Investment Manager, signed by any two
current Authorised Signatories, or by a certified Resolution of the Board of
Directors of the Company.

 

 

APPENDIX II 

 

INVESTMENT GUIDELINES

 

The Client will adopt investment management
guidelines pursuant to which its investable assets will be managed as directed
by the Client in writing from time to time. Until such further direction, the
assets will be managed as follows:

 

West End will manage the investment funds in
its long-only fixed income strategy. Investment funds will be managed according
to conservative investment guidelines focused on protection and growth of
assets, high credit quality and moderate interest rate risk. This portfolio
will be invested 100% in fixed income assets (to include mortgage-backed
securities, whole loans, preferred stocks, etc.) with the following profile:
Average rating of AA- with a minimum of A- at purchase, maximum duration of 3.0
years, and a benchmark of the Lehman Aggregate Index adjusted for a duration of
2.0 years. Risk management limits including duration, credit, asset concentration
and liquidity within the investment portfolio will be set and monitored by the
Asset and Liability Committee of the Investment Manager.

 

 

APPENDIX III

 

REPORTING PACKAGE

 

1.             Transaction Advices

 

The Investment Manager will send the Client
copies of contract notes and other transaction advices in respect of Portfolio
transactions monthly.

 

2.             Periodic Valuations

 

The Investment Manager will send the Client
quarterly a Portfolio Valuation which will include a list of the individual
investments comprising the Portfolio, their respective acquisition costs, the
value of each as at the valuation date and the performance of the Portfolio
measured relative to the relevant Index.

 

Unless otherwise agreed or stated in the
Valuation, the basis of valuation shall be as follows:

 

 

	
  Securities quoted on a Stock Exchange

  	
   

  	
  :

  	
   

  	
  mid-market
  price between bid and offer or, where this is not available, in accordance
  with local market practice

   

  
	
  Quoted Unit
  Trusts

  	
   

  	
  :

  	
   

  	
  mid price
  between bid and offer or, where this is not available, in accordance with
  local market practice

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Other

  	
   

  	
  :

  	
   

  	
  cost or the
  Investment Manager’s estimated valuation where appropriate evidence is
  available.

  

 

3.             Account Statements

 

Statements of the Call Deposit Account will
be sent to the Client monthly on which any changes in the basis of interest
rates applicable to the Call Deposit Account will be shown.

 

4.             Tax

 

The Investment Manager will provide the
Client (and/or the Client’s professional advisers) with such information and
certificates (including dividend vouchers) as may be reasonably required for
the preparation of tax returns.

 

 

APPENDIX IV

FEES AND CHARGES

 

The Investment Manager’s Remuneration

 

1.             The
Investment Manager shall receive for its services under this Agreement a
management fee (the “Management Fee”) of 0.50% per annum on assets managed. This
covers the purchase of assets (but excludes associated global custody services),
together with the ongoing management of the portfolio on a discretionary basis.

 

2.             The Management
Fee shall be paid quarterly in advance and is calculated by reference to the
market value of the Portfolio (including cash, accrued dividends and interest
but excluding the value of any investment in collective investment schemes of
which any Affiliate acts as manager or adviser and makes a periodic management
charge to the scheme for its services) on the first business day of the
quarterly period in respect of which fees are due. Additions to and withdrawals
from the Portfolio during any quarterly period are taken into account on a
time-weighted basis.

 

3.            The Investment Manager
will also receive annually a performance fee from the Client (the “Performance Fee”). The Performance Fee if any, shall be
calculated by reference to each issued preferred share of the Client for each
period commencing on 1st January (or if later, the date of issue of
the relevant preferred share) and ending on the earliest of (i) 31st
December; (ii) the date of redemption of the relevant preferred share; or (iii)
termination of this Agreement. The Performance Fee payable in respect of each preferred
share for any period will be an amount equal to 15% of the appreciation (if
any) on a cumulative high water mark basis of the Net Asset Value per Share
attributable of the relevant preferred share. If there is no such appreciation,
no Performance Fee will be paid in respect of that Ordinary Share for that
period. The Investment Manager may, in its discretion, effectively waive all or
part of the Performance Fee with respect to any Shareholder’s investment by
rebate or otherwise.

 

The
Performance Fee (if any) shall be paid to the Investment Manager within five
business days following the completion of the annual audited financial
statements.

 

4.             The
Investment Manager is authorised to debit its fees to the Call Deposit Account
under advice to the Client.

 

5.             In
the event of termination of the Agreement, fees will be pro-rated by reference
to the date on which the Portfolio is transferred to the Client or to the
Client’s order, in accordance with the termination provisions of this
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Exhibit 10.17    
    

COMMON STOCK PURCHASE AGREEMENT  

        THIS COMMON STOCK PURCHASE AGREEMENT (this "Agreement") is made as of this 13th day
of February 2007, by and between OMNEON VIDEO NETWORKS, INC., a Delaware corporation (the "Company"),
and SONY ELECTRONICS INC., a Delaware corporation (the "Investor") 

        THE
PARTIES HEREBY AGREE AS FOLLOWS: 

        1.    Purchase
and Sale of Stock.    Subject to the terms and conditions hereof, the purchase and sale
(the "Closing") of that number of shares (rounded down to the nearest whole share) of the Company's Common Stock,
par value $0.001 per share (the "Common Stock"), which equals $15,000,000 divided by the Per Share Price
(as defined in Section 1.1 hereof), shall take place concurrently with and conditioned upon the closing of the Offering (as defined in
Section 4.3 hereof). Those shares of Common Stock to be sold by the Company to Investor pursuant to this Agreement at the Closing are referred to herein as
the "Shares". 

        1.1    Purchase
of Common Stock.    At the Closing, the Investor agrees to purchase, and the Company agrees to sell and issue to the
Investor, the Shares at a purchase price per share (the "Per Share Price") equal to the per share price at which the
Company's Common Stock is offered to the public in the Offering (before deduction of underwriters' discounts and commissions). At the Closing, the Company shall deliver to the Investor a certificate
representing the Shares against payment of the purchase price therefore by check payable to the Company, wire transfer of funds to the Company or any combination of the foregoing. 

        1.2    Terms
of Closing.    The Investor, by delivery of the appropriate executed counterpart signature pages, shall become a party to
this Agreement, the Fourth Amended and Restated Investor Rights Agreement, dated as of March 26, 2004, among the Company and the other parties thereto
(the "Investor Rights Agreement") through execution of the Amendment Agreement to the Fourth Amended and Restated
Investor Rights Agreement of even date herewith in substantially the form attached hereto as Exhibit A (the "Investor
Rights Agreement Amendment"), and any other agreement to which the Company and the Investor are parties, the execution and delivery of which is contemplated
hereby (together with the Investor Rights Agreement Amendment, the "Ancillary Agreements"), and shall have the rights and
obligations of an Investor hereunder and thereunder. 

        2.    Representations
and Warranties of the Company.    The Company hereby represents and warrants as follows: 

        2.1    Financial
Statements.    The financial statements and the related notes thereto of the Company and its consolidated subsidiaries
provided in the disclosure statement attached hereto as Exhibit B (the "Disclosure
Statement") comply in all material respects with the applicable requirements of the Securities Act of 1933, as amended, and the rules and regulations of the
Securities and Exchange Commission (the "Commission") thereunder (collectively, the
"Securities Act")) and the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission
thereunder (collectively, the "Exchange Act"), as applicable, and present fairly the financial position of the Company and
its subsidiaries as of the dates indicated and the results of their operations and the changes in their cash flows for the periods specified; such financial statements have been prepared in conformity
with generally accepted accounting principles applied on a consistent basis throughout the periods covered thereby (except to the extent necessary to effect changes in such generally accepted
accounting principles or other applicable accounting standards); and the other financial information included in the Disclosure Statement has been derived from the accounting records of the Company
and its subsidiaries and presents fairly the information shown thereby. 

1

 

        2.2    No
Material Adverse Change.    Since the date of the most recent financial statements of the Company included in the Disclosure
Statement, (i) there has not been any material change in the long-term debt of the Company or any of its subsidiaries, or any dividend or distribution of any kind declared, set
aside for payment, paid or made by the Company on any class of capital stock, or any material adverse change, or any development that would reasonably be expected to result in a material adverse
change, in or affecting the business, properties, management, financial position, stockholders' equity, results of operations or prospects of the Company and its subsidiaries taken as a whole;
(ii) neither the Company nor any of its subsidiaries has entered into any transaction or agreement that is material to the Company and its subsidiaries taken as a whole or incurred any
liability or obligation, direct or contingent, that is material to the Company and its subsidiaries taken as a whole; and (iii) neither the Company nor any of its subsidiaries has sustained any
material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor disturbance or dispute or any action, order or
decree of any court or arbitrator or governmental or regulatory authority, except in each case as otherwise disclosed in the Disclosure Statement. 

        2.3    Organization
and Good Standing.    The Company and each of its subsidiaries have been duly organized and are validly existing and
in good standing under the laws of their respective jurisdictions of organization, are duly qualified to do business and are in good standing in each jurisdiction in which their respective ownership
or lease of property or the conduct of their respective businesses requires such qualification, and have all power and authority necessary to own or hold their respective properties and to conduct the
businesses in which they are engaged, except where the failure to be so qualified, in good standing or have such power or authority would not, individually or in the aggregate, reasonably be expected
to have a material adverse effect on the business, properties, management, financial position, stockholders' equity, results of operations or prospects of the Company and its subsidiaries taken as a
whole (a "Material Adverse Effect"). The Company does not own or control, directly or indirectly, any corporation,
association or other entity other than the subsidiaries listed in the Disclosure Statement, and the Company wholly owns each of the subsidiaries listed. 

        2.4    The
authorized capital stock of the Company consists of 36,103,049 shares of Common Stock, par value $0.001, of which 2,774,543 are issued and outstanding,
and 17,526,882 shares of Preferred Stock ("Preferred Stock"), par value $0.001, of which 11,363,661 are
designated Series A-1 Preferred Stock, all of which are issued and outstanding; 512,901 are designated Series A-2.1 Preferred Stock, all of which
are issued and outstanding; 1 is designated Series A-2.2 Preferred Stock, one of which is issued and outstanding; 27,557 are designated
Series A-3 Preferred Stock, all of which are issued and outstanding; 21,275 are designated Series A-4 Preferred Stock, all of which are issued and
outstanding; 99 are designated Series A-5 Preferred Stock, all of which are issued and outstanding, 479,436 are designated Series A-6 Preferred
Stock, none of which are issued and outstanding; and 5,121,952 shares are designated as Series B-1 Preferred Stock, all of which are issued and outstanding. The Company also
has: (i) 6,303,821 shares of Common Stock reserved for issuance under the Company's 1998 Stock Option Plan
(the "Plan"), of which 2,497,716 have been issued and exercised (net of repurchases),
3,689,659 are subject to currently issued and unexercised options, and up to 116,446 are available for future grant under the Plan; and (ii) 479,436 shares of
Series A-6 Preferred Stock reserved for issuance upon exercise of outstanding warrants. Except as set forth above in this Section 2.4, there are
no outstanding rights, options, warrants, preemptive rights, rights of first refusal or similar rights for the purchase or acquisition from the Company (or any of its subsidiaries) of any
securities of the Company (or any of its subsidiaries) nor are there any commitments to issue or execute any such rights, options, warrants, preemptive rights or rights of first refusal (other
than as contemplated in the Investor Rights Agreement). All issued and outstanding shares of the Company's capital stock have been duly authorized and validly issued and are fully paid and
nonassessable. All outstanding shares of the Company's capital stock have been issued in compliance with state and federal securities laws. No stock plan, stock purchase, stock option or other
agreement or understanding between the Company and any 

2

 

holder
of any equity securities or rights to purchase equity securities provides for acceleration or other changes in the vesting provisions or other terms of such agreement or understanding as the
result of any merger, consolidated sale of stock or assets, change in control or any other transaction(s) by the Company. 

        2.5    Due
Authorization.    The Company has full right, power and authority to execute and deliver this Agreement and to perform its
obligations hereunder; and all corporate action required to be taken for
the due and proper authorization, execution and delivery by it of this Agreement has been duly and validly taken. This Agreement has been duly authorized, executed and delivered by the Company, and
this Agreement constitutes a valid and legally binding obligation of the Company, enforceable in accordance with its terms, subject to: 1) judicial principles limiting the availability of
specific performance, injunctive relief, and other equitable remedies; 2) bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect generally relating
to or affecting creditors' rights; and 3) limitations on the enforceability of any indemnification provisions. 

        2.6    The
Shares.    The Shares to be issued and sold by the Company hereunder have been duly authorized by the Company and, when issued
and delivered and paid for as provided herein, will be duly and validly issued and fully paid free and clear of all liens, encumbrances, claims, or defects; and the issuance of the Shares is not
subject to any preemptive or similar rights. 

        2.7    No
Violation or Default.    Neither the Company nor any of its subsidiaries is (i) in violation of its Certificate of
Incorporation or By-Laws or similar organizational documents; (ii) in default, and no event has occurred that, with notice or lapse of time or both, would constitute such a default,
in the due performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any
of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject; or
(iii) in violation of any law or statute or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory authority, except, in the case of
clauses (ii) and (iii) above, for any such default or violation that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. 

        2.8    No
Conflicts.    The execution, delivery and performance by the Company of this Agreement and the issuance and sale of the Shares
and the consummation by the Company of the transactions contemplated by this Agreement will not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its subsidiaries pursuant to, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to
which any of the property or assets of the Company or any of its subsidiaries is subject, (ii) result in any violation of the provisions of the Certificate of Incorporation or
By-Laws or similar organizational documents of the Company or any of its subsidiaries or (iii) result in the violation of any law or statute or any judgment, order, rule or
regulation of any court or arbitrator or governmental or regulatory authority, except, in the case of clauses (i) and (iii) above, for any such conflict, breach, violation or default
that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. 

        2.9    No
Consents Required.    No consent, approval, authorization, order, registration or qualification of or with any court or
arbitrator or governmental or regulatory authority is required for the execution, delivery and performance by the Company of this Agreement, the issuance and sale of the Shares and the consummation of
the transactions contemplated by this Agreement. 

        2.10    Legal
Proceedings.    Except as described in the Disclosure Statement, there are no legal, governmental or regulatory
investigations, actions, suits or proceedings pending to which the Company 

3

 

or
any of its subsidiaries is a party or to which any property of the Company or any of its subsidiaries is the subject that, individually or in the aggregate, if determined adversely to the Company
or any of its subsidiaries, could reasonably be expected to have a Material Adverse Effect or materially and adversely affect the ability of the Company to perform its obligations under this
Agreement; no such investigations, actions, suits or proceedings are threatened or, to the knowledge of the Company, contemplated by any governmental or regulatory authority or threatened
by others. 

        2.11    Title
to Real and Personal Property.    The Company and its subsidiaries have good and marketable title in fee simple to, or have
valid rights to lease or otherwise use, all items of real and personal property that are material to the business of the Company taken as a whole and its subsidiaries, in each case free and clear of
all liens, encumbrances, claims and defects and imperfections of title except those that (i) do not materially interfere with the use made and proposed to be made of such property by the
Company and its subsidiaries or (ii) could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect and such personal property is usable by the Company in
the ordinary course of its business. 

        2.12    Intellectual
Property. 

        (a)    Title
to Intellectual Property.    The Company and its subsidiaries own or possess or can acquire on reasonable terms all patents,
patent applications, inventions, trademarks, service marks, trade names, trademark registrations, service mark registrations, domain names, copyrights, licenses, know-how (including trade
secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures) and other intellectual property necessary for the conduct of the businesses of the
Company and its subsidiaries taken as a whole in all material respects ("Intellectual Property"); and to the knowledge of
the Company, the conduct of their respective businesses will not conflict in any material respect with any such rights of others, and except as described in the Disclosure Statement, the Company and
its subsidiaries have not received any notice of any claim of infringement or conflict with any such rights of others that could reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect. To the Company's knowledge, there are no valid and enforceable rights of third parties to the Intellectual Property that are or would be infringed by the business currently
conducted by the Company and its subsidiaries. All Intellectual Property owned by the Company or its subsidiaries is free and clear of all liens, encumbrances, defects or other restrictions, except as
could not, singly or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company; and the Company is not aware of any reasonable basis for a finding that any of the
Intellectual Property is invalid or unenforceable. The Company and its subsidiaries have paid all applicable maintenance fees, filed applicable statements of use, timely responded to office actions,
and disclosed any required information to applicable governmental authorities with respect to its registered Intellectual Property. 

        (b)    No
Judgments Affecting Intellectual Property.    The Company and its subsidiaries are not subject to any judgment, order, writ,
injunction or decree of any court or any federal, state, local, foreign or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, or any arbitrator,
nor have they entered into or are parties to any contract, which materially restricts or impairs their use of any Intellectual Property. 

        (c)    Confidential
Information and Invention Assignments.    The Company has taken all reasonable actions to protect its rights in
confidential information and trade secrets that are material to its business, protect any material confidential information provided to it by any other person, and obtain ownership of all works of
authorship and inventions made by its employees, consultants and contractors and which are material to the Company's business. All founders, key employees and any other employees involved in the
development of software for the Company that is material to the Company's business have signed confidentiality and invention assignment agreements with the Company. 

4

 

        2.13    No
Undisclosed Relationships.    No relationship, direct or indirect, exists between or among the Company or any of its
subsidiaries, on the one hand, and the directors, officers, stockholders, customers or suppliers of the Company or any of its subsidiaries, on the other, that is not described in the Disclosure
Statement. 

        2.14    Taxes.    The
Company and its subsidiaries have paid all material federal, state, local and foreign taxes and filed all federal
and material state or foreign tax returns required to be paid or filed through the date hereof; and except as otherwise disclosed in the Disclosure Statement, there is no tax deficiency that has been,
or could reasonably be expected to be, asserted against the Company or any of its subsidiaries or any of their respective properties or assets that is material to the business, properties, financial
position or results of operations of the Company and its subsidiaries, taken as a whole. 

        2.15    Licenses
and Permits.    The Company and its subsidiaries possess all licenses, certificates, permits and other authorizations
issued by, and have made all declarations and filings with, the appropriate federal, state, local or foreign governmental or regulatory authorities that are necessary for the ownership or lease of
their respective properties or the conduct of their respective businesses as described in the Disclosure Statement, except where the failure to possess or make the same would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect; and except as described in the Disclosure Statement, neither the Company nor any of its subsidiaries has received notice of any
revocation or modification of any such license, certificate, permit or authorization or has any reason to believe that any such license, certificate, permit or authorization will not be renewed in the
ordinary course. 

        2.16    No
Labor Disputes.    No labor disturbance by or dispute with employees of the Company or any of its subsidiaries exists or, to
the best knowledge of the Company, is contemplated or threatened and the Company is not aware of any existing or imminent labor disturbance by, or dispute with, the employees of any of its or its
subsidiaries' principal suppliers, contractors or customers, except as would not reasonably be expected to have a Material Adverse Effect. 

        2.17    Compliance
With Environmental Laws.    (i) The Company and its subsidiaries (x) are, and at all prior times were, in
compliance with any and all applicable federal, state, local and foreign laws, rules, regulations, requirements, decisions and orders relating to the protection of human health or safety, the
environment, natural resources, hazardous or toxic substances or wastes, pollutants or contaminants (collectively, "Environmental
Laws"); (y) have received and are in compliance with all permits, licenses, certificates or other authorizations or approvals required of them under
applicable Environmental Laws to conduct their respective businesses; and (z) have not received notice of any actual or potential liability under or relating to any Environmental Laws,
including for the investigation or remediation of any disposal or release of hazardous or toxic substances or wastes, pollutants or contaminants, and have no knowledge of any event or condition that
would reasonably be expected to result in any such notice; (ii) there are no costs or liabilities associated with Environmental Laws of or relating to the Company or its subsidiaries, except in
the case of each of (i) and (ii) above, for any such failure to comply, or failure to receive required permits, certificates, licenses or other authorizations or approvals, receipt of
notice or cost or liability, as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect and (iii) except as described in the Disclosure Statement,
(x) there are no proceedings that are pending, or that are known by the Company to be contemplated, against the Company or any of its subsidiaries under any Environmental Laws in which a
governmental entity is also a party, other than such proceedings regarding it which it is reasonably believed would not result in a liability to the Company that would be material to the business or
financial position of the Company and its subsidiaries taken as a whole, and (y) none of the Company and its subsidiaries anticipates material capital expenditures relating to any
Environmental Laws. 

5

 

        2.18    Compliance
with ERISA.    (i) Each employee benefit plan, within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), for which the Company or any member of its
"Controlled Group" (defined as any organization which is a member of a controlled group of corporations within the meaning
of Section 414 of the Internal Revenue Code of 1986, as amended (the "Code")) would have any liability (each,
a "Plan") has been maintained in compliance with its terms and the requirements of any applicable statutes, orders, rules
and regulations, including but not limited to ERISA and the Code; (ii) no prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975 of the Code, has
occurred with respect to any Plan excluding transactions effected pursuant to a statutory or administrative exemption; (iii) for each Plan that is subject to the funding rules of
Section 412 of the Code or Section 302 of ERISA, no "accumulated funding deficiency" as defined in Section 412 of the Code has been incurred, whether or not waived, has occurred
or is reasonably expected to occur; (iv) the fair market value of the assets of each Plan exceeds the present value of all benefits accrued under such Plan (determined based on those
assumptions used to fund such Plan); (v) no "reportable event" (within the meaning of Section 4043(c) of ERISA) has occurred or is reasonably expected to occur; and (vi) neither
the Company nor any member of the Controlled Group has incurred, nor reasonably expects to incur, any liability under Title IV of ERISA (other than contributions to the Plan or premiums to the PBGC,
in the ordinary course and without
default) in respect of a Plan (including a "multiemployer plan", within the meaning of Section 4001(a)(3) of ERISA). 

        2.19    Insurance.    The
Company and its subsidiaries have insurance covering their respective properties, operations, personnel and
businesses, including business interruption insurance, which insurance is in amounts and insures against such losses and risks as are prudent and customary in the businesses in which they are engaged;
and neither the Company nor any of its subsidiaries has (i) received notice from any insurer or agent of such insurer that capital improvements or other expenditures are required or necessary
to be made in order to continue such insurance or (ii) any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain
similar coverage at reasonable cost from similar insurers as may be necessary to continue its business. 

        2.20    No
Restrictions on Subsidiaries.    No subsidiary of the Company is currently prohibited, directly or indirectly, under any
agreement or other instrument to which it is a party or is subject, from paying any dividends to the Company, from making any other distribution on such subsidiary's capital stock, from repaying to
the Company any loans or advances to such subsidiary from the Company or from transferring any of such subsidiary's properties or assets to the Company or any other subsidiary of the Company. 

        2.21    No
Broker's Fees.    Neither the Company nor any of its subsidiaries is a party to any contract, agreement or understanding with
any person that would give rise to a valid claim against the Company or any of its subsidiaries for a brokerage commission, finder's fee or like payment in connection with the offering and sale of the
Shares hereunder. 

        3.    Representations
and Warranties of the Investor.    The Investor hereby represents and warrants as follows: 

        3.1    Experience.    The
Investor is experienced in evaluating companies such as the Company, and has either individually or through its
current officers such knowledge and experience in financial and business matters that the Investor is capable of evaluating the merits and risks of the Investor's prospective investment in the
Company, and has the ability to bear the economic risks of the investment. 

        3.2    Purchase
Entirely for Own Account.    The Investor shall acquire the Shares for investment for the Investor's own account and not
with the view to, or for resale in connection with, any distribution thereof. The Investor understands that the Shares have not been registered under the 

6

 

Securities
Act by reason of a specific exemption from the registration provisions of the Securities Act which depends upon, among other things, the bona fide nature of the investment intent as
expressed herein. The Investor further represents that it does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participation to any third person
with respect to any of the Shares. The Investor understands and acknowledges that the offering of the Shares pursuant to this Agreement will not be registered under the Securities Act on the ground
that the sale provided for in this Agreement and the issuance of securities hereunder is exempt from the registration requirements of the Securities Act. 

        3.3    Accreditation
Status.    The Investor is an "accredited investor" within the meaning of Regulation D, Rule 501(a),
promulgated by the Securities and Exchange Commission. 

        3.4    Rule 144.    The
Investor acknowledges that the Shares must be held indefinitely unless subsequently registered
under the Securities Act or an exemption from such registration is available. The Investor is aware of the provisions of Rule 144 promulgated under the Securities Act which permit limited
resale of shares purchased in a private placement subject to the satisfaction of certain conditions. The Investor covenants that, in the absence of an effective registration statement covering the
stock in question, the Investor will sell, transfer, or otherwise dispose of the Shares only in a manner consistent with the Investor's representations and covenants set forth in this
Section 3. In connection therewith, the Investor acknowledges that the Company will make a notation on its stock books regarding the restrictions on transfers set
forth in this Section 3 and will transfer securities on the books of the Company only to the extent not inconsistent therewith. 

        3.5    Access
to Data.    The Investor has received and reviewed information about the Company and has had an opportunity to discuss the
Company's business, management and financial affairs with its management and to review the Company's facilities. 

        3.6    Authorization.    This
Agreement when executed and delivered by the Investor will constitute a valid and legally binding
obligation of the Investor, enforceable in accordance with its terms, subject to: (a) judicial principles limiting the availability of specific performance, injunctive relief, and other
equitable remedies; (b) bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect generally relating to or affecting creditors' rights; and
(c) limitations on the enforceability of any indemnification provisions. 

        3.7    Principal
Address.    For state securities law purposes, the principal address of the Investor is that set forth below. 

        4.    Conditions
of Investor's Obligations to Close.    Company shall give Investor at least five (5) business days' prior notice
of the Offering and the Closing. The obligation of the Investor to purchase Shares at the Closing is subject to both the satisfaction of the following conditions, unless waived by the Investor: 

        4.1    Representations
and Warranties.    The representations and warranties of the Company contained in
Section 2 shall be true in all material respects at and as of the date of this Agreement and shall continue to be true as of the date of Closing except, for any
failure to be so true, as not had and is not reasonably likely to have, individually or in the aggregate, a Material Adverse Effect. 

        4.2    Performance.    The
Company shall have performed and complied with all agreements, obligations and conditions contained in this
Agreement that are required to be performed or complied with by it on or before the Closing. 

        4.3    Closing
of Initial Public Offering.    The Company shall close a firm commitment underwritten public offering pursuant to an
effective registration statement, covering the offer and sale of Common Stock for the account of the Company in which (i) the per share price to the public is at least $4.10 (before deduction
of underwriters' discounts and commissions) and (ii) the aggregate public offering 

7

 

price
(before deduction of underwriters' discounts and commissions) is at least $25,000,000 (the "Offering"), by no
later than December 31, 2007, and that all of the Company's Preferred Stock has converted into shares of the Company's Common Stock. 

        4.4    Qualifications.    All
authorizations, approvals, or permits, if any, of any governmental authority or regulatory body of the
United States or of any state that are required prior to the lawful issuance and sale of the Shares to be issued pursuant to this Agreement shall be duly obtained and effective as of
the Closing. 

        4.5    Investor
Rights Agreement Amendment.    The Company, the Investor, the holders of a majority of the Registrable Securities
(as defined in the Investor Rights Agreement), and the holders of a majority of the aggregate outstanding Shares (as defined in the Investor Rights Agreement) held by the Founders
(as defined in the Investor Rights Agreement) shall have entered into the Investor Rights Agreement Amendment. 

        4.6    No
Government Action.    No provision of any applicable law or regulation and no judgment, injunction order or decree issued by
any court or government body having competent jurisdiction shall prohibit the consummation of this Agreement. 

        4.7    Position
on Board of Directors.    Mitsuru Ohki shall have been appointed as a member of the Company's Board of Directors 

        4.8    Insurance.    The
Company shall have obtained Directors and Officers Errors and Omissions insurance with an aggregate coverage
limit of no less than $15,000,000. 

        4.9    Lock-Up
Agreement.    Holders of the Company's Preferred Stock representing 76% of the Company's Preferred Stock
(on an as-converted to common stock basis) outstanding immediately prior to Closing have entered into the Lock-Up Agreement in the form attached hereto at
Exhibit C (the "Lock-Up Agreement"). 

        4.10    Compliance
Certificate.    The President of the Company shall deliver to the Investor at the Closing a certificate stating that
the conditions specified in Sections 4.1 through and including 4.9 have been fulfilled and that, at the Closing: 

        1)    The
Company and its subsidiaries maintain an effective system of "disclosure controls and procedures" (as defined in Rule 13a-15(e) of the
Exchange Act) that is designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the Commission's rules and forms, including controls and procedures designed to ensure that such information is accumulated and communicated to the
Company's management as appropriate to allow timely decisions regarding required disclosure; and 

        2)    The
Company and its subsidiaries maintain systems of "internal control over financial reporting" (as defined in Rule 13a-15(f) of the Exchange
Act) that comply with the requirements of the Exchange Act and have been designed by, or under the supervision of, their respective principal executive and principal financial officers, or persons
performing similar functions, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles, including, but not limited to, internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed in
accordance with management's general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. 

8

 

        4.11    Secretary's
Certificate.    The Investor shall have received from the Company's Secretary, a certificate having attached thereto
(i) the Company's Certificate of Incorporation as in effect at the time of the Closing, (ii) the Company's By-laws as in effect at the time of the Closing,
(iii) resolutions approved by the Board of Directors authorizing the transactions contemplated hereby, and (iv) good standing certificates (including tax good standing) with respect to
the Company from the applicable authorities in Delaware and any other jurisdiction in which the Company is qualified to do business, dated as of a recent date on or before the Closing. 

        4.12    Opinion
of Company Counsel.    The Investor shall have received from Fenwick & West LLP, counsel for the Company,
an opinion, dated as of the Closing, in a form reasonably acceptable to Investor. 

        5.    Conditions
of the Company's Obligations to Close.    The obligations of the Company to sell and issue the Shares at the Closing are
subject to the satisfaction of the following conditions, unless waived by the Company: 

        5.1    Closing
of Initial Public Offering.    The Offering as defined in Section 4.3 shall be
effective at and as of the date of this Agreement, and the Offering shall have closed no later than December 31, 2007. 

        5.2    Representations
and Warranties.    The representations and warranties of the Investor contained in
Section 3 shall be true with respect to the Investor on and as of the date of the Closing with the same effect as though such representations and warranties had
been made on and as of the Closing. 

        5.3    Investor
Rights Agreement Amendment.    The Company, the Investor, the holders of a majority of the Registrable Securities as
defined in the Investor Rights Agreement, and the holders of a majority of the aggregate outstanding Shares (as defined in the Investor Rights Agreement) held by the Founders shall have
executed the Investor Rights Agreement Amendment. 

        5.4    Lock-Up
Agreement.    The Investor shall have entered into the Lock-Up Agreement. 

        5.5    No
Government Action.    No provision of any applicable law or regulation and no judgment, injunction order or decree issued by
any court or government body having competent jurisdiction shall prohibit the consummation of this Agreement. 

        6.    Agreements.    The
Company will diligently and in good faith negotiate with Sony Corporation, the Investor's parent company
(subject to Sony similarly negotiating diligently and in good faith with the
Company), and the Investor will cause Sony to diligently and in good faith negotiate with the Company, the scope of a definitive collaborative work agreement. 

        7.    Miscellaneous.

        7.1    Governing
Law.    This Agreement shall be governed in all respects by the laws of the State of California without regard to choice
of laws or conflict of laws provisions thereof. 

        7.2    Survival.    The
representations, warranties, covenants and agreements made herein shall survive any investigation made by the
Investor and the Closing. All statements of the Company as to factual matters contained in any certificate or exhibit delivered by or on behalf of the Company pursuant hereto shall be deemed to be the
representations and warranties of the Company hereunder as of such date of such certificate or exhibit. 

        7.3    Cumulative
Rights.    Except as specifically provided in this Agreement, the rights and remedies of the parties set forth herein
shall be cumulative and in addition to any rights and remedies available at law and/or in equity. 

9

 

        7.4    Successors
and Assigns.    Except as otherwise provided herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors, assigns, heirs, executors and administrators of the parties hereto; provided, however, that the rights of the Investor to purchase Shares shall not be assignable without
the consent of the Company. 

        7.5    Entire
Agreement; Amendment.    This Agreement and the other documents delivered pursuant hereto constitute the full and entire
understanding and agreement among the parties with regard to the subjects hereof and thereof. Neither this Agreement nor any term hereof may be amended, waived, discharged or terminated other than by
a written instrument signed by the party against whom enforcement of any such amendment, waiver, discharge or termination is sought. 

        7.6    Notices,
Etc.    All notices and other communications required or permitted hereunder shall be in writing and shall be mailed by
registered or certified mail, postage prepaid, return receipt requested, or otherwise delivered by hand or by messenger, or sent by facsimile or e-mail, addressed (a) if to the
Investor, at the Investor's address set forth below, or at such other address or e-mail address or facsimile number as such Investor shall have furnished to the Company in writing, or
(b) if to the Company, at its address at 965 Stewart Drive, Sunnyvale, California
94085-3913, addressed to the attention of the Corporate Secretary, or at such other address as the Company shall have furnished to the Investor. If notice is provided by mail, notice shall
be deemed to be given upon proper deposit in a mailbox. 

        7.7    Delays
or Omissions.    No delay or omission to exercise any right, power or remedy accruing to the Investor upon any breach or
default of the Company under this Agreement shall impair any such right, power or remedy of the Investor, nor shall it be construed to be a waiver of any such breach or default, or an acquiescence
therein, or of any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter
occurring. Any waiver, permit, consent or approval of any kind or character on the part of any holder of any breach or default under this Agreement, or any waiver on the part of any holder of any
provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing or as provided in this Agreement. All remedies, either
under this Agreement or by law or otherwise afforded to any holder, shall be cumulative and not alternative. 

        7.8    California
Corporate Securities Law.    THE SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED
WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS
UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM THE QUALIFICATION BY SECTION 25100, 25102, OR 25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS
AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT. 

        7.9    Expenses.    The
Company and the Investor shall each pay their own expenses in connection with the transactions contemplated by
this Agreement; provided, however, that, promptly following the Closing and delivery to the Company of a reasonably detailed invoice, the Company shall pay the customary fees and expenses of outside
legal counsel to the Investor and actual out of pocket expenses incurred by the Investor for the diligence respecting the transaction contemplated hereby, in an amount not to exceed in the aggregate
twenty-five thousand dollars ($25,000). 

        7.10    Finder's
Fee.    The Company shall indemnify and hold the Investor harmless and the Investor shall indemnify and hold the Company
harmless from any liability for any commission or compensation in the nature of a finder's fee (including the costs, expenses and legal fees of defending 

10

 

against
such liability) for which the Company or the Investor, or any of their respective partners, employees, or representatives, as the case may be, is responsible. 

        7.11    Counterparts.    This
Agreement may be executed in any number of counterparts and signatures may be delivered by facsimile, each
of which shall be enforceable against the parties actually executing such counterparts, and all of which together shall constitute one instrument. 

        7.12    Severability.    If
any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, portions of such provision, or such provision in its entirety, to the extent necessary, shall be severed from this Agreement and the balance of this Agreement shall be
enforceable in accordance with its terms unless either party determines same to be material to it, in which event the parties will diligently and in good faith negotiate a replacement provision that
attempts to achieve the same objective. 

        7.13    Attorney's
Fees.    In the event that any suit or action is instituted to enforce any provision in this Agreement, the prevailing
party in such dispute shall be entitled to recover from the losing party all fees, costs and expenses of enforcing any right of such prevailing party under or with respect to this Agreement, including
without limitation, such reasonable fees and expenses of attorneys and accountants, which shall include, without limitation, all fees, costs and expenses of appeals. 

* * * *

[SIGNATURES ON NEXT PAGE]

11

        IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. 

	 	 	OMNEON VIDEO NETWORKS, INC.
	
 	
 	

 	

 
	 	 	By:	/s/  JOSEPH KENNEDY      
 Joseph Kennedy

President and Chief Executive Officer
	
 	
 	

 	

 

	
 SONY ELECTRONICS INC.	

 
	
 	

 	

 
	By:	/s/  GEN TSUCHIKAWA      
	 
	
 	

 	

 
	Print Name:	Gen Tsuchikawa
	 
	
 	

 	

 
	Title:	Senior Vice President
	 
	
 	

 	

 
	Address:	Sony Electronic Inc.

16530 Via Esprillo, MZ 7325

San Diego, CA 92127-1804
	 
	
 	

 	

 
	Phone:	    
	 
	
 	

 	

 
	Fax:	    
	 
	
 	

 	

 

	 EXHIBITS
	
 Exhibit A	
 	

Amendment Agreement to the Fourth Amended and Restated Investor Rights Agreement
	Exhibit B	 	Disclosure Statement
	Exhibit C	 	Lock-Up Agreement

QuickLinks

Exhibit 10.17

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