Document:

Master Agreement by and between Zoran Corporation and the Registrant

 Exhibit 10.10 
  
 [CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL 
 PORTIONS OF THIS DOCUMENT HAVE BEEN 
 REDACTED AND HAVE BEEN SEPARATELY

 FILED WITH THE COMMISSION] 
  
 STRATEGIC MAESTROLINK ALLIANCE 
  
 by and between 
  
 ZORAN CORPORATION 
  
 and 
  
 ARCSOFT, INC.

  
 dated 
  
 March 31, 2004 
  

			
	 	  	Strategic MaestroLink Alliance

 TABLE OF CONTENTS 
  
 STRATEGIC MAESTROLINK ALLIANCE 
 by and between 
 ZORAN CORPORATION 
 and 
 ARCSOFT, INC. 
 dated 
 March 31, 2004 
  

					
	 Master Agreement
	  	 
			
	 Exhibit A
	  	Definitions	  	 
			
	 Exhibit B
	  	Development Agreement	  	 
			
	 Exhibit C
	  	Core Technology License Agreement	  	 
			
	 Exhibit D
	  	IC Production and Sales Agreement	  	 
			
	 Exhibit E
	  	Equipment Transfer Agreement	  	 
			
	 Exhibit F
	  	Form of Convertible Promissory Note	  	 
			
	 Exhibit G
	  	Amendment No. 1 to Investors Rights Agreement	  	 

  

			
	 	  	Strategic MaestroLink Alliance

 MASTER AGREEMENT 
  
 by and between 
  
 ZORAN CORPORATION 
  
 and 
  
 ARCSOFT, INC. 
  
 dated 
  
 March 31, 2004

  

					
	 	 	 	 	 ArcSoft/Zoran Confidential
 Master Agreement

 MASTER AGREEMENT 
  
 This MASTER AGREEMENT (“Master Agreement”), executed on March 31, 2004 (“Execution Date”), is made by
and between Zoran Corporation, a Delaware corporation with its principal place of business at 1390 Kifer Road, Sunnyvale, California 94086 (“Zoran”), and ArcSoft, Inc., a California corporation with its principal place of business at 46601
Fremont Boulevard, Fremont, California 94538 (“ArcSoft”). 
  
 RECITALS 
  
 The following provisions form
the basis for, and are hereby made a part of, this Master Agreement: 
  

	A-1.	The parties desire to set forth in this Master Agreement an overview of the transaction and certain terms that apply to the entire transaction. 

  

	A-2.	Zoran desires ArcSoft to complete the development of Zoran’s MaestroLink hardware and software technology and ArcSoft desires to complete such development in accordance with
the terms and conditions set forth in the Development Agreement attached hereto as Exhibit B. 

  

	A-3.	Each party desires to grant to each other the licenses relating to this transaction, including, without limitation, the licenses required for development and manufacturing as set
forth in the Core Technology License Agreement attached hereto as Exhibit C. 

  

	A-4.	Zoran desires to manufacture the first version of the integrated circuit implementing the MaestroLink technology and any other integrated circuits implementing the MaestroLink
technology agreed upon in writing by the parties, and desires to sell such integrated circuits to ArcSoft, and ArcSoft desires to purchase such integrated circuits in accordance with the terms and conditions set forth in the IC Production and Sales
Agreement attached hereto as Exhibit D. 

  

	A-5.	Zoran desires to transfer, and ArcSoft is willing to accept, certain equipment necessary to assist in the development of the MaestroLink hardware and software in accordance with the
terms and conditions set forth in the Equipment Transfer Agreement attached hereto as Exhibit E. 

  

	A-6.	ArcSoft desires to borrow up to Four Million Dollars ($4,000,000) from Zoran, and Zoran is willing to lend such sum to ArcSoft in accordance with the terms and conditions set forth
herein and in the form of Note attached hereto as Exhibit F. 

  
 AGREEMENT 
  
 NOW, THEREFORE, for and in
consideration of the covenants, conditions and undertakings hereinafter set forth, the parties hereto hereby agree as follows: 
  
 1. Definitions. All capitalized terms in the Transaction Agreements shall be as defined in Exhibit A hereto. 
  
 2. Scope of Agreement. The parties desire by the Transaction
Agreements to create a mechanism that will enable them to implement the business relationship as described herein. To accomplish the foregoing, the Transaction Agreements:  
  

	 	$	provide the terms, conditions and milestone schedule for ArcSoft’s continued development of the MaestroLink Technology;  

  

	 	$	set forth the licenses to the Intellectual Property Rights granted by one party to the other party that are necessary to fulfill such party’s obligations and exercise its
rights under the Transaction Agreements; 

  

					
	 	 	 	 	 ArcSoft/Zoran Confidential
 Master Agreement

	 	$	provide for Zoran’s manufacture and sale to ArcSoft of the first version of the integrated circuit implementing the MaestroLink Technology and any other integrated circuits
implementing the MaestroLink Technology agreed upon in writing by the parties;  

  

	 	$	provide for the transfer from Zoran to ArcSoft of certain equipment related to the MaestroLink Technology;  

  

	 	$	set forth the terms and conditions under which Zoran will loan the Note Amount to ArcSoft and under which ArcSoft will pay back such sum to Zoran with interest.

  
 3. Development. The following is
intended to serve as a summary of the terms and conditions of the Development Agreement, and shall not be construed in any way to limit the terms and conditions set forth therein. In all cases, the rights and obligations set forth in this Section 3
are subject to the actual terms and conditions set forth in the Development Agreement: 
  

	 	$	All development under the Transaction Agreement shall be done, and all required deliverables shall be delivered in accordance with (a) the Development Plan attached to the
Development Agreement, which sets forth the required Deliverables, milestone schedule and Acceptance Criteria, and (b) the Specifications, which are to be agreed upon by the parties. 

  

	 	$	ArcSoft acknowledges and agrees that time is of the essence for the provision of development services under the Transaction Agreements, but if either party fails to fulfill a
milestone set forth in the delivery schedule, the other party’s subsequent obligations shall be pushed out an equivalent amount of time as such party was delinquent. 

  

	 	$	Each party will provide the other party with certain technical assistance related to such development. 

  
 4. Intellectual Property Rights. The following is intended to serve as a summary of the terms and conditions
of the Core Technology License Agreement, and shall not be construed in any way to limit the terms and conditions set forth therein. In all cases, the rights and obligations set forth in this Section 4 are subject to the actual terms and conditions
set forth in the Core Technology License Agreement:  
  

	 	$	Zoran shall grant to ArcSoft an exclusive and royalty-bearing license under the Zoran Patent Rights and Zoran Trade Secrets in the Application Field; provided, however, that the
parties agree that Zoran may grant a license to an Industry Standards Body and/or a Licensing Company for further sublicensing within a patent pool. Additionally, Zoran shall grant to ArcSoft an exclusive and royalty bearing license under
Zoran’s Intellectual Property Rights in the Licensed MaestroLink Software to develop the Modified MaestroLink Software. The foregoing licenses shall not become exclusive until the earlier to occur of (a) Zoran’s acceptance of the final
Deliverables under the Development Plan, or (b) ArcSoft’s closing of an Initial Public Offering; and Zoran will covenant not to grant any of the foregoing licenses to any Third Parties for a period of one (1) year after the Effective Date. The
license granted to ArcSoft in the Licensed MaestroLink Software shall survive the termination of the Transaction Agreements. 

  

	 	$	Zoran shall grant to ArcSoft a non-exclusive and royalty-free license under Zoran’s Intellectual Property Rights in the Licensed MaestroLink IP Core Technology, which includes
the License MaestroLink Firmware, and in the Licensed MaestroLink IC Design in the Application Field. 

  

					
	 	 	2	 	 ArcSoft/Zoran Confidential
 Master Agreement

	 	$	ArcSoft shall grant to Zoran a perpetual, non-exclusive and royalty-free license in all of its modifications to the foregoing, as well as to any ArcSoft Derivative IC Products for
use with MaestroLink IC Products in the Application Field. ArcSoft shall also grant to Zoran licenses back to the foregoing for Zoran’s manufacture of the first version of the integrated circuit implementing the MaestroLink technology and any
other integrated circuits implementing the MaestroLink technology agreed upon in writing by the parties, and the right to manufacture the modifications to the foregoing upon the occurrence of certain Release Events.  

 

	 	$	Zoran shall own all of the Zoran IPR in the MaestroLink Technology licensed to ArcSoft, and ArcSoft shall own all of the ArcSoft IPR in the MaestroLink Technology modified by
ArcSoft. ArcSoft shall own all of the Joint Technology implemented in software for the personal computer. Zoran shall own all other Joint Technology.  

  

	 	$	Each party will pay to the other party certain royalties for each MaestroLink IC Product sold by such party. 

  
 5. Manufacturing and Sales. The following is intended to serve
as a summary of the terms and conditions of the IC Production and Sales Agreement, and shall not be construed in any way to limit the terms and conditions set forth therein. In all cases, the rights and obligations set forth in this Section 5 are
subject to the actual terms and conditions set forth in the IC Production and Sales Agreement:  
  

	 	$	Zoran shall manufacture the First IC Product pursuant to the terms of the IC Production and Sales Agreement. Zoran shall manufacture the Related IC Products and/or New IC Products
that ArcSoft has requested for Zoran to manufacture and which Zoran has agreed in writing to manufacture on terms negotiated between the parties. 

  

	 	$	Zoran shall sell the First IC Product and any Related IC Products and/or New IC Products manufactured by Zoran to ArcSoft in accordance with the terms of the IC Production and Sales
Agreement. The MaestroLink IC Products ordered by ArcSoft shall have the same manufacturing priority status with Zoran’s Third Party Contract Manufacturer as the MaestroLink IC Products ordered by Zoran.  

  
 6. Equipment Sale. Zoran shall transfer the equipment listed in
Schedule A of the Equipment Transfer Agreement to ArcSoft in accordance with the terms and conditions set forth in the Equipment Transfer Agreement. 
  
 7. Equity Financing 
  
 7.1 Bridge Loans. Zoran will lend to ArcSoft the amounts set forth below, at the times specified. Each loan will be funded by a check or wire
transfer to an account designated by ArcSoft, against delivery of a Note in the principal amount of the loan. 
  
 7.1.1 Two Million Dollars ($2,000,000) on the Execution Date; 
  
 7.1.2 Eight Hundred Thousand Dollars ($800,000) upon verification, to Zoran’s reasonable satisfaction, of completion of the First Major Milestone;

  
 7.1.3 Six Hundred Thousand Dollars ($600,000) upon
verification, to Zoran’s reasonable satisfaction, of completion of the Second Major Milestone; and 
  
 7.1.4 Six Hundred Thousand Dollars ($600,000) upon verification, to Zoran’s reasonable satisfaction, of completion of the Third Major Milestone.

  

					
	 	 	3	 	 ArcSoft/Zoran Confidential
 Master Agreement

 7.2 Initial Public Offering; Additional Purchase Rights. If ArcSoft completes its Initial Public
Offering prior to the completion of the Third Major Milestone, Zoran will not be required to make any further loans to ArcSoft pursuant to Section 7.1 above following the closing of the Initial Public Offering. In such event, ArcSoft hereby grants
to Zoran an option (the “Option”) to purchase for cash shares of ArcSoft Common Stock, at the applicable conversion price, as specified in the Notes, for a total purchase price (Note conversion plus cash investment) of Four Million Dollars
($4,000,000). The Option shall terminate on the earlier of the IPO Date or the Maturity Date (as those terms are defined in the Notes), or upon any earlier conversion of any of the Notes. The Option may be exercised at any time during its term by
Zoran by delivery of written notice to ArcSoft (the “Exercise Notice”). The closing of the sale and purchase of the shares issuable upon exercise of the Option will take place at the offices of ArcSoft ten (10) days following delivery of
the Exercise Notice, or at such other time and place as Zoran and ArcSoft shall agree. 
  
 7.3 Registration Rights. Zoran shall be entitled to all of the registration rights provided by the Investors Rights Agreement dated December 22, 2000, among ArcSoft and the holders of its Series B Preferred
Stock, on a pro rata basis, with respect to all shares of ArcSoft’s equity securities issuable upon conversion of the Notes (the “Conversion Shares”) and upon exercise of the Option (the “Option Shares”), in accordance with
Amendment No. 1 to the Investors Rights Agreement, in the form attached hereto as Exhibit G. 
  
 7.4 Market Stand-Off Agreement. Zoran agrees that, during a period specified by ArcSoft, not to exceed one hundred eighty (180) days following the
effective date of the registration statement for the Initial Public Offering, it shall not, to the extent requested by ArcSoft, directly or indirectly, sell, offer to sell, contract to sell (including, without limitation, any short sale), grant any
option to purchase or otherwise transfer or dispose of (other than to donees who agree to be similarly bound) any securities of ArcSoft held by Zoran at any time during such period except common stock included in such registration; provided,
however, that such agreement shall not be effective unless all executive officers and directors of ArcSoft and all other holders of at least five percent (5%) of ArcSoft’s outstanding voting equity securities enter into similar agreements.

  
 7.5 Representations and Warranties of ArcSoft. In
connection with the issuance of the Notes and the grant of the Option, ArcSoft hereby represents and warrants to Zoran as follows: 
  
 7.5.1 Organization and Standing. ArcSoft is a corporation duly organized, validly existing and in good standing under the laws of the State of
California and has full corporate power and authority to conduct its business as presently conducted and as presently proposed to be conducted by it, and to enter into and perform this Agreement and to carry out the transactions contemplated by this
Agreement. ArcSoft is duly qualified to do business as a foreign corporation and is in good standing in any jurisdiction in which the failure to so qualify would have a material adverse effect on the operations or financial condition of ArcSoft.
ArcSoft has furnished to Zoran true and complete copies of its Articles of Incorporation and Bylaws, each as amended to date and presently in effect. 
  
 7.5.2 Capitalization. The authorized capital stock of ArcSoft immediately prior to the Effective Date will consist of (i) one hundred million
(100,000,000) shares of Common Stock, $0.001 par value per share, of which twenty million, six hundred thirty-five thousand seven hundred fifty-eight (20,635,758) shares will be issued and outstanding, and (ii) ten million (10,000,000) shares of
Preferred Stock, $0.001 par value, (A) two million (2,000,000) shares of which have been designated Series A Preferred Stock, of which one million eight hundred thirty-two thousand seven hundred twenty-six (1,832,726) shares will be issued and
outstanding, and (B) four million (4,000,000) shares of which have been designated Series B Preferred Stock, of which three million six hundred sixty-six thousand six hundred sixty-six (3,666,666) shares will be issued and outstanding. All of the
issued and outstanding shares of ArcSoft’s capital stock have been duly authorized and validly issued and are fully paid and nonassessable. Immediately prior to the Effective Date, ArcSoft will have reserved (i) seven million five hundred
thousand (7,500,000) shares of Common Stock for issuance under its employee stock option plan, three million five hundred sixteen thousand five hundred sixty (3,516,560) of which shall be subject to outstanding options, (ii) twenty thousand (20,000)
shares of Common Stock for issuance upon exercise of outstanding warrants and (iii) the shares of Common Stock issuable upon conversion of the 
  

					
	 	 	4	 	 ArcSoft/Zoran Confidential
 Master Agreement

 outstanding shares of Preferred Stock. Except as set forth above or provided in this Agreement, (i) no subscription,
warrant, option, convertible security or other right (contingent or otherwise) to purchase or acquire any shares of capital stock of ArcSoft is authorized or outstanding, (ii) ArcSoft has no obligation (contingent or otherwise) to issue any
subscription, warrant, option, convertible security or other such right or to issue or distribute to holders of any shares of its capital stock any evidences of indebtedness or assets of ArcSoft, and (iii) ArcSoft has no obligation (contingent or
otherwise) to purchase, redeem or otherwise acquire any shares of its capital stock or any interest therein or to pay any dividend or make any other distribution in respect thereof. All of the issued and outstanding shares of capital stock of
ArcSoft have been offered, issued and sold by ArcSoft in compliance with applicable federal and state securities laws. 
  
 7.5.3 Issuance of Securities. The issuance, sale and delivery of the Notes and the grant of the Option in accordance with this Agreement, and the
issuance and delivery of the Conversion Shares and the Option Shares, have each been duly authorized by all necessary corporate action on the part of ArcSoft, and all such shares have been duly reserved for issuance. The Conversion Shares, when
issued in accordance with the provisions of the Notes, and the Option Shares, when issued in accordance with the provisions of the Option, will be duly authorized and validly issued, fully paid and non-assessable. 
  
 7.5.4 Authority for Agreement. The execution, delivery and
performance by ArcSoft of this Agreement, and the consummation by ArcSoft of the transactions contemplated hereby, have been duly authorized by all necessary corporate and shareholder action. This Agreement has been and each of the Notes, when
issued hereunder, will be duly executed and delivered by ArcSoft and constitutes, or will constitute, the valid and binding obligation of ArcSoft, enforceable in accordance with their respective terms, except as limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general application relating to or affecting enforcement of creditors’ rights and rules or laws concerning equitable remedies. Neither the execution of or the performance of the
transactions contemplated by this Agreement by ArcSoft, the issuance of the Notes, the grant of the Option or the issuance of the Conversion Shares or the Option Shares will violate any provision of law or conflict with or result in any breach of
any of the terms, conditions or provisions of, or constitute a default under, or require a consent or waiver under, ArcSoft’s Articles of Incorporation or Bylaws (each as amended to date) or any indenture, lease, agreement or other instrument
to which ArcSoft is a party or by which it or any of its properties is bound, or any decree, judgment, order, statute, rule or regulation applicable to ArcSoft. 
  

7.5.5 Governmental Consents. No consent, approval, order or authorization of, or registration, qualification, designation, declaration or
filing with, any governmental authority is required on the part of ArcSoft in connection with the execution and delivery of this Agreement, the offer, issuance, sale and delivery of the Notes, the grant of the Option, the issuance of the Conversion
Shares or the Option Shares, or the other transactions as contemplated by this Agreement, except such filings as shall have been made prior to and shall be effective on and as of the Effective Date. 
  
 7.5.6 Litigation. There is no litigation, action, suit, proceeding,
or governmental inquiry or investigation, pending, or, to ArcSoft’s knowledge, any threat thereof, against ArcSoft, which questions the validity of this Agreement, or the right of ArcSoft to enter into this Agreement or consummate the
transactions contemplated hereby, or which might result, either individually or in the aggregate, in any material adverse change in the business, prospects, assets or condition, financial or otherwise, of ArcSoft, nor is ArcSoft aware that there is
any basis for any of the foregoing. 
  
 7.5.7 Financial
Statements. ArcSoft has delivered to Zoran its audited financial statements for the fiscal years ended June 30, 2001, June 30, 2002 and June 30, 2003 and its unaudited financial statements for the six-month period ended December 31, 2003
(collectively, the “Financial Statements”). The Financial Statements were prepared in accordance with generally accepted accounting principles (“GAAP”) applied on a consistent basis throughout the periods involved, subject, in
the case of the unaudited financial statements, to normal year-end audit adjustments. The Financial Statements present fairly in all material respects the financial position of ArcSoft as of the respective dates and the results of its operations and
cash flows for the periods indicated. 
  

					
	 	 	5	 	 ArcSoft/Zoran Confidential
 Master Agreement

 7.5.8 Absence of Undisclosed Liabilities. ArcSoft has no liabilities, either accrued or
contingent (whether or not required to be reflected in financial statements in accordance with GAAP), and whether due or to become due, other than (a) liabilities reflected or provided for on the balance sheet as of December 31, 2003 (the
“Balance Sheet Date”) contained in the Financial Statements, (b) liabilities contemplated by this Agreement, and (c) normal or recurring liabilities incurred since the Balance Sheet Date in the ordinary course of business consistent with
past practices. 
  
 7.5.9 Absence of Certain Changes or
Events. Since the Balance Sheet Date, ArcSoft has conducted its business in the ordinary course and in a manner consistent with past practices and, since such date, ArcSoft has not suffered any event or occurrence that has had or could
reasonably be expected to have a Material Adverse Effect on ArcSoft. 
  
 7.5.10 Property and Assets. ArcSoft has good and marketable title to all of its material properties and assets, and good title to its leasehold estates, and none of such properties or assets is subject to any material mortgage,
pledge, lien, security interest, lease, charge or encumbrance. 
  
 7.5.11 Intellectual Property. Subject to the licenses granted in the Transaction Agreements, ArcSoft owns or possesses sufficient legal rights to all Intellectual Property Rights necessary for the conduct of its business as now
conducted and as currently proposed to be conducted, without any known infringement of the rights of others. ArcSoft has received no notice that it is infringing upon, violating or otherwise acting adversely to the right or claimed right of any
person or entity under or with respect to any Intellectual Property Rights or licenses. 
  
 7.5.12 Insurance. ArcSoft maintains general business insurance with respect to its properties and business of the kinds and in the amounts not
less than are customarily obtained by corporations of established reputation engaged in the same or similar business and similarly situated, including, without limitation, insurance against loss, damage, fire, theft, public liability and other
risks. 
  
 7.5.13 Compliance. ArcSoft has, in all material
respects, complied with all laws, regulations and orders applicable to its present business and has all material permits and licenses required thereby. 
  
 7.5.14 Books and Records. The minute books of ArcSoft contain complete and accurate records of all meetings and other corporate actions of its
shareholders and its Board of Directors and committees thereof. The stock ledger of ArcSoft is complete and reflects all issuances, transfers, repurchases and cancellations of shares of capital stock of ArcSoft. 
  
 7.5.15 Disclosures. Neither this Agreement nor any Exhibit hereto or
thereto, nor any report, certificate or instrument furnished to Zoran or its counsel in connection with the transactions contemplated by this Agreement, when read together, contains or will contain any untrue statement of a material fact or omits or
will omit to state a material fact necessary in order to make the statements contained herein or therein, in light of the circumstances under which they were made, not misleading. 
  
 7.5.16 Use of Proceeds. ArcSoft will use the proceeds of the loans made pursuant to this Section 7 for the purpose
of performing its development, support, sales and marketing obligations under the Transaction Agreements. Without limiting the generality of the foregoing, no portion of the proceeds will be used to pay any outstanding indebtedness of ArcSoft,
including, without limitation, its indebtedness under the outstanding promissory note in the original principal amount of One Million Five Hundred Thousand Dollars ($1,500,000) payable to Xu-Sheng Zhang. 
  
 7.6 Representations and Warranties of Zoran. Zoran hereby represents
and warrants to ArcSoft as follows: 
  
 7.6.1 The Notes and the
Option are being acquired for Zoran’s own account for investment and not with a view to, or for resale in connection with, any distribution or public offering thereof within the meaning of the Securities Act of 1933, as amended, or the
California Corporate Securities Law of 1968, as amended (the “Securities Act”); and 
  

					
	 	 	6	 	 ArcSoft/Zoran Confidential
 Master Agreement

 7.6.2 Zoran understands that the Note, the Option, the Conversion Shares and the Option Shares have not
been registered under the Securities Act by reason of their issuance in a transaction exempt from the registration requirements of the Securities Act pursuant to Section 4(2) thereof, that ArcSoft has no present intention of registering the Note,
the Option, the Conversion Shares or the Option Shares, that such securities must be held by Zoran indefinitely, and that Zoran must therefore bear the economic risk of such investment indefinitely unless a subsequent disposition is registered under
the Securities Act or is exempt from such registration. 
  
 7.7
Notice of Financial Condition. During the term of the Transaction Agreements, ArcSoft shall, upon request of Zoran, provide to Zoran a copy of its quarterly profit and loss statement, balance sheet and cash flow statement that ArcSoft makes
generally available to its shareholders. During the term of the Transaction Agreements, Zoran shall, upon the request of ArcSoft, provide to ArcSoft with a copy of its most recent quarterly profit and loss statement, balance sheet and cash flow
statement that it makes generally available to its shareholders. 
  
 7.8 Observer Rights. During the period that any principal amount remains outstanding under any of the Notes, Zoran shall have the right to send its representative to attend in a nonvoting observer capacity all meetings of
ArcSoft’s Board of Directors and, in this respect, ArcSoft shall provide Zoran’s representative copies of all notices, minutes, financial information, consents, and other material that it provides to its directors; provided, however, that
ArcSoft reserves the right to exclude Zoran’s representative from access to any material or meeting or portion thereof if ArcSoft believes, upon advice of counsel, that such exclusion is reasonably necessary to preserve the attorney-client
privilege, discuss ArcSoft’s relationship with Zoran or to discuss ArcSoft’s relationship with a competitor of Zoran. Zoran agrees that Zoran and its representative will hold in confidence and trust, and not use or disclose, any
confidential information provided to or learned by Zoran or its representative in connection with Zoran’s rights hereunder, unless such information is known, or until such information becomes known, to the public; provided, however, that Zoran
and its representative may disclose such information to Zoran’s attorneys, accountants, consultants and other professionals to the extent necessary to obtain their services in connection with Zoran’s rights hereunder. Zoran’s rights
under this Section 7.8 shall terminate upon the closing of the Initial Public Offering. 
  
 8. Strategic Relationship and Other Obligations 
  
 8.1 Non-compete Obligation. The fundamental basis for Zoran licensing the rights granted to ArcSoft under the Transaction Agreements is ArcSoft’s obligations to complete the development of the
MaestroLink Technology and use commercially reasonable efforts to promote the MaestroLink Technology as an industry standard within the Application Field. Consequently, ArcSoft agrees that for twenty-four (24) months after the Effective Date,
ArcSoft shall not develop, manufacture or sell products in the Application Field based on a technology other than the MaestroLink Technology. 
  
 8.2 Strategic Agreement 
  
 8.2.1 Porting. At no cost to Zoran, ArcSoft shall create the Strategic Ports by porting five (5) existing ArcSoft software applications agreed
upon in writing by parties no later than sixty (60) days after the Effective Date to Zoran platforms one in each of the following product lines not to exceed a total five (5) portings: DVD player, DVD recorder, digital still camera, digital TV and
printer; provided, however, that such porting shall not require more than thirty (30) man-days of ArcSoft work. Zoran will provide ArcSoft with technical support for such porting for the applicable Zoran platforms as reasonably necessary.

  
 8.2.2 Embedded Software Applications. So long as any
principal and/or interest is not fully paid under the Note (but for at least twelve (12) months after the Effective Date (“Right of First Announcement Term”)), ArcSoft hereby extends to Zoran a right of first announcement for any Embedded
Software developed by ArcSoft and the first right to announce the implementation and 
  

					
	 	 	7	 	 ArcSoft/Zoran Confidential
 Master Agreement

 distribution of such Embedded Software on or with Zoran Products as compared with all Third Parties providing integrated
circuits which could use the Object Code form of the Embedded Software (“Other Companies”). ArcSoft will provide Zoran with written notification of ArcSoft’s completion of development of any such Embedded Software prior to, or at the
same time as any Other Companies. Zoran shall have a period of thirty (30) days after Zoran’s receipt of such notification and a copy of the Embedded Software to provide written notice to ArcSoft of its intent to exercise its right to first
announce the implementation and distribution of the Embedded Software described in ArcSoft’s notification (“Notice of Intent”). If Zoran provides ArcSoft with a Notice of Intent within such thirty (30) day period, then ArcSoft shall
work with Zoran to port the Embedded Software for distribution with Zoran Products subject to the terms of a written agreement to be negotiated in good faith and executed by the parties, whereby Zoran shall be able to first announce the
implementation and distribution of such Embedded Software with Zoran Products, and no Other Company may announce the implementation and/or distribution of such Embedded Software with such Other Company’s products until after thirty (30) days
after Zoran’s announcement. The written agreement will include the following terms (a) ArcSoft shall retain the right to distribute the Embedded Software directly to end users, (b) for end users introduced by Zoran, ArcSoft shall pay Zoran a
referral fee, and (c) Zoran shall have the right to distribute the Embedded Software with the Zoran Products. If ArcSoft receives of a Notice of Intent from Zoran regarding any particular Embedded Software, ArcSoft will not agree with any Other
Companies to distribute and/or announce the availability of any version of any software with similar functionality to such Embedded Software until thirty (30) days after Zoran has announced Zoran’s implementation and distribution of such
Embedded Software with Zoran Products. If Zoran gives written notice to ArcSoft that it does not intend to exercise its rights to such Embedded Software or if Zoran does not provide ArcSoft with a Notice of Intent within the thirty (30) days period,
then ArcSoft shall be free to agree with Other Companies to announce the distribution of such Embedded Software at any time. Each new Version of ArcSoft’s Embedded Software shall constitute a new Embedded Software that is required to be
resubmitted to Zoran pursuant to the terms of this Section 8.2.2. “Version” means a revised version of the Embedded Software that ArcSoft designates by a change to the number on the left of the decimal point (e.g., a change from version
1.0 to 2.0). The Right of First Announcement Term shall automatically renew for successive twelve (12) month periods, unless either party provides written notice to the other party of their intent not to renew no later than thirty (30) days prior to
the end of the then-current term. If the Right of First Announcement Term is terminated, the provisions of this Section 8.2.2 shall be immediately terminated. 
  

8.2.3 Zoran Proposals. From time to time, Zoran may submit in writing to an ArcSoft employee on the management level a non-confidential
proposal containing ideas to be further developed by ArcSoft (“Zoran Proposal”). Within such Zoran Proposal, Zoran will indicate to ArcSoft a period of time during which ArcSoft will work exclusively with Zoran on the confidential aspects
of such Zoran Proposal. If ArcSoft approves such proposal with such specified period of time, then ArcSoft agrees to work exclusively with Zoran and no Other Company to develop the technology specified on such Zoran Proposal for the specified period
of time. If ArcSoft rejects such Zoran Proposal and/or specified period of time, Zoran shall be free to propose the technology referenced in the Zoran Proposal to any Third Parties. 
  
 8.3 Non-solicitation. During the term of this Agreement, ArcSoft will not solicit, directly or indirectly, any Zoran
Major Customers for purchase of any IC product from ArcSoft, including, without limitation, the MaestroLink IC Product. 
  
 8.4 Additional Development. To the extent that any Zoran request of development work from ArcSoft for the MaestroLink IC Products hereunder outside
the scope of the Development Plan proposes a project involving a product that Zoran reasonably believes will sell more than *** Units of customized MaestroLink IC Products in the first twenty-four (24) months after first commercial sale, then (a) if
such project will not involve more than thirty (30) ArcSoft man-days, then ArcSoft will perform such development at no additional cost to Zoran within ninety (90) days after such request, and (b) if such project will involve more than thirty (30)
ArcSoft man-days, then Zoran will be required to detail the proposed terms and conditions, including, without limitation, payment terms, in writing and such proposal must be approved in writing and in advance by ArcSoft (which approval may not be
unreasonably withheld and/or delayed). 
  
 *** CONFIDENTIAL MATERIAL
REDACTED AND 
 SEPARATELY FILED WITH THE COMMISSION 
  

					
	 	 	8	 	 ArcSoft/Zoran Confidential
 Master Agreement

 8.5 Conditional Obligations. If ArcSoft materially fails for a period of thirty (30) days to
perform (a) any of its development or support obligations or (b) fails to make any of the payments to Zoran as they become due, Zoran may, upon written notice to ArcSoft, immediately suspend (i) its performance under the Development Agreement and
(ii) its performance of other promotion, operation services, or support activities assigned to Zoran under the Transaction Agreements, in each case until ArcSoft remedies any breach and resumes its performance under the Transaction Agreements.

  
 9. Payments 
  
 9.1 Payment Method. Unless the parties agree to the contrary in
writing, all payments made to Zoran under the Transaction Agreements shall be made by bank wire transfer in immediately available funds to the account designated in writing by Zoran. All dollar amounts specified in the Transaction Agreements, and
all payments made hereunder, are and shall be made in U.S. dollars. Any payments due under the Transaction Agreements that are not paid by the date such payments are due under the applicable agreement shall bear interest to the extent permitted by
applicable law at the prime rate as reported by Morgan Guaranty Trust Co. of New York, New York, on the date such payment is due calculated on the number of days such payment is delinquent. This Section 9.1 shall in no way limit any other remedies
available to either party. 
  
 9.2 Currency Conversion. If
any currency conversion shall be required in connection with the calculation of amounts payable hereunder, such conversion shall be made using the buying exchange rate for conversion of the foreign currency into U.S. Dollars, quoted for current
transactions reported in The Wall Street Journal (U.S., Eastern Edition) for the business day on which the respective payment is due. 
  
 9.3 Taxes. Amounts payable by one party (the “Paying Party”) to the other party (the “Paid Party”) under the Transaction
Agreements are payable in full by the Paying Party to the Paid Party without reduction for taxes (including, without limitation, withholding taxes) or customs duties. If any applicable law requires the Paying Party to withhold amounts from any
payments to the Paid Party hereunder, then: (a) the Paying Party shall effect such withholding, remit such amounts to the appropriate taxing authorities and promptly furnish the Paid Party with tax receipts evidencing the payments of such amounts;
and (b) the sum payable by the Paying Party upon which the deduction or withholding is based shall be increased to the extent necessary to ensure that, after such deduction or withholding, the Paid Party receives and retains, free from liability for
such deduction or withholding, a net amount equal to the amount the Paid Party would have received and retained in the absence of such required deduction or withholding. 
  
 9.4 Records; Inspection. Each party shall keep complete, true and accurate books of accounts and records for the
purpose of (a) determining the amounts payable pursuant to the Transaction Agreements and (b) ensuring compliance with the provisions of the Transaction Agreements relating to (i) payment, payment reporting and obligations under the Core Technology
License Agreement and the Development Agreement, (ii) disclosure matters under the Core Technology License Agreement and the Development Agreement, (c) intellectual property matters under the Core Technology License Agreement and the Development
Agreement, and (d) the licensing and sublicensing restrictions and obligations imposed on the licensee in the Core Technology License Agreement. Such books and records shall be kept for at least three (3) years following the end of the calendar
quarter to which they pertain. Such records will be open for inspection at the principal place of business of the other party (“Auditing Party”) during such three (3) year period by an independent auditor chosen by the Auditing Party and
reasonably acceptable to the party being audited (“Audited Party”) for the purpose of verifying (A) payment, payment reporting and obligations the Audited Party under the Core Technology License Agreement and the Development Agreement, (B)
disclosure matters under the Core Technology License Agreement and the Development Agreement, (C) intellectual property matters under the Core Technology License Agreement and the Development Agreement, and (D) the licensing and sublicensing
restrictions and obligations imposed on the Audited Party in the Core Technology License Agreement and the Development Agreement. The independent auditor shall be obligated to execute a reasonable confidentiality agreement prior to commencing any
such inspection. If an inspection establishes a variation or error producing an overstatement of any fees payable under the Transaction Agreements 
  

					
	 	 	9	 	 ArcSoft/Zoran Confidential
 Master Agreement

 actually incurred by the Audited Party or underpayment in amounts payable by the Audited Party, then any excess cost
reimbursement or underpayment shall be reimbursed by the Audited Party, together with interest on such amounts at the rate set forth in Section 9.1 above. Inspections conducted under this Section 9.4 shall be at the expense of Auditing Party, unless
a variation or error exceeding ten percent (10%) for the period covered by the inspection is established in the course of any such inspection, whereupon all costs relating to the inspection for such period shall be reimbursed by the Audited Party.
Such inspections may be made no more than once each calendar year, at reasonable times during the Audited Party’s normal business hours and on reasonable prior written notice; provided, however, that if an inspection establishes a variation or
error exceeding ten percent (10%), then an additional inspection may be conducted by the Auditing Party during such calendar year. The parties will endeavor to minimize disruption of the Audited Party’s normal business activities to the extent
reasonably practicable. 
  
 10. Closing. The
Effective Date of the Transaction Agreements shall be the date that all of the following conditions are satisfied (“Closing Conditions”):  
  
 10.1 the parties shall have executed this Master Agreement,  
  
 10.2 the parties shall have executed the Development Agreement; 
  
 10.3 the parties shall have executed the Core Technology License
Agreement; 
  
 10.4 the parties shall have executed the IC
Production and Sales Agreement; 
  
 10.5 the parties shall
have executed the Equipment Transfer Agreement; 
  
 10.6
Amendment No. 1 to the Investors Rights Agreement, in the form of Exhibit G to this Master Agreement, shall have been executed by ArcSoft and the holders of a majority of the shares of its outstanding Series A Preferred Stock and a majority
of the shares of its outstanding Series B Preferred Stock; 
  
 10.7 Zoran shall have paid to ArcSoft Two Million Dollars ($2,000,000), against delivery of a Note in the principal sum of Two Million Dollars ($2,000,000); and 
  
 10.8 the representations and warranties of each party contained in Section 12 below shall be true on and as of the Effective
Date with the same effect as though such representations and warranties had been made on and as of the date of the Effective Date. 
  
 11. Confidentiality 
  
 11.1 Confidential Information. Except as expressly provided below, the parties agree that, for the term of this Master Agreement and for seven (7)
years thereafter, the Receiving Party shall not publish or otherwise disclose and shall not use for any purpose any Confidential Information received from the Disclosing Party. 
  
 11.2 Permitted Disclosures. Notwithstanding the provisions of Section 11.1 above, the Receiving Party may use or
disclose the Disclosing Party’s Confidential Information to the extent such use or disclosure is reasonably necessary for exercising the rights granted and fulfill the obligations required under the Transaction Agreements (including the right
to grant sublicenses and have made rights, as applicable), provided, however, that any such use or disclosure shall be subject to the Receiving Party requiring Third Party recipients of Confidential Information to agree to written agreements
containing provisions consistent with the protections afforded the Confidential Information hereunder (including corresponding exceptions). In addition, disclosure of Confidential Information (a) in response to a valid order by a court or other
governmental body, or (b) otherwise required by law, shall not be considered to be a breach of this Agreement or a waiver of confidentiality for other purposes; provided, however, that the party disclosing such information shall provide prompt
written notice thereof to the other party to enable it to seek a protective order or otherwise prevent such disclosure. 
  

					
	 	 	10	 	 ArcSoft/Zoran Confidential
 Master Agreement

 11.3 Terms of Agreement; Publicity. Each party agrees not to disclose to any Third Parties the
financial terms of the Transaction Agreements without the prior written consent of the other party, except to advisors, independent accountants, investors and others on a need-to-know basis under circumstances that reasonably ensure the
confidentiality thereof, or to the extent required by law. 
  
 11.4 Return and/or Destruction of Confidential Information. Within thirty (30) days of the effective date of termination of this Agreement, each party will return to the other party or destroy, at such other party’s discretion,
all of such other party’s Confidential Information and provide such other party with an officer’s certificate attesting to such return and/or destruction, as appropriate. Notwithstanding the foregoing, ArcSoft shall retain the Licensed
MaestroLink Software following any termination of this Agreement, in order to exercise its rights as expressly set forth in Section 2.3 of the Core Technology License Agreement. 
  
 11.5 Press Release. ArcSoft and Zoran will jointly issue a press release announcing the transactions contemplated by
the Transaction Agreements; provided that the timing and substance of such press release shall be mutually agreed upon in writing by the parties in advance.  
  
 12. Representations and Warranties 
  
 12.1 ArcSoft Warranties 
  
 12.1.1 Authority. ArcSoft represents, warrants and covenants to Zoran that (a) it has the full right and authority to enter into the Transaction
Agreements and grant the respective rights and licenses granted by it to Zoran herein and therein and (b) it has not previously granted and will not grant any rights in conflict with the respective rights and licenses granted by it to Zoran herein
and therein. 
  
 12.1.2 No Alteration of Financing
Warranties. Nothing in this Master Agreement is intended to alter the representations and warranties of ArcSoft contained in the Note and those warranties are intended to stand on their own, without the effect of any disclaimer contained in this
Master Agreement, the Core Technology License Agreement, the Development Agreement, the Equipment Transfer Agreement or the IC Production and Sales Agreement. Such representations and warranties shall apply solely to the Note and shall not apply in
any way to the Transaction Agreements or give rise to any right or remedy hereunder. 
  
 12.1.3 ArcSoft Existing Third-Party Rights. ArcSoft represents and warrants that as of the Effective Date, all ArcSoft Technology for which ArcSoft has a license permitting it to incorporate such technology
into MaestroLink IC Products are licensable to Zoran as provided in the Transaction Agreements without payment of royalties, fees or any other non-monetary restrictions beyond those set forth in the Transaction Agreements. 
  
 12.1.4 ArcSoft Developments. ArcSoft represents and warrants that as
of the date provided to Zoran, all ArcSoft Developments are licensable to Zoran as provided in the Transaction Agreements without payment of royalties, fees or any other non-monetary restrictions beyond those set forth in the Transaction Agreements.

  
 12.2 Zoran Warranties 
  
 12.2.1 Authority. Zoran represents, warrants and covenants to
ArcSoft that (a) it has the full right and authority to enter into the Transaction Agreements and grant the rights and licenses granted to it by ArcSoft herein and therein and (b) it has not previously granted and will not grant any rights in
conflict with the rights and licenses granted by it to ArcSoft herein and therein. 
  
 12.2.2 No Alteration of Financing Warranties. Nothing in this Master Agreement is intended to alter the representations and warranties of Zoran contained in the Note and those warranties are intended to stand
on their own, without the effect of any disclaimer contained in this Master Agreement, the Core Technology License Agreement, the Development Agreement, the 
  

					
	 	 	11	 	 ArcSoft/Zoran Confidential
 Master Agreement

 Equipment Transfer Agreement or the IC Production and Sales Agreement. Such representations and warranties shall apply
solely to the Note and shall not apply in any way to the Transaction Agreements or give rise to any right or remedy hereunder. 
  
 12.2.3 Third Party Rights. Zoran represents and warrants that as of the date provided to ArcSoft, Zoran has not received written notice from and
is not aware of any Third Party claiming that any of the Licensed MaestroLink Software infringes or misappropriates the Intellectual Property Rights of any Third Party. 
  
 12.2.4 Zoran Existing Third-Party Rights. Zoran represents and warrants that as of the Effective Date all Zoran
Technology for which Zoran has a license permitting it to incorporate such technology into MaestroLink IC Products are licensable to ArcSoft as provided in the Transaction Agreements without payment of royalties, fees or any other non-monetary
restrictions beyond those set forth in the Transaction Agreements. 
  
 12.2.5 Zoran Developments. Zoran represents and warrants that as of the Effective Date, all Zoran Technology is licensable to ArcSoft as provided in the Transaction Agreements without payment of royalties, fees or any other
non-monetary restrictions beyond those set forth in the Transaction Agreements. 
  
 12.3 Other Warranties. Each party makes the additional warranties and representations as expressly set forth in each of the other Transaction Agreements. 
  
 12.4 Disclaimer of Warranties 
  
 12.4.1 ArcSoft Disclaimer. EXCEPT AS EXPRESSLY SET FORTH IN THE
TRANSACTION AGREEMENTS, ARCSOFT PROVIDES THE ARCSOFT TECHNOLOGY TO ZORAN UNDER THE TRANSACTION AGREEMENTS ON AN “AS-IS” BASIS. ARCSOFT EXPRESSLY DISCLAIMS ANY WARRANTIES OR CONDITIONS, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, WITH RESPECT
TO THE ARCSOFT TECHNOLOGY, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES. 
  
 12.4.2 Zoran Disclaimer. EXCEPT AS EXPRESSLY SET FORTH IN THE
TRANSACTION AGREEMENTS, ZORAN PROVIDES THE ZORAN TECHNOLOGY TO ARCSOFT UNDER THE TRANSACTION AGREEMENTS ON AN “AS-IS” BASIS. ZORAN EXPRESSLY DISCLAIMS ANY WARRANTIES OR CONDITIONS, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, WITH RESPECT TO
THE ZORAN TECHNOLOGY, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES. 
  
 13. Indemnification 
  
 13.1 Indemnification of Zoran 
  
 13.1.1 Indemnification Obligations. ArcSoft shall defend, indemnify
and hold harmless Zoran and any Zoran Affiliates and the directors, officers, and employees of Zoran and any of such Zoran Affiliates and the successors and assigns of any of the foregoing (the “Zoran Indemnitees”), from and against any
and all Claims (whether under a theory of negligence, strict liability, contract or otherwise) incurred or to be incurred by any of the Zoran Indemnitees (including but not limited to costs of investigation and reasonable attorney and other Third
Party fees and, to the extent permitted by law, fines, penalties and forfeitures in connection with any proceedings against the Zoran Indemnitees) arising out of or resulting from the making, selling, using, having made, offering for sale, import,
modifying, reproducing and/or distribution of the MaestroLink Unique IC Product, including, without limitation, any claim that the MaestroLink Unique IC Product infringes and/or misappropriates the Intellectual Property Rights of any Third Party;
provided, however that this indemnity shall not extend to liability arising from the breach of the warranty set forth in Section 12.2.3 above. 
  

					
	 	 	12	 	 ArcSoft/Zoran Confidential
 Master Agreement

 13.1.2 Procedure. Zoran will notify ArcSoft in writing of any Claim in respect of which Zoran
Indemnitees intend to claim such indemnification and ArcSoft shall have sole control of the defense and/or settlement thereof. The omission to provide or delay in providing such notice for a Zoran Indemnitee shall not limit the right to indemnity
for such Zoran Indemnitee unless the omission or delay materially prejudices the legal position of ArcSoft relating to such Zoran Indemnitee. ArcSoft will select legal counsel with experience in similar actions and from a law firm having at least
fifty (50) attorneys. The Zoran Indemnitees shall reasonably cooperate with ArcSoft and its legal representatives in the investigation of any Claim covered by this indemnification. 
  
 13.1.3 Sole Remedy. THE FOREGOING STATES ZORAN’S SOLE AND EXCLUSIVE REMEDY AND ARCSOFT’S SOLE OBLIGATION
WITH RESPECT TO ANY CLAIM OF INFRINGEMENT OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS. 
  
 13.2 Indemnification of ArcSoft 
  
 13.2.1 Indemnification Obligations. Zoran shall defend, indemnify and hold harmless ArcSoft and any ArcSoft Affiliates and the directors, officers, and employees of ArcSoft and any of such ArcSoft Affiliates
and the successors and assigns of any of the foregoing (the “ArcSoft Indemnitees”), from and against any Claims (whether under a theory of negligence, strict liability, contract or otherwise) incurred or to be incurred by any of the
ArcSoft Indemnitees (including but not limited to costs of investigation and reasonable attorney and other Third Party fees and, to the extent permitted by law, fines, penalties and forfeitures in connection with any proceedings against the ArcSoft
Indemnitees) arising out of or resulting from any claim that (i) the Licensed MaestroLink IP Core Technology and/or Licensed IC Design infringes and/or misappropriates the Intellectual Property Rights of any Third Party, or (ii) Zoran has breached
the warranty set forth in Section 12.2.3 above. 
  
 13.2.2
Procedure. ArcSoft will notify Zoran in writing of any Claim in respect of which ArcSoft Indemnitees intend to claim such indemnification and Zoran shall have sole control of the defense and/or settlement thereof. The omission to provide or
delay in providing such notice for an Indemnitee shall not limit the right to indemnity for such ArcSoft Indemnitee unless the omission or delay materially prejudices the legal position of Zoran relating to such ArcSoft Indemnitee. Zoran will select
legal counsel with experience in similar actions and from a law firm having at least fifty (50) attorneys. The ArcSoft Indemnitees shall reasonably cooperate with Zoran and its legal representatives in the investigation of any Claim covered by this
indemnification. 
  
 13.3 Sole Remedy. THE FOREGOING STATES
ARCSOFT’S SOLE AND EXCLUSIVE REMEDY AND ZORAN’S SOLE OBLIGATION WITH RESPECT TO ANY CLAIM OF INFRINGEMENT OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS AND FOR BREACH OF THE WARRANTIES SET FORTH IN SECTION 12.2.3 ABOVE. 
  
 14. Limitations of Liability 
  
 14.1 Consequential Damages Waiver. EXCEPT FOR LIABILITY ARISING FOR
BREACHES OF SECTIONS 8.2, 8.3 AND 11 ABOVE AND FOR LIABILITY ARISING UNDER SECTION 13 ABOVE, AND FOR BREACHES OF SECTIONS 2 AND/OR 9 OF THE CORE TECHNOLOGY LICENSE AGREEMENT, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY LOSS OF USE, INTERRUPTION
OF BUSINESS, OR ANY INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND (INCLUDING, WITHOUT LIMITATION, LOST PROFITS AND LOSS OF REVENUE), REGARDLESS OF THE FORM OF ACTION WHETHER IN CONTRACT, TORT (INCLUDING, WITHOUT LIMITATION,
NEGLIGENCE), STRICT PRODUCT LIABILITY OR OTHERWISE, EVEN IF A REPRESENTATIVE OF SUCH PARTY HAS BEEN ADVISED IN ADVANCE OF THE POSSIBILITY OF SUCH DAMAGES. 
  
 14.2 Limitation of Damages. EXCEPT FOR LIABILITY ARISING FOR BREACHES OF SECTION 8.2, 8.3 AND 8.5 ABOVE AND FOR LIABILITY ARISING UNDER
SECTION 13 ABOVE, AND FOR BREACHES OF SECTIONS 2 AND/OR 9 OF THE CORE TECHNOLOGY LICENSE AGREEMENT, IN NO EVENT SHALL EITHER PARTY’S LIABILITY UNDER THE TRANSACTION AGREEMENTS EXCEED THREE MILLION DOLLARS ($3,000,000). 
  

					
	 	 	13	 	 ArcSoft/Zoran Confidential
 Master Agreement

 14.3 Failure of Essential Purpose. THE PARTIES AGREE THAT THESE LIMITATIONS SHALL APPLY EVEN IF
THIS MASTER AGREEMENT OR ANY LIMITED REMEDY SPECIFIED HEREIN IS FOUND TO HAVE FAILED OF ITS ESSENTIAL PURPOSE. 
  
 14.4 Allocation of Risk. The sections on limitation of liability, warranties and disclaimer of warranties allocate the risks in this Master
Agreement between the parties. This allocation is an essential element of the basis of the bargain between the parties. 
  
 15. Project Management and Dispute Resolution 
  
 15.1 Project Management 
  
 15.1.1 Project Managers and Teams. Each party shall appoint a project manager that will be such party’s primary contact person working with
the other party in connection with each of the development project under this Section 15 (each, a “Project Manager”) and shall be identified on the Development Plan, as applicable. Each party may change its Project Manager by providing
notice to the other party as provided in Section 17.7 of this Master Agreement. 
  
 15.1.2 Periodic Meetings. The parties will meet, electronically, telephonically or otherwise as mutually agreed upon, on at least as frequently as on a bi-weekly basis to (a) track the progress and status of
the development of the MaestroLink Deliverables and the parties’ adherence to the Development Schedule, (b) track the progress and status of Deficiencies reported by either party, and (c) discuss the manufacturing capacity of Zoran’s Third
Party Contract Manufacturer. 
  
 15.2 Internal Dispute
Resolution 
  
 15.2.1 Intent. The parties shall use
good faith efforts to resolve their disputes under the Transaction Agreements informally when possible. Only disputes within the scope of the Transaction Agreements are subject to this Section 15.2.1, except for the IC Production and Sales
Agreement, for which disputes shall not be subject to this Section 15, but will be subject to the arbitration provisions set forth in Section 17.2 below. Unless agreed otherwise, each party shall bear their own costs in connection with any informal
dispute resolution efforts. 
  
 15.2.2 Informal
Resolution. With the exception of disputes relating to or in connection with the Intellectual Property Rights of either party for which either party may seek temporary or permanent injunctive or other equitable relief in any court of competent
jurisdiction, if a dispute arises under the Transaction Agreements (except for the IC Production and Sales Agreement), then within three (3) business days after a written request by either party, each party’s Project Manager shall promptly
confer to resolve the dispute. If these representatives cannot resolve the dispute or either of them determines they are not making progress toward the resolution of the dispute within three (3) business days after their initial conference, then the
dispute shall be submitted to a company executive (Vice President level or higher) designated by Zoran and a company executive (Vice President level or higher) designated by ArcSoft, who shall promptly confer to resolve the dispute. If the executive
designated by Zoran and the executive designated by ArcSoft cannot resolve the dispute, or either one of them determines that they are not making reasonable progress toward resolution of the dispute within five (5) business days after the dispute is
first submitted to them, then the parties may avail themselves of the arbitration remedy set forth in Section 17.2 below. The procedure set forth in this Section 15.2.2 shall run concurrent with the forty-five (45) day cure period that runs
following one party giving written notice to the other party of a material breach of any term of this Master Agreement. 
  
 16. Term and Termination 
  
 16.1 Term. After the Effective Date, unless earlier terminated pursuant to the other provisions of this Section 16, this Master Agreement shall
remain in effect until the last to terminate of the Core Technology License Agreement, the Development Agreement, the Equipment Transfer Agreement or the IC Production and Sales Agreement. 
  

					
	 	 	14	 	 ArcSoft/Zoran Confidential
 Master Agreement

 16.2 Termination for Cause. Either Zoran or ArcSoft may terminate this Master Agreement, together
with the other Agreements, if the other party shall have: 
  
 16.2.1 breached its obligation to make payments as required under the Transaction Agreements and such default shall have continued for forty-five (45) days after written notice thereof was provided to the breaching party by the
non-breaching party; or 
  
 16.2.2 breached any of its material
obligations under the Master Agreement and such default shall have continued for forty-five (45) days after written notice thereof was provided to the breaching party by the non-breaching party. 
  
 Any termination shall become effective at the end of such forty-five (45) day period unless
the breaching party (or any other party on its behalf) has cured any such breach or default prior to the expiration of the forty-five (45) day period. 
  
 16.3 Termination of Other Transaction Agreements. This Master Agreement shall be immediately terminated upon any termination of the Development
Agreement and/or the Core Technology License Agreement, which under Section 16.4 below shall immediately terminate the other Transaction Agreements. 
  
 16.4 Effect of Termination. 
  
 16.4.1 Termination of Master Agreement. The termination of this Master Agreement for any reason shall result in the termination of all of the
Transaction Agreements, subject to the survival provisions of each of the Transaction Agreements. 
  
 16.4.2 Accrued Obligations. The termination of this Master Agreement for any reason shall not release any party hereto from any liability that, at
the time of such termination, has already accrued to the other party or which is attributable to a period prior to such termination nor preclude either party from pursuing all rights and remedies it may have hereunder or at law or in equity with
respect to any breach of this Master Agreement. 
  
 16.4.3
Survival. Sections 1 (“Definitions”), 7 (“Equity Financing”), 9 (“Payments”), 11 (“Confidentiality”), 12 (“Representations and Warranties”), 13 (“Indemnification”), 14
(“Limitations of Liability”), 16.4 (“Effect of Termination”) and 17 (“Miscellaneous”) and any accrued payment obligations shall survive the expiration and any termination of this Master Agreement for any reason.

  
 17. Miscellaneous  
  
 17.1 Governing Law. The Transaction Agreements and any dispute
arising from the performance or breach hereof or thereof shall be governed by and construed and enforced in accordance with, the laws of the State of California, without reference to conflicts of laws. 
  
 17.2 Arbitration. With the exception of disputes relating to or in
connection with the Intellectual Property Rights of either party for which either party may seek temporary or permanent injunctive or other equitable relief in any court of competent jurisdiction, the parties agree that any and all disputes arising
out of or related to the Transaction Agreements that were not resolved pursuant to the procedure set forth in Section 15 above shall be settled by binding arbitration in accordance with the rules of the Judicial Arbitration and Mediation Services
(“JAMS”) in Santa Clara County, California, and judgment upon the award may be entered in any court having jurisdiction. A single arbitrator who shall have at least three (3) years of experience in the semiconductor and/or software
industry shall be selected according to JAMS rules within thirty (30) days of submission of the dispute to the JAMS. The arbitrator shall conduct the arbitration in accordance with the California Evidence Code Except as 
  

					
	 	 	15	 	 ArcSoft/Zoran Confidential
 Master Agreement

 expressly provided above, no discovery of any kind shall be taken by either party without the written consent of the
other party, provided, however, that either party may seek the arbitrators permission to take any deposition which is necessary to preserve the testimony of a witness who either is, or may become, outside the subpoena power of the arbitrator or
otherwise unavailable to testify at the arbitration. The arbitrator shall have the power to enter any award that could be entered by a Judge of the Superior Court of the State of California sitting without a jury (and only such power), except that
the arbitrator shall not have the power to award punitive damages, treble damages, or any other damages which are not compensatory, even if permitted under the laws of the State of California or any other applicable law. The arbitrator shall award
the prevailing party its costs and its reasonable attorneys fees, and the losing party shall bear the entire cost of the arbitration, including the arbitrators fee The arbitration award may be enforced in any court having jurisdiction over the
parties and the subject matter of the arbitration. Notwithstanding the forgoing, the parties irrevocably submit to the non-exclusive jurisdiction of the Superior Court of the State of California, Santa Clara County, and the United States District
Court for the Northern District of California, Santa Clara County Branch, in any action to enforce an arbitration award. 
  
 17.3 Force Majeure. Except as provided in Section 8.5 above, nonperformance of any party (other than with respect to payment obligations) shall be
excused to the extent that performance is rendered impossible by strike, fire, earthquake, flood, governmental acts or orders or restrictions, failure of suppliers, or any other reason where failure to perform is beyond the reasonable control of the
nonperforming party. If such nonperformance continues for more than one hundred eighty (180) days, the performing party may terminate the Master Agreement together with the Core Technology License Agreement, the Development Agreement, the Equipment
Transfer Agreement or the IC Production and Sales Agreement, provided that the surviving provisions of such Agreements shall continue in full force and effect. 
  

17.4 No Implied Waivers; Rights Cumulative. No failure on the part of ArcSoft or Zoran to exercise and no delay in exercising any right under
the Transaction Agreements, or provided by statute or at law or in equity or otherwise, shall impair, prejudice or constitute a waiver of any such right, nor shall any partial exercise of any such right preclude any other or further exercise thereof
or the exercise of any other right. 
  
 17.5
Interpretation. In the event of any conflict between the terms of this Master Agreement and any other Agreement, the terms contained in the other Agreement shall prevail. 
  
 17.6 Independent Contractors. Nothing contained in the Transaction Agreements is intended implicitly, or is to be
construed, to constitute ArcSoft or Zoran as partners in the legal sense. No party hereto shall have any express or implied right or authority to assume or create any obligations on behalf of or in the name of any other party or to bind any other
party to any contract, agreement or undertaking with any Third Party. 
  
 17.7 Notices. All notices, requests and other communications under the Transaction Agreements shall be in writing and shall be personally delivered or sent by registered or certified mail, return receipt requested, postage prepaid,
or by commercial overnight courier service with tracking capabilities, costs prepaid, in each case to the respective address specified below, or such other address as may be specified in writing to the other parties hereto: 
  

			
	 Zoran:
	  	 Zoran Corporation
 1390 Kifer Road
 Sunnyvale, California 94086
 Attn: Shmuel Farkash

		
	 with a copy to:
	  	 Gray Cary Ware & Freidenrich LLP
 2000 University
Avenue
 East Palo Alto, California 94303
 Attn: Mark F.
Radcliffe, Esq.

  

					
	 	 	16	 	 ArcSoft/Zoran Confidential
 Master Agreement

			
	 ArcSoft:
	  	 ArcSoft, Inc.
 46601 Fremont Blvd.
 Fremont, California 94538
 Attn: Todd Rumaner, Senior Vice President of Sales
and Marketing

		
	 with a copy to:
	  	 Pillsbury Winthrop LLP
 2475 Hanover Street

Palo Alto, CA 94304
 Attn: Lior Nuchi, Esq.

  
 17.8
Assignment. The fundamental basis for Zoran licensing these rights to ArcSoft is ArcSoft’s obligations to complete the development of the MaestroLink Technology and use commercially reasonable efforts to promote the MaestroLink
Technology as an industry standard within the Application Field. Consequently, the Transaction Agreements shall not be assignable by ArcSoft without the prior written consent of Zoran; except that ArcSoft may assign the Transaction Agreements
without Zoran’s consent to an entity that is not a Prohibited Assignee that acquires all or substantially all of the business or assets of ArcSoft, in each case whether by merger, sale of assets, or otherwise, provided that such entity assumes
and agrees in writing to be bound by all of the obligations of ArcSoft under the Transaction Agreements. 
  
 17.9 Modification; Waivers. No amendment, modification or waiver of any provision of any of the Transaction Agreements shall be effective unless in
writing signed by all parties hereto. No provision of the Transaction Agreements shall be varied, contradicted or explained by any oral agreement, course of dealing or performance or any other matter not set forth in an agreement in writing and
signed by all parties. 
  
 17.10 Severability. If any
provision of the Transaction Agreements should be held invalid, illegal or unenforceable in any jurisdiction, the parties shall negotiate in good faith a valid, legal and enforceable substitute provision that most nearly reflects the original intent
of the parties and all other provisions hereof shall remain in full force and effect in such jurisdiction and shall be liberally construed in order to carry out the intentions of the parties hereto as nearly as may be possible. Such invalidity,
illegality or unenforceability shall not affect the validity, legality or enforceability of such provision in any other jurisdiction. 
  
 17.11 Rights and Obligations of Parties. Any obligations between Zoran and ArcSoft, respectively, shall not be construed as giving rise to
obligations of Zoran to any Third Party and no Third Party shall have the right to assert any default or breach or to terminate the Transaction Agreements or pursue any other remedies by reason of any obligations or duties between ArcSoft and Zoran
if Zoran is in compliance with its respective obligations to ArcSoft. 
  
 17.12 Counterparts. The Transaction Agreements may be executed in one or more counterparts, each of which shall be deemed an original, and all of which together, shall constitute one and the same instrument. 
  
 17.13 Headings. Headings used in the Transaction Agreements are for
convenience only and shall not in any way affect the construction of or be taken into consideration in interpreting the Transaction Agreements. 
  
 17.14 Export Laws. Notwithstanding anything to the contrary contained herein, all obligations of ArcSoft and Zoran are subject to prior compliance
with United States and foreign export regulations and such other United States and foreign laws and regulations as may be applicable, and to obtaining all necessary approvals required by the applicable agencies of the governments of the United
States and foreign jurisdictions. ArcSoft and Zoran shall reasonably cooperate with each other and shall provide assistance to the other as reasonably necessary to obtain any required approvals. 
  

					
	 	 	17	 	 ArcSoft/Zoran Confidential
 Master Agreement

 17.15 Entire Agreement. This Master Agreement, together with the Core Technology License
Agreement, the Development Agreement, the Equipment Transfer Agreement, the IC Production and Sales Agreement and the Note between the parties of even date herewith, constitutes the entire agreement, both written or oral, with respect to the subject
matter hereof, and, subject to the following, supersedes all prior or contemporaneous understandings or agreements, whether written or oral, between ArcSoft and Zoran with respect to such subject matter. 
  
 [Remainder of this page intentionally left blank] 
  

					
	 	 	18	 	 ArcSoft/Zoran Confidential
 Master Agreement

 IN WITNESS WHEREOF, the parties have caused this Master Agreement to be executed by its duly authorized representatives
and delivered in duplicate originals as of the date first above written. 
  

			
	 ZORAN CORPORATION

		
	 By:
	 	 /s/ Karl Schneider

	 Name:
	 	 Karl Schneider

	 Title:
	 	 CFO

	
	 ARCSOFT, INC.

		
	 By:
	 	 /s/ Todd Rumaner

	 Name:
	 	 Todd Rumaner

	 Title:
	 	 SVP

  

					
	 	 	 	 	 ArcSoft/Zoran Confidential
 Master Agreement

 Exhibit A 
  

Definitions 
  

	A-1.	“Acceptance Criteria” means the applicable acceptance criteria for a Deliverable, as set forth in the Development Plan. 

  

	A-2.	“Action” shall have the meaning set forth in Section 8 of the Core Technology License Agreement. 

  

	A-3.	“Affiliate” of an entity means an entity controlled by, under common control or controlling such entity. For these purposes, “control” shall mean the right,
either directly or indirectly, to control the vote of the securities or otherwise elect the majority of the board of directors or similar management of an entity. Further, for these purposes, ownership of more than fifty percent (50%) of the voting
securities needed to elect the board of directors or similar management of an entity shall be deemed to be control. 

  

	A-4.	“Application Field” means the field of products, components, algorithms, software, hardware, materials, equipment, systems and services that enable or manage the
interconnection of (a) consumer electronic devices whose primary function is (i) DVD player, (ii) DVD recorder, (iii) digital still camera, (iv) digital television, or (v) printer, and (b) personal computers over a home network in order to display
content residing in a personal computer on a television screen or play audio through a television or component system. 

  

	A-5.	“ArcSoft Affiliate” means an entity controlled by, under common control or controlling ArcSoft. For these purposes, “control” shall mean the right, either
directly or indirectly, to control the vote of the securities or otherwise elect the majority of the board of directors or similar management of an entity. Further, for these purposes, ownership of more than fifty percent (50%) of the voting
securities needed to elect the board of directors or similar management of an entity shall be deemed to be control. 

  

	A-6.	“ArcSoft Base Technology” means, collectively, any and all Technology (a) developed prior to the Effective Date and (b) developed by or for ArcSoft after the Effective
Date and outside the scope of the Application Field and of ArcSoft’s obligations under the Transaction Agreements. 

  

	A-7.	“ArcSoft Derivative IC Products” means any integrated circuits based on the MaestroLink Technology developed by or for ArcSoft. 

  

	A-8.	“ArcSoft Developments” means all of ArcSoft’s developments under the Transaction Agreements, including, without limitation, the Modified MaestroLink IP Core
Technology, the Modified MaestroLink IC Design and the Modified MaestroLink Software, but does not include the Licensed MaestroLink IP Core Technology, the Zoran Joint Technology (as defined in the Core Technology License Agreement), the Licensed
MaestroLink IC Design and the Licensed MaestroLink Software. 

  

	A-9.	“ArcSoft First IC Product Developments” means all of the ArcSoft Developments incorporated within and/or related to the First IC Product. 

  

	A-10.	“ArcSoft MaestroLink IC Product Developments” means all of the ArcSoft Developments incorporated within and/or related to a particular MaestroLink IC Product other that
the First IC Product. 

  

	A-11.	“ArcSoft Indemnitees” shall have the meaning set forth in Section 13.2.1 of the Master Agreement. 

  

	A-12.	“ArcSoft IPR” means Intellectual Property Rights in the ArcSoft Technology that is either owned by ArcSoft or ArcSoft Affiliates or sublicensable to Zoran without payment
of a fee to Third Parties. 

  

					
	 	 	 	 	 ArcSoft/Zoran Confidential
 Master Agreement Definitions

	A-13.	“ArcSoft Technology” means, collectively, the ArcSoft Base Technology, the Strategic Ports and the ArcSoft Developments. 

  

	A-14.	“Assert” shall have the meaning set forth in Section 8 of the Core Technology License Agreement. 

  

	A-15.	“Audited Party” shall have the meaning set forth in Section 9.4 of the Master Agreement. 

  

	A-16.	“Auditing Party” shall have the meaning set forth in Section 9.4 of the Master Agreement. 

  

	A-17.	“Balance Sheet Date” shall have the meaning set forth in Section 7.5.8 of the Master Agreement. 

  

	A-18.	“Chipset” means a group of integrated circuits that can be used together to serve a single function and are therefore sold as a unit. 

  

	A-19.	“Claims” means obligations, demands, claims, liabilities and losses. 

  

	A-20.	“Common Stock” shall have the meaning set forth in Section 1.2 of the Note. 

  

	A-21.	“Confidential Information” shall refer to information furnished to one party by the other party hereto pursuant to any of the Transaction Agreements that if disclosed in
tangible form is marked “Confidential” or with other similar designation to indicate its confidential or proprietary nature or if disclosed orally is indicated orally to be confidential or proprietary by the party disclosing such
information (“Disclosing Party”) at the time of such disclosure or is confirmed in writing as confidential or proprietary by the Disclosing Party within a reasonable time after such disclosure. Notwithstanding the foregoing, Confidential
Information shall not include information that, in each case as demonstrated by written documentation: (a) was already known to the receiving party (“Receiving Party”), other than under an obligation of confidentiality, at the time of
disclosure; (b) was generally available to the public or otherwise part of the public domain at the time of its disclosure to the Receiving Party; (c) became generally available to the public or otherwise part of the public domain after its
disclosure and other than through any act or omission of the Receiving Party in breach of any Agreement; (d) was subsequently lawfully disclosed to the Receiving Party by a person other than a party without an obligation of confidentiality; or (e)
was independently developed by the Receiving Party without reference to or use of any information or materials disclosed by the Disclosing Party. 

  

	A-22.	“Closing Conditions” shall have the meaning set forth in Section 10 of the Master Agreement. 

  

	A-23.	“Conversion Shares” shall have the meaning set forth in Section 7.3 of the Master Agreement. 

  

	A-24.	“Core Technology License Agreement” means the Core Technology License Agreement to be executed, delivered and to become effective upon the Effective Date by and between
ArcSoft and Zoran in the form attached as Exhibit C (“Core Technology License Agreement”) to this Master Agreement. 

  

	A-25.	“Deficiencies” means a deficiency in a Deliverable resulting in such Deliverable’s non-conformity to the applicable Acceptance Criteria. 

  

	A-26.	“Deliverables” means, collectively, the Zoran Deliverables and the MaestroLink Deliverables. 

  

	A-27.	“Derivative” means: (a) for copyrightable or copyrighted material, any translation, abridgment, revision or other form in which an existing work may be recast, transformed
or adapted; (b) for patentable or patented material, any improvement thereon; and (c) for material that is protected by trade secret, any new material derived from such existing trade secret material, including new material that may be protected
under copyright, patent and/or trade secret laws. 

  

					
	 	 	 	 	 ArcSoft/Zoran Confidential
 Master Agreement Definitions

	A-28.	“Development Agreement” means the Development Agreement to be executed, delivered and to become effective upon the Effective Date by and between ArcSoft and Zoran in the
form attached as Exhibit B (“Development Agreement”) to this Master Agreement. 

  

	A-29.	“Development Plan” means the written development plan developed for ArcSoft’s further development of the MaestroLink Technology, and that sets forth, without
limitation, the applicable Deliverables and the development schedule to be finalized by ArcSoft under the Development Agreement, a preliminary form of which Development Plan is attached to the Development Agreement as Schedule A
(“Development Plan”). 

  

	A-30.	“DVD” means optical disc storage technology using the Universal Disk Format file system. 

  

	A-31.	“Effective Date” means the date when all of the Closing Conditions set forth in Section 10 of the Master Agreement are satisfied. 

  

	A-32.	“Embedded Software” means a software application that does not contain any MaestroLink Technology developed by or for ArcSoft used on or in conjunction with integrated
circuits for implementation in any consumer electronic device whose primary function is (a) DVD player, (b) DVD recorder, (c) digital still camera, (d) digital television, or (e) printer. 

  

	A-33.	“End User License Agreement” shall have the meaning set forth in Section 2.3.1 of the Core Technology License Agreement. 

  

	A-34.	“Equipment Transfer Agreement” means the Equipment Transfer Agreement to be executed, delivered and to become effective upon the Effective Date by and among ArcSoft and
Zoran in the form attached as Exhibit E (“Equipment Transfer Agreement”) to this Master Agreement. 

  

	A-35.	“Escrow Materials” shall have the meaning set forth in Section 7.1 of the Core Technology License Agreement. 

  

	A-36.	“Execution Date” shall have the meaning set forth in the first paragraph of the Master Agreement. 

  

	A-37.	“Exercise Notice” shall have the meaning set forth in Section 7.2 of the Master Agreement. 

  

	A-38.	“Financial Statements” shall have the meaning set forth in Section 7.5.7 of the Master Agreement. 

  

	A-39.	“First IC Product” means the first MaestroLink IC Product developed by or for ArcSoft sold to Third Parties in commercial quantities. 

  

	A-40.	“First Major Milestone” means (a) complete development of all of the MaestroLink Software as set forth in the Development Plan except for uPNP and DHWF support and (b)
readiness of engineering samples of the MaestroLink IC Product to ship to customers. 

  

	A-41.	“***” for a Zoran employee means the sum of (a) ***, (b) *** of such person’s salary (for benefits), and (c) overhead facilities charge of *** per head per month, or
as pro-rated for part of a month (to be further pro-rated if such employee is a part-time employee in accordance with the applicable percentage of “full-time” status). 

  

	A-42.	“GAAP” shall have the meaning set forth in Section 7.5.7 of the Master Agreement. 

  

	A-43.	“IC Production and Sales Agreement” means the IC Production and Sales Agreement to be executed, delivered and to become effective upon the Effective Date by and among
ArcSoft and Zoran in the form attached as Exhibit D (“IC Production and Sales Agreement”) to this Master Agreement. 

  

	A-44.	“Industry Standard Body” means an association of business entities organized for the purposes of developing and promoting electronic standards within the Application
Field. 

  
 *** CONFIDENTIAL MATERIAL REDACTED AND 
 SEPARATELY FILED WITH THE COMMISSION 
  

					
	 	 	 	 	 ArcSoft/Zoran Confidential
 Master Agreement

	A-45.	“Initial Public Offering” means the sale of the common stock of ArcSoft or a successor in a firm commitment, underwritten public offering registered under the Securities
Act of 1933, as amended (the “Securities Act”), other than a registration relating solely to a transaction under Rule 145 under the Securities Act (or any successor thereto) or to an employee benefit plan of ArcSoft or its successor and
the aggregate net proceeds to ArcSoft and/or any selling stockholders (after deduction for underwriter’s discounts and expenses relating to the issuance) of which exceed Twenty Million Dollars ($20,000,000). 

  

	A-46.	“Intellectual Property Rights” means: (a) all Patent Rights; (b) all trade secret rights arising under the laws of any jurisdiction; (c) all United States and foreign mask
work rights and registrations for such rights; and (d) all copyright rights and all other literary property and author rights, whether or not copyrightable, and all copyrights and copyrighted interests, including any renewals thereof, but will not
include any rights in any trademarks, trade names, service marks, logos and the goodwill associated therewith. 

  

	A-47.	“IPO Date” shall have the meaning set forth in Section 1.7 of the Note. 

  

	A-48.	“Joint Technology” means any (a) Technology that is first conceived or reduced to practice by one or more of ArcSoft’s employees with one or more of Zoran’s
employees; provided in the case of a patentable invention that a party’s contribution to such invention shall meet the requirements for joint invention under United States law, or (b) joint work of authorship fixed in a tangible medium of
expression prepared by one or more of ArcSoft’s employees with one or more of Zoran’s employees with the intention that their contributions be merged into inseparable or interdependent parts of a unitary whole. The term “Joint
Technology” does not include Zoran Technology or ArcSoft Technology 

  

	A-49.	“Jointly Developed Software Applications” means software for which both parties contribute code and/or ideas for use on any product. 

  

	A-50.	“Licensed MaestroLink IP Core Technology” means Zoran’s intellectual property core (“IP Core”) technology in the First IC Product, as further described on
Schedule C (“Licensed MaestroLink Firmware and Licensed MaestroLink IP Core Technology”) to the Core Technology License Agreement. The Licensed MaestroLink IP Core Technology shall also include the Related MaestroLink IP Core
Technology and the Licensed MaestroLink Firmware. 

  

	A-51.	“Licensed MaestroLink IC Design” means Zoran’s MaestroLink integrated circuit design as developed by HCL for Zoran in existence on the Effective Date and any
Derivatives thereof developed by Zoran after the Effective Date and Joint Technology related thereto, as further described on Schedule D (“Licensed MaestroLink IC Design”) of the Core Technology License Agreement.

  

	A-52.	“Licensed MaestroLink Firmware” means Zoran’s proprietary MaestroLink firmware in existence on the Effective Date and any Derivatives thereof developed by Zoran after
the Effective Date and Joint Technology related thereto, as further described on Schedule C (“Licensed MaestroLink Firmware and Licensed MaestroLink IP Core Technology”) to the Core Technology License Agreement.

  

	A-53.	“Licensed MaestroLink Software” means the software owned by Zoran that runs on personal computers to operate with the MaestroLink IC Product in existence on the Effective
Date and any Derivatives thereof developed by Zoran after the Effective Date and Joint Technology related thereto, as further described on Schedule B (“Licensed MaestroLink Software”) to the Core Technology License Agreement.

  

	A-54.	“Licensing Companies” means a company in the business of developing and administering patent licensing programs and/or patent pools. 

  

					
	 	 	 	 	 ArcSoft/Zoran Confidential
 Master Agreement Definitions

	A-55.	“MaestroLink Deliverables” means ArcSoft’s required deliverables to Zoran in furtherance of ArcSoft’s development of the MaestroLink Technology as set forth in
the Development Plan. 

  

	A-56.	“MaestroLink Equipment” means the equipment listed on Schedule A (“MaestroLink Equipment”) to the Equipment Transfer Agreement. 

 

	A-57.	“MaestroLink IC Product” means integrated circuit products designed by or for ArcSoft incorporating the MaestroLink IC Design. 

  

	A-58.	“MaestroLink IP Core Technology” means, collectively, the Licensed MaestroLink IP Core Technology and the Modified MaestroLink IP Core Technology 

 

	A-59.	“MaestroLink IC Design” means, collectively, the Licensed MaestroLink IC Design and the Modified MaestroLink IC Design 

  

	A-60.	“MaestroLink Software” means, collectively, the Licensed MaestroLink Software and the Modified MaestroLink Software. 

  

	A-61.	“MaestroLink Specifications” means the functional specifications for the MaestroLink IC Products and the MaestroLink Software attached to the Development Agreement as
Schedule B. 

  

	A-62.	“MaestroLink Technology” means, collectively, the MaestroLink Software, the MaestroLink IP Core Technology and the MaestroLink IC Design. 

  

	A-63.	“MaestroLink Unique IC Products” means (a) the elements of the MaestroLink IC Products, including, without limitation, the Technology of Third Parties, but excluding the
Licensed MaestroLink IP Core Technology and the Licensed MaestroLink IC Design, and (b) the MaestroLink Software, excluding the Licensed MaestroLink Software developed by Zoran. 

  

	A-64.	“Material Adverse Effect” with respect to ArcSoft, means a material adverse effect on the business, assets (including intangible assets), financial condition, properties,
liabilities, results of operations or prospects of ArcSoft. 

  

	A-65.	“Maturity Date” shall have the meaning set forth in Section 2.1 of the Note. 

  

	A-66.	“MedioStream Software” means the software owned or licensed by MedioStream, Inc. that runs on personal computers to operate with the MaestroLink IC Product in existence on
the Effective Date and any Derivatives thereof developed by Zoran or licensed to Zoran by MedioStream, Inc. after the Effective Date. 

  

	A-67.	“MFN Price” means (a) for MaestroLink Software sold separately, the lowest price charged by ArcSoft to a similarly situated customer within the applicable calendar
quarter, and (b) for MaestroLink Software that is not sold separately but is bundled within an integrated circuit product, a price mutually agreed upon by the parties, and if no such agreement is reached within thirty (30) days, then the MFN Price
shall be calculated based on ten percent (10%) of the Net Sales Price of the product which includes the MaestroLink Software, as applicable. 

  

	A-68.	“Modified MaestroLink IC Design” means Derivatives developed under the Transaction Agreements by or for ArcSoft (except the Joint Technology) to the Licensed MaestroLink
IC Design. 

  

	A-69.	“Modified MaestroLink IP Core Technology” means Derivatives developed under the Transaction Agreements by or for ArcSoft (except the Joint Technology) to the Licensed
MaestroLink IP Core Technology. The Licensed MaestroLink IP Core Technology shall also include the Modified MaestroLink Firmware the Derivatives developed under the Agreement by or for ArcSoft (except the Joint Technology) to the Related MaestroLink
IP Core Technology. 

  

					
	 	 	 	 	 ArcSoft/Zoran Confidential
 Master Agreement Definitions

	A-70.	“Modified MaestroLink Firmware” means Derivatives developed under the Transaction Agreements by or for ArcSoft (except the Joint Technology) to the Licensed MaestroLink
Firmware. 

  

	A-71.	“Modified MaestroLink Software” means Derivatives developed under the Transaction Agreements by or for ArcSoft (except the Joint Technology) to the Licensed MaestroLink
Software. 

  

	A-72.	“Net Sales Price” means the gross amount invoiced by ArcSoft for the sale of a product to a customer less the following reasonable and customary deductions to the extent
applicable to such sales: (a) all trade, cash and quantity credits, discounts and refunds; (b) actual freight, packing and insurance cost to ArcSoft or its licensees for shipment of the product to the customer; and (c) amounts for claims, allowances
or credits for returns, in each case to the extent actually allowed to and taken by such customer. 

  

	A-73.	“New IC Product” means a MaestroLink IC Product developed by or for ArcSoft that is sold in commercial quantities to Third Parties, but that is not a First IC Product or
Related IC Product. 

  

	A-74.	“Note” means the Convertible Promissory Notes of ArcSoft in the form attached as Exhibit E (“Convertible Promissory Note”) to this Master Agreement to be
executed and delivered to Zoran in consideration for cash advances at the times specified in this Master Agreement 

  

	A-75.	“Note Amount” means Four Million Dollars ($4,000,000). 

  

	A-76.	“Notice of Intent” shall have the meaning set forth in Section 8.2.2 of the Master Agreement. 

  

	A-77.	“Object Code” means computer programming code in binary form that is directly executable by a computer after suitable processing but without the intervening steps of
compilation or assembly. 

  

	A-78.	“Option” shall have the meaning set forth in Section 7.2 of the Master Agreement. 

  

	A-79.	“Option Shares” shall have the meaning set forth in Section 7.3 of the Master Agreement. 

  

	A-80.	“Other Companies” shall have the meaning set forth in Section 8.2.2 of the Master Agreement. 

  

	A-81.	“Patent Rights” means all of the following to the extent claiming, covering or encompassing any invention, including: (a) all patents, utility models, certificates of
invention and other governmental grants for the protection of inventions anywhere in the world and all reissues, renewals, re-examinations and extensions thereof; (b) all applications for any of the foregoing including without limitation any
international, provisional, divisional, continuation, continuation-in-part, and continuing prosecution applications; and (c) all rights in, arising out of, or associated with any of the foregoing anywhere in the world. 

  

	A-82.	“Patent Rights License” shall have the meaning set forth in Section 2.1.1 of the Core Technology License Agreement. 

  

	A-83.	“Paid Party” shall have the meaning set forth in Section 9.3 of the Master Agreement. 

  

	A-84.	“Paying Party” shall have the meaning set forth in Section 9.3 of the Master Agreement. 

  

	A-85.	“Prohibited Assignee” means any entity that develops, manufactures or sells integrated circuits in the consumer electronics field from which such entity and all of its
Affiliates receives Fifty Million Dollars ($50,000,000) or more per year. 

  

	A-86.	“Project Manager” shall have the meaning set forth in Section 15.1.1 of the Master Agreement. 

  

					
	 	 	 	 	 ArcSoft/Zoran Confidential
 Master Agreement Definitions

	A-87.	“Related IC Product” means a MaestroLink IC Product developed by or for ArcSoft that is sold in commercial quantities to Third Parties and in which the die size is ninety
percent (90%) the same as the First IC Product not including I/Os. 

  

	A-88.	“Related MaestroLink IP Core Technology” means Derivatives of Zoran’s IP cores produced by Zoran, as further described on Schedule C (“Licensed
MaestroLink Firmware and Licensed MaestroLink IP Core Technology”) to the Core Technology License Agreement in which the die size is ninety percent (90%) the same as the First IC Product not including I/Os. 

  

	A-89.	“Release Event” shall have the meaning set forth in Section 7.3 of the Core Technology License Agreement. 

  

	A-90.	“Right of First Announcement Term” shall have the meaning set forth in Section 8.2.2 of the Master Agreement. 

  

	A-91.	“RMA” shall have the meaning set forth in Section 12 of the IC Production and Sales Agreement. 

  

	A-92.	“Second Major Milestone” means (a) complete beta functionality of the MaestroLink Software and (b) completed full verification and board and system development of the
MaestroLink IC Product. 

  

	A-93.	“Securities Act” shall have the meaning set forth in Section 7.6.1 of the Master Agreement. 

  

	A-94.	“Source Code” means that form of software that is written and understood by human programmers but that must be compiled into Object Code form and, where applicable, linked
with other object modules to enable execution by a computer system. 

  

	A-95.	“Strategic Ports” means the ported applications resulting from ArcSoft’s strategic porting obligations as set forth in Section 8.2.1 of the Master Agreement.

  

	A-96.	“Support Services” means the ArcSoft support services set forth on Schedule C (“Support Services”) of the Development Agreement. 

 

	A-97.	“Technology” means any and all technical information and/or materials, including, without limitation, ideas, techniques, designs, sketches, drawings, models, inventions,
know-how, processes, apparatus, methods, equipment, algorithms, software programs, data, software source documents, other works of authorship, formulae and information concerning engineering, research, experimental work, development, design details
and specifications. 

  

	A-98.	“Third Major Milestone” means (a) completed quality assurance of the gold master version of the MaestroLink Software and mass production readiness of the MaestroLink IC
Product and (b) manufacturing readiness of the board and system. 

  

	A-99.	“Third Party” means any individual or entity that is neither Zoran, a Zoran Affiliate, ArcSoft nor an ArcSoft Affiliate. When an entity ceases to meet the standards to be
an Affiliate, it shall be considered to be a Third Party. 

  

	A-100.	“Third Party Contract Manufacturer” means TSMC, Ltd., or another third party contract manufacturer designated by Zoran in writing. 

  

	A-101.	“Transaction Agreements” means, collectively, this Master Agreement, the Core Technology License Agreement, the Development Agreement, the Equipment Transfer Agreement and
the IC Production and Sales Agreement. 

  

	A-102.	“Unit” means the form in which the product is most frequently sold to a customer which could be as a single integrated circuit or Chipset. 

  

	A-103.	“Version” shall have the meaning set forth in Section 8.2.2 of the Master Agreement. 

  

					
	 	 	 	 	 ArcSoft/Zoran Confidential
 Master Agreement Definitions

	A-104.	“Zoran Affiliate” means an entity controlled by Zoran. For these purposes, “control” shall mean the right, either directly or indirectly, to control the vote of
the securities or otherwise elect the majority of the board of directors or similar management of an entity. Further, for these purposes, ownership of more than fifty percent (50%) of the voting securities needed to elect the board of directors or
similar management of an entity shall be deemed to be control. 

  

	A-105.	“Zoran Deliverables” means Zoran’s required deliverables to ArcSoft in furtherance of ArcSoft’s development of the MaestroLink Technology as set forth in the
Development Plan. 

  

	A-106.	“Zoran Indemnitees” shall have the meaning set forth in Section 13.1.1 of the Master Agreement. 

  

	A-107.	“Zoran IPR” means Intellectual Property Rights in (a) Licensed MaestroLink IP Core Technology, (b) Licensed MaestroLink IC Design and (c) Licensed MaestroLink Software
that is either owned by Zoran or Zoran Affiliates or sublicensable to ArcSoft without payment of a fee to Third Parties. 

  

	A-108.	“Zoran Major Customer” means a customer of Zoran that either (a) purchased at least ten thousand (10,000) units of Zoran Products within the preceding twelve (12) months,
or (b) is listed on a list of Zoran Major Customers whom Zoran has engaged for the sale of Zoran Products, which list shall be provided by Zoran to ArcSoft promptly after the Effective Date, and updated by Zoran on a monthly basis at Zoran’s
sole discretion. 

  

	A-109.	“Zoran Patent Rights” means Patent Rights set forth in Schedule A (“Zoran Patent Rights”) of the Core Technology License Agreement, as such schedule will
be updated by Zoran upon filing with the applicable filing application number. 

  

	A-110.	“Zoran Products” means products (including, without limitation, software and hardware) designed by or for Zoran. Except for the First IC Product, Zoran Products may
integrate the MaestroLink IP Core Technology and the MaestroLink IC Design. 

  

	A-111.	“Zoran Proposal” shall have the meaning set forth in Section 8.2.3 of the Master Agreement. 

  

	A-112.	“Zoran Technology” means the Licensed MaestroLink IP Core Technology, the Licensed MaestroLink IC Design and the Licensed MaestroLink Software. 

 

	A-113.	“Zoran Trade Secrets” shall mean the trade secrets, know-how, and technical information (whether or not patentable or secret or confidential) useful in the design, making
or use of the Licensed MaestroLink Software and/or the MaestroLink IC Products. 

  
 [Remainder of this page intentionally left blank] 
  

					
	 	 	 	 	 ArcSoft/Zoran Confidential
 Master Agreement Definitions

 Exhibit B 
  

Development Agreement 
  

					
	 	 	 	 	 ArcSoft/Zoran Confidential
 Development Agreement

 DEVELOPMENT AGREEMENT 
  
 This DEVELOPMENT AGREEMENT (“Development Agreement”), executed on March 31, 2004, is made by and between Zoran
Corporation, a Delaware corporation with its principal place of business at 1390 Kifer Road, Sunnyvale, California 94086 (“Zoran”), and ArcSoft, Inc., a California corporation with its principal place of business at 46601 Fremont
Boulevard., Fremont, California 94538 (“ArcSoft”). 
  
 BACKGROUND 
  
 WHEREAS, Zoran and ArcSoft have
entered into a Master Agreement dated March 31, 2004 (“Master Agreement”) that governs the relationship between the parties generally with respect to the continued development of the “MaestroLink” technology; and 
  
 WHEREAS, the parties now desire to set forth terms that, among other things,
apply more specifically to the continued development and collaboration by the parties with respect to the continued development of the “MaestroLink” technology. 
  
 NOW, THEREFORE, in consideration of the covenants, conditions and undertakings hereinafter set forth, it is agreed by and
between Zoran and ArcSoft as follows: 
  
 AGREEMENT

  
 1. Definitions. Unless otherwise defined in this
License Agreement, all capitalized terms shall be as defined in Exhibit A (“Definitions”) of the Master Agreement. 
  
 2. Development of the MaestroLink Deliverables 
  
 2.1 Development Plan and Development Effort 
  
 2.1.1 Development Obligations. ArcSoft shall develop and deliver the MaestroLink Deliverables to Zoran completing the development of the
MaestroLink IC Product and the MaestroLink Software in accordance with the MaestroLink Specifications and the Development Schedule. 
  
 2.1.2 Time Frames. ArcSoft acknowledges and agrees that time is of the essence for the performance of development services hereunder and that the
full and timely performance of all development services hereunder is a material condition of this Development Agreement. Notwithstanding the foregoing, the due date for any MaestroLink Deliverable, the performance of which was delayed on account of
failure of Zoran to complete any of its prerequisite obligations in timely fashion, shall be extended by one (1) day for each day of Zoran’s lateness, except to the extent Zoran’s lateness is due to an act or omission of ArcSoft. Further,
the due date for any deliverable to be provided by Zoran to ArcSoft under the Development Plan, performance of which was delayed on account of failure of ArcSoft to complete any of its prerequisite obligations in timely fashion, shall be extended by
one (1) day for each day of ArcSoft’s lateness. Any such extension of time for Zoran’s performance hereunder shall be in addition to any other rights or remedies of Zoran, whether available under this Development Agreement, at law or in
equity. 
  
 2.2 Zoran Deliverables. Zoran shall provide the
Zoran Deliverables to ArcSoft as set forth in the Development Plan. 
  
 2.3 Development Plan. ArcSoft and Zoran shall cooperate in good faith to develop the Development Plan. ArcSoft shall submit the finalized Development Plan to Zoran for Zoran’s written approval no later
than thirty (30) days after the Effective Date, except that the parties shall agree on the milestone dates for the First Major Milestone, Second Major Milestone and Third Major Milestone within twenty-one (21) days after the Effective Date. ArcSoft
acknowledges and agrees that time is of the essence for the development of the Development Plan hereunder and that the full and timely development of the Development Plan is a material condition of this Development Agreement. The following procedure
shall apply to the approval of the Development Plan. If Zoran approves ArcSoft’s proposed Development 
  

					
	 	 	1	 	 ArcSoft/Zoran Confidential
 Development Agreement

 Plan in writing, then the Development Plan will be attached as Schedule A of this Development Agreement. If Zoran
rejects the proposed Development Plan by providing a description of the reasons for rejection in writing, ArcSoft shall submit a corrected version of the Development Plan, as appropriate, no later than thirty (30) days from the notice of rejection.
Any corrected Development Plan submitted to Zoran by ArcSoft shall be subject to the approval procedure set forth in this Section 2.3. 
  
 2.4 Changes. Either party may propose changes to the MaestroLink Specifications, and/or the Development Plan. No suggested change will be effective
and binding on the parties unless agreed upon in writing by both parties. Upon written agreement of the parties, the written modifications shall be deemed incorporated herein as part of this Development Agreement. 
  
 2.5 Acceptance by Zoran 
  
 2.5.1 Except with respect to the approval of the Development Plan (which is
subject to Section 2.3 above), upon the delivery of each MaestroLink Deliverable to Zoran, Zoran will review the applicable Deliverable to determine whether such MaestroLink Deliverable conforms to the applicable Acceptance Criteria. Zoran will
accept or reject each MaestroLink Deliverable within thirty (30) days after delivery and will give ArcSoft written notice of acceptance or rejection thereof. If Zoran fails to accept or reject a MaestroLink Deliverable within the specified time
period, then the MaestroLink Deliverable will be deemed accepted. If a MaestroLink Deliverable does not conform to the applicable Acceptance Criteria, Zoran shall reject the MaestroLink Deliverable and provide notice to ArcSoft describing the
Deficiencies. 
  
 2.5.2 Within thirty (30) days of receiving each
report regarding Deficiencies, ArcSoft shall use commercially reasonable efforts to correct the Deficiencies so that the MaestroLink Deliverable conforms to the applicable Acceptance Criteria. If ArcSoft has not resubmitted such corrected
MaestroLink Deliverable within such thirty (30) day period, then ArcSoft shall promptly submit to Zoran an immediate corrective action plan with a detailed description of the proposed correction of the Deficiency and a date of resubmission, which
date shall be as soon as is commercially practicable. Upon the correction of each Deficiency, ArcSoft shall deliver the corrected Deliverable to Zoran, at ArcSoft’s expense, which corrected MaestroLink Deliverable shall be subject to the
approval procedure set forth in this Section 2.5. 
  
 2.5.3 The
procedure set forth in Sections 2.5.1 and 2.5.2 above will be repeated with respect to a revised MaestroLink Deliverable to determine whether it is acceptable to Zoran as provided in Section 2.5.1 above, unless and until Zoran issues a written final
rejection of the revised MaestroLink Deliverable after rejecting the MaestroLink Deliverable on at least three (3) prior occasions. If Zoran rejects a MaestroLink Deliverable after three (3) or more correction attempts by ArcSoft, then Zoran may
immediately terminate this Development Agreement upon written notice to ArcSoft; provided that the parties have abided by the dispute resolution process set forth in Section 15 of the Master Agreement. 
  
 2.6 Acceptance by ArcSoft 
  
 2.6.1 Upon the delivery of each Zoran Deliverable to ArcSoft, ArcSoft will
review the applicable Zoran Deliverable to determine whether such Zoran Deliverable conforms to the applicable Acceptance Criteria. ArcSoft will accept or reject each Zoran Deliverable within thirty (30) days after delivery and will give Zoran
written notice of acceptance or rejection thereof. If ArcSoft fails to accept or reject a Zoran Deliverable within the specified time period, then the Zoran Deliverable will be deemed accepted. If a Zoran Deliverable does not conform to the
applicable Acceptance Criteria, ArcSoft shall reject the Zoran Deliverable and provide notice to Zoran describing the Deficiencies. 
  
 2.6.2 Within thirty (30) days of receiving each report regarding Deficiencies, Zoran shall use commercially reasonable efforts to correct the
Deficiencies so that the Zoran Deliverable conforms to the applicable Acceptance Criteria. If Zoran has not resubmitted such corrected Zoran Deliverable within such thirty (30) day period, then Zoran shall promptly submit to ArcSoft an immediate
corrective action plan with a detailed description of the proposed correction of the Deficiency and a date of 
  

					
	 	 	2	 	 ArcSoft/Zoran Confidential
 Development Agreement

 resubmission, which date shall be as soon as is commercially practicable. Upon the correction of each Deficiency, Zoran
shall deliver the corrected Zoran Deliverable to ArcSoft, at Zoran’s expense, which corrected Zoran Deliverable shall be subject to the approval procedure set forth in this Section 2.6. 
  
 2.6.3 The procedure set forth in Sections 2.6.1 and 2.6.2 above will be
repeated with respect to a revised Zoran Deliverable to determine whether it is acceptable to ArcSoft as provided in Section 2.6.1 above, unless and until ArcSoft issues a written final rejection of the revised Zoran Deliverable after rejecting the
Zoran Deliverable on at least three (3) prior occasions. If ArcSoft rejects a Zoran Deliverable after three (3) or more correction attempts by Zoran, then ArcSoft may immediately terminate this Development Agreement upon written notice to Zoran;
provided that the parties have abided by the dispute resolution process set forth in Section 15 of the Master Agreement. 
  
 2.7 ArcSoft Technical Assistance, Support and Training. Until the final written acceptance by Zoran of every Deliverable under the Development
Plan, ArcSoft shall, at Zoran’s reasonable request, make available to Zoran, at no additional cost to Zoran, on-going technical assistance to assist Zoran or its authorized sublicensees under the License Agreement to use such Deliverable to
manufacture the MaestroLink IC Product and develop the MaestroLink Software. ArcSoft will provide Support Services, including level 2 and level 3 support and training to Zoran for the MaestroLink Deliverables, as mutually agreed upon in writing by
the parties no later than thirty (30) days after the Effective Date, to be attached hereto as Schedule C of this Development Agreement. For purposes of this Section 2.7, “level 2” and “level 3” support shall mean
engineering support provided directly to Zoran. In addition to Support Services by ArcSoft that is required under this Development Agreement, ArcSoft shall use good faith efforts to work with Zoran to make modifications to the MaestroLink
Deliverable requested by Zoran following the first commercial shipment of the MaestroLink IC Products by Zoran to address concerns or complaints of Zoran’s customers. Such modifications shall be (a) subject to the availability of ArcSoft
personnel, and (b) provided by ArcSoft at ArcSoft’s then-current rates for such services. The parties shall mutually agree in writing on the terms and conditions, and the scope and the delivery dates of such MaestroLink Deliverables
modifications undertaken by ArcSoft. 
  
 2.8 Zoran Technical
Assistance. Upon the written request of ArcSoft, Zoran will provide integrated circuit operation services for producing the MaestroLink IC Product with its Third Party Contract Manufacturer. Zoran will provide services to (a) produce the mask
set and (b) characterize the MaestroLink IC Product as described in Schedule D hereto at ***. In addition, ArcSoft will pay Zoran an additional fee for operation services described in Schedule D hereto at *** of the cost of any parts
acquired by Zoran for ArcSoft; provided, however ArcSoft will pay a minimum of *** for each three hundred sixty-five (365) day period after the Effective Date, whether or not any services are used, which payment shall be due at the rate of *** per
month until ArcSoft terminates such services (this minimum amount shall be pro-rated for any part of the period less than a full three hundred sixty-five (365) day period). Zoran will invoice ArcSoft for such services and fees for each calendar
month and the invoices shall be due thirty (30) days after the invoice date. 
  
 2.9 OEM Support. The parties acknowledge and agree that as between ArcSoft and Zoran: (a) ArcSoft shall be responsible for providing technical support to all OEM licensees of the MaestroLink Technology related
to software issues, and (b) Zoran shall be responsible for providing technical support to all OEM licensees of the MaestroLink Technology related to hardware and firmware issues. The nature and amount of this support shall be agreed upon by the
parties in writing within thirty (30) days after the Effective Date and the parties shall attach such agreement to this Development Agreement as Schedule E. 
  
 2.10 ArcSoft Performance and Deliverables. ArcSoft represents and warrants that it shall perform all services
provided to Zoran hereunder in a professional and workmanlike manner, with the degree of skill and care that is required by current, good and sound professional procedures and practices. ArcSoft agrees to commit sufficient personnel and resources to
meet the Development Plan. ArcSoft further represents and warrants that it will complete its MaestroLink Deliverables in accordance with the MaestroLink Specifications and all other applicable documentation. 
  
 *** CONFIDENTIAL MATERIAL REDACTED AND 
 SEPARATELY FILED WITH THE COMMISSION 
  

					
	 	 	3	 	 ArcSoft/Zoran Confidential
 Master Agreement

 2.11 Zoran Performance. Zoran represents and warrants that it shall perform all services provided
to ArcSoft hereunder in a professional and workmanlike manner, with the degree of skill and care that is required by current, good and sound professional procedures and practices. Zoran agrees to commit sufficient personnel and resources to meet its
obligations under the Development Plan. 
  
 2.12 Warranty
Disclaimer. EXCEPT AS EXPRESSLY SET FORTH IN SECTION 2.10 AND 2.11 ABOVE AND AS INCORPORATED BY SECTION 7 BELOW, EACH PARTY EXPRESSLY DISCLAIMS ANY WARRANTIES OR CONDITIONS, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, WITH RESPECT TO THE SERVICES
PERFORMED HEREUNDER, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES. 
  
 3. Joint Reference Designs. The parties will work to develop joint
reference designs of MaestroLink Technology-enabled consumer electronic devices in accordance with the Development Plan. 
  
 4. Ownership. The ownership provisions governing development performed under this Agreement are set forth in the Core Technology License
Agreement. 
  
 5. Other Rights and Obligations of the
Parties 
  
 5.1 Availability of Facilities. Each party
shall use reasonable commercial efforts to make available to the other party during such party’s normal business hours appropriate facilities, personnel, hardware and object code version of software for any development, functional testing,
integration and/or interoperability testing purposes as may be required hereunder. Each party shall comply with all standard safety and security rules and regulations then in effect while on the other party’s premises. 
  
 5.2 Insurance. At all times during the term of this Development
Agreement and for a period of three (3) years thereafter, each party shall be solely responsible for maintaining, and requiring its employees, contractors and agents to maintain such adequate health, auto, workers’ compensation, unemployment
compensation, disability, liability and any other type of insurance, as is required by law or as is the common practice in each party’s trade or business, whichever affords greater coverage. Upon request, each party shall provide the other
party with certificates of insurance evidencing such coverage. 
  
 6. Term and Termination 
  
 6.1 Term. This
Agreement shall commence upon the Effective Date and shall continue unless earlier terminated by either party as provided in this Development Agreement. 
  
 6.2 Termination 
  
 6.2.1 Termination for Cause. If any material breach of this Development Agreement continues after forty-five (45) days written notice of said
breach by the non-breaching party to the breaching party, then this Development Agreement shall immediately terminate, subject to the terms of the dispute resolution procedure set forth in Section 15 of the Master Agreement. Notwithstanding the
foregoing, the failure of the parties agree on the Development Plan within the timeframes set forth in this Development Agreement shall be deemed to be a material breach hereof, for which either party may terminate this Agreement in accordance with
this Section 6.2.1. 
  
 6.2.2 Termination of Other Transaction
Agreements. This Development Agreement shall be immediately terminated upon any termination of the Master Agreement. Termination of this Development Agreement shall immediately terminate the Master Agreement and, thus, the other Transaction
Agreements. 
  
 6.2.3 Obligations on Termination.
Termination of this Development Agreement for any reason shall not release any party hereto from any liability that, at the time of such 
  

					
	 	 	4	 	 ArcSoft/Zoran Confidential
 Development Agreement

 termination, has already accrued to the other party or that is attributable to a period prior to such termination nor
preclude either party from pursuing all rights and remedies it may have hereunder or at law or in equity with respect to any breach of this Development Agreement. 
  
 6.2.4 Survival. The following Sections shall survive any termination or expiration of this Development Agreement: 1
(“Definitions”); 2.11 (“Warranty Disclaimer”); 4 (“Ownership”); 6.2.3 (“Obligations on Termination”); 6.2.4 (“Survival”); and 7 (“Incorporation of Certain Terms from the Master Agreement”).

  
 7. Incorporation of Certain Terms from the Master
Agreement. The following Sections of the Master Agreement are hereby incorporated in this Development Agreement by reference and made a part hereof: 1 (“Definitions”); 9 (“Payments”); 11 (“Confidentiality”); 12
(“Representations and Warranties”); 13 (“Indemnification”); 14 (“Limitations of Liability”); 15 (“Project Management and Dispute Resolution”); and 17 (“Miscellaneous”). 
  
 [Remainder of this page intentionally left blank] 
  

					
	 	 	5	 	 ArcSoft/Zoran Confidential
 Development Agreement

 IN WITNESS WHEREOF, the parties have caused this Development Agreement to be executed by its duly authorized
representatives and delivered in duplicate originals as of the date first above written. 
  

			
	ZORAN CORPORATION
		
	By:	 	 /s/ Karl Schneider

	Name:	 	Karl Schneider
	Title:	 	CFO
	
	ARCSOFT, INC.
		
	By:	 	 /s/ Todd Rumaner

	Name:	 	Todd Rumaner
	Title:	 	SVP

  

					
	 	 	35	 	 ArcSoft/Zoran Confidential
 Development Agreement

 Exhibit C 
  

Core Technology License Agreement 
  

			
	 	 	 ArcSoft/Zoran Confidential
 Core Technology License Agreement

 CORE TECHNOLOGY LICENSE AGREEMENT 
  
 This CORE TECHNOLOGY LICENSE AGREEMENT (“License Agreement”), executed on March 31, 2004 and effective as of the
Effective Date, is made by and between Zoran Corporation, a Delaware corporation with its principal place of business at 1390 Kifer Road, Sunnyvale, California 94086 (“Zoran”), and ArcSoft, Inc., a California corporation with its principal
place of business at 46601 Fremont Boulevard, Fremont, California 94538 (“ArcSoft”). 
  
 BACKGROUND 
  
 WHEREAS,
Zoran and ArcSoft have entered into a Master Agreement dated March 31, 2004 (“Master Agreement”) that governs the relationship between the parties generally with respect to the continued development of Zoran’s “MaestroLink”
hardware and software technology; 
  
 WHEREAS, Zoran wishes to
license certain patent rights and certain software to ArcSoft in order to develop and promote the MaestroLink Technology and pay royalties to Zoran for such licenses; and 
  
 WHEREAS, ArcSoft agrees to license its improvements back to Zoran. 
  
 NOW, THEREFORE, in consideration of the covenants, conditions and
undertakings hereinafter set forth, it is agreed by and between Zoran and ArcSoft as follows: 
  
 AGREEMENT 
  
 1.
Definitions. Unless otherwise defined in this License Agreement, all capitalized terms shall be as defined in Exhibit A (“Definitions”) of the Master Agreement. 
  
 2. Licenses Granted to ArcSoft 
  
 2.1 Zoran Patent Rights and Zoran Trade Secrets 
  
 2.1.1 Grant to Zoran Patent Rights and Zoran Trade Secrets. Subject to the terms of this License Agreement,
including, without limitation, the restriction set forth in Section 2.6 below, Zoran hereby grants to ArcSoft an exclusive, non-transferable (except as set forth in Section 17.8 of the Master Agreement), worldwide, royalty-bearing right and license
under the Zoran Patent Rights and the Zoran Trade Secrets, without the right to sublicense, during the term of this License Agreement to make, have made, use, sell, offer for sale and import the MaestroLink IC Products in the Applications Field
(“Patent Rights License”); provided, however, that ArcSoft may only exercise the “have made” rights under this license with respect to products that (a) are designed wholly or primarily by ArcSoft for its own products and not for
use and/or sale by Third Parties and (b) will be distributed under trademarks or tradenames owned by ArcSoft; provided further that ArcSoft may sublicense these rights to the extent required to exercise its rights under Section 2.3.1. 
  
 2.1.2 Industry Standards Body and Licensing Companies Sublicense.
During the term of this License Agreement, the parties shall use commercially reasonable efforts to promote the MaestroLink Technology as an industry standard. After reasonable discussions with ArcSoft, Zoran may, in its reasonable discretion,
choose to license the Zoran Patent Rights and the Zoran Trade Secrets to an Industry Standards Body and/or a Licensing Company, for further sublicensing within a patent pool. The exclusivity set forth in Section 2.1.1 above shall be limited to
permit the foregoing upon the date that Zoran grants such license. All revenues generated from sublicenses granted by ArcSoft under this Section 2.1.2 shall be distributed between the parties as set forth in Section 6.3 below. 
  
 2.1.3 License Restrictions. Except for the licenses provided above,
Zoran retains all rights to the Zoran Patent Rights and the Zoran Trade Secrets. 
  

			
	 	 	 ArcSoft/Zoran Confidential
 Core Technology License Agreement

 2.1.4 Retention of Rights. Notwithstanding anything to the contrary, Zoran shall retain the
absolute right to use the Zoran Patent Rights and the Zoran Trade Secrets in connection with Zoran’s manufacture and sale of the Zoran Products in all fields. 
  
 2.2 Representations. Nothing in this License Agreement shall be construed as: 
  
 (a) a warranty or representation by Zoran as to the validity or scope of
any Zoran Patent Right; or 
  
 (b) a warranty or representation
that anything made, used, sold, or otherwise disposed of under any license granted in this License Agreement is or will be free from infringement of patents of Third Parties; or 
  
 (c) granting by implication, estoppel, or otherwise any licenses or rights under patents of Zoran other than the Zoran
Patent Rights. 
  
 Except as expressly provided in Sections 12.2 and 13.2 of the
Master Agreement, Zoran makes no representations, extends no warranties of any kind, either express or implied that the use, sale, or other disposition by ArcSoft or its purchasers or other transferees of products incorporating or made by use of the
rights licensed under this License Agreement violates any Intellectual Property Rights of any Third Party. 
  
 2.3 Licensed MaestroLink Software 
  
 2.3.1 Grant to Licensed MaestroLink Software. Subject to the terms of this License Agreement, including, without limitation, the restriction set
forth in Section 2.6 below, Zoran hereby grants to ArcSoft an exclusive, non-transferable (except as set forth herein), worldwide, sublicensable (only to ArcSoft contractors who have a need to access the Source Code to fulfill their contracting
obligations to ArcSoft) and royalty-bearing right and license in the Application Field under the Zoran IPR in the Licensed MaestroLink Software, during the term of this License Agreement to: (a) use internally the Source Code and Object Code forms
of the Licensed MaestroLink Software; (b) modify the Source Code form of the Licensed MaestroLink Software solely to create derivative works from, modifications to, and improvements to, the Licensed MaestroLink Software; (c) reproduce the Licensed
MaestroLink Software, including, without limitation, the Source Code form, thereof, solely as necessary to exercise the rights in (a) and (b) above; (d) combine the Licensed MaestroLink Software or portions thereof in Object Code form with the
Modified MaestroLink Software in Object Code form; and (e) reproduce, distribute, market, license and otherwise commercialize and exploit the Licensed MaestroLink Software or portions thereof in Object Code form with the right to sublicense through
multiple tiers of sublicensees solely for use on personal computers for use with MaestroLink IC Products. ArcSoft and its distributors may distribute and license the Licensed MaestroLink Software solely in Object Code form as combined with the
Modified MaestroLink Software in Object Code form, as set forth in this Section 2.3.1, to end-user customers only pursuant to a written agreement (“End User License Agreement”), the form and substance of which End User License Agreement to
be mutually agreed upon in writing by the parties no later than thirty (30) days after the Effective Date. Upon the written request of ArcSoft, Zoran will negotiate in good faith the right to sublicense the rights to Third Parties for use with
products developed by such Third Parties based on MaestroLink Technology within thirty (30) days of receipt of such request. 
  
 2.3.2 License Restrictions. ArcSoft may only disclose and allow access to the Source Code form of the Licensed MaestroLink Software to its
authorized employees in its engineering department or its contractors who have a need to access the Source Code to fulfill their employment or contracting obligations to ArcSoft. During the term of the license granted in Section 2.3.1 above, ArcSoft
shall not have the right to bring suit to enforce the copyrights in the Licensed MaestroLink Software against Third Parties. 
  
 2.3.3 MedioStream Software. Zoran will use commercially reasonable efforts to negotiate an agreement with MedioStream, Inc. that will permit
ArcSoft to use the MedioStream 
  

			
	 	 	 ArcSoft/Zoran Confidential
 Core Technology License Agreement

 Software with the MaestroLink Technology for a period of at least one (1) year after the effective date of such
agreement. ArcSoft agrees to pay fifty percent (50%) of any payments that Zoran is required to pay to MedioStream, Inc. under such agreement. If Zoran is successful in executing such an agreement with MedioStream, Inc., then the Licensed MaestroLink
Software shall be deemed to include the MedioStream Software. 
  
 2.4 Licensed MaestroLink IP Core Technology. Subject to the terms of this License Agreement, including, without limitation, the restriction set forth in Section 2.6 below, Zoran hereby grants to ArcSoft a non-exclusive,
non-transferable (except as set forth herein), worldwide, royalty-free right and license in the Application Field under the Zoran IPR in the Licensed MaestroLink IP Core Technology during the term of this License Agreement to make, have made, use,
reproduce, modify, have modified, and prepare derivative works from the Licensed MaestroLink IP Core Technology solely for the purpose of developing the Modified MaestroLink IP Core Technology, and integrating the Licensed MaestroLink IP Core
Technology and the Modified MaestroLink IP Core Technology into MaestroLink IC Products. Additionally, Zoran agrees that ArcSoft shall have the right to sublicense the rights granted in this Section 2.4 to Third Parties for use with products
developed by such Third Parties based on MaestroLink Technology. ArcSoft acknowledges and agrees that it shall be solely responsible for obtaining a license to the third party IP core technology listed on Schedule C (“Licensed
MaestroLink Firmware and Licensed MaestroLink IP Core Technology”) hereto. 
  
 2.5 Licensed MaestroLink IC Design. Subject to the terms of this License Agreement, including, without limitation, the restriction set forth in Section 2.6 below, Zoran hereby grants to ArcSoft a non-exclusive,
non-transferable (except as set forth herein), worldwide, royalty-bearing right and license in the Application Field under the Zoran IPR in the Licensed MaestroLink IC Design during the term of this License Agreement to make, have made, use,
reproduce, modify, have modified, and prepare derivative works from the Licensed MaestroLink IC Products solely for the purpose of having the Licensed MaestroLink IC Design and the Modified MaestroLink IC Design incorporated into integrated circuits
designed by ArcSoft. 
  
 2.6 Restriction. The licenses
granted under Sections 2.1 and 2.3 above shall not be exclusive until the first to occur of (a) Zoran’s acceptance of the final Deliverables as set forth in the Development Agreement in accordance with Section 2.6 therein, or (b) ArcSoft’s
closing of an Initial Public Offering. Zoran covenants not to grant such licenses to Third Parties for a period of one (1) year from the Effective Date. 
  
 3. Licenses Granted to Zoran 
  
 3.1 Modified MaestroLink IP Core Technology and Modified MaestroLink IC Design. ArcSoft hereby grants to Zoran a perpetual, irrevocable,
royalty-free, non-exclusive, non-transferable (except as set forth herein), worldwide license, with the right to sublicense through multiple tiers of sublicensees, under the ArcSoft IPR in the Modified MaestroLink IP Core Technology and Modified
MaestroLink IC Design to make, have made, use, reproduce, modify, have modified, and prepare derivative works from the Modified MaestroLink IP Core Technology and Modified MaestroLink IC Design in any MaestroLink IC Product. Additionally, ArcSoft
hereby grants to Zoran a perpetual, irrevocable, royalty-bearing, non-exclusive, non-transferable (except as set forth herein), worldwide license, with the right to sublicense through multiple tiers of sublicensees, under the ArcSoft IPR in the
Modified MaestroLink IP Core Technology and Modified MaestroLink IC Design to make, have made, use, reproduce, modify, have modified, and prepare derivative works from the Modified MaestroLink IP Core Technology and Modified MaestroLink IC Design in
any Zoran Product other than a MaestroLink IC Product. Zoran shall pay a royalty to ArcSoft to exercise the license in the foregoing sentence to be negotiated in good faith by the parties, but in no event under pricing terms less favorable to Zoran
as ArcSoft provides any other customer. 
  
 3.2 ArcSoft Base
Technology. To the extent authorized under the Development Plan, ArcSoft may incorporate ArcSoft Base Technology into the ArcSoft Developments ; provided, 
  

			
	 	 	 ArcSoft/Zoran Confidential
 Core Technology License Agreement

 however, that ArcSoft shall provided Zoran with reasonable notice prior to incorporating any ArcSoft Base Technology into
the ArcSoft Developments, and such incorporation shall be subject to Zoran’s prior written approval in advance. Any ArcSoft Base Technology incorporated into the ArcSoft Developments shall be deemed to be Modified MaestroLink IP Core
Technology, Modified MaestroLink IC Design, Modified MaestroLink Software and/or ArcSoft Derivative IC Products, as applicable, for the purposes of the licenses granted to Zoran under this License Agreement. 
  
 3.3 ArcSoft Derivative IC Products. ArcSoft hereby grants to Zoran a
perpetual, irrevocable, royalty-free, non-exclusive, non-transferable (except as set forth herein), worldwide license, with the right to sublicense through multiple tiers of sublicensees, under the ArcSoft IPR in the ArcSoft Derivative IC Products
to make, have made, use, sell, offer for sale and import MaestroLink IC Products. 
  
 3.4 License of MaestroLink Software to Zoran. ArcSoft hereby grants to Zoran a perpetual, irrevocable, royalty-free, non-exclusive, non-transferable (except as set forth herein), worldwide license, with the
right to sublicense through multiple tiers of sublicensees, under the ArcSoft IPR in the MaestroLink Software to use, reproduce and distribute the MaestroLink Software for use with the MaestroLink IC Products. The parties shall negotiate in good
faith a separate license granting Zoran a perpetual, irrevocable, royalty-free, non-exclusive, non-transferable (except as set forth herein), worldwide license, with the right to sublicense through multiple tiers of sublicensees, under the ArcSoft
IPR in the MaestroLink Software to use, reproduce and distribute the MaestroLink Software for use with the any Zoran Products other than the MaestroLink IC Product. 
  
 3.5 Manufacturing Rights. The rights granted in Section 2.1.1 and 2.3.1 above shall not to be exclusive to the extent
provided in Section 3.5.2 below with respect to the manufacture of the First IC Product and any Related IC Product and/or New IC Product that ArcSoft requests that Zoran manufacture and that Zoran agrees to manufacture, and the following terms shall
apply: 
  
 3.5.1 Zoran Patent Rights and Zoran Trade
Secrets. Zoran shall retain the non-exclusive, non-transferable (except as set forth herein), worldwide, royalty-free right and license under the Zoran Patent Rights and the Zoran Trade Secrets, with the right to sublicense through multiple
tiers of sublicensees, during the term of this License Agreement to make, have made, use, sell, offer for sale and import the First IC Product and any Related IC Product and/or New IC Product that ArcSoft requests that Zoran manufacture and that
Zoran agrees to manufacture, but only distribute the First IC Product and any applicable Related IC Product and/or New IC Product as part of a Chipset, and not on a standalone basis. 
  
 3.5.2 MaestroLink Software. In addition, ArcSoft grants Zoran a perpetual, irrevocable, royalty-free, non-exclusive,
non-transferable (except as set forth herein), worldwide license, with the right to sublicense through multiple tiers of sublicensees, under the ArcSoft IPR in the MaestroLink Software: (a) use internally the Source Code and Object Code forms of the
MaestroLink Software; (b) modify the Source Code form of the MaestroLink Software to create derivative works from, modifications to, and improvements to, the MaestroLink Software; (c) reproduce the MaestroLink Software, including, without
limitation, the Source Code form, thereof, solely as necessary to exercise the rights in (a) and (b) above; (d) combine the MaestroLink Software or portions thereof in Object Code form with derivatives of the MaestroLink Software in Object Code
form; and (e) reproduce, distribute, market, license and otherwise commercialize and exploit the MaestroLink Software or portions thereof in Object Code form for use on personal computers for use with the First IC Product and any Related IC Product
and/or New IC Product that ArcSoft requests that Zoran manufacture and that Zoran agrees to manufacture. The parties acknowledge and agree that the rights licensed under this Section 3.5.2 shall be a sublicense granted to Zoran of the rights, which
Zoran granted to ArcSoft in the Licensed MaestroLink Software under Section 2.2 above. 
  
 3.5.3 Manufacturing Support. Upon Zoran’s request, ArcSoft shall assist Zoran in setting up facilities and processes to manufacture, maintain and support the First IC Product, and any Related IC Product
and/or New IC Product that ArcSoft requests that Zoran manufacture and that Zoran agrees to manufacture, at no further charge to Zoran. 
  

			
	 	 	 ArcSoft/Zoran Confidential
 Core Technology License Agreement

 3.6 Strategic Ports. ArcSoft hereby grants to Zoran a perpetual, irrevocable, royalty-free,
non-exclusive, non-transferable (except as set forth herein), worldwide license, with the right to sublicense through multiple tiers of sublicensees, under the ArcSoft IPR in the Strategic Ports to use, reproduce and distribute the Strategic Ports
for use with the MaestroLink IC Products 
  
 4. No Other
Rights. Except for the limited license rights expressly granted hereunder, each party grants no license, by implication, estoppel or otherwise to the other party. All rights not expressly granted to the other party are hereby retained. There are
no implied rights. 
  
 5. Ownership 
  
 5.1 Zoran Ownership. Zoran and/or its licensors owns and shall
retain all right, title and interest, including, without limitation, all Intellectual Property Rights, in and to the Zoran Patent Rights and the Zoran Trade Secrets, Zoran IPR, Licensed MaestroLink Software, Licensed MaestroLink IP Core Technology,
Licensed MaestroLink IC Designs and MaestroLink IC Products. 
  
 5.2 ArcSoft Ownership. ArcSoft and/or its licensors owns and shall retain all right, title and interest, including, without limitation, all Intellectual Property Rights, in and to the ArcSoft Technology (except for the Joint
Technology) and the ArcSoft IPR; provided, however, that ArcSoft hereby assigns to Zoran all right, title and interest, including, without limitation, all Intellectual Property Rights, in and to (a) the ArcSoft First IC Product Developments, and (b)
any ArcSoft MaestroLink IC Product Developments applicable to a Related IC Product or a New IC Product that ArcSoft has requested of Zoran and Zoran has agreed in writing to manufacture. To the extent any of the rights, title and interest in and to
the ArcSoft First IC Product Developments and/or the applicable ArcSoft MaestroLink IC Product Developments cannot be assigned by ArcSoft to Zoran, ArcSoft hereby grants to Zoran an exclusive, royalty-free, transferable, irrevocable, worldwide
license (with rights to sublicense through multiple tiers of sublicensees) to practice such non-assignable rights, title and interest. To the extent any of the rights, title and interest in and to the ArcSoft First IC Product Developments and/or the
applicable ArcSoft MaestroLink IC Product Developments can neither be assigned nor licensed by ArcSoft to Zoran, ArcSoft hereby irrevocably waives and agrees never to assert such non-assignable and non-licensable rights, title and interest against
Zoran or any of Zoran’s successors in interest. ArcSoft agrees to perform, during and after the term of this License Agreement, all acts that Zoran deems necessary or desirable to permit and assist Zoran, at its expense, in obtaining,
perfecting and enforcing the full benefits, enjoyment, rights and title throughout the world in the ArcSoft First IC Product Developments and/or the applicable ArcSoft MaestroLink IC Product Developments as provided to Zoran under this License
Agreement. If Zoran is unable for any reason to secure ArcSoft’s signature to any document required to file, prosecute, register or memorialize the assignment of any rights under any of the ArcSoft First IC Product Developments and/or the
applicable ArcSoft MaestroLink IC Product Developments as provided under this License Agreement, ArcSoft hereby irrevocably designates and appoints Zoran and Zoran’s duly authorized officers and agents as ArcSoft’s agents and
attorneys-in-fact to act for and on ArcSoft’s behalf and instead of ArcSoft to take all lawfully permitted acts to further the filing, prosecution, registration, memorialization of assignment, issuance and enforcement of rights under such
ArcSoft First IC Product Developments and/or applicable ArcSoft MaestroLink IC Product Developments, all with the same legal force and effect as if executed by ArcSoft. The foregoing is deemed a power coupled with an interest and is
irrevocable. 
  
 5.3 Joint Ownership 
  
 5.3.1 Subject to the ownership rights specified in Sections 5.1 and 5.2
above, and Section 5.3.2 below, ArcSoft shall own all right, title and interest in the Joint Technology that is implemented in software for the personal computer (but not in firmware form) and all Intellectual Property Rights therein. To the extent
that Zoran obtains ownership of any such Intellectual Property Rights, Zoran hereby irrevocably transfers, conveys and assigns to ArcSoft all of its right, title and interest therein. Zoran shall execute such documents, render such assistance, and
take such other action as ArcSoft may reasonably request, at ArcSoft’s expense, to apply for, register, perfect, confirm and protect such rights. 
  

			
	 	 	 ArcSoft/Zoran Confidential
 Core Technology License Agreement

 5.3.2 Subject to the ownership rights specified in Sections 5.1 and 5.2 above, Zoran shall own all
right, title and interest in all Joint Technology other than as provided in Section 5.3.1 above and all Intellectual Property Rights therein. To the extent that ArcSoft obtains ownership of any such Intellectual Property Rights, ArcSoft hereby
irrevocably transfers, conveys and assigns to Zoran all of its right, title and interest therein. ArcSoft shall execute such documents, render such assistance, and take such other action as Zoran may reasonably request, at Zoran’s expense, to
apply for, register, perfect, confirm and protect such rights. 
  
 5.3.3 Each party hereby waives any and all moral rights, including without limitation any right to identification of authorship or limitation on subsequent modification that such party (or its employees, agents or consultants) has or may
have in any Joint Technology. 
  
 5.4 Prosecution,
Maintenance and Enforcement of Zoran Patent Rights. On and after the Effective Date, the expenses for prosecuting each patent application (including, without limitation, any taxes, annuities and maintenance fees for any pending and/or issued
patent application(s)) corresponding to each patent that is part of the Zoran Patent Rights, and for the issuance of the respective patent shall be borne by Zoran. Zoran will have the right to prosecute or abandon such patent applications in its own
discretion. 
  
 6. Payments 
  
 6.1 Upfront License Fee. As partial payment for the rights and
licenses in the Licensed MaestroLink Software granted to ArcSoft hereunder, upon the Effective Date, ArcSoft will pay to Zoran a non-refundable upfront license fee of Nine Hundred Thousand Dollars ($900,000). Zoran will issue an invoice to ArcSoft
on the Effective Date, and ArcSoft shall pay such license fee within thirty (30) days after receipt of such invoice. Zoran shall provide the Licensed MaestroLink Software to ArcSoft on the Effective Date. On the Effective Date, ArcSoft will provide
Zoran with written confirmation of ArcSoft’s receipt of the Licensed MaestroLink Software. 
  
 6.2 Sales by Zoran. In consideration of the rights and licenses granted to Zoran hereunder, for each sale by Zoran to a Third Party of a Unit of a
MaestroLink IC Product bundled with a copy of the MaestroLink Software, Zoran agrees to pay to ArcSoft a royalty equal to (a) *** for each Unit sold, if the gross sales price of such bundled Unit to the Third Party is less than or equal to ***, and
(b) *** for each Unit sold, if the gross sales price of such bundled Unit to the Third Party is greater than ***. For each sale, license or distribution by Zoran to a Third Party of only the MaestroLink Software unaccompanied by a MaestroLink IC
Product, Zoran agrees to pay to ArcSoft a royalty equal to *** for each copy distributed to a Third Party. 
  
 6.3 Sales by ArcSoft. In consideration of the rights and licenses granted to ArcSoft hereunder, for each sale by ArcSoft to a Third Party of a
product containing the MaestroLink IC Product bundled with a copy of the MaestroLink Software, ArcSoft agrees to pay to Zoran a royalty equal to (a) *** for each Unit sold, if the gross sales price of such Unit to the Third Party is less than or
equal to ***, and (b) *** for each Unit sold, if the gross sales price of such Unit to the Third Party is greater than ***. For each sale, license or distribution by ArcSoft to a Third Party of only the MaestroLink Software, ArcSoft agrees to pay to
Zoran a royalty equal to *** for each copy distributed to a Third Party.  
  
 6.4 Industry Standard Body and Licensing Company Revenues. All revenues paid to Zoran as a result of Zoran granting a license under Section 2.1.2 above to an Industry Standards Body and/or a Licensing Company
for sublicensing through a patent pool shall be allocated between the parties as follows: Zoran shall retain *** of all such revenues owed, and Zoran shall pay ArcSoft *** of all such revenues owed within thirty (30) days of receipt of such
payments. 
  
 6.5 Payment Terms. All payments under
Sections 6.2, 6.3 and 6.4 above shall be made on a calendar quarter basis as follows: For each calendar quarter during the term of this License 
  
 *** CONFIDENTIAL MATERIAL REDACTED AND 
 SEPARATELY FILED WITH THE COMMISSION 
  

			
	 	 	 ArcSoft/Zoran Confidential
 Core Technology License Agreement

 Agreement, ArcSoft will provide to Zoran a written report detailing the calculation of all payments due to Zoran under
Sections 6.2, 6.3 and 6.4 above, along with the appropriate payment, and Zoran will provide to ArcSoft a written report detailing the calculation of all payments due to ArcSoft under Sections 6.2, 6.3 and 6.4 above, along with the appropriate
payment, no later than thirty (30) days after the end of the relevant calendar quarter. 
  
 7. Manufacturing Rights and Escrow 
  
 7.1 Escrow Materials. “Escrow Materials” means all of the MaestroLink IC Products and all information, including but not limited to, fabrication drawings for all proprietary mechanical parts, bills of
material, inventions, works of authorship, Source Code, Object Code, mask works, test procedures, test specifications, design specifications, schematics, assembly drawings, artwork, and any other information that would be useful to Zoran to modify,
manufacture, develop, distribute, support and/or maintain the MaestroLink IC Products, which information is now in ArcSoft’s possession or which during the term of this License Agreement comes into ArcSoft’s possession, including the
absolute right of Zoran to the embodiment of any of the foregoing intellectual property. 
  
 7.2 Escrow Agreement. The parties will select a mutually agreed upon escrow agent and execute an escrow agreement in the form attached hereto as Schedule F (“Escrow Agreement”). Zoran shall be
responsible for the costs charged by the escrow agent under the Escrow Agreement. ArcSoft shall deposit the Escrow Materials with such escrow agent and shall update the Escrow Materials on at least as frequently as on a quarterly basis. 

 
 7.3 Release Events. The occurrence of any of the following events
shall be deemed to be a “Release Event” that permits Zoran to exercise its rights under Section 7.4 below: 
  
 7.3.1 ArcSoft becomes insolvent, generally fails to pay or admits in writing its inability to pay its debts as they become due; 
  
 7.3.2 ArcSoft applies for or consents to the appointment of a trustee,
receiver or other custodian or makes a general assignment for the benefit of its creditors; 
  
 7.3.3 any bankruptcy, reorganization, debt arrangement or other case or proceeding under any bankruptcy or insolvency law or other dissolutions or liquidation proceedings are commenced by or against ArcSoft, and if
such case is not commenced by ArcSoft, it is acquiesced in or remains undismissed for sixty (60) days; 
  
 7.3.4 ArcSoft takes any corporate or other action to authorize, or in furtherance of, any of the foregoing; and 
  
 7.3.5 termination of the Master Agreement. 
  
 7.4 Manufacturing License 
  
 7.4.1 MaestroLink Unique IC Products. Subject to its covenant set
forth in Section 7.4.3 below, ArcSoft hereby grants to Zoran a perpetual, irrevocable, royalty-free, non-exclusive, non-transferable (except as set forth below) worldwide license, with the right to sublicense through multiple tiers of sublicensees,
under the ArcSoft IPR in the MaestroLink Unique IC Products to make, have made, use, import, offer to sell, publicly display, modify, reproduce, distribute and sell the MaestroLink IC Products and/or the Zoran Products. 
  
 7.4.2 MaestroLink Software. Subject to its covenant set forth below
in Section 7.4.3 below, ArcSoft hereby grants to Zoran a perpetual, irrevocable, royalty-free, non-exclusive, non-transferable (except as set forth herein), worldwide license, with the right to sublicense through multiple tiers of sublicensees,
under the ArcSoft IPR in the MaestroLink Software: (a) use internally the Source Code and Object Code forms of the MaestroLink Software; (b) modify the Source Code form of 
  

			
	 	 	 ArcSoft/Zoran Confidential
 Core Technology License Agreement

 the MaestroLink Software to create derivative works from, modifications to, and improvements to, the MaestroLink
Software; (c) reproduce the MaestroLink Software, including, without limitation, the Source Code form, thereof, solely as necessary to exercise the rights in (a) and (b) above; (d) combine the MaestroLink Software or portions thereof in Object Code
form with derivatives of the MaestroLink Software in Object Code form; and (e) reproduce, distribute, market, license and otherwise commercialize and exploit the MaestroLink Software or portions thereof in Object Code form for use solely for use on
personal computers for use with MaestroLink IC Products or Zoran Products. The parties acknowledge and agree that the rights licensed under this Section 7.4.2 shall be a sublicense granted to Zoran of the rights, which Zoran granted to ArcSoft in
the Licensed MaestroLink Software under Section 2.3 above. 
  
 7.4.3 Covenant. Zoran covenants not to exercise its rights under this Section 7.4 until the occurrence of a Release Event as defined in Section 7.3 above. 
  
 7.5 Manufacturing Support. Upon the occurrence of a Release Event, and upon Zoran’s request, ArcSoft shall
assist Zoran in setting up facilities and processes to manufacture, maintain and support the MaestroLink IC Products and/or Zoran Products. ArcSoft shall be compensated for such services on a time and material basis at ArcSoft’s then standard
rates for such services charged to its most favored customers. 
  
 8. Covenant Not to Sue. ArcSoft agrees that ArcSoft shall not Assert (as defined below) any of its Intellectual Property Rights against Zoran or any Zoran licensee with respect to the manufacture, use, sale or import of modifications
of the MaestroLink IC Products developed by Zoran. For purposes of this Section 8, “Assert” means to bring a suit, arbitration, or other formal legal proceeding (including, without limitation, ITC enforcement actions) (each, an
“Action”) for intellectual property infringement before any type of body or tribunal that has or claims to have authority to adjudicate such Action in whole or in part.  
  
 9. Term and Termination 
  
 9.1 Term. This Agreement shall commence upon the Effective Date and shall continue unless earlier terminated by either party as provided in this
License Agreement. 
  
 9.2 Termination 
  
 9.2.1 Termination for Cause. If any material breach of this License
Agreement continues after forty-five (45) days written notice of said breach by the non-breaching party to the breaching party, this License Agreement shall immediately terminate, subject to the terms of the dispute resolution procedure set forth in
Section 15 of the Master Agreement. 
  
 9.2.2 Termination of
Other Transaction Agreements. This License Agreement shall be immediately terminated upon any termination of the Master Agreement. Termination of this Agreement shall immediately terminate the Master Agreement and, thus, the other Transaction
Agreements. 
  
 9.2.3 Obligations on Termination

  
 (a) Termination of this License Agreement for any reason
shall not release any party hereto from any liability that, at the time of such termination, has already accrued to the other party or that is attributable to a period prior to such termination nor preclude either party from pursuing all rights and
remedies it may have hereunder or at law or in equity with respect to any breach of this License Agreement. 
  
 (b) Upon termination of this License Agreement by Zoran due to a breach by ArcSoft, all licenses under Section 2 above shall terminate, except that the
licenses under Sections 2.1.1 (only with respect to the Zoran Patent Rights and Zoran Trade Secrets to the extent that such rights cover the Licensed MaestroLink Software), 2.3.1 and 2.3.2 above shall continue, but shall become non-exclusive on the
effective date of termination. 
  

			
	 	 	 ArcSoft/Zoran Confidential
 Core Technology License Agreement

 (c) Upon termination of this License Agreement by ArcSoft due to a breach by Zoran, all licenses under
Section 2 above shall terminate except that the licenses under Sections 2.1.1 (only with respect to the Zoran Patent Rights and Zoran Trade Secrets to the extent that such rights cover the Licensed MaestroLink Software), 2.3.1 and 2.3.2 above shall
continue. 
  
 9.2.4 Survival. The following Sections shall
survive any termination or expiration of this License Agreement: 1 (“Definitions”); 2.3 (“Licensed MaestroLink Software”); 3 (“Licenses Granted to Zoran”); 4 (“No Other Rights”); 5 (“Ownership”); 6
(“Payment”); 7 (“Manufacturing Rights and Escrow”); 8 (“Covenant Not to Sue”); 9.2.3 (“Obligations on Termination”); 9.2.4 (“Survival”); and 10 (“Incorporation of Certain Terms from the Master
Agreement”). 
  
 10. Incorporation of Certain Terms from
the Master Agreement. The following Sections of the Master Agreement are hereby incorporated in this License Agreement by reference and made a part hereof: 1 (“Definitions”); 9 (“Payments”); 11 (“Confidentiality”);
12 (“Representations and Warranties”); 13 (“Indemnification”); 14 (“Limitations of Liability”); 15 (“Project Management and Dispute Resolution”); and 17 (“Miscellaneous”). 
  
 [Remainder of this page intentionally left blank] 
  

			
	 	 	 ArcSoft/Zoran Confidential
 Core Technology License Agreement

 IN WITNESS WHEREOF, the parties have caused this Core Technology License Agreement to be executed by its duly authorized
representatives and delivered in duplicate originals as of the date first above written. 
  

			
	 ZORAN CORPORATION

		
	 By:
	 	 /s/ Karl Schneider

	 Name:
	 	 Karl Schneider

	 Title:
	 	 CFO

	
	 ARCSOFT, INC.

		
	 By:
	 	 /s/ Todd Rumaner

	 Name:
	 	 Todd Rumaner

	 Title:
	 	 SVP

  

					
	 	 	 	 	 ArcSoft/Zoran Confidential
 Core Technology License Agreement

 Exhibit D 
  

IC Production and Sales Agreement 
  

					
	 	 	 	 	 ArcSoft/Zoran Confidential
 Production and Sales Agreement

 IC PRODUCTION AND SALES AGREEMENT 
  
 This IC PRODUCTION AND SALES AGREEMENT (“IC Sales Agreement”), executed on March 31, 2004, is made by and between
Zoran Corporation, a Delaware corporation with its principal place of business at 1390 Kifer Road, Sunnyvale, California 94086 (“Zoran”), and ArcSoft, Inc., a California corporation with its principal place of business at 46601 Fremont
Boulevard, Fremont, California 94538 (“ArcSoft”). 
  
 BACKGROUND 
  
 WHEREAS, Zoran and ArcSoft have
entered into a Master Agreement dated March 31, 2004 (“Master Agreement”) that governs the relationship between the parties generally with respect to the continued development of the “MaestroLink” technology; and 
  
 WHEREAS, the parties now desire to set forth terms upon which Zoran will sell
to ArcSoft the First IC Products, Related IC Products and MaestroLink IC Products agreed upon by the parties in writing to be manufactured by Zoran. 
  
 NOW, THEREFORE, in consideration of the covenants, conditions and undertakings hereinafter set forth, it is agreed by and between Zoran and ArcSoft as
follows: 
  
 AGREEMENT 
  
 1. Definitions. Unless otherwise defined in this IC Sales Agreement,
all capitalized terms shall be as defined in Exhibit A (“Definitions”) of the Master Agreement. 
  
 2. Scope. ArcSoft may only order and purchase, and Zoran may only produce and sell, the First IC Products, Related IC Products and/or other
MaestroLink IC Products that the parties have agreed upon in writing that Zoran will manufacture. All references to MaestroLink IC Products hereunder shall be deemed to be limited to the foregoing. 
  
 3. Acceptance and Minimum Orders. All orders for MaestroLink IC
Products issued by ArcSoft hereunder must be approved and accepted by Zoran in an order confirmation or other writing at its designated offices. All orders must be for at least the minimum quantity specified to ArcSoft by Zoran in the quote then in
effect or on the then-current price list. Orders by ArcSoft for quantities less than the minimum quantity will be deemed by Zoran as an order for the minimum quantity and ArcSoft agrees to accept and pay for the total units delivered pursuant to
such order. Orders for MaestroLink IC Products are non-cancelable and non-refundable (except for non-conforming products returned under Section 10 below). It is recognized that the parties may, for their respective convenience, desire to use
standardized “Purchase Order” forms and other documents to set forth the amount of the order and the delivery date, which forms may contain terms in addition to, or at variance with, the terms of this IC Sales Agreement. Therefore, it is
expressly understood and agreed that such forms may be used but will not add to or vary the terms and conditions herein, whether or not this IC Sales Agreement is referenced therein. Zoran shall provide ArcSoft with Zoran’s most favored pricing
for the MaestroLink IC Products that Zoran provides to Third Parties for similar quantities and similar due dates. The MaestroLink IC Products ordered by ArcSoft hereunder shall have the same manufacturing priority status with Zoran’s Third
Party Contract Manufacturer as the MaestroLink IC Products ordered by Zoran and any allocation between the parties shall be fifty percent (50%) to each party. 
  

4. Price. Zoran will sell the MaestroLink IC Products to ArcSoft at a price such that Zoran’s gross margins on such sales will be ***,
meaning that the price will equal *** of Zoran’s full costs to produce such MaestroLink IC Products, as charged by Zoran’s Third Party Contract Manufacturer. 
  
 5. Payments. Payments will be made in U.S. dollars, net cash on delivery unless (a) a confirmed irrevocable letter of
credit has been issued, or (b) satisfactory open credit has been established, in which case the terms are net thirty (30) days from the date of the invoice. Accounts 
  
 *** CONFIDENTIAL MATERIAL REDACTED AND 
 SEPARATELY FILED WITH THE COMMISSION 
  

					
	 	 	1	 	 ArcSoft/Zoran Confidential
 Production and Sales Agreement

 overdue by more than thirty (30) days will be subject to a charge of one and one-half percent (1 1/2%) per month or the maximum rate of interest allowed by law, whichever is less. If deliveries are to be made in
installments, each installment will be separately invoiced and payment will be made accordingly. If ArcSoft does not make payment in accordance with the terms of payment specified, Zoran may, at its option, (i) immediately terminate this IC Sales
Agreement upon written notice to ArcSoft, or (ii) refuse to perform further under this IC Sales Agreement unless ArcSoft immediately pays for all MaestroLink IC Products that have been delivered and paid in advance. In the event of insolvency or
bankruptcy of ArcSoft, or if any such proceeding is brought by or against ArcSoft, Zoran will be entitled to cancel any order then outstanding and will receive full reimbursement for its cancellation charges. If Zoran exercises any right it may have
to stop MaestroLink IC Products in transit because of ArcSoft’s financial condition, Zoran, at its option, may resell such articles at public sale without notice to ArcSoft or a private sale after giving notice to ArcSoft and without affecting
Zoran’s right to hold ArcSoft liable for any loss or damage caused by ArcSoft’s breach. All rights specified above will be in addition to any and all other rights that Zoran may have. 
  
 6. Reports. Zoran will provide ArcSoft with status reports of all
orders placed by ArcSoft hereunder no less frequently than on a weekly basis. 
  
 7. Taxes. All prices are exclusive of federal, state or local sales, use, excise or similar taxes applicable to the sale of the MaestroLink IC Products. Any such tax(es) will be separately itemized on
Zoran’s invoice(s) and paid by ArcSoft, or in lieu thereof, ArcSoft will furnish Zoran a properly executed tax exemption certificate prior to shipment. ArcSoft also will be responsible for all withholding taxes imposed by any foreign
government. 
  
 8. Delivery. All shipments will be F.O.B.
point of origin and title and risk of loss or damage will pass to ArcSoft upon delivery to a carrier at such point. The delivery date stated represents Zoran’s best estimate of when the MaestroLink IC Products will be shipped. Zoran does not
accept any liability for losses or added costs due to delivery delays. Claims against Zoran for shortages must be made in writing within ten (10) days after receipt of shipment. Prices include packaging in accordance with Zoran’s standard
practice. Notwithstanding the passage of title, Zoran will retain a security interest and right of possession in the MaestroLink IC Products until ArcSoft has made payment in full. ArcSoft agrees to, and hereby appoints Zoran as ArcSoft’s agent
and attorney-in-fact to sign and file any documents, including, without limitation, UCC-1 financing statements, necessary for the perfection of Zoran’s security interest in the shipped products. 
  
 9. Rescheduling and Cancellation. ArcSoft may reschedule all or any
portion of an order for MaestroLink IC Products in accordance with the following: (a) fewer than ninety (90) days prior to scheduled delivery date, there is no rescheduling or cancellation allowed; and (b) over ninety (90) days prior to scheduled
delivery date, a maximum thirty (30) day postponement within the same calendar quarter is allowed and these quantities are not subject to cancellation or subsequent postponement. Orders for MaestroLink IC Products cannot be cancelled. In addition,
if ArcSoft issues an order for any MaestroLink IC Products at a quantity less than the firm quantity previously agreed, then a retroactive higher unit price will be determined in accordance with Zoran’s published volume pricing information
relating to the MaestroLink IC Products. The difference between the total price paid and the total price due will be applied and billed by Zoran and paid by ArcSoft in accordance with Section 3 above. 
  
 10. Acceptance. ArcSoft has ten (10) days after receipt of the
MaestroLink IC Products to confirm that they conform to the MaestroLink Specifications. Unless ArcSoft gives written notice to Zoran within such period, the MaestroLink IC Products will be deemed to be accepted. 
  
 11. Warranty. Because ArcSoft has designed the MaestroLink IC
Products, Zoran sells the MaestroLink IC Products to ArcSoft on an “AS IS” basis, except as incorporated by Section 16 below. EXCEPT AS INCORPORATED BY SECTION 16 BELOW, THIS WARRANTY AND THE REMEDY HEREIN PROVIDED ARE IN LIEU OF ALL OTHER
WARRANTIES, EXPRESS, STATUTORY, IMPLIED OR OTHERWISE, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY, NONINFRINGEMENT OF THIRD PARTY RIGHTS AND FITNESS FOR A PARTICULAR PURPOSE, AND OF ALL OTHER OBLIGATIONS OR LIABILITIES ON ZORAN’S PART
WITH RESPECT TO THE MAESTROLINK IC PRODUCTS AND THEIR PERFORMANCE. 
  

					
	 	 	2	 	 ArcSoft/Zoran Confidential
 IC Production and Sales Agreement

 12. Returns. Returns of any type must be pre-approved by Zoran in writing and all return
documentation must contain Zoran’s Return Materials Authorization (“RMA”) number. All returns will be in accordance with Zoran’s standard return policies then in effect. 
  
 13. Indemnification. Zoran will indemnify ArcSoft as set forth in
Section 14.2 of the Master Agreement. 
  
 14. Responsibility
for MaestroLink IC Products. ArcSoft will be solely responsible for its MaestroLink IC Products, including those using or incorporating MaestroLink IC Products purchased from Zoran hereunder. ArcSoft will be responsible, and Zoran will have no
liability, for obtaining all applicable legal and governmental consents, authorizations and approvals and all applicable licenses from Third Parties and all licenses needed for patents that are essential in order to comply with applicable standards
for such MaestroLink IC Products. ArcSoft will indemnify and hold harmless Zoran from any damages/liability resulting from ArcSoft’s failure to comply with this Section. 
  
 15. Term and Termination 
  
 15.1 Term. This IC Sales Agreement shall commence upon the Effective Date and shall continue unless earlier terminated by either party as provided
in this IC Sales Agreement. 
  
 15.2 Termination

  
 15.2.1 Termination for Cause. If any material breach
of this IC Sales Agreement continues after forty-five (45) days written notice of said breach by the non-breaching party to the breaching party, then this IC Sales Agreement shall immediately terminate, subject to the terms of the dispute resolution
procedure set forth in Section 16 of the Master Agreement. 
  
 15.2.2 Termination of Other Transaction Agreements. This IC Sales Agreement shall be immediately terminated upon any termination of the Master Agreement. 
  
 15.2.3 Obligations on Termination. Termination of this IC Sales Agreement for any reason shall not release any party
hereto from any liability that, at the time of such termination, has already accrued to the other party or that is attributable to a period prior to such termination nor preclude either party from pursuing all rights and remedies it may have
hereunder or at law or in equity with respect to any breach of this IC Sales Agreement. 
  
 15.2.4 Survival. The following Sections of this IC Sales Agreement shall survive any termination or expiration hereof: 1 (“Definitions”); 5 (“Payments”); 7 (“Taxes”); 11
(“Warranty”); 13 (“Indemnification”); 14 (“Responsibility for MaestroLink IC Products”); 15.2.3 (“Obligations on Termination”); 15.2.4 (“Survival”); and 16 (“Incorporation of Certain Terms from
the Master Agreement”). 
  
 16. Incorporation of Certain
Terms from the Master Agreement. The following Sections of the Master Agreement are hereby incorporated in this IC Sales Agreement by reference and made a part hereof: 1 (“Definitions”); 9 (“Payments”); 11
(“Confidentiality”); 12 (“Representations and Warranties”); 13 (“Indemnification”); 14 (“Limitations of Liability”); 15 (“Project Management and Dispute Resolution”); and 17
(“Miscellaneous”). 
  
 [Remainder of this page
intentionally left blank] 
  

					
	 	 	3	 	 ArcSoft/Zoran Confidential
 IC Production and Sales Agreement

 IN WITNESS WHEREOF, the parties have caused this IC Sales Agreement to be executed by its duly authorized representatives
and delivered in duplicate originals as of the date first above written. 
  

			
	 ZORAN CORPORATION

		
	 By:
	 	 /s/ Karl Schneider

	 Name:
	 	 Karl Schneider

	 Title:
	 	 CFO

	
	 ARCSOFT, INC.

		
	 By:
	 	 /s/ Todd Rumaner

	 Name:
	 	 Todd Rumaner

	 Title:
	 	 SVP

  

					
	 	 	 	 	 ArcSoft/Zoran Confidential
 Production and Sales Agreement

 Exhibit E 
  

Equipment Transfer Agreement 
  

					
	 	 	 	 	 ArcSoft/Zoran Confidential
 Equipment Transfer Agreement

 EQUIPMENT TRANSFER AGREEMENT 
  
 This Equipment Transfer Agreement (“Equipment Transfer Agreement”), executed on March 31, 2004 and, is made by and
between Zoran Corporation, a Delaware corporation with its principal place of business at 1390 Kifer Road, Sunnyvale, California 94086 (“Zoran”), and ArcSoft, Inc., a California corporation with its principal place of business at 46601
Fremont Blvd., Fremont, California 94538 (“ArcSoft”). 
  
 BACKGROUND 
  
 WHEREAS, Zoran and ArcSoft have
entered into a Master Agreement dated March 31, 2004 (“Master Agreement”) that governs the relationship between the parties generally with respect to the continued development of the “MaestroLink” technology; and 
  
 WHEREAS, the parties now desire to set forth terms that, among other things,
apply more specifically to ArcSoft’s purchase of certain Zoran equipment relating to the continued development of the “MaestroLink” technology. 
  

NOW, THEREFORE, in consideration of the covenants, conditions and undertakings hereinafter set forth, it is agreed by and between Zoran and ArcSoft as
follows: 
  
 AGREEMENT 
  
 1. Definitions. Unless otherwise defined in this Equipment Transfer
Agreement, all capitalized terms shall be as defined in Exhibit A (“Definitions”) of the Master Agreement. 
  
 2. Equipment Purchase. Zoran shall transfer to ArcSoft all right, title and interest in and to the MaestroLink Equipment in exchange for the full
and complete consideration set forth in the other Transaction Agreements. 
  
 3. Delivery and Acceptance. All shipments shall be F.O.B. Zoran’s shipping point. The risk of loss or damage to the MaestroLink Equipment shall pass to ArcSoft upon Zoran’s delivery of the MaestroLink
Equipment to the carrier. The MaestroLink Equipment shall be deemed accepted by ArcSoft upon delivery. 
  
 4. Bill of Sale. Zoran shall execute and deliver to ArcSoft a bill of sale in the form attached hereto as Schedule B (“Bill of
Sale”). 
  
 5. Title. Upon ArcSoft’s acceptance,
Zoran shall be deemed to have transferred to ArcSoft all right, title and interest in and to the MaestroLink Equipment free and clear of any and all claims of Zoran or any Third Party. 
  
 6. Software License. The software, if any, provided with the products is not sold but is subject to a license on the
terms included with such product or in a separate written or shrink-wrapped agreement between the parties. 
  
 7. Disclaimer of Warranties. ARCSOFT ACCEPTS THE MAESTROLINK EQUIPMENT ON AN “AS-IS” BASIS, EXCEPT AS INCORPORATED BY SECTION 8 BELOW.
EXCEPT AS INCORPORATED BY SECTION 8 BELOW, ZORAN MAKES NO WARRANTIES, EXPRESS, IMPLIED STATUTORY OR OTHERWISE, INCLUDING ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NONINFRINGEMENT OF THIRD PARTY RIGHTS, WITH RESPECT TO
ANY OF THE MAESTROLINK EQUIPMENT SOLD BY ZORAN TO ARCSOFT HEREUNDER, AND ALL SUCH WARRANTIES ARE EXPRESSLY EXCLUDED. 
  
 8. Incorporation of Certain Terms from the Master Agreement. The following Sections of the Master Agreement are hereby incorporated in this
Equipment Transfer Agreement by reference and made a part hereof: 1 (“Definitions”); 9 (“Payments”); 11 (“Confidentiality”); 12 (“Representations and Warranties”); 13 (“Indemnification”); 14
(“Limitations of Liability”); 15 (“Project Management and Dispute Resolution”); and 17 (“Miscellaneous”). 
  

					
	 	 	1	 	 ArcSoft/Zoran Confidential
 Equipment Transfer Agreement

 IN WITNESS WHEREOF, the parties have caused this Equipment Transfer Agreement to be executed by its duly authorized
representatives and delivered in duplicate originals as of the date first above written. 
  

			
	 ZORAN CORPORATION

		
	 By:
	 	 /s/ Karl Schneider

	 Name:
	 	 Karl Schneider

	 Title:
	 	 CFO

	
	 ARCSOFT, INC.

		
	 By:
	 	 /s/ Todd Rumaner

	 Name:
	 	 Todd Rumaner

	 Title:
	 	 SVP

  

					
	 	 	 	 	 ArcSoft/Zoran Confidential
 Equipment Transfer Agreement

 Exhibit F 
  

Form of Convertible Promissory Note 
  

 THIS CONVERTIBLE PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH RULE 144 UNDER THE ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR
THE HOLDER REASONABLY SATISFACTORY TO THE COMPANY STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT. 
  
 CONVERTIBLE PROMISSORY NOTE 
  

			
	 $2,000,000
	 	April 15, 2004

  
 ArcSoft, Inc., a
California corporation (the “Company”), for value received, hereby promises to pay to the order of Zoran Corporation (the “Holder”), the principal sum of Two Million Dollars ($2,000,000), with interest as provided
below. 
  
 1. Definitions. As used in this Note, the
following terms shall be defined as follows: 
  
 1.1
“Change of Control Transaction” shall mean any (a) merger or consolidation of the Company with or into any other corporation or other entity, or any other reorganization of the Company, in which the holders of the Company’s
outstanding capital stock immediately prior to such transaction do not, immediately after such transaction, retain a majority of the voting power of the surviving entity or its parent, or (b) sale of all or substantially all of the assets of the
Company. 
  
 1.2 “Common Stock” shall mean the
Common Stock of the Company. 
  
 1.3 “Conversion
Stock” shall mean the Common Stock, or such other Equity Securities as shall be issuable upon conversion of this Note pursuant to Section 3 hereof. 
  
 1.4 “Equity Securities” shall mean shares of capital stock of the Company of any class or series, whether or not currently authorized,
and any securities convertible into or exchangeable for such capital stock. 
  
 1.5 “Financing Transaction” shall mean the issuance by the Company of Equity Securities in exchange for cash or other property in any transaction, or series of related transactions, except issuances
(a) to employees, officers, directors or consultants of the Company pursuant to a stock option or similar plan approved by the Company’s Board of Directors, (b) in connection with a merger or consolidation involving the Company or the
acquisition of all or substantially all of the assets or outstanding securities of another corporation or entity or (c) to landlords, licensors of technology or lending institutions incidental to transactions which are primarily for other than
equity financing purposes and which are approved by the Board of Directors of the Company. 
  

 1 

 1.6 “IPO” shall mean the initial public offering of the Company’s Equity Securities
to the general public pursuant to a registration statement filed with the Securities and Exchange Commission. 
  
 1.7 “IPO Date” shall mean the date of the closing of the IPO. 
  
 1.8 “Master Agreement” shall mean the Master Agreement, dated March 31, 2004, between the Company and
Holder. 
  
 1.9 “Note” and
“Notes” shall refer to this convertible promissory note and other convertible promissory notes of like tenor, in the aggregate principal amount of up to an aggregate of Four Million Dollars ($4,000,000), issued or issuable pursuant
to the Master Agreement. 
  
 1.10 “Series B Preferred
Stock” shall mean the Series B Preferred Stock of the Company, as currently constituted. 
  
 2. Payment. 
  
 2.1 Payment. Subject to the provisions of Section 3 hereof relating to the conversion of this Note, the principal hereof and all accrued interest
thereon shall be due and payable on the earlier of (i) the second anniversary of the Effective Date, as defined in the Master Agreement (the “Maturity Date”) or (ii) the IPO Date. The Company shall make payments to the Holder, at
the address the Holder provides to the Company in writing, in lawful money of the United States of America. Interest shall accrue with respect to the unpaid principal amount from the date of this Note until such principal is paid or converted as
provided in Section 3 hereof at the rate of five percent (5%) per annum (computed on the basis of a 365-day year for actual days elapsed). 
  
 2.2 Acceleration. 
  
 (a) The principal outstanding hereunder and all accrued and unpaid interest shall be immediately due and payable in full at the Holder’s election
upon an Event of Default (as defined in Section 4 hereof). 
  
 (b) In the event of any voluntary or involuntary liquidation, dissolution or winding up of the company (including a Change of Control Transaction), an amount equal to two (2) times the outstanding principal amount of this Note, together
with all accrued and unpaid interest on the original principal amount of this Note, shall be immediately due and payable, except, in the case of a Change of Control Transaction, to the extent the Holder elects to convert this Note pursuant to
Section 3.2 hereof. 
  
 2.3 No Right to Prepayment. The
Company shall have no right to prepay, in whole or in part, the principal outstanding hereunder or any interest accrued thereon, except pursuant to Section 2.2 hereof or upon conversion of such principal and interest prior to the Maturity Date
pursuant to Section 3 hereof. 
  

 2 

 3. Conversion. This Note shall be convertible into Equity Securities as follows: 
  
 3.1 Notice of Financing or Change of Control Transactions. In the
event that the Company shall propose to consummate a Financing Transaction (including an IPO) or a Change of Control Transaction, the Company shall give the Holder not less than thirty (30) days prior written notice thereof, which notice shall
contain all of the material terms and conditions of the proposed Financing Transaction or Change of Control Transaction, and, in the case of a Financing Transaction, all preliminary prospectuses, business plans, financial statements and other
documents provided by the Company to the prospective investors in connection with such Financing Transaction. In the case of the IPO, the Company shall give the Holder notice of the final pricing terms and the IPO Date promptly following execution
of the underwriting agreement. 
  
 3.2 Voluntary Conversion
Prior to Maturity or Upon a Change of Control Transaction. The Holder may elect to convert all or any part of the principal amount of this Note, and the accrued interest thereon into Conversion Stock (as specified in Section 3.3 hereof) in
accordance with the following procedures: 
  
 (a) In the case of
an IPO, the Holder may elect such conversion by delivering written notice to the Company not more than two (2) business days prior to the scheduled IPO Date, and such conversion shall be effective on the IPO Date, immediately following the closing
of the IPO. 
  
 (b) In the case of a Change of Control
Transaction, the Holder may elect such conversion by delivering written notice to the Company not more than thirty (30) days following receipt by the Holder of the Company’s notice of such Change of Control Transaction, and such conversion
shall be effective immediately prior to the closing of such Change of Control Transaction. 
  
 (c) The Holder may not elect to convert any part of the principal amount of this Note, or any interest thereon, prior to July 15, 2004, except in connection with an IPO or Change of Control Transaction occurring prior
to that date. After July 15, 2004, the Holder may elect such conversion by delivering written notice to the Company at any time up to five (5) business days prior to the Maturity Date, and such conversion shall be effective immediately upon delivery
of such notice. 
  
 3.3 Conversion Stock and Conversion
Price. Upon delivery of notice, as provided in Section 3.2, the principal amount of this Note, and/or the interest thereon, as specified in such notice, shall be converted into securities of the Company, as follows: 
  
 (a) The principal amount of this Note, and the accrued interest thereon,
shall initially be convertible into shares of Common Stock. If the IPO Date has not occurred by July 15, 2004, the conversion price shall initially be fixed at $4.90 as of that date. 
  
 (b) Immediately following the closing of the IPO, the conversion price shall be adjusted as follows: 
  
 (i) if the IPO Date is prior to August 31, 2004, the conversion price shall
be adjusted to equal 70% of the per share price of the Common Stock sold in the IPO (the “IPO Price”); 
  

 3 

 (ii) if the IPO Date is during September 2004, the conversion price shall be adjusted to equal 65% of
the IPO price; 
  
 (iii) if the IPO Date is during October 2004,
the conversion price shall be adjusted to equal 60% of the IPO Price; 
  
 (iv) if the IPO Date is during November 2004, the conversion price shall be adjusted to equal 55% of the IPO Price; and 
  
 (v) if the IPO Date is between December 1, 2004 and August 31, 2005, the conversion price shall be adjusted to equal 50% of the IPO Price. 
  
 (c) In the event that the IPO has not been completed prior to the earlier of
September 1, 2005, or five (5) days prior to a Change of Control Transaction, the principal amount of this Note, and the accrued interest thereon, shall no longer be convertible into Common Stock but shall, instead, be convertible into shares of
Series B Preferred Stock at a per share purchase price of $1.50 per share and on other terms and conditions (including all ancillary contractual rights) no less favorable to the Holder than the terms and conditions upon which shares of the
Company’s Series B Preferred Stock were issued to any outstanding holder thereof; provided, however, that, if one or more Financing Transactions (other than an IPO) have been consummated between the date of this Note and such
date, the Holder may elect instead to convert all or any part of the outstanding principal amount of this Note, and the accrued interest thereon, into shares or other units of the class or series of Equity Securities sold and issued in any such
Financing Transaction at a conversion price equal to 80% of the lowest per share or per unit price paid by any other investor in such Financing Transaction and on other terms and conditions (including all ancillary contractual rights) no less
favorable to the Holder than the terms and conditions upon which any other investor acquired such Equity Securities in such Financing Transaction. 
  
 3.4 Delivery of Note and Share Certificates. Upon conversion of this Note pursuant to this Section 3, the Holder will deliver the original Note to
the Company for cancellation, and will execute a standard form of stock purchase agreement and/or other agreements and instruments as are necessary to document the issuance of the Conversion Stock upon the conversion of this Note. On, or as soon as
reasonably practicable after, such conversion, the Company shall issue and deliver to the Holder a certificate or certificates for the number of full shares or other units of Conversion Stock to which the Holder is entitled, a check with respect to
any fractional interest and, in the case of a partial conversion, a replacement Note evidencing the remaining balance due hereunder. The Company covenants that all shares of Conversion Stock issued upon conversion of this Note will, upon such
issuance, be fully paid and non-assessable and free from all taxes, liens and charges caused or created by the Company. 
  
 3.5 Adjustment of Conversion Rights. In the event that at any time while any portion of the principal of this Note remains outstanding the Company
grants conversion rights to any other lender containing provisions more favorable to such lender than the terms of this Note, the Holder’s conversion rights hereunder shall automatically be adjusted to conform to such more favorable provisions.

  

 4 

 4. Adjustment of Conversion Price and Number of Shares. The number of shares of Conversion Stock
issuable upon the conversion of this Note and the purchase price therefor shall be subject to adjustment from time to time upon the occurrence of certain events as follows: 
  
 4.1 Adjustment for Dividends in Stock, Cash or Other Property. In the event that at any time or from time to time on
or after the date of this Note the holders of the Common Stock (or any shares of stock or other securities at the time constituting Conversion Stock) shall have received or, on or after the record date fixed for the determination of eligible
stockholders, shall have become entitled to receive, without payment therefor, other or additional shares of capital stock of the Company or cash or other property (other than cash out of earnings or earned surplus, as determined in accordance with
generally accepted accounting principles) by way of a dividend or other distribution then, and in each such case, the Holder shall, upon conversion hereof, be entitled to receive, in addition to the number of shares of Conversion Stock receivable
thereupon, and without payment of any additional consideration therefor, the amount of such other or additional capital stock of the Company and/or such cash or other property which the Holder would have held on the date of such exercise had it been
the holder of record of such Conversion Stock on the date of this Note and had thereafter, during the period from the date of this Note to and including the date of such exercise, retained such shares and/or all other additional stock, cash or other
property receivable by it as aforesaid during such period, giving effect to all adjustments called for during such period by Sections 4.2 and 4.3. 
  
 4.2 Adjustment for Reclassification of Reorganization. Subject to the provisions of Section 3 hereof, in the event of any reclassification or
change of the outstanding securities of the Company (including the conversion of any series of the Company’s Preferred Stock into Common Stock, pursuant to the Company’s Certificate of Incorporation) any reorganization of the Company or
any consolidation or merger of the Company with any other corporation or corporations (other than a wholly-owned subsidiary) on or after the date of this Note, then and in each such case, the Holder of this Note, upon the conversion hereof at any
time after the consummation of such reclassification, change, reorganization, consolidation or merger shall be entitled to receive, in lieu of or in addition to the Conversion Stock receivable upon the exercise hereof prior to such consummation, the
stock or other securities to which such Holder would have been entitled upon such consummation if such Holder had converted this Note immediately prior thereto, all subject to further adjustment as provided in Sections 4.1 and 4.3. 
  
 4.3 Stock Splits and Reverse Stock Splits. If, at any time on or after
the date of this Note, the Company shall subdivide its outstanding shares of Common Stock (or shares of stock or other securities at the time constituting Conversion Stock) into a greater number of shares, the conversion price in effect immediately
prior to such subdivision shall thereby be proportionately reduced and the number of shares receivable upon conversion of this Note shall thereby be proportionately increased; and, conversely, if at any time on or after the date of this Note, the
outstanding number of shares of Common Stock (or shares of stock or other securities at the time constituting Conversion Stock) shall be combined into a smaller number of shares, the conversion price in effect immediately prior to such combination
shall thereby be proportionately increased and the number of shares receivable upon conversion of this Note shall be proportionately decreased. 
  

 5 

 5. Default. 
  
 5.1 Events of Default. The occurrence of any one or more of the following events shall constitute an “Event
of Default” hereunder: 
  
 (a) any failure by the
Company to pay any amount payable, or to issue any securities issuable, under this Note or any of the other Notes or in accordance with the terms hereof or thereof which default is not cured within thirty (30) days following notice thereof from the
Holder; 
  
 (b) any failure by the Company to pay any amount
payable, or any other event of default by the Company, under any other promissory note, loan agreement or credit facility to which the Company is a party; 
  
 (c) the Company’s breach of any representation or warranty made to the Holder hereunder or pursuant to the Master Agreement, or any of the other
agreements entered into between the Company and the Holder pursuant to the Master Agreement, or the Company’s breach of any covenant contained herein, in the Master Agreement or in any of such other agreements which is not cured within thirty
(30) days of the earlier of the Company learning of such breach or of notice thereof from the Holder; or 
  
 (d) the Company (i) has an order for relief entered against it under the federal Bankruptcy Code, (ii) makes an assignment for the benefit of its
creditors, (iii) applies for or seeks the appointment a receiver, liquidator, assignee, trustee or other similar official for it or for any substantial part of its property or any such official is appointed, other than upon Company’s request,
and such unrequested appointment continues for thirty (30) days, (iv) institutes proceedings seeking an order for relief under the federal Bankruptcy Code or seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution, winding up,
liquidation, reorganization, arrangement, adjustment or composition of it or any of its debts under other applicable federal or state law relating to creditor rights and remedies, or any such proceeding is filed against it, other than upon the
Company’s request, and such unrequested proceeding continues undismissed or unstayed for thirty (30) days, or (v) takes corporate action in furtherance of any of the foregoing actions. 
  
 5.2 Remedies. During the continuance of an Event of Default, the
Holder shall have the right to (i) accelerate the payment of the principal amount hereunder and all accrued interest thereon, and (ii) enforce this Note by exercise of any of the rights and remedies granted to it by applicable law. The Company shall
pay all reasonable attorneys’ fees and court costs incurred by the Holder in enforcing and collecting this Note as a result of an Event of Default. The Company hereby waives demand, notice, presentment, protest and notice of dishonor.

  
 5.3 Equitable Remedies. The Company acknowledges that
the Holder’s remedies at law in the event of any default or threatened default by the Company in the performance of or compliance with any of the terms of this Note are not and will not be adequate to compensate the Holder to the extent
permitted by law and that such terms may be specifically enforced by a decree for the specific performance of any agreement contained herein or by an injunction against a violation of any of the terms hereof or otherwise. 
  

 6 

 5.4 Waiver; Cumulative Remedies. No course of dealing or any delay or failure to exercise any
right hereunder on the Holder’s part shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. No single or partial waiver by the Holder of any provision of this Note or of any breach or
default hereunder or of any right or remedy shall operate as a waiver of any other provision, breach, default right or remedy or of the same provision, breach, default, right or remedy on a future occasion. The Holder’s rights and remedies are
cumulative and are in addition to all rights and remedies which the Holder may have in law or in equity or by statute or otherwise. 
  
 6. Registration Rights. Holder shall be entitled to all of the registration rights provided by the Investors Rights Agreement dated December 22,
2000, among the Company and the holders of its Series A Preferred Stock and Series B Preferred Stock, as amended, on a pro rata basis, with respect to the shares of Conversion Stock issuable upon conversion of this Note. 
  
 7. Amendments. This Note may not be amended or modified, nor may any
of its terms be waived, except by written instruments signed by the Company and the Holder and then only to the extent set forth therein. 
  
 8. Severability. If any provision of this Note is determined to be invalid, illegal or unenforceable, in whole or in part, the validity, legality
and enforceability of any of the remaining provisions or portions of this Note shall not in any way be affected or impaired thereby. 
  
 9. Binding Effect. This Note shall be binding upon, and shall inure to the benefit of, the Company and the Holder and their respective successors
and permitted assigns. The Company may not assign its rights and obligations hereunder without the Company’s prior written consent, given in its sole discretion and any unauthorized assignment shall be void. 
  
 10. Notices. Any notice required by any provision of this Note to be
given to the Holder shall be in writing and may be delivered by personal service or facsimile or sent by registered or certified mail, return receipt requested, with postage thereon fully prepaid. All such communications shall be addressed to the
Holder at its address appearing on the books of the Company. 
  
 11. Replacement. Upon the Company’s receipt of reasonably satisfactory evidence of the loss, theft, destruction or mutilation of this Note and (i) in the case of any such loss theft or destruction, upon delivery of indemnity
reasonably satisfactory to the Company in form and amount, or (ii) in the case of any such mutilation, upon surrender of this Note for cancellation, the Company, at its expense, shall execute and deliver, in lieu thereof, a new Note. 
  
 12. No Rights as Shareholder. This Note, as such, shall not entitle
the Holder to any rights as a shareholder of the Company, except as otherwise specified herein. 
  

 7 

 13. Headings and Governing Law. The descriptive headings in this Note are inserted for convenience
only and do not constitute a part of this Note. The validity, meaning and effect of this Note shall be determined in accordance with the laws of the State of California, without regard to principles of conflicts of law. 
  
 IN WITNESS WHEREOF, the Company has duly caused this Note to be signed in its
name and on its behalf by its duly authorized officer as of the date hereinabove written. 
  

			
	 ARCSOFT, INC.

		
	By:	 	 /s/ Alfred Larrenaga

	Title :	 	SVP & CFO
	Address:	 	46601 Fremont Boulevard
	 	 	Fremont, CA 95035

  

 8 

 Exhibit G 
  

Amendment No. 1 to Investors Rights Agreement 

 WAIVER OF RIGHT OF FIRST REFUSAL 
 and 
 AMENDMENT NO. 1 
 TO 
 INVESTORS RIGHTS AGREEMENT

  
 THIS WAIVER OF RIGHT OF FIRST REFUSAL and AMENDMENT is
made as of the 31 day of March, 2004, with regard to that certain Investors Rights Agreement (the “Rights Agreement”) dated as of December 22, 2000, by and among ArcSoft, Inc., a California corporation (the
“Company”), the holders of the Company’s Series A Preferred Stock (the “Series A Holders”) and the holders of the Company’s Series B Preferred Stock (the “Series B Holders” and,
collectively with the Series A Holders, the “Holders”) and Zoran Corporation, a Delaware corporation (the “Lender”). 
  
 RECITALS 
  
 A. The Company proposes to enter into a Master Loan Agreement (as the same may be amended from time to time, the “Master Agreement”)
under which, among other things, the Lender will lend the Company up to $4,000,000, evidenced by convertible promissory notes to be issued by the Company to the Lender (the “Notes”) and the Company will grant to the Lender an option
to purchase shares of the Company’s Common Stock (the “Option”). 
  
 B. Pursuant to the Master Agreement, among other things, the Lender is entitled to certain registration rights and related rights with regard to the Notes, the Option and the shares of the Company’s capital stock
issuable upon conversion of the Notes and exercise of the Option. 
  
 C. Pursuant to Section 6.7 of the Rights Agreement, the Rights Agreement may be amended and the observance of any term of the Rights Agreement may be waived with the prior written consent of the Company and the holders of a majority of the
outstanding shares of Series A Preferred Stock and Series B Preferred Stock, including any shares of Common Stock into which the Preferred Stock has been converted, voting as separate classes. 
  
 D. The undersigned Holders, holding the requisite number of outstanding
shares of Series A Preferred Stock and Series B Preferred Stock, desire to (i) facilitate the Master Agreement, (ii) consent to the granting to the Lender of such registration rights and (iii) waive any rights of first refusal such Holders may have
with regard to the issuance of the Notes, the Option or the shares of the Company’s capital stock issuable upon conversion or exercise thereof. 
  
 NOW, THEREFORE, the parties agree as follows: 
  
 1. Consent of Holders. The Holders hereby consent to granting to the Lender registration and related rights set forth in the Rights Agreement.

  

 -1- 

 2. Addition of Party to Agreement. Upon the effectiveness of this Waiver and Amendment, the Lender
shall be deemed to be a party to the Rights Agreement and shall be deemed to be a “Holder” thereunder for all purposes. 
  
 3. Amendment of Registration Rights. Upon the effectiveness of this Waiver and Amendment, Section 1.13 of the Rights Agreement shall be
amended to read as follows: 
  
 “‘Registrable
Securities’ shall mean (i) any Conversion Shares, (ii) any shares of Common Stock issued or issuable upon conversion of any convertible promissory note issued to Zoran Corporation (‘Zoran’) pursuant to the Master Loan Agreement
between the Company and Zoran (as the same may be amended from time to time, the ‘Master Agreement’), or upon conversion of any other equity securities issued upon such conversion (‘Zoran Conversion Shares;), (iii) any
shares of Common Stock issued or issuable upon exercise of the Option granted to Zoran pursuant to the Master Agreement (the ‘Zoran Option Shares’), (iv) any Common Stock issued in respect of, in exchange for or in replacement of
the Conversion Shares, the Zoran Conversion Shares or the Zoran Option Shares, or other securities issued pursuant to the conversion of the Preferred Stock, or upon any subdivision, stock split, stock dividend, combination, consolidation,
recapitalization or the like, and (v) any other shares of Common Stock now or later held by any holder of Registrable Securities acquired by such Holder pursuant to the Purchase Agreements or herein. Securities previously sold to the public pursuant
to a registered public offering or Rule 144 of the Securities Act shall cease to be Registrable Securities.” 
  
 4. Waiver of Rights of First Refusal. The Holders hereby waive any rights of all Holders under Section 3 of the Rights Agreement to participate in
the sale and issuance of the Notes and/or the Option, including, without limitation, any right to purchase a Note or an Option, or to receive notice of such sale and issuance beyond that notice provided by this Waiver and Amendment. 
  
 5. Effect of this Waiver and Amendment. Pursuant to Section 6.7 of the
Rights Agreement, the execution of this Waiver and Amendment by (a) the Company, (b) the holders of a majority of the outstanding shares of Series A Preferred Stock and (c) the holders of a majority of the outstanding shares of Series B Preferred
Stock shall render this Waiver and Amendment effective and binding against and upon all Holders. 
  
 6. Counterparts. This Waiver and Amendment may be executed in counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and were upon the same instrument. 
  
 7.
Effectiveness. This Waiver and Amendment shall be effective upon the Effective Date of the Master Agreement. In the event that such Effective Date does not occur for any reason, this Amendment shall not become effective. 
  

 -2- 

 8. Other Provisions. Except as specifically amended hereby, the Rights Agreement shall remain in
full force and effect. 
  
 IN WITNESS WHEREOF, the parties hereto
have executed this Waiver and Amendment as of the date first written above. 
  

			
	 ARCSOFT, INC.

		
	 By
	 	 /s/ Michael H. Deng

	 Print Name
	 	 Michael H. Deng

	 Title
	 	 President and CEO

	
	 ZORAN CORPORATION

		
	 By
	 	  

	 Print Name
	 	  

	 Title
	 	  

  

 -3- 

	
	 HOLDERS:

	  

	Print Name of Holder
	  

	Signature
	  

	Print Name (if signing on behalf of an entity)
	  

	Title (if applicable)

  

 -4-Amended and Restated Agreement of Limited Partnership

 Exhibit 10.1 

  
 AMENDED AND RESTATED 
  
 AGREEMENT OF LIMITED PARTNERSHIP 
  
 OF 
  
 PALADIN REALTY INCOME PROPERTIES, L.P. 
  

  
                                 , 2004 
  

 TABLE OF CONTENTS 
  

					
	 	 	 	  	Page

	 ARTICLE 1 DEFINED TERMS
	  	1
		
	 ARTICLE 2 ORGANIZATIONAL MATTERS
	  	14
			
	 2.1
	 	 Formation
	  	14
			
	 2.2
	 	 Name
	  	14
			
	 2.3
	 	 Registered Office and Agent
	  	15
			
	 2.4
	 	 Principal Place of Business
	  	15
			
	 2.5
	 	 Term and Termination
	  	15
			
	 2.6
	 	 Power of Attorney
	  	15
			
	 2.7
	 	 Effectiveness of this Agreement
	  	17
		
	 ARTICLE 3 PURPOSE AND POWERS
	  	17
			
	 3.1
	 	 Purpose and Business
	  	17
			
	 3.2
	 	 Powers
	  	18
		
	 ARTICLE 4 CAPITAL CONTRIBUTIONS; PARTNERSHIP UNITS; ADDITIONAL FUNDS
	  	18
			
	 4.1
	 	 Capital Contributions of the Partners
	  	18
			
	 4.2
	 	 Issuance of Additional Partnership Interests
	  	19
			
	 4.3
	 	 Issuance of Securities by the General Partner
	  	20
			
	 4.4
	 	 Additional Funds
	  	21
			
	 4.5
	 	 No Third-Party Beneficiary
	  	21
			
	 4.6
	 	 No Interest
	  	22
			
	 4.7
	 	 No Preemptive Rights
	  	22
			
	 4.8
	 	 Capital Accounts; Adjustments to Carrying Values
	  	22
		
	 ARTICLE 5 DISTRIBUTIONS
	  	23
			
	 5.1
	 	 Distributions
	  	23

  

 - i - 

					
	 5.2
	 	 Qualification as a REIT
	  	24
			
	 5.3
	 	 Withholding
	  	24
			
	 5.4
	 	 Additional Partnership Interests
	  	24
		
	 ARTICLE 6 ALLOCATIONS
	  	24
			
	 6.1
	 	 Allocation of Profits and Net Losses
	  	24
			
	 6.2
	 	 Special Allocations
	  	25
			
	 6.3
	 	 Tax Allocations
	  	27
			
	 6.4
	 	 Revisions to Allocations to Reflect Issuance of Partnership Interests
	  	27
		
	 ARTICLE 7 MANAGEMENT AND OPERATIONS OF BUSINESS
	  	27
			
	 7.1
	 	 Management
	  	27
			
	 7.2
	 	 Certificate of Limited Partnership
	  	31
			
	 7.3
	 	 Reimbursement of the General Partner
	  	31
			
	 7.4
	 	 Acquisition of Limited Partner Interests by the General Partner
	  	32
			
	 7.5
	 	 Transactions with Affiliates
	  	32
			
	 7.6
	 	 Indemnification
	  	33
			
	 7.7
	 	 Liability of the General Partner
	  	35
			
	 7.8
	 	 Other Matters Concerning the General Partner
	  	36
			
	 7.9
	 	 Title to Partnership Assets
	  	37
			
	 7.10
	 	 Reliance by Third Parties
	  	37
		
	 ARTICLE 8 RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
	  	38
			
	 8.1
	 	 Limitation of Liability
	  	38
			
	 8.2
	 	 No Right to Participate in the Management of Business
	  	38
			
	 8.3
	 	 Outside Activities of Limited Partners
	  	38
			
	 8.4
	 	 Return of Capital
	  	39
			
	 8.5
	 	 Rights of Limited Partners Relating to the Partnership
	  	39

  

 - ii - 

					
	 8.6
	 	 Redemption Right
	  	40
		
	 ARTICLE 9 BOOKS, RECORDS, ACCOUNTING AND REPORTS
	  	43
			
	 9.1
	 	 Records and Accounting
	  	43
			
	 9.2
	 	 Reports
	  	43
		
	 ARTICLE 10 TAX MATTERS
	  	43
			
	 10.1
	 	 Preparation of Tax Returns
	  	43
			
	 10.2
	 	 Tax Elections
	  	44
			
	 10.3
	 	 Tax Matters Partner
	  	44
			
	 10.4
	 	 Organizational Expenses
	  	45
			
	 10.5
	 	 Withholding
	  	45
		
	 ARTICLE 11 TRANSFERS AND WITHDRAWALS
	  	46
			
	 11.1
	 	 Transfer
	  	46
			
	 11.2
	 	 Transfer of the General Partner’s General Partner Interest
	  	47
			
	 11.3
	 	 Limited Partners’ Rights to Transfer
	  	47
			
	 11.4
	 	 Substituted Limited Partners
	  	48
			
	 11.5
	 	 Assignees
	  	49
			
	 11.6
	 	 General Provisions
	  	49
		
	 ARTICLE 12 ADMISSION OF PARTNERS
	  	51
			
	 12.1
	 	 Admission of Successor General Partner
	  	51
			
	 12.2
	 	 Admission of Additional Limited Partners
	  	51
			
	 12.3
	 	 Amendment of Agreement and Certificate of Limited Partnership
	  	52
		
	 ARTICLE 13 DISSOLUTION, LIQUIDATION AND TERMINATION
	  	52
			
	 13.1
	 	 Dissolution
	  	52
			
	 13.2
	 	 Winding Up; Liquidation
	  	53
			
	 13.3
	 	 No Obligation to Contribute Deficit
	  	54

  

 - iii - 

					
	 13.4
	 	 Notice of Dissolution
	  	54
			
	 13.5
	 	 Termination of Partnership and Cancellation of Certificate of Limited Partnership
	  	55
			
	 13.6
	 	 Reasonable Time for Winding-Up
	  	55
			
	 13.7
	 	 Waiver of Partition
	  	55
		
	 ARTICLE 14 AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS
	  	55
			
	 14.1
	 	 Amendments
	  	55
			
	 14.2
	 	 Meetings of the Partners
	  	56
		
	 ARTICLE 15 GENERAL PROVISIONS
	  	57
			
	 15.1
	 	 Addresses and Notice
	  	57
			
	 15.2
	 	 Titles and Captions
	  	57
			
	 15.3
	 	 Pronouns and Plurals
	  	57
			
	 15.4
	 	 Further Action
	  	57
			
	 15.5
	 	 Binding Effect
	  	57
			
	 15.6
	 	 Creditors
	  	57
			
	 15.7
	 	 Waiver
	  	57
			
	 15.8
	 	 Counterparts
	  	58
			
	 15.9
	 	 Applicable Law
	  	58
			
	 15.10
	 	 Invalidity of Provisions
	  	58
			
	 15.11
	 	 Merger
	  	58
			
	 15.12
	 	 No Rights as Stockholders
	  	58
			
	 15.13
	 	 Entire Agreement
	  	58

  

					
	 EXHIBITS

	
	 Exhibit A - Partner’s Contributions and Partnership Interests

	
	 Exhibit B - Form of Notice of Redemption Request

  

 - iv - 

 AMENDED AND RESTATED 
  
 AGREEMENT OF LIMITED PARTNERSHIP 
  
 OF 
  
 PALADIN REALTY INCOME PROPERTIES, L.P. 
  
 THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF PALADIN REALTY INCOME PROPERTIES, L.P. (this “Agreement”), dated as of
                    , 2004, is entered into by and among PALADIN REALTY INCOME PROPERTIES, INC., a Maryland corporation, as general partner
(the “General Partner”), and those Persons who have executed this Agreement or a counterpart hereof, or who become parties hereto pursuant to the terms of this Agreement. 
  
 W I T N E S S E T H 
  
 WHEREAS, the General Partner and the Initial Limited Partner formed Paladin
Realty Income Properties, L.P. (the “Partnership”) as a limited partnership pursuant to the Act by filing a certificate of limited partnership with the Secretary of State of the State of Delaware on October 31, 2003; 
  
 WHEREAS, the General Partner and the Initial Limited Partner entered into
that certain Agreement of Limited Partnership of Paladin Realty Income Properties, L.P., dated as of October 31, 2003 (the “Prior Partnership Agreement”), providing for the organization of the Partnership upon the terms and
conditions set forth therein; 
  
 WHEREAS, the parties thereto
desire to amend and restate the Prior Partnership Agreement in its entirety pursuant to the terms hereof; and 
  
 WHEREAS, this Agreement shall constitute the “partnership agreement” (within the meaning of the Act) of the Partnership, and shall be binding
upon all Persons now or at any time hereafter who are Partners; 
  
 NOW, THEREFORE, in consideration of the mutual covenants and obligations set forth in this Agreement, and of other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto, intending
legally to be bound, hereby agree as follows: 
  
 ARTICLE 1

 DEFINED TERMS 
  
 Capitalized terms used in this Agreement (including exhibits, schedules and amendments) shall have the meanings set forth below or in the Section of this
Agreement referred to below, except as otherwise expressly indicated or limited by the context in which they appear in this Agreement. All terms defined in this Agreement in the singular have the same meanings when used in the plural and vice versa.
Accounting terms used but not otherwise defined shall have the meanings given to them under GAAP. 

 1.1 “Act” means the Delaware Revised Uniform Limited Partnership Act, as amended from time to time, and
any successor to such statute. 
  
 1.2 “Additional Limited
Partner” means a Person that has executed and delivered an additional limited partner signature page in the form attached hereto and has been admitted to the Partnership as a Limited Partner pursuant to Section 12.2. 
  
 1.3 “Adjusted Capital Account Deficit” means with respect to any Partner,
the negative balance, if any, in such Partner’s Capital Account as of the end of any relevant Fiscal Year, determined after giving effect to the following adjustments: 
  
 (a) credit to such Capital Account any portion of such negative balance which such Partner (i) is treated as obligated to
restore to the Partnership pursuant to the provisions of Section 1.704-1(b)(2)(ii)(c) of the Treasury Regulations, or (ii) is deemed to be obligated to restore to the Partnership pursuant to the penultimate sentences of Sections 1.704-2(g)(1) and
1.704-2(i)(5) of the Treasury Regulations; and 
  
 (b) debit to
such Capital Account the items described in Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6) of the Treasury Regulations. 
  
 This definition of Adjusted Capital Account Deficit is intended to comply with the provisions of Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and shall be
interpreted consistently therewith. 
  
 1.4 “Advisor” means
Paladin Realty Advisors, LLC, the advisor to the Partnership and the General Partner pursuant to the Advisory Agreement. 
  
 1.5 “Advisory Agreement” means that certain Advisory Agreement by and among the Advisor, the Partnership and the General Partner dated as of
                    , 2004. 
  
 1.6 “Affiliate” means, with respect to a specified Person, any Person that, directly or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with the specified Person. For this purpose, the term “control” (including the terms “controlling,” “controlled by” and “under common control with”) means the
possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. 
  
 1.7 “Agreed Value” means (a) in the case of any Contributed Property, the
fair market value of such Contributed Property at the time such property is contributed as determined by the General Partner and agreed to by the contributing party, reduced by any liabilities either assumed by the Partnership upon such contribution
or to which such property is subject when contributed, and (b) in the case of any property distributed to a Partner by the Partnership, the Partnership’s Carrying Value of such property at the time such property is distributed, reduced by any
indebtedness either assumed by such Partner upon such distribution or to which such property is subject at the time of distribution. 
  
 1.8 “Agreement” means this Amended and Restated Agreement of Limited Partnership of Paladin Realty Income Properties, L.P., as originally executed and as
amended, modified, supplemented or restated from time to time, as the context requires. 
  

 - 2 - 

 1.9 “Appraised Value” means the value of the Partnership Assets as determined by an appraisal made by an
Independent Appraiser. 
  
 1.10 “Articles of Incorporation” means
the General Partner’s Articles of Incorporation, filed with the Maryland State Department of Assessments and Taxation, or other organizational document governing the General Partner, as amended, modified, supplemented or restated from time to
time. 
  
 1.11 “Assignee” means a Person to whom one or more
Partnership Units have been transferred in a manner permitted under this Agreement, but who has not become a Substituted Limited Partner, and who has the rights set forth in Section 11.5. 
  
 1.12 “Available Operating Cash” means the cash flows derived by the Partnership from the operation of the
Partnership’s business (other than any Net Capital Event Proceeds or Capital Contributions) before any deduction for depreciation or amortization and after deduction of: 
  
 (a) all operating costs and expenses including taxes; 
  
 (b) all payments of principal, interest and other charges in respect of any Partnership indebtedness; 
  
 (c) all expenditures for capital improvements to the Partnership assets or
property; and 
  
 (d) all reserves, whether for working capital,
debt repayment, new portfolio investments or otherwise (including for the redemption of Partnership Units) that are established by the General Partner in the exercise of its sole and absolute discretion. 
  
 1.13 “Book Gain” or “Book Loss” means the gain or loss
recognized by the Partnership for purposes of Section 704(b) of the Code in any Fiscal Year by reason of any sale or disposition with respect to any of the property or assets of the Partnership. Such Book Gain or Book Loss shall be computed by
reference to the Carrying Value of such property or assets as of the date of such sale or disposition, rather than by reference to the tax basis of such property or assets as of such date, and each and every reference herein to “gain” or
“loss” shall be deemed to refer to Book Gain or Book Loss, rather than to tax gain or tax loss, unless the context manifestly otherwise requires. 
  
 1.14 “Business Day” means any day except a Saturday, Sunday or other day on which commercial banks in Los Angeles, California are authorized or required
by law to close. 
  
 1.15 “Capital Account” has the meaning set
forth in Section 4.8. 
  
 1.16 “Capital Contribution” means, with
respect to any Partner, any cash, cash equivalents or the Agreed Value of Contributed Property that such Partner contributes or is deemed to contribute to the Partnership pursuant to Article 4 hereof. 
  
 1.17 “Capital Transaction” means (a) any sale, exchange, taking by eminent
domain, damage, destruction or other disposition of all or any part of the assets of the Partnership, any 

  

 - 3 - 

 
Subsidiary or any other Person in which the Partnership holds a direct or indirect interest, other than tangible personal property disposed of in the
ordinary course of business; or (b) any financing or refinancing of any indebtedness of the Partnership, any Subsidiary or any other Person in which the Partnership holds a direct or indirect interest; provided, that the receipt by the Partnership
of Capital Contributions shall not constitute a Capital Transaction; and provided further that no Terminating Capital Transaction shall constitute a Capital Transaction. 
  
 1.18 “Carrying Value” means, except as otherwise provided herein, (a) with respect to a Contributed Property, the fair
market value of such Contributed Property at the time such property is contributed, as determined by the General Partner and agreed to by the contributing partner, without reduction for any liabilities either assumed by the Partnership upon such
contribution or to which such property was subject when contributed, reduced (but not below zero) by all Depreciation with respect to such property charged to the Partners’ Capital Accounts, and (b) with respect to any other Partnership Asset,
the adjusted basis of such Partnership Asset for Federal income tax purposes, all as of the time of determination. The Carrying Value of any property shall be adjusted in accordance with Section 4.8(b) from time to time to reflect changes, additions
or other adjustments to the Carrying Value, as deemed appropriate by the General Partner. 
  
 1.19 “Cash Amount” means an amount of cash equal to the Value of the REIT Stock Amount on the Valuation Date. 
  

1.20 “Certificate” means the Certificate of Limited Partnership of the Partnership, filed on October 31, 2003, as amended, restated, supplemented or
otherwise modified from time to time as herein provided in accordance with the Act. 
  
 1.21 “Code” means the Internal Revenue Code of 1986, as amended from time to time, and any subsequent Federal law of similar import, and, to the extent applicable, any Treasury Regulations promulgated thereunder.

  
 1.22 “Common Stock” means a share of the common stock of the
General Partner, par value $.01 per share. Common Stock may be issued in one or more classes or series in accordance with the terms of the Articles of Incorporation. If there is more than one class or series of Common Stock, the term “Common
Stock” shall, as the context requires, be deemed to refer to the class or series of Common Stock that correspond to the class or series of Partnership Units for which the reference to Common Stock is made. 
  
 1.23 “Consent” means the consent or approval of a proposed action by a
Partner given in accordance with Section 14.2 hereof. 
  
 1.24 “Consent of
the Outside Limited Partners” means the Consent of the Outside Limited Partners holding a number of Partnership Units greater than fifty percent (50%) of the aggregate Partnership Units held by all Outside Limited Partners. 
  
 1.25 “Contributed Property” means each property or other asset (but
excluding cash and cash equivalents), in such form as may be contributed by a Partner to the Partnership as permitted by the Act. 
  

 - 4 - 

 1.26 “Depreciation” means, for each Fiscal Year, an amount equal to the depreciation, amortization or
other cost recovery deduction allowable with respect to an asset for such year or other period for Federal income tax purposes; provided, that if the Carrying Value of an asset differs from its adjusted basis for Federal income tax purposes at the
beginning of any such year or other period, Depreciation shall be determined in the manner described in Treasury Regulations Section 1.704-1(b)(2)(iv)(g)(3) or 1.704-3(d)(2), whichever is applicable, and if such asset has a zero adjusted tax basis,
Depreciation shall be an amount determined under any reasonable method selected by the General Partner. 
  
 1.27 “Effective Date” means the date of first closing of the offering of Common Stock pursuant to the Registration Statement. 
  
 1.28 “8% Return” means, with respect to the General Partner, an amount calculated like simple interest at the rate of eight
percent (8%) per annum calculated on the varying daily balances of Invested Capital of the General Partner during the period to which the 8% Return relates, and determined on the basis of a 360-day year/30-day month, cumulative for the period for
which such 8% Return is being determined. 
  
 1.29 “8% Return
Account” means, with respect to the General Partner, as of any relevant date, an amount equal to the excess of (i) the 8% Return that has accrued with respect to the Invested Capital of the General Partner through such date, over (ii) the
sum of (A) the cumulative distributions of Available Cash and Net Capital Event Proceeds made to the General Partner prior to such relevant date pursuant to Section 5.1 hereof, and (B) the cumulative amounts paid to the General Partner in redemption
of its Partnership Units pursuant to Section 8.6(g) as of such date, other than such distributions and payments that are applied to reduce the Unrecovered Contribution Account of the General Partner. All amounts distributed and paid to the General
Partner pursuant to Sections 5.1 and 8.6(g) shall first be applied to reduce the Unrecovered Contribution Account of the General Partner until the balance of such Unrecovered Contribution Account equals zero ($0), and then shall be applied to reduce
the 8% Return Account of the General Partner. 
  
 1.30 “Entity”
means any general partnership, limited liability company, proprietorship, corporation, joint venture, joint-stock company, limited partnership, limited liability partnership, business trust, firm, trust, estate, governmental entity, cooperative,
association or other foreign or domestic enterprise. 
  
 1.31
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time (or any corresponding provisions of succeeding laws). 
  
 1.32 “Fiscal Year” means the fiscal year of the Partnership and shall be the same as its taxable year, which shall be the
calendar year unless otherwise determined by the General Partner in accordance with the Code. 
  
 1.33 “GAAP” means United States generally accepted accounting principles, as in effect from time to time. 
  
 1.34 “General Partner” means Paladin Realty Income Properties, Inc., a Maryland corporation, and any successor as general partner of the Partnership.

  

 - 5 - 

 1.35 “General Partner Interest” means a Partnership Interest held by the General Partner, in its
capacity as general partner. A General Partner Interest may be expressed as a number of Partnership Units. 
  
 1.36 “Incapacity” or “Incapacitated” means: 
  
 (a) as to any individual Partner, death, total physical disability or entry by a court of competent jurisdiction adjudicating him incompetent to manage
his person or his estate; 
  
 (b) as to any corporation that is a
Partner, the filing of a certificate of dissolution, or its equivalent, for the corporation or the revocation of its charter; 
  
 (c) as to any partnership that is a Partner, the dissolution and commencement of winding up of the partnership; 
  
 (d) as to any estate that is a Partner, the distribution by the fiduciary of
the estate’s entire interest in the Partnership; 
  
 (e) as
to any trustee of a trust that is a Partner, the termination of the trust (but not the substitution of a new trustee); or 
  
 (f) as to any Partner, the bankruptcy of such Partner, which shall be deemed to have occurred when: 
  
 (i) the Partner commences a voluntary proceeding seeking
liquidation, reorganization or other relief under any bankruptcy, insolvency or other similar law now or hereafter in effect; 
  
 (ii) the Partner is adjudged as bankrupt or insolvent, or a final and nonappealable order for relief under any bankruptcy, insolvency or
similar law now or hereafter in effect has been entered against the Partner; 
  
 (iii) the Partner executes and delivers a general assignment for the benefit of the Partner’s creditors; 
  
 (iv) the Partner files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against
the Partner in any proceeding of the nature described in clause (ii) above; 
  
 (v) the Partner seeks, consents to or acquiesces in the appointment of a trustee, receiver or liquidator for the Partner or for all or any substantial part of the Partner’s assets; 
  
 (vi) any proceeding seeking liquidation, reorganization or
other relief of or against such Partner under any bankruptcy, insolvency or other similar law now or hereafter in effect has not been dismissed within one hundred twenty (120) days after the commencement thereof; 
  

 - 6 - 

 (vii) the appointment without the Partner’s consent or acquiescence of a trustee,
receiver or liquidator has not been vacated or stayed within ninety (90) days of such appointment; or 
  
 (viii) an appointment referred to in clause (vii) which has been stayed is not vacated within ninety (90) days after the expiration of any
such stay. 
  
 1.37 “Indemnitee” means 
  
 (a) any Person made a party to a proceeding by reason of its status as:

  
 (i) the General Partner, 
  
 (ii) a Limited Partner, 
  
 (iii) the Advisor, 
  
 (iv) a director, trustee, manager, member or officer of the
Partnership, the General Partner or the Advisor, or 
  
 (v) a director, trustee, manager, member or officer of any other Entity, serving in such capacity at the request of the Partnership, the General Partner or the Advisor, acting on behalf of the Partnership or the General Partner, or

  
 (b) such other Persons (including Affiliates of the General
Partner) as the General Partner may designate from time to time (whether before or after the event giving rise to potential liability), in its sole and absolute discretion. 
  
 1.38 “Independent Appraiser” means an appraiser of real estate with no material current or prior business or personal
relationship with the Advisor, the Partnership, the General Partner or the directors of the General Partner, that, in the determination of the General Partner, is qualified to appraise real estate by virtue of being engaged to a substantial extent
in the business of rendering opinions regarding the value of assets of the type held by the Partnership. Membership in a nationally recognized appraisal society such as the American Institute of Real Estate Appraisers or the Society of Real Estate
Appraisers shall be conclusive evidence of such qualification. 
  
 1.39
“Initial Limited Partner” means Paladin Realty Advisors, LLC. 
  
 1.40 “Invested Capital” means, with respect to the General Partner, as of any relevant date, an amount equal to the excess of (i) the aggregate amount of cash contributed or deemed contributed by the General Partner to the
Partnership from the gross proceeds of the issuance by the General Partner of REIT Stock or other equity Securities pursuant to Article IV hereof, over (ii) the sum of (A) the cumulative distributions of Net Sales Proceeds made to the General
Partner pursuant to Section 5.1(c) as of such date, and (B) the cumulative amounts paid to the General Partner in redemption of its Partnership Units pursuant to Section 8.6(g) as of such date. 
  
 1.41 “IRS” shall mean the Internal Revenue Service of the United States.

  

 - 7 - 

 1.42 “Lien” means any lien, security interest, mortgage, deed of trust, charge, claim, encumbrance,
pledge, option, right of first offer or first refusal and any other right or interest of others of any kind or nature, actual or contingent, or other similar encumbrance of any nature whatsoever. 
  
 1.43 “Limited Partner” means, prior to the admission of the first Additional
Limited Partner to the Partnership, the Initial Limited Partner, and thereafter any Person named as a limited partner of the Partnership in Exhibit A, as such Exhibit may be amended from time to time, upon the execution and delivery by such
Person of an additional limited partner signature page, including any Additional Limited Partner or Substituted Limited Partner in each case, in such Person’s capacity as a limited partner of the Partnership. 
  
 1.44 “Limited Partner Interest” means a Partnership Interest of a Limited
Partner in the Partnership. A Limited Partner Interest may be expressed as a number of Partnership Units. 
  
 1.45 “Liquidating Event” has the meaning set forth in Section 13.1 hereof. 
  
 1.46 “Liquidator” has the meaning set forth in Section 13.2 hereof. 
  
 1.47 “Listing Event” means the listing of the REIT Stock on a national securities exchange or quotation of the REIT Stock
on the Nasdaq Stock Market. 
  
 1.48 “Listing Date” means the
date on which a Listing Event occurs. 
  
 1.49 “Market Value”
means the market value of the REIT Stock as of the date of a Listing Event, which shall be equal to the product of (a) the number of shares of REIT Stock issued and outstanding at the time of the Listing Event, multiplied by (b) the average Listed
Market Price (as defined below) of a share of REIT Stock for the 30 trading days beginning on the 180th day after
the Listing Date. The “Listed Market Price” of a share of REIT Stock for each such trading day shall be the last reported sale price on such day or, if no sale takes place on such day, the average of the closing bid and asked prices on
such day, as reported on the national securities exchange on which the REIT Stock is listed for trading, or, if the REIT Stock is not listed for trading on a national securities exchange, as reported by the Nasdaq Stock Market. 
  
 1.50 “Nasdaq Stock Market” means the National Market of the National
Association of Securities Dealers, Inc. Automated Quotation System. 
  
 1.51
“Net Capital Event Proceeds” means, with respect to any Partnership Asset (or portion thereof), the proceeds, if any, with respect to a Capital Transaction related to such Partnership Asset, net of (a) any costs and expenses incurred
in connection with such Capital Transaction, (b) any of such proceeds which are used to repay indebtedness, (c) any insurance proceeds applied to restoration, repair or rebuilding, and (d) any proceeds of business interruption insurance, and after
setting aside appropriate reserves, as determined by the General Partner in its sole and absolute discretion. 
  
 1.52 “Net Sales Proceeds” means any Net Capital Event Proceeds other than proceeds from any transaction or event described under clause (b) of the definition herein of Capital Transaction; provided,
that the receipt by the Partnership of Capital Contributions shall not 

  

 - 8 - 

 
constitute Net Sales Proceeds; and provided further that the proceeds of a Terminating Capital Transaction shall not constitute Net Sales Proceeds.

  
 1.53 “Nonrecourse Deductions” has the meaning set forth in
Sections 1.704-2(b)(1) and 1.704-2(c) of the Treasury Regulations. 
  
 1.54
“Nonrecourse Liabilities” has the meaning set forth in Section 1.704-2(b)(3) of the Treasury Regulations. 
  
 1.55 “Notice of Redemption Request” means a notice of redemption request substantially in the form of Exhibit B attached hereto. 
  
 1.56 “Outside Limited Partners” means the Limited Partners, excluding the
Initial Limited Partner and any Limited Partner that is an Affiliate of the General Partner or the Initial Limited Partner. 
  
 1.57 “Partner” means a General Partner or a Limited Partner, and “Partners” means the General Partner and the Limited Partners, collectively.

  
 1.58 “Partner Minimum Gain” means an amount, with respect to
each Partner’s Partner Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if such Partner Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance with Treasury Regulations Section 1.704-2(i)(3).

  
 1.59 “Partner Nonrecourse Debt” has the meaning set forth in
Treasury Regulations Section 1.704-2(b)(4). 
  
 1.60 “Partner Nonrecourse
Deductions” has the meaning set forth in Treasury Regulations Section 1.704-2(i)(2), and the amount of Partner Nonrecourse Deductions with respect to a Partner Nonrecourse Debt for a Partnership taxable year shall be determined in
accordance with the rules of Treasury Regulations Section 1.704-2(i)(2). 
  
 1.61 “Partnership” means Paladin Realty Income Properties, L.P., and any successor thereto. 
  
 1.62 “Partnership Asset” means the interest of the Partnership in any Entity or security (whether in corporate securities, equity, debt or hybrid
securities, partnership or joint venture interests, other contractual rights or otherwise), or any other Real Estate Assets or other assets owned, directly or indirectly, by the Partnership, as determined by the General Partner. 
  
 1.63 “Partnership Interest” means the entire ownership interest of a Partner
in the Partnership at any particular time which represents a Capital Contribution by such Partner and which includes the right of such Partner to any and all benefits to which such Partner may be entitled as provided in this Agreement, together with
the obligations of such Partner to comply with all terms and provisions of this Agreement. A Partnership Interest may be expressed as a number of Partnership Units. 
  
 1.64 “Partnership Minimum Gain” has the meaning set forth in Regulations Section 1.704-2(b)(2), and the amount of
Partnership Minimum Gain, as well as any net increase or decrease in 

  

 - 9 - 

 
a Partnership Minimum Gain, for a Partnership taxable year shall be determined in accordance with the rules of Treasury Regulations Section 1.704-2(d).

  
 1.65 “Partnership Record Date” means the record date
established by the General Partner for the distribution by the Partnership of Available Operating Cash, Net Capital Event Proceeds or other Partnership Assets pursuant to Section 5.1 hereof, which record date shall be the same as the record date
established by the General Partner for a distribution to its stockholders of some or all of its portion of such distribution by the Partnership. 
  
 1.66 “Partnership Unit” means a unit of Partnership Interest with the rights, powers and duties set forth herein, designated as such on Exhibit A
and expressed in the number set forth on Exhibit A, as such exhibit may be amended from time to time. 
  
 1.67 “Percentage Interest” means, as to each Partner, the percentage determined by dividing the total number of Partnership Units owned by such Partner by the aggregate number of Partnership Units
then issued and outstanding, as set forth on Exhibit A, as such exhibit may be amended from time to time. 
  
 1.68 “Permitted Transferee” means with respect to a Person, (a) any Affiliate of such Person, (b) the spouse of such Person or any ancestor, descendent
or sibling of such Person or of the spouse of such Person, or (c) any trust for the benefit of such Person or any other person described in clause (b) of this Section 1.68. 
  
 1.69 “Person” means any individual or Entity, and the heirs, executors, administrators, legal representatives, successors
and assigns of such individual or Entity where the context so permits. 
  
 1.70
“Profits” and “Losses” means, for each Fiscal Year or other period for which allocations to Partners are made, an amount equal to the Partnership’s taxable income or loss for such period determined in accordance
with Federal income tax principles, with the following adjustments: 
  
 (a) any income of the Partnership that is exempt from Federal income tax and not otherwise taken into account in computing Profits or Losses pursuant to this provision shall be added to such taxable income or loss; 
  
 (b) any expenditure of the Partnership described in Section 705(a)(2)(B) of
the Code or treated as Code Section 705(a)(2)(B) expenditures pursuant to Section 1.704-1(b)(2)(iv)(i) of the Treasury Regulations, and not otherwise taken into account in computing Profits or Losses pursuant to this provision, shall be subtracted
from such taxable income or loss; 
  
 (c) in the event the
Carrying Value of any Partnership asset is adjusted pursuant to this Agreement, the amount of such adjustment shall be taken into account as gain or loss from the disposition of such asset for purposes of computing Profits or Losses, and shall be
allocated in accordance with the provisions of Article 6; 
  
 (d)
Book Gain or Book Loss from a Capital Transaction shall be taken into account in lieu of any tax gain or tax loss recognized by the Partnership by reason of such Capital Transaction; 
  

 - 10 - 

 (e) in lieu of the depreciation, amortization, and other cost recovery deductions taken into account in
computing such taxable income or loss, there shall be taken into account Depreciation for such Fiscal Year or other period, computed as provided in this Agreement; 
  
 (f) to the extent an adjustment to the adjusted tax basis of any Partnership asset pursuant to Section 734(b) or Section
743(b) of the Code is required pursuant to Treas. Reg. § 1.704-1(b)(2)(iv)(m)(4) to be taken into account in determining Capital Accounts as a result of a distribution other than in liquidation of a Partner’s interest in the Partnership,
the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the basis of the Partnership asset) or loss (if the adjustment decreases the basis of the Partnership asset) from the disposition of the Partnership asset
and shall be taken into account for purposes of computing Profits or Losses; and 
  
 (g) any items which are specially allocated pursuant to Section 6.2 shall not be taken into account in computing Profits or Losses. 
  
 If the Partnership’s taxable income or loss for such Fiscal Year or other period, as adjusted in the manner provided above, is a
positive amount, such amount shall be the Partnership’s Profits for such Fiscal Year or other period; and if a negative amount, such amount shall be the Partnership’s Losses for such Fiscal Year or other period. 
  
 1.71 “Prohibited Transferee” means any Person who is a: 
  
 (a) person or entity who is a “designated national,”
“specially designated national,” “specially designated terrorist,” “specially designated global terrorist,” “foreign terrorist organization,” or “blocked person” within the definitions set forth in
the Foreign Assets Control Regulations of the United States Treasury Department, 31 C.F.R., Subtitle B, Chapter V, as amended; 
  
 (b) person acting on behalf of, or an entity owned or controlled by, any government against whom the United States maintains economic sanctions or
embargoes under the Regulations of the United States Treasury Department, 31 C.F.R., Subtitle B, Chapter V, as amended, including, but not limited to, the “Government of Sudan,” the “Government of Iran,” the “Government of
Libya,” and the “Government of Iraq;” or 
  
 (c)
person or entity subject to additional restrictions imposed by the following statutes or Regulations and Executive Orders issued thereunder: the Trading with the Enemy Act, 50 U.S.C. app. §§1 et. seq., the Iraq Sanctions Act, Pub. L.
101-513, Title V, §§ 586 to 586J, 104 Stat. 2047, the National Emergencies Act, 50 U.S.C. §§ 1601 et. seq., the Antiterrorism and Effective Death Penalty Act of 1996, Pub. L. 104-132, 110 Stat. 1214-1319, the International
Emergency Economic Powers Act, 50 U.S.C. §§ 1701 et seq., the United Nations Participation Act, 22 U.S.C. § 287c, the International Security and Development Cooperation Act, 22 U.S.C. § 2349aa-9, the Nuclear Proliferation
Prevention Act of 1994, Pub. L. 103-236, 108 Stat. 507, the Foreign Narcotics Kingpin Designation Act, 21 U.S.C. §§ 1901 et. seq., the Iran and Libya Sanctions Act of 1996, Pub. L. 104-172, 110 Stat. 1541, the Cuban Democracy Act, 22
U.S.C. §§ 6001 et seq., the Cuban Liberty and Democratic Solidarity Act, 22 U.S.C. §§ 6021-91, and the Foreign Operations, Export Financing and Related Programs Appropriations Act, 1997, 

  

 - 11 - 

 
Pub. L. 104-208, 110 Stat. 3009-172, or any other law of similar import as to any non-U.S. country, as each such Act or law has been or may be amended,
adjusted, modified, or reviewed from time to time. 
  
 1.72 “Real Estate
Assets” means unimproved and improved real property, real estate-related assets and any direct or indirect interest therein (including, without limitation, fee or leasehold interests, options, leases, partnership and joint venture
interests, equity and debt securities of entities that own real estate, first or second mortgages on real property, mezzanine loans secured by junior liens on real property, preferred equity interests secured by a property owner’s interest in
real property and other contractual rights in real estate). 
  
 1.73
“Redeeming Partner” has the meaning set forth in Section 8.6. 
  
 1.74 “Redemption Amount” means either the Cash Amount or the REIT Stock Amount, as determined by the General Partner in its sole and absolute discretion. 
  
 1.75 “Redemption Right” has the meaning set forth in Section 8.6. 
  
 1.76 “Registration Statement” means the Registration Statement on Form S-11
to be filed by the General Partner with the Securities and Exchange Commission, and any amendments thereto made at any time. 
  
 1.77 “REIT” means a “real estate investment trust” as defined under Section 856 of the Code. 
  
 1.78 “REIT Notice” has the meaning set forth in Section 8.6(g). 

 
 1.79 “REIT Requirements” has the meaning set forth in Section 5.2.

  
 1.80 “REIT Stock” means the Common Stock and all other shares
of capital stock of the General Partner. 
  
 1.81 “REIT Stock
Amount” means a number of shares of REIT Stock equal to the number of Partnership Units offered by redemption by a Redeeming Partner; provided that in the event that the General Partner issues to all holders of REIT Stock rights, options,
warrants, or convertible or exchangeable securities entitling stockholders of the General Partner to acquire REIT Stock, or any other securities or property (collectively, the “rights”), then the REIT Stock Amount shall also include such
rights that a holder of that number of shares of REIT Stock would be entitled to receive. 
  
 1.82 “Securities Act” means the Securities Act of 1933, as amended. 
  
 1.83 “Specified Redemption Date” means the tenth (10th) Business Day after receipt by the General Partner of a Notice of Redemption Request (or, in the case of the General Partner exercising the Redemption Right, after the date of the General
Partner’s receipt of a REIT Notice). 
  
 1.84 “Stock Option
Plans” means, collectively, any and all plans adopted from time to time by the General Partner pursuant to which REIT Stock is issued, or options to acquire REIT Stock 

  

 - 12 - 

 
are granted, to employees or directors of the General Partner, employees of the Partnership or employees of their respective Affiliates in consideration for
services or future services. 
  
 1.85 “Subsidiary” means, with
respect to any Person, any Entity of which a majority of the voting power or the voting equity securities, and/or the outstanding equity interests (whether or not voting), is owned, directly or indirectly, by such Person. 
  
 1.86 “Substituted Limited Partner” means a Person who is admitted as a
Limited Partner to the Partnership pursuant to Section 11.4 hereof. 
  
 1.87
“Terminating Capital Transaction” means any sale or other disposition (other than a deemed disposition pursuant to Code Section 708(b)(1)(B) and the Treasury Regulations thereunder) of all or substantially all of the assets of the
Partnership or a related series of transactions that, taken together, result in the sale or other disposition of all or substantially all of the assets of the Partnership. 
  
 1.88 “Termination Event” means any termination of the Advisor as advisor to the Partnership and the General Partner under
the terms of the Advisory Agreement, other than any termination for “Cause” (as defined in the Advisory Agreement) and other than any termination of the Advisory Agreement due to the occurrence of a Listing Event. 
  
 1.89 “Transfer” means to give, sell, assign, pledge, hypothecate, devise,
bequeath, or otherwise dispose of, transfer, or permit to be transferred, during life or at death. The word “Transfer,” when used as a noun, shall mean any Transfer transaction. 
  
 1.90 “Treasury Regulations” means the Federal income tax regulations, including any temporary or proposed regulations,
promulgated under the Code, as such Treasury Regulations may be amended from time to time (it being understood that all references herein to specific sections of the Treasury Regulations shall be deemed also to refer to any corresponding provisions
of succeeding Treasury Regulations). 
  
 1.91 “Unrecovered Contribution
Account” means, with respect to the General Partner, as of any relevant date, the excess of (i) the aggregate amount of cash contributed or deemed contributed by the General Partner to the Partnership pursuant to the provisions of Article
IV as of such date, over (ii) the sum of (A) the cumulative distributions of Available Cash and Net Capital Event Proceeds made to the General Partner prior to such relevant date pursuant to Section 5.1 hereof, and (B) the cumulative amounts paid to
the General Partner in redemption of its Partnership Units pursuant to Section 8.6(g) as of such date. All amounts distributed and paid to the General Partner pursuant to Sections 5.1 and 8.6(g) shall first be applied to reduce the Unrecovered
Contribution Account of the General Partner until the balance of such Unrecovered Contribution Account equals zero ($0), and then shall be applied to reduce the 8% Return Account of the General Partner. 
  
 1.92 “Valuation Date” means the date of receipt by the General Partner of a
Notice of Redemption Request (or, in the case of the General Partner exercising the Redemption Right, the date of the General Partner’s receipt of a REIT Notice) or, if such date is not a Business Day, the first Business Day thereafter.

  

 - 13 - 

 1.93 “Value” means, with respect to a share of REIT Stock, (a) if REIT Stock is traded on a national
securities exchange, reported through the Nasdaq Stock Market or otherwise traded over-the-counter, the average of the daily Market Price (as defined below) for shares of REIT Stock for the ten (10) consecutive trading days immediately preceding the
Valuation Date, or (b) if REIT Stock is not traded in a manner described in clause (a), the value of a share of REIT Stock as determined by the General Partner acting in good faith on the basis of such quotations and other information as it
considers, in its reasonable judgment, appropriate. The “Market Price” for each such trading day shall be (i) the last reported sale price on such day or, if no sale takes place on such day, the average of the closing bid and asked prices
on such day, as reported by a reliable quotation source designated by the General Partner; or (ii) if no such last reported sale price or closing bid and asked prices are available, the average of the reported high bid and low asked prices on such
day, as reported by a reliable quotation source designated by the General Partner, or (iii) if there shall be no bid and asked prices on such day, the average of the high bid and low asked prices, as so reported, on the most recent day (not more
than ten (10) days prior to the date in question) for which prices have been so reported. In the event the REIT Stock Amount includes rights that a holder of REIT Stock would be entitled to receive, then the Value of such rights shall be determined
by the General Partner acting in good faith on the basis of such quotations and other information as it considers, in its reasonable judgment, appropriate. 
  
 ARTICLE 2 
 ORGANIZATIONAL MATTERS

  
 2.1 Formation 
  
 The Partnership is a limited partnership organized pursuant to the provision
of the Act and upon the terms and conditions set forth in this Agreement. Except as expressly provided herein to the contrary, the rights and obligations of the Partners and the administration and termination of the Partnership shall be governed by
the Act. 
  
 2.2 Name 
  
 The name of the Partnership is Paladin Realty Income Properties, L.P. The
Partnership’s business may be conducted under such name or under any other name or names deemed advisable by the General Partner, including the name of the General Partner or any Affiliate thereof. The words “Limited Partnership,”
“L.P.,” “Ltd.” or similar words or letters shall be included in the Partnership’s name where necessary for the purposes of complying with the laws of any jurisdiction that so requires. The General Partner, acting in its sole
and absolute discretion without the Consent of any Limited Partner, may change the name of the Partnership. The General Partner shall notify the Limited Partners of any such name change in the next regular communication to the Limited Partners. Upon
termination of the Partnership or the termination, resignation or withdrawal of the Initial Limited Partner as the Advisor, all of the Partnership’s right, title and interest in and to the use of the name “Paladin Realty Income Properties,
L.P.” and any variation thereof, shall become the property of the Initial Limited Partner, and if requested to do so by the Initial Limited Partner, the Partnership shall change the name of the Partnership to exclude the term
“Paladin.” Neither the Partnership nor any Limited Partner shall have any right or interest in and to the use of any such name or mark. 
  

 - 14 - 

 2.3 Registered Office and Agent 
  
 The address of the registered office of the Partnership in the State of Delaware shall be c/o Corporation Service Company,
2711 Centerville Road, Suite 400, Wilmington, DE 19808, or such other place as may be designated from time to time by the General Partner. The name of the registered agent for service of process on the Partnership in the State of Delaware at such
address shall be Corporation Service Company, 2711 Centerville Road, Suite 400, Wilmington, DE 19808, or such other Person as may be designated from time to time by the General Partner. 
  
 2.4 Principal Place of Business 
  
 The Partnership may maintain offices at such other place or places within or outside the State of Delaware as the General Partner deems advisable. The
principal office of the Partnership shall be 10880 Wilshire Blvd., Los Angeles, California 90024, Suite 1400 or such other place as the General Partner may from time to time designate by notice to the Limited Partners. 
  
 2.5 Term and Termination 
  
 The term of the Partnership shall commence on the date hereof and shall continue until
                    , 2104, unless the Partnership is dissolved sooner pursuant to the provisions of Article 13 or as otherwise provided by
law. 
  
 2.6 Power of Attorney 
  
 (a) Each Limited Partner and each Assignee who accepts Partnership Units (or
any other Partnership Interest or any rights, benefits or privileges associated therewith) is deemed to irrevocably constitute and appoint the General Partner, any Liquidator and authorized officers and attorneys-in-fact of each, and each such
Person acting singly, in each case with full power of substitution, as its true and lawful agent and attorney-in-fact, with full power and authority in its name, place and stead to: 
  
 (i) execute, swear to, acknowledge, deliver, file and record in the appropriate public offices: 

 
 (A) all certificates, documents and other instruments
(including, without limitation, this Agreement and the Certificate and all amendments or restatements thereof) that the General Partner or the Liquidator deems appropriate or necessary to form, qualify or continue the existence or qualification of
the Partnership as a limited partnership (or a partnership in which the Limited Partners have limited liability) in the State of Delaware and in all other jurisdictions in which the Partnership may or plans to conduct business or own property,
including, without limitation, any documents necessary or advisable to convey any Contributed Property to the Partnership; 
  
 (B) all instruments that the General Partner or any Liquidator deems appropriate or necessary to reflect any amendment, change,
modification or restatement of this Agreement in accordance with its terms; 
  

 - 15 - 

 (C) all conveyances and other instruments or documents that the General Partner or any
Liquidator deems appropriate or necessary to reflect the dissolution and liquidation of the Partnership pursuant to the terms of this Agreement, including, without limitation, a certificate of cancellation; 
  
 (D) all instruments relating to the admission, withdrawal,
removal or substitution of any Partner pursuant to, or other events described in, Article 11, 12 or 13 hereof or any Capital Contribution of any Partner; 
  
 (E) all certificates, documents and other instruments relating to the determination of the rights, preferences and privileges of
Partnership Interests; 
  
 (F) all amendments to
this Agreement as provided in Article 14 hereof; and 
  
 (G) all other instruments that may be required by law to be filed on behalf of or relating to the Partnership and that are not inconsistent with this Agreement; and 
  
 (ii) execute, swear to, seal, acknowledge and file all ballots, consents, approvals, waivers, certificates
and other instruments appropriate or necessary, in the sole and absolute discretion of the General Partner or any Liquidator, to make, evidence, give, confirm or ratify any vote, consent, approval, agreement or other action which is made or given by
the Partners hereunder or is consistent with the terms of this Agreement or appropriate or necessary, in the sole discretion of the General Partner or any Liquidator, to effectuate the terms or intent of this Agreement. 
  
 Nothing contained herein shall be construed as authorizing the General
Partner or any Liquidator to amend this Agreement except in accordance with Article 14 hereof or as may be otherwise expressly provided for in this Agreement. 
  

(b) The foregoing power of attorney is hereby declared to be irrevocable and a power coupled with an interest, in recognition of the fact that each of
the Partners will be relying upon the power of the General Partner and any Liquidator to act as contemplated by this Agreement in any filing or other action by it on behalf of the Partnership, and it shall survive and not be affected by the
subsequent Incapacity of any Limited Partner or Assignee and/or the Transfer of all or any portion of such Limited Partner’s or Assignee’s Partnership Units and shall extend to such Limited Partner’s or Assignee’s heirs,
successors, assigns and personal representatives. 
  
 (c) Each
such Limited Partner or Assignee hereby agrees to be bound by any representation made by the General Partner or any Liquidator, acting in good faith pursuant to such power of attorney, and each such Limited Partner or Assignee hereby waives any and
all defenses which may be available to contest, negate or disaffirm the action of the General Partner or any Liquidator, taken in good faith under such power of attorney. 
  
 (d) Each Limited Partner or Assignee shall execute and deliver to the General Partner or the Liquidator, within fifteen (15)
days after receipt of the General Partner’s or Liquidator’s request therefor, such further designation, powers of attorney and other instruments as the 

  

 - 16 - 

 
General Partner or the Liquidator, as the case may be, deems necessary to effectuate this Agreement and the purposes of the Partnership. 
  
 (e) Any Person dealing with the Partnership may conclusively presume and rely
upon the fact that any instrument referred to in this Section 2.6, executed by the General Partner or the Liquidator acting as attorney-in-fact, is authorized by and binding on the Partnership, without further inquiry. 
  
 2.7 Effectiveness of this Agreement 
  
 This Agreement shall govern the operations of the Partnership and the rights
and restrictions applicable to the Partners, to the extent permitted by law. Pursuant to Section 17-101(12) of the Act, all Persons who become holders of Partnership Interests shall be bound by the provisions of this Agreement. The execution by a
Person of this Agreement and acceptance thereof by the General Partner in accordance with the terms of this Agreement or the receipt of Partnership Interests by a Person as a successor or assign of an existing Partner and the consent of the General
Partner to the admission of such Person as a Substituted Limited Partner in accordance with the terms of this Agreement shall be deemed to constitute a request that the records of the Partnership reflect such admission, and shall be deemed to be a
sufficient act to comply with the requirements of Section 17-101(12) of the Act and to so cause that Person to become a Partner as of the date of acceptance of its Capital Contribution by the Partnership and to bind that Person to the terms and
conditions of this Agreement (and to entitle that Person to the rights of a Partner hereunder). 
  
 ARTICLE 3 
 PURPOSE AND POWERS 
  
 3.1 Purpose and Business 
  
 The purpose and nature of the business to be conducted by the Partnership is to conduct any business that may be lawfully conducted by a limited
partnership organized pursuant to the Act including, without limitation, to engage in the following activities: 
  
 (a) to acquire, hold, own, develop, construct, improve, maintain, operate, sell, lease, transfer, encumber, convey, exchange and otherwise dispose of or
deal with Real Estate Assets; 
  
 (b) to acquire, hold, own,
develop, construct, maintain, operate, sell, lease, transfer, encumber, convey, exchange and otherwise dispose of or deal with other real and personal property of all kinds; 
  
 (c) acquire own, hold for investment and ultimately dispose of general and limited partner interests, and stock, warrants,
options or other equity and debt interests in Entities, and exercise all rights and powers granted to the owner of any such interests; 
  
 (d) make any type of investment and engage in any other lawful act or activity for which limited partnerships may be formed under the Act, and by such
statement all lawful acts and activities shall be within the purposes of the Partnership; 
  

 - 17 - 

 (e) to undertake such other activities as may be necessary, advisable, desirable or convenient to the
business of the Partnership; and 
  
 (f) to engage in such other
ancillary activities as shall be necessary or desirable to effectuate the foregoing purposes; 
  
 provided, however, that such business shall be limited to and conducted in such a manner as to permit the General Partner at all times to be classified as a REIT, unless the General Partner determines not to qualify
as a REIT or ceases to qualify as a REIT for reasons other than the conduct of the business of the Partnership. 
  
 3.2 Powers 
  
 (a) The Partnership is empowered to do any and all acts and things necessary, appropriate, proper, advisable, incidental to or convenient for the
furtherance and accomplishment of the purposes and business described in Section 3.1 and for the protection and benefit of the Partnership including, without limitation, full power and authority to enter into, perform, and carry out contracts of any
kind, to borrow money and to issue evidences of indebtedness, whether or not secured by mortgage, trust deed, pledge or other Lien, and, directly or indirectly, to acquire, hold, own, develop, construct, improve, maintain and operate Real Estate
Assets, and to sell, lease, transfer, encumber, convey, exchange and otherwise dispose of Real Estate Assets. 
  
 (b) The General Partner also is empowered to do any and all acts and things necessary, appropriate or advisable to ensure that the Partnership will not be
classified as a “publicly traded partnership” within the meaning of Section 7704 of the Code, including, but not limited to, imposing restrictions on Transfers of Partnership Units. 
  
 ARTICLE 4 
 CAPITAL CONTRIBUTIONS; PARTNERSHIP UNITS; 
 ADDITIONAL FUNDS 
  
 4.1 Capital Contributions of the Partners 
  
 (a) Initial Capital Contributions. The General Partner and the Initial
Limited Partner have made or shall make on the Effective Date, the Capital Contributions as set forth on Exhibit A to this Agreement in exchange for the number of Partnership Units set forth opposite their names on Exhibit A. At such
time as Additional Limited Partners are admitted to the Partnership, each such Additional Limited Partner shall make Capital Contributions in the amount set forth opposite such Limited Partner’s name on Exhibit A, as it shall be amended
at the time of such contribution. 
  
 (b) Deemed Capital
Contributions. To the extent the Partnership acquires any property by the merger of any other Person into the Partnership or the contribution of assets by any other Person to the Partnership, Persons who receive Partnership Interests in exchange
for their interests in the Person merging into or contributing assets to the Partnership shall become Partners and shall be deemed to have made Capital Contributions as provided in the applicable 

  

 - 18 - 

 
merger agreement or contribution agreement and as set forth in Exhibit A, as it shall be amended to reflect such deemed Capital Contributions.

  
 (c) Partnership Units. Each Partner shall own
Partnership Units in the amounts set forth for such Partner in Exhibit A and shall have a Percentage Interest in the Partnership as set forth in Exhibit A, which Percentage Interest shall be adjusted in Exhibit A from time to
time by the General Partner to the extent necessary to reflect accurately redemptions, additional Capital Contributions, the issuance of additional Partnership Units or similar events having an effect on the number of Partnership Units held by, and
the Percentage Interest of, any Partner. Each Partnership Unit shall entitle the holder thereof to one vote on all matters on which the Partners (or any portion of the Partners) are entitled to vote under this Agreement. 
  
 (d) No Additional Capital Contributions. Except as provided in
Sections 4.3(a) and 10.5, the Partners shall have no obligation to make any additional Capital Contributions or provide any additional funding to the Partnership (whether in the form of loans or otherwise) and no Partner shall have any obligation to
restore any deficit that may exist in its Capital Account, either upon a liquidation of the Partnership or otherwise. 
  
 4.2 Issuance of Additional Partnership Interests 
  
 (a) The General Partner is authorized to cause the Partnership to issue additional Partnership Interests (or options or warrants to acquire Partnership
Interests) in the form of Partnership Units or other Partnership Interests in one or more series or classes to any Persons at any time or from time to time, on such terms and conditions as the General Partner shall establish in each case in its sole
and absolute discretion subject to Delaware law, including, without limitation, (i) the allocations of items of Partnership income, gain, loss, deduction and credit to each class or series of Partnership Interests, (ii) the right of each class or
series of Partnership Interests to share in Partnership distributions, and (iii) the rights of each class or series of Partnership Interest upon dissolution and liquidation of the Partnership; provided, that, no such Partnership Interests shall be
issued to the General Partner unless either (A) the Partnership Interests are issued pursuant to Section 4.3, or (B) the additional Partnership Interests are issued to all Partners holding Partnership Interests in the same class in proportion to
their respective Percentage Interests in such class. 
  
 (b)
Subject to the limitations set forth in Sections 4.2(a) and 4.3(a), the General Partner may take such steps as it, in its sole and absolute discretion, deems necessary or appropriate to admit any Person as a Limited Partner of the Partnership in
accordance with Section 12.2 or to issue any Partnership Interests, including, without limitation, amending the Certificate, Exhibit A or any other provision of this Agreement. 
  
 (c) Without limiting the foregoing, the General Partner is expressly authorized to cause the Partnership to issue
Partnership Interests (or options to acquire Partnership Interests) for less than fair market value, so long as the General Partner concludes in good faith that such issuance is in the interest of the Partnership and the Partners (for example, and
not by way of limitation, the issuance of Partnership Units in connection with a Stock Option Plan providing for employee purchases of REIT Stock and corresponding Partnership Units at a discount from 

  

 - 19 - 

 
fair market value or employee options that have an exercise price that is less than the fair market value of the REIT Stock and corresponding Partnership
Units covered by the option, either at the time of issuance or at the time of exercise). 
  
 4.3 Issuance of Securities by the General Partner 
  
 (a) General. The General Partner shall not issue any debt securities, preferred stock, Common Stock, any other class of REIT Stock or rights, options, warrants or other securities convertible into or
exchangeable for preferred stock, Common Stock or any other class of REIT Stock (collectively, “Securities”), other than (1) as payment of the REIT Stock Amount in connection with a redemption of Partnership Units pursuant to
Section 8.6, (2) upon the conversion, exchange or exercise of other outstanding securities of the General Partner in accordance with the terms of such securities, or (3) to all holders of REIT Stock on a pro rata basis, unless the General
Partner shall: 
  
 (i) in the case of REIT Stock
or other equity Securities other than Securities described in clause (ii) below, (A) contribute to the Partnership the proceeds of or consideration (including any property or other non-cash assets) received upon the issuance of such Securities, and
(B) receive from the Partnership in consideration for such contributions Partnership Interests with the same terms and conditions, including dividend, dividend priority and liquidation preference, as are applicable to such Securities (including, for
purposes of clarification, Partnership Units in the case of any issuance of Common Stock by the General Partner); 
  
 (ii) in the case of options, warrants or other rights to purchase REIT Stock, or other equity securities convertible into or exchangeable
for REIT Stock, (A) contribute to the Partnership the proceeds of or consideration (including any property or other non-cash assets) received upon the issuance of such equity Securities, and (B) receive from the Partnership in consideration for such
contributions a number of options, warrants or other rights to purchase Partnership Interests equal to the number of such Securities issued by the General Partner, with equivalent rights, preferences and limitations to the terms of such equity
Securities; and 
  
 (iii) in the case of debt
securities, lend to the Partnership the proceeds of or consideration received for such Securities on the same terms and conditions, including interest rate and repayment schedule, as shall be applicable with respect to or incurred in connection with
the issuance of such Securities and the proceeds of, or consideration received from, any subsequent exercise, exchange or conversion thereof (if applicable). 
  
 (b) Splits. The Partnership shall (i) make a distribution in Partnership Units, (ii) subdivide its outstanding Partnership Units, or (iii) combine
its outstanding Partnership Units into a smaller number of Partnership Units, in the event the General Partner takes an analogous action with respect to the Common Stock. The intent of the previous sentence is that one Partnership Unit remains the
economic equivalent of one share of Common Stock without dilution. If the General Partner determines that it is necessary or desirable to make any filings under the Act or otherwise in order to reference the existence of such action, the General
Partner may cause such filings to be made, which filings might take the form of amendments to the 

  

 - 20 - 

 
Certificate; provided, however, that, unless specifically required by this Agreement or the Act after giving effect to the terms of this Agreement, no
approval or consent of any Partners shall be required in connection with the making of any such filing. 
  
 (c) Treatment of Proceeds. If the proceeds actually received by the General Partner in connection with an issuance of Securities by the General
Partner are less than the gross proceeds of such offering, grant, award or issuance as a result of any underwriter’s discounts, commissions or other fees or expenses paid or incurred in connection with such offering, grant, award or issuance,
then the General Partner shall be deemed to have made a Capital Contribution to the Partnership in the amount of the gross proceeds of such offering, grant, award or issuance and the Partnership shall be deemed simultaneously to have paid pursuant
to Section 7.3(c) for the amount of such expenses. 
  
 4.4 Additional Funds

  
 (a) The sums of money required to finance the business and
affairs of the Partnership shall be derived from the initial Capital Contributions made to the Partnership by the Partners as set forth in Section 4.1 and from funds generated from the operation and business of the Partnership. 
  
 (b) In the event additional financing is needed from sources other than as
set forth in Section 4.4(a) for any reason, the General Partner may, in its sole and absolute discretion, in such amounts and at such times as it solely shall determine to be necessary or appropriate: 
  
 (i) cause the Partnership to issue additional Partnership
Interests and admit additional Limited Partners to the Partnership in accordance with Section 4.2; 
  
 (ii) make additional Capital Contributions to the Partnership (subject to the provisions of Section 4.3(a)); 
  
 (iii) cause the Partnership to borrow money, enter into loan
arrangements, issue debt securities, obtain letters of credit or otherwise borrow money on a secured or unsecured basis; 
  
 (iv) make a loan or loans to the Partnership (subject to Section 4.3(a)); or 
  
 (v) cause the Partnership to sell any assets or properties
directly or indirectly owned by the Partnership. 
  
 4.5 No Third-Party
Beneficiary 
  
 No creditor or other third party having
dealings with the Partnership shall have the right to enforce the right or obligations of any Partner to make Capital Contributions or loans or to pursue any other right or remedy hereunder or at law or in equity, it being understood and agreed that
the provisions of this Agreement shall be solely for the benefit of, and may be enforced solely by, the parties hereto and their respective successors and assigns. 
  

 - 21 - 

 4.6 No Interest 
  
 No Partner shall be entitled to interest on any Capital Contribution or on such Partner’s Capital Account. 
  
 4.7 No Preemptive Rights 
  
 Subject to any preemptive rights that may be granted in connection with the issuance of Partnership Interests under Section
4.3(a), no Person shall have any preemptive or other similar right with respect to any: 
  
 (a) additional Capital Contributions or loans to the Partnership; or 
  
 (b) issuance or sale of any Partnership Units or other Partnership Interests. 
  
 4.8 Capital Accounts; Adjustments to Carrying Values 
  
 (a) Capital Accounts. The Partnership shall establish and maintain
throughout the life of the Partnership for each Partner a separate “Capital Account” in accordance with Treasury Regulations Section 1.704-1(b). Such Capital Account shall be increased by (i) the amount of all Capital Contributions made by
such Partner to the Partnership pursuant to this Agreement and (ii) all Profits and other items of income and gain allocated to such Partner pursuant to Section 6.2, and decreased by (1) the amount of cash or Agreed Value of all actual and deemed
distributions of cash or property made to such Partner pursuant to this Agreement and (2) all Losses and other items of loss and deduction allocated to such Partner pursuant to Section 6.2 of this Agreement. Any other Partnership item which is
required or authorized under Treasury Regulation Section 1.704-1(b) to be reflected in Capital Accounts shall be so reflected. 
  
 (b) Adjustments to Carrying Values. Consistent with the provisions of Treasury Regulations Section 1.704-1(b)(2)(iv)(f), and as provided in this
Section 4.8(b), the Carrying Values of all Partnership Assets shall be adjusted upward or downward to reflect any Book Gains or Book Losses attributable to such Partnership Asset, as of the times of the adjustments provided in this Section 4.8(b),
as if such Book Gain or Book Loss had been recognized on an actual sale of each such Partnership Asset and allocated pursuant to Section 6.1. Such adjustments shall be made as of the following times: (i) as of the end of the calendar quarter
immediately prior to the acquisition of an additional interest in the Partnership by any new or existing Partner in exchange for more than a de minimis Capital Contribution; (ii) as of the end of the calendar quarter immediately prior to the
distribution by the Partnership to a Partner of more than a de minimis amount of property as consideration for an interest in the Partnership; (iii) upon the occurrence of a Listing Event or a Termination Event if the Advisor is entitled to a
distribution under Section 5.1(d) or 5.1(e) as a result of such event, and (iv) at such other times as the General Partner may determine so long as such adjustment is made under generally accepted industry accounting practices within the meaning of
Treasury Regulations Section 1.704-1(b)(2)(iv)(f)(5). In accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(e), the Carrying Values of Partnership assets distributed in kind shall be adjusted upward or downward to reflect any Book Gain
or Book Loss attributable to such Partnership Asset, as of the time any such asset is distributed. If the Carrying Values of the Partnership Assets are adjusted as a result of a Listing Event, the total Carrying Value of all Partnership 

  

 - 22 - 

 
Assets shall be deemed to equal the Market Value plus the total amount of liabilities of the Partnership as of the date of the Listing Event. If the Carrying
Values of the Partnership Assets are adjusted as a result of a Termination Event, the total Carrying Value of all Partnership Assets shall be deemed to equal the Appraised Value as of the Termination Date. 
  
 ARTICLE 5 
 DISTRIBUTIONS 
  
 5.1 Distributions 
  
 (a) General. Subject
to the provisions of Sections 5.3, 5.4, 8.6(b), 11.6(d) and 13.2, the General Partner shall cause the Partnership to distribute to the Partners as of the applicable Partnership Record Date, at such times as the General Partner shall determine,
amounts of Available Operating Cash, Net Sales Proceeds and Net Capital Event Proceeds in the manner set forth in this Section 5.1. 
  
 (b) Available Operating Cash. Available Operating Cash shall be distributed to the Partners as determined by the General Partner in its sole and
absolute discretion in accordance with their respective Percentage Interests as of the applicable Partnership Record Date. 
  
 (c) Net Sales Proceeds and Net Capital Event Proceeds. Net Sales Proceeds shall be distributed to the Partners as determined by the General Partner
in its sole and absolute discretion in accordance with their respective Percentage Interests as of the applicable Partnership Record Date until the Unrecovered Contribution Account and 8% Return Account of the General Partner has been reduced to
zero ($0). Thereafter, 10% of any Net Sales Proceeds shall be distributed to the Advisor (such distributions, the “Advisor Participation in Sales Proceeds”), and 90% of such Net Sales Proceeds shall be distributed to the Partners as
determined by the General Partner in its sole and absolute discretion in accordance with their respective Percentage Interests as of the applicable Partnership Record Date. Any Net Capital Event Proceeds in excess Net Sales Proceeds of shall be
distributed to the Partners as determined by the General Partner in its sole and absolute discretion in accordance with their respective Percentage Interests as of the applicable Partnership Record Date. 
  
 (d) Distribution to Advisor Upon Listing. Upon a Listing Event, the
Advisor shall no longer be entitled to any distributions of the Advisor Participation in Sales Proceeds under Section 5.1(c). If the Advisor has not been terminated under the Advisory Agreement as of the Listing Date, the Advisor shall receive a
distribution, which shall be paid within five (5) Business Days of the determination of the Market Value, in an amount equal to 10% of the amount, if any, by which (i) the Market Value plus the cumulative distributions made to the General Partner
from the inception of the Partnership through the Listing Date exceeds (ii) the sum of (A) the Invested Capital of the General Partner as of the Listing Date, and (B) the 8% Return that has accrued with respect to the Invested Capital of the General
Partner from the inception of the Partnership through the Listing Date. 
  
 (e) Distribution to Advisor Upon Termination. Upon a Termination Event, the Advisor shall no longer be entitled to any distributions of the Advisor Participation in Sales Proceeds under Section 5.1(c). If a Listing Event has not
occurred as of the date of a 

  

 - 23 - 

 
Termination Event, and the Advisor was not terminated for Cause (as defined in the Advisory Agreement), then the Advisor shall receive a distribution, which
shall be paid within five (5) Business Days of the date of such Termination Event, in an amount equal to 10% of the amount, if any, by which (i) the Appraised Value of all of the Partnership Assets as of the date of the Termination Event, less any
indebtedness secured by such assets, plus the cumulative distributions made to the General Partner from the inception of the Partnership through the date of the Termination Event, exceeds (ii) the sum of (A) the Invested Capital of the General
Partner as of such date, and (B) the 8% Return Amount that has accrued with respect to the Invested Capital of the General Partner from the inception of the Partnership through such date. 
  
 5.2 Qualification as a REIT 
  
 The General Partner shall take such action as it deems necessary or advisable to cause the Partnership to distribute sufficient amounts under this Article
5 to enable the General Partner to pay stockholder dividends that will enable the General Partner to (a) satisfy the requirements for qualification as a REIT under the Code and the Treasury Regulations (the “REIT Requirements”), and
(b) avoid any Federal income or excise tax liability; provided, however, the General Partner shall not be bound to comply with this covenant to the extent such distributions would violate applicable Delaware law. 
  
 5.3 Withholding 
  
 With respect to any withholding tax or other similar tax liability or obligation to which the Partnership may be subject as
a result of any act by or status of any Partner or to which the Partnership becomes subject with respect to any Partnership Interest, the Partnership shall have the right to withhold amounts of Available Operating Cash, Net Capital Event Proceeds or
other Partnership Assets distributable to such Partner or with respect to such Partnership Interests, to the extent of the amount of such withholding tax or other similar tax liability or obligation pursuant to the provisions contained in Section
10.5. 
  
 5.4 Additional Partnership Interests 
  
 If the Partnership issues Partnership Interests in accordance with Section
4.2 or 4.3, the distribution priorities set forth in Section 5.1 shall be amended, as necessary, to reflect any distribution priority of such Partnership Interests and corresponding amendments shall be made to the provisions of Article 6. If a new
or existing Partner acquires an additional Partnership Interest in exchange for a Capital Contribution on any date other than a Partnership Record Date, such Partner shall not be entitled to any distributions with respect to such additional
Partnership Interest until the first Partnership Record Date following the date of such issuance. 
  
 ARTICLE 6 
 ALLOCATIONS 
  
 6.1 Allocation of Profits and Net Losses 
  
 (a) General. Except as otherwise provided in this Article 6 and in
Section 11.6(c), and after making any special allocations under Section 6.2, Profits and Losses for each Fiscal Year shall be allocated among the Partners in accordance with their respective Percentage 

  

 - 24 - 

 
Interests as of the end of such Fiscal Year, subject to any rights of holders of Partnership Interests other than Partnership Units. 
  
 (b) Adjustment. If the amount of Losses for any Fiscal Year that
otherwise would be allocated to a Partner under Section 6.1(a) or this Section 6.1(b) would cause or increase an Adjusted Capital Account Deficit of such Partner as of the last day of such Fiscal Year (after all other allocations have been made
pursuant to this Article 6), then such Partner shall be allocated that amount of Losses which does not cause or increase such Adjusted Capital Account Deficit, and the remainder of such Losses that would have been allocated to such Partner shall be
allocated to the other Partners in proportion to their Percentage Interests. 
  
 6.2 Special Allocations 
  
 Notwithstanding any
provisions of Section 6.1, the following special allocations shall be made in the following order of priority: 
  
 (a) Minimum Gain Chargeback (Nonrecourse Liabilities). Except as otherwise provided in Section 1.704-2(f) of the Treasury Regulations, if there is
a net decrease in Partnership Minimum Gain for any Fiscal Year, each Partner shall be specially allocated items of Partnership income and gain for such year (and, if necessary, subsequent years) in an amount equal to such Partner’s share of the
net decrease in Partnership Minimum Gain to the extent required by Treasury Regulations Section 1.704-2(f). The items to be so allocated shall be determined in accordance with Sections 1.704-2(f) and (j)(2) of the Treasury Regulations. This
subparagraph is intended to comply with the minimum gain chargeback requirement in said section of the Treasury Regulations and shall be interpreted consistently therewith. Allocations pursuant to this subparagraph shall be made in proportion to the
respective amounts required to be allocated to each Partner pursuant hereto. 
  
 (b) Partner Minimum Gain Chargeback. Except as otherwise provided in Section 1.704-2(i)(4) of the Treasury Regulations, if there is a net decrease in Partner Minimum Gain attributable to a Partner Nonrecourse
Debt during any Fiscal Year, each Partner who has a share of the Partner Minimum Gain attributable to such Partner Nonrecourse Debt, determined in accordance with Section 1.704-2(i)(5) of the Treasury Regulations, shall be specially allocated items
of Partnership income and gain for such year (and, if necessary, subsequent years) in an amount equal to that Partner’s share of the net decrease in the Partner Minimum Gain attributable to such Partner Nonrecourse Debt to the extent and in the
manner required by Section 1.704-2(i) of the Treasury Regulations. The items to be so allocated shall be determined in accordance with Sections 1.704-2(i)(4) and (j)(2) of the Treasury Regulations. This subparagraph is intended to comply with the
minimum gain chargeback requirement with respect to Partner Nonrecourse Debt contained in said section of the Treasury Regulations and shall be interpreted consistently therewith. Allocations pursuant to this subparagraph shall be made in proportion
to the respective amounts to be allocated to each Partner pursuant hereto. 
  
 (c) Qualified Income Offset. In the event a Partner unexpectedly receives any adjustment, allocation or distribution described in Treasury Regulation Sections 1.704 1(b)(2)(ii)(d)(4), (5) and (6) that causes or
increases an Adjusted Capital Account Deficit, gross items of income and gain shall be specially allocated to such Partner so as to 

  

 - 25 - 

 
eliminate such Adjusted Capital Account Deficit as quickly as possible. This subparagraph is intended to constitute a “qualified income offset”
under Section 1.704-1(b)(2)(ii)(d) of the Treasury Regulations and shall be interpreted consistently therewith. 
  
 (d) Nonrecourse Deductions. Nonrecourse Deductions for any Fiscal Year shall be allocated to the Partners in accordance with their respective
Percentage Interests. 
  
 (e) Partner Nonrecourse
Deductions. Partner Nonrecourse Deductions for any Fiscal Year with respect to a Partner Nonrecourse Debt shall be specially allocated to the Partners that bear the economic risk of loss for such Partner Nonrecourse Debt (as determined under
Sections 1.704-2(b)(4) and 1.704-2(i)(1) of the Treasury Regulations). 
  
 (f) Allocations of Book Gain to Advisor. 
  
 (i) If the Partnership distributes Net Capital Event Proceeds to the Advisor pursuant to Section 5.1(c) during any Fiscal year, then any Book Gain realized by the Partnership for such Fiscal Year and, if necessary,
for subsequent Fiscal Years, shall be allocated to the Advisor until the cumulative Book Gain allocated to the Advisor under this Section 6.2(f)(i) is equal to the cumulative Net Capital Event Proceeds distributed to the Advisor pursuant to Section
5.1(c). 
  
 (ii) If a Listing Event or
Termination Event occurs and the Advisor is entitled to a distribution under Section 5.1(d) or 5.1(e), then any Book Gain attributable to the adjustment to Carrying Values required under Section 4.8(b) shall be allocated to the Advisor until the
cumulative Book Gain allocated to the Advisor under this Section 6.2(f)(ii) is equal to the amount to which the Advisor is entitled under Section 5.1(d) or 5.1(e), as the case may be. If there is insufficient Book Gain attributable to such
adjustment to Carrying Values to allocate the full amount to be allocated to the Advisor under the immediately preceding sentence, then any subsequent Book Gain realized by the Partnership shall be allocated to the Advisor in an amount equal to such
shortfall. 
  
 (g) Curative Allocations. The allocations
set forth in Section 6.1(b) and Sections 6.2(a) through (e) hereof (the “Regulatory Allocations”) are intended to comply with certain requirements of the Treasury Regulations. It is the intent of the Partners that, to the extent
possible all Regulatory Allocations that are made be offset either with other Regulatory Allocations or with special allocations pursuant to this Section 6.2(g). Therefore, notwithstanding any other provision of this Article 6 (other than the
Regulatory Allocations), the General Partner shall make such offsetting special allocations in whatever manner it determines appropriate so that, after such offsetting allocations are made, each Partner’s Capital Account balance is, to the
extent possible, equal to the Capital Account balance such Partner would have had if the Regulatory Allocations were not part of the Agreement and all Partnership items were allocated pursuant to Sections 6.1(a) and 6.2(f). In exercising its
discretion under this Section 6.2(g), the General Partner shall take into account future Regulatory Allocations under Sections 6.2(a) and 6.2(b) that, although not yet made, are likely to offset other Regulatory Allocations previously made under
Sections 6.2(d) and 6.2(e). 
  

 - 26 - 

 (h) Changes in Interest. If during any Fiscal Year there is a change in any Partner’s
Percentage Interest, then for purposes of determining the Profits, Losses, or any other items allocable to such Partner for such Fiscal Year, Profits, Losses, and any such other items shall be determined on a daily, monthly, or other basis, as
determined by the General Partner using any permissible method under Code Section 706 and the Treasury Regulations thereunder. 
  
 6.3 Tax Allocations 
  
 (a) Except as otherwise provided in this Section 6.3, items of Partnership income, gain, loss and deduction shall be determined in accordance with Code
Section 703, and the Partners’ distributive shares of such items for purposes of Code Section 702 shall be determined according to their respective shares of Profits or Losses to which such items relate. 
  
 (b) Items of Partnership taxable income, gain, loss and deduction with
respect to any Contributed Property contributed by a Partner shall be allocated among the Partners in accordance with Code Section 704(c) so as to take account of any variation between the adjusted basis of such property to the Partnership for
Federal income tax purposes and its Carrying Value. Such allocations shall be made using any method chosen by the General Partner that is permitted by applicable Treasury Regulations. 
  
 (c) If the Carrying Value of any asset of the Partnership is adjusted pursuant to Section 4.8(b), subsequent allocations of
items of income, gain, loss and deduction with respect to such property shall take account of any variation between the adjusted basis of such asset for Federal income tax purposes and its Carrying Value. Such allocations shall be made using any
method chosen by the General Partner that is permitted by applicable Treasury Regulations, as determined by the General Partner. 
  
 (d) Allocations pursuant to this Section 6.3 are solely for purposes of Federal, state and local taxes and shall not affect, or in any way be taken into
account in computing, any Partner’s Capital Account or share of Profits, Losses, distributions or other Partnership items pursuant to any provision of this Agreement. 
  
 6.4 Revisions to Allocations to Reflect Issuance of Partnership Interests 
  
 If the Partnership issues Partnership Interests to the General Partner or any
additional Limited Partner pursuant to Article 4, the General Partner shall make any such revisions to this Article 6 as it deems necessary to reflect the terms of the issuance of such Partnership Interests, including making preferential allocations
to classes of Partnership Interests that are entitled thereto. Such revisions shall not require the consent or approval of any other Partner. 
  
 ARTICLE 7 
 MANAGEMENT AND OPERATIONS
OF BUSINESS 
  
 7.1 Management 
  
 (a) Management By the General Partner. Except as otherwise expressly
provided in this Agreement, full, complete and exclusive discretion to manage and control the business and affairs of the Partnership are and shall be vested in the General Partner, and no Limited Partner 

  

 - 27 - 

 
other than the Advisor shall have any right to participate in or exercise control or management power over the business and affairs of the Partnership. The
General Partner may not be removed by the Limited Partners with or without cause. 
  
 (b) Power and Authority of the General Partner. In addition to the powers now or hereafter granted a general partner of a limited partnership under applicable law or which are granted to the General Partner
under any other provision of this Agreement, the General Partner shall have full power and authority to do all things deemed necessary or desirable by it to conduct the business of the Partnership, to exercise all powers set forth in Section 3.2
hereof and to effectuate the purposes set forth in Section 3.1 hereof, including, without limitation: 
  
 (i) (A) the making of any expenditures, the lending or borrowing of money (including, without limitation, making prepayments on loans and
borrowing money to permit the Partnership to make distributions to its Partners in such amounts as will permit the General Partner (so long as the General Partner qualifies as a REIT) to (1) avoid the payment of any Federal income or excise tax
(including any excise tax pursuant to Section 4981 of the Code) and (2) make distributions to its stockholders in amounts sufficient to permit the General Partner to maintain REIT status), (B) the assumption or guarantee of, or other contracting
for, indebtedness and other liabilities, (C) the issuance of any evidence of indebtedness (including the securing of the same by deed, mortgage, deed of trust or other lien or encumbrance on the Partnership’s assets), and (D) the incurring of
any obligations it deems necessary for the conduct of the activities of the Partnership, including the payment of all expenses associated with the General Partner; 
  
 (ii) the making of tax, regulatory and other filings, or rendering of periodic or other reports to
governmental or other agencies having jurisdiction over the business or assets of the Partnership or the General Partner; 
  
 (iii) the acquisition, disposition, mortgage, pledge, encumbrance, hypothecation or exchange of any assets, including Real Estate Assets,
of the Partnership (including the exercise or grant of any conversion, option, privilege, or subscription right or other right available in connection with any assets at any time held by the Partnership) or the merger or other combination of the
Partnership with or into another entity on such terms as the General Partner deems proper; 
  
 (iv) the use of the assets of the Partnership (including, without limitation, cash on hand) for any purpose consistent with the terms of
this Agreement and on any terms the General Partner sees fit, including, without limitation, 
  
 (A) the financing of the conduct of the operations of the General Partner, the Partnership or any of the Partnership’s Subsidiaries,

  
 (B) the lending of funds to other Persons
(including, without limitation, the Subsidiaries of the Partnership and/or the General Partner) and the repayment of obligations of the Partnership and its Subsidiaries and any other Person in which it has an equity investment, and 
  

 - 28 - 

 (C) the making of capital contributions to the Partnership’s Subsidiaries;

  
 (v) the development, expansion, construction,
management, operation, leasing, repair, alteration, demolition or improvement of any real property in which the Partnership or any Subsidiary of the Partnership owns a direct or indirect interest; 
  
 (vi) the negotiation, execution, and performance of any
contracts, conveyances or other instruments that the General Partner considers useful or necessary to the conduct of the Partnership’s operations or the implementation of the General Partner’s powers under this Agreement, including
contracting with contractors, developers, consultants, accountants, legal counsel, other professional advisors and other agents and the payment of their expenses and compensation out of the Partnership’s assets; 
  
 (vii) the distribution of Partnership cash or other
Partnership assets in accordance with this Agreement; 
  
 (viii) the holding, management, investment and reinvestment of cash and other assets of the Partnership; 
  
 (ix) the collection and receipt of revenues and income of the Partnership; 
  
 (x) the establishment of one or more divisions of the Partnership, the selection and dismissal of employees
of the Partnership (including, without limitation, employees having titles such as “president,” “vice president,” “secretary” and “treasurer” of the Partnership), and agents, outside attorneys, accountants,
consultants and contractors of the Partnership, and the determination of their compensation and other terms of employment or engagement; 
  
 (xi) the formation of, or acquisition of an interest (including non-voting interests in entities controlled by Affiliates of the
Partnership or third parties) in, and the contribution of property to, any other Entities that the General Partner deems desirable (including, without limitation, the acquisition of interests in, and the contributions of funds or property to, or
making of loans to, Subsidiaries of the Partnership and any other Person from time to time), or the incurrence of indebtedness on behalf of such Persons or the guarantee of the obligations of such Persons; provided that, as long as the General
Partner has determined to elect to qualify as a REIT or to continue to qualify as a REIT, the Partnership may not engage in any such formation, acquisition or contribution that would cause the General Partner to fail to qualify as a REIT;

  
 (xii) the control of any matters affecting
the rights and obligations of the Partnership, including: 
  
 (A) the settlement, compromise, submission to arbitration or any other form of dispute resolution, or abandonment of, any claim, cause of action, liability, debt or damages, due or owing to or from the Partnership,

  

 - 29 - 

 (B) the commencement or defense of suits, legal proceedings, administrative proceedings,
arbitration or other forms of dispute resolution, and 
  
 (C) the representation of the Partnership in all suits or legal proceedings, administrative proceedings, arbitrations or other forms of dispute resolution, the incurring of legal expenses, and the indemnification of any Person against
liabilities and contingencies to the extent permitted by law; 
  
 (xiii) the undertaking of any action in connection with the Partnership’s direct or indirect investment in its Subsidiaries or any other Person (including, without limitation, the contribution or loan of funds by
the Partnership to such Persons); 
  
 (xiv) the
determination of the fair market value of any Partnership Assets distributed in kind using such reasonable method of valuation as the General Partner, in its sole discretion, may adopt; 
  
 (xv) the exercise, directly or indirectly, through any attorney-in-fact acting under a general or limited
power of attorney, of any right, including the right to vote, appurtenant to any asset or investment held by the Partnership; 
  
 (xvi) the exercise of any of the powers of the General Partner enumerated in this Agreement or the undertaking of any action on behalf of
or in connection with any Subsidiary of the Partnership or any other Person in which the Partnership has a direct or indirect interest, or jointly with any such Subsidiary or other Person; 
  
 (xvii) the making, execution and delivery of any and all
deeds, leases, notes, mortgages, deeds of trust, security agreements, conveyances, contracts, guarantees, warranties, indemnities, waivers, releases or legal instruments or agreements in writing necessary or appropriate, in the judgment of the
General Partner, for the accomplishment of any of the foregoing; 
  
 (xviii) the issuance of additional Partnership Interests in connection with Capital Contributions by Additional Limited Partners and additional Capital Contributions by Partners pursuant to Article 4 hereof;

  
 (xix) the opening of bank accounts on behalf
of, and in the name of, the Partnership and its Subsidiaries; and 
  
 (xx) the amendment and restatement of Exhibit A to reflect accurately at all times the Capital Contributions of, Partnership Units held by and Percentage Interests of the Partners as the same are adjusted from
time to time to the extent necessary to reflect any Capital Contributions, redemptions, issuance of Partnership Units, admission of any Additional Limited Partner or any Substituted Limited Partner or otherwise, which amendment and restatement,
notwithstanding anything in this Agreement to the contrary, shall not be deemed an amendment of this Agreement, as long as the matter or event being reflected in Exhibit A otherwise is authorized by this Agreement. 
  

 - 30 - 

 (c) Advisor. The General Partner has engaged the Advisor to serve as the advisor to the
Partnership and the General Partner pursuant to the terms and conditions of the Advisory Agreement. In consideration for the services to be provided to the Partnership and the General Partner, the Advisor will receive the fees described in the
Advisory Agreement. In addition, the Advisor is entitled to receive distributions of the Advisor Participation in Sales Proceeds under Section 5.1(c) hereof, and distributions upon a Listing Event under Section 5.1(d) hereof or upon a Termination
Event under Section 5.1(e) hereof. 
  
 (d) Insurance. At
all times from and after the date hereof, the General Partner may cause the Partnership to obtain and maintain: 
  
 (i) casualty, liability and other insurance on the Real Estate Assets of the Partnership; 
  
 (ii) liability insurance for the Indemnitees hereunder; and

  
 (iii) such other insurance as the General
Partner, in its sole and absolute discretion, determines to be appropriate and reasonable. 
  
 (e) Working Capital and Other Reserves. At all times from and after the date hereof, the General Partner may cause the Partnership to establish and maintain at any and all times working capital accounts and
other cash or similar balances in such amount as the General Partner, in its sole and absolute discretion, deems appropriate and reasonable from time to time. 
  

7.2 Certificate of Limited Partnership 
  
 The General Partner has previously filed the Certificate with the Secretary of State of Delaware as required by the Act. The General Partner shall use all
reasonable efforts to cause to be filed such other certificates or documents as may be reasonable and necessary or appropriate for the formation, continuation, qualification and operation of a limited partnership (or a partnership in which the
limited partners have limited liability) in the State of Delaware and any other state, or the District of Columbia, in which the Partnership may elect to do business or own property. To the extent that such action is determined by the General
Partner to be reasonable and necessary or appropriate, the General Partner shall file amendments to and restatements of the Certificate and do all of the things to maintain the Partnership as a limited partnership (or a partnership in which the
limited partners have limited liability) under the laws of the State of Delaware and each other state, or the District of Columbia, in which the Partnership may elect to do business or own property. Subject to the terms of Section 8.5(a)(iv) hereof,
the General Partner shall not be required, before or after filing, to deliver or mail a copy of the Certificate or any amendment thereto to any Limited Partner. 
  

7.3 Reimbursement of the General Partner 
  
 (a) No Compensation. Except as provided in this Section 7.3 and elsewhere in this Agreement (including the provisions of Articles 5 and 6 regarding
distributions, payments, and allocations to which it may be entitled), the General Partner shall not be compensated for its services as general partner of the Partnership. 
  

 - 31 - 

 (b) Responsibility for Partnership Expenses. The Partnership shall be responsible for and shall
pay all expenses relating to the Partnership’s organization and the ownership and operation of the Partnership Assets. The General Partner shall be reimbursed on a monthly basis, or such other basis as it may determine in its sole and absolute
discretion, for all expenses that it incurs on behalf of the Partnership relating to the ownership and operation of the Partnership Assets, or for the benefit of the Partnership; provided, that the amount of any such reimbursement shall be reduced
by any interest earned by the General Partner with respect to bank accounts or other instruments or accounts held by it on behalf of the Partnership. Such reimbursement shall be in addition to any reimbursement made as a result of indemnification
pursuant to Section 7.6 hereof. 
  
 (c) Responsibility for
General Partner Expenses. The General Partner shall also be reimbursed for (i) all expenses related to the operations of the General Partner and to the management and administration of any Subsidiaries of the General Partner or the Partnership
or Affiliates of the Partnership, such as auditing expenses and filing fees and any and all salaries, compensation and expenses of officers and employees of the General Partner, and (ii) all expenses the General Partner incurs relating to the
organization and/or reorganization of the Partnership and the General Partner, the public offering of REIT Stock by the General Partner, and any other offering, grant, award or issuance of REIT Stock or additional Partnership Interests pursuant to
Section 4.2 or 4.3, including all expenses associated with compliance by the General Partner and the Initial Limited Partner with laws, rules and regulations promulgated by any regulatory body. 
  
 (d) Business of the General Partner. The Limited Partners acknowledge
that the sole business of the General Partner is the ownership of direct or indirect interests in, and the direct or indirect operation of, the Partnership, and that all of the expenses of the General Partner are incurred for the benefit of the
Partnership. 
  
 (e) Characterization of Reimbursements.
All payments and reimbursements hereunder shall be characterized for Federal income tax purposes as expenses of the Partnership incurred on its behalf, and not as expenses of the General Partner. 
  
 7.4 Acquisition of Limited Partner Interests by the General Partner 
  
 The General Partner and any Affiliates of the General Partner may acquire
Limited Partner Interests and shall be entitled to exercise all rights of a Limited Partner relating to such Limited Partner Interests. 
  
 7.5 Transactions with Affiliates 
  
 (a) Transactions with Subsidiaries. The Partnership may lend or contribute funds or other assets to its Subsidiaries or other Persons in which it
has an equity investment and such Subsidiaries and Persons may borrow funds from the Partnership, on terms and conditions established in the sole and absolute discretion of the General Partner. The foregoing authority shall not create any right or
benefit in favor of any Subsidiary or any other Person. 
  
 (b)
Certain Transactions with the Advisor and its Affiliates. Notwithstanding anything to the contrary in this Agreement, the General Partner shall not cause the Partnership, 

  

 - 32 - 

 
directly or indirectly, to Transfer any property to, purchase any property from, loan any money to, borrow any money from or enter into any other transaction
with the Advisor or any of its Affiliates, or any director of the General Partner, except in accordance with the procedures set forth in Articles X and XI of the Articles of Incorporation for transactions between the General Partner and the Advisor
or its Affiliates. 
  
 (c) Benefit Plans Sponsored by the
Partnership. The General Partner, in its sole and absolute discretion and without the approval of the Limited Partners, may propose and adopt, on behalf of the Partnership, employee benefit plans, option or other equity incentive plans, and
similar plans funded by the Partnership for the benefit of employees of the Partnership, the General Partner, any Subsidiaries of the Partnership or any Affiliate of any of them in respect of services performed, directly or indirectly, for the
benefit of the Partnership, the General Partner, any Subsidiaries of the Partnership or any of their respective Affiliates. 
  
 7.6 Indemnification 
  
 (a) General. To the maximum extent permitted under the Act in effect from time to time, the Partnership shall indemnify each Indemnitee from and
against any and all losses, claims, damages, liabilities, joint or several, expenses (including, without limitation, reasonable attorneys’ fees and other legal fees and expenses), judgments, fines, settlements, and other amounts arising from
any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative (collectively, “Claims”), that relate to the operations of the Partnership, the General Partner or any of the
Partnership’s Subsidiaries in which such Indemnitee may be involved, or is threatened to be involved, as a party or otherwise, except to the extent that (i) with respect to the General Partner, any such Claim results from the gross negligence,
willful misconduct or fraud of the General Partner or with respect to any Limited Partner, any such Claim results from the gross negligence, willful misconduct or fraud of the Limited Partner, (ii) with respect to (A) the directors, officers and
employees of the General Partner, (B) the Advisor and (C) the members, managers and employees of the Advisor, any such Claim results from the negligence or misconduct of such Person, (iii) with respect to the Independent Directors (as defined in the
Articles of Incorporation), any such Claim results from the gross negligence or willful misconduct of such Independent Director, or (iv) in the case of any criminal proceeding against any Indemnitee, such Indemnitee had reasonable cause to believe
that the act or omission was unlawful. In addition, the Partnership shall reimburse the General Partner for any amounts paid by the General Partner in satisfying indemnification obligations of the General Partner incurred in accordance with the
Articles of Incorporation. 
  
 (b) Limitation.
Notwithstanding any provision hereof to the contrary, the provisions of this Section 7.6 as applied to each Indemnitee shall in all respects be subject to the limitations on indemnification and advancement of expenses that would be applicable to a
claim for indemnification made by such Indemnitee against the General Partner pursuant to the Articles of Incorporation, such that the Partnership shall not be permitted to provide for the indemnification of, or advancement of expenses to, any such
Indemnitee for or relating to any liability (including liability under Federal securities laws which, under certain circumstances, impose liability on persons that act in good faith), to the extent (but only to the extent) that the General Partner
could not provide such indemnification or advancement of expenses to such Indemnitee if a similar claim for indemnification were made by such Indemnitee against the General Partner 

  

 - 33 - 

 
pursuant to the Articles of Incorporation, but the provisions of this Section shall be construed so as to effectuate the provision of this Section 7.6 to the
fullest extent indemnification and advancement of expenses would be permissible to such Indemnitee by the General Partner under the Articles of Incorporation. 
  

(c) Contractual Obligations. Without limitation, the indemnity set forth in this Section 7.6 shall extend to any liability of any Indemnitee
pursuant to a loan guaranty (except a guaranty by a Limited Partner of nonrecourse indebtedness of the Partnership or as otherwise provided in any such loan guaranty), contractual obligation for any indebtedness or other obligation or otherwise for
any indebtedness of the Partnership or any Subsidiary of the Partnership (including, without limitation, any indebtedness which the Partnership or any Subsidiary of the Partnership has assumed or taken subject to), and the General Partner is hereby
authorized and empowered, on behalf of the Partnership, to enter into one or more indemnification agreements consistent with the provisions of this Section 7.6 in favor of any Indemnitee having or potentially having liability for any such
indebtedness. 
  
 (d) Advancement of Expenses. Reasonable
expenses incurred by an Indemnitee who is a party to a proceeding shall be paid or reimbursed by the Partnership in advance of the final disposition of any and all Claims made or threatened against an Indemnitee upon receipt by the Partnership of
(i) a written affirmation by the Indemnitee of the Indemnitee’s good faith belief that the standard of conduct necessary for indemnification by the Partnership as authorized in this Section 7.6 has been met, and (ii) a written undertaking by or
on behalf of the Indemnitee to repay the amount if it shall ultimately be determined that the standard of conduct has not been met. 
  
 (e) No Exclusivity. The indemnification provided by this Section 7.6 shall be in addition to any other rights to which an Indemnitee or any other
Person may be entitled under any agreement, pursuant to any vote of the Partners, as a matter of law or otherwise, and shall continue as to an Indemnitee who has ceased to serve in such capacity unless otherwise provided in a written agreement
pursuant to which such Indemnities are indemnified. 
  
 (f)
Insurance. The Partnership may purchase and maintain insurance, on behalf of the Indemnitees and such other Persons as the General Partner shall determine, against any liability that may be asserted against or expenses that may be incurred by
such Person in connection with the Partnership’s activities, regardless of whether the Partnership would have the power to indemnify such Person against such liability under the provisions of this Agreement. 
  
 (g) Benefit Plan Fiduciary. For purposes of this Section 7.6, the
Partnership shall be deemed to have requested an Indemnitee to serve as fiduciary of an employee benefit plan whenever the performance by such Indemnitee of its duties to the Partnership also imposes duties on, or otherwise involves services by,
such Indemnitee to the plan or participants or beneficiaries of the plan. Excise taxes assessed on an Indemnitee with respect to an employee benefit plan pursuant to applicable law shall constitute fines within the meaning of this Section 7.6 and
actions taken or omitted by the Indemnitee with respect to an employee benefit plan in the performance of its duties for a purpose reasonably believed by such Indemnitee to be in the interest of the participants and beneficiaries of the plan shall
be deemed to be for a purpose which is not opposed to the best interests of the Partnership. 
  

 - 34 - 

 (h) No Personal Liability for Partners. Any indemnification pursuant to this Section 7.6 shall be
made only out of the assets of the Partnership, and neither the General Partner nor any Limited Partner shall have any obligation to contribute to the capital of the Partnership, or otherwise provide funds, to enable the Partnership to fund its
obligations under this Section 7.6. In no event may an Indemnitee subject any of the Partners to personal liability by reason of the indemnification provisions set forth in this Agreement. 
  
 (i) Interested Transactions. An Indemnitee shall not be denied
indemnification in whole or in part under this Section 7.6 because the Indemnitee had an interest in the transaction with respect to which the indemnification applies if the transaction was otherwise permitted by the terms of this Agreement.

  
 (j) Benefit. The provisions of this Section 7.6 are for
the benefit of the Indemnitees, their heirs, successors, assigns and administrators and shall not be deemed to create any rights for the benefit of any other Persons. 
  
 (k) Amendment of this Section 7.6. Any amendment, modification or repeal of this Section 7.6 or any provision hereof
shall be prospective only and shall not in any way affect the Partnership’s liability to any Indemnitee under this Section 7.6, as in effect immediately prior to such amendment, modification, or repeal with respect to Claims arising from or
relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such Claims may arise or be asserted. 
  
 (l) Indemnification Payments Not Distributions. If and to the extent any payments to the General Partner or the Initial Limited Partner in its
capacity as the Advisor pursuant to this Section 7.6 constitute gross income to the General Partner or the Initial Limited Partner (as opposed to the repayment of advances made on behalf of the Partnership), such amounts shall constitute guaranteed
payments within the meaning of Section 707(c) of the Code, shall be treated consistently therewith by the Partnership and all Partners, and shall not be treated as distributions for purposes of computing the Partners’ Capital Accounts.

  
 (m) Exception to Indemnification. Notwithstanding
anything to the contrary in this Agreement, the General Partner shall not be entitled to indemnification hereunder for any Claim for which the General Partner is obligated to indemnify the Partnership under any other agreement between the General
Partner and the Partnership. 
  
 7.7 Liability of the General Partner

  
 (a) General. To the maximum extent permitted under
the Act in effect from time to time, neither the General Partner nor any director, officer, shareholder, partner, member or employee, trustee, representative or agent of the General Partner (including the Advisor and its Affiliates) shall be liable
to the Partnership or to any Partner for (i) any act or omission performed or failed to be performed by it, or for any losses, claims, costs, damages, or liabilities arising from any such act or omission, except to the extent such loss, claim, cost
damage or liability results from such Person’s gross negligence, willful misconduct or fraud, (ii) any tax liability imposed on the Partnership or (iii) any losses due to the misconduct, negligence (gross or ordinary), dishonesty or bad faith
of any agents of the Partnership. 
  

 - 35 - 

 (b) No Obligation to Consider Separate Interests of Limited Partners. The Limited Partners
expressly acknowledge that (i) the General Partner (and the Advisor, in advising the General Partner) is acting on behalf of the Partnership and the stockholders of the General Partner, collectively, (ii) the General Partner (and the Advisor, in
advising the General Partner), subject to the provisions of Section 7.1(f) hereof, is under no obligation to consider the separate interest of the Limited Partners (including, without limitation, the tax consequences to Limited Partners or
Assignees) in deciding whether to cause the Partnership to take (or decline to take) any actions, and (iii) neither the General Partner nor the Advisor shall be liable for monetary damages for losses sustained, liabilities incurred, or benefits not
derived by Limited Partners in connection with such decisions, unless the General Partner or the Advisor, as the case may be, acted in bad faith and the act or omission was material to the matter giving rise to the loss, liability or benefit not
derived. 
  
 (c) Conflict. The Limited Partners expressly
acknowledge that in the event of any conflict in the fiduciary duties owed by the General Partner to its stockholders and by the General Partner, in its capacity as a general partner of the Partnership, to the Limited Partners, the General Partner
may act in the best interests of the General Partner’s stockholders without violating its fiduciary duties to the Limited Partners, and that the General Partner shall not be liable for monetary damages for losses sustained, liabilities
incurred, or benefits not derived by the Limited Partners in connection with any such violation. 
  
 (d) Amendment of this Section 7.7. Any amendment, modification or repeal of this Section 7.7 or any provision hereof shall be prospective only and
shall not in any way affect the limitations on the General Partner’s and its officers’ and directors’ liability to the Partnership and the Limited Partners under this Section 7.7 as in effect immediately prior to such amendment,
modification or repeal with respect to claims arising from or relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted. 
  
 7.8 Other Matters Concerning the General Partner 
  
 (a) Reliance on Documents. The General Partner may rely and shall be
protected in acting, or refraining from acting, upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, debenture, or other paper or document believed by it in good faith to be genuine and to
have been signed or presented by the proper party or parties. 
  
 (b) Reliance on Advisors. The General Partner may consult with legal counsel, accountants, appraisers, management consultants, investment bankers, architects, engineers, environmental consultants and other consultants and advisers
selected by it, and any act taken or omitted to be taken in reliance upon the opinion of such Persons as to matters which such General Partner reasonably believes to be within such Person’s professional or expert competence shall be
conclusively presumed to have been done or omitted in good faith and in accordance with such opinion. 
  
 (c) Action Through Agents. The General Partner shall have the right, in respect of any of its powers or obligations hereunder, to act through any
of its duly authorized officers, agents, including the Advisor, and duly appointed attorneys-in-fact. Each such officer, agent or 

  

 - 36 - 

 
attorney-in-fact shall, to the extent granted by the General Partner in writing, have full power and authority to do and perform each and every act and duty
which is permitted or required to be done by the General Partner hereunder. 
  
 (d) Actions to Maintain REIT Status. Notwithstanding any other provisions of this Agreement or the Act, any action of the General Partner on behalf of the Partnership or any decision of the General Partner to
refrain from acting on behalf of the Partnership, undertaken in the good faith belief that such action or omission is necessary or advisable in order to: (i) protect the ability of the General Partner to continue to qualify as a REIT, or (ii) avoid
the General Partner incurring any taxes under Section 857 or Section 4981 of the Code, is expressly authorized under this Agreement and is deemed approved by all of the Limited Partners. 
  
 7.9 Title to Partnership Assets 
  
 Title to all Partnership Assets, whether real, personal or mixed and whether tangible or intangible, shall be deemed to be held by the Partnership as an
entity, and no Partner, individually or collectively, shall have any ownership interest in the Partnership Assets or any portion thereof. Title to any or all of the Partnership Assets may be held in the name of the Partnership, the General Partner
or one or more nominees, as the General Partner may determine, including Affiliates of the General Partner. The General Partner hereby declares and warrants that any Partnership Asset for which legal title is held in the name of the General Partner
or any nominee or Affiliate of the General Partner shall be held by the General Partner for the use and benefit of the Partnership in accordance with the provisions of this Agreement; provided, that the General Partner shall use reasonable efforts
to cause beneficial and record title to such assets to be vested in the Partnership as soon as reasonably practicable. All Partnership Assets shall be recorded as the property of the Partnership in its books and records, irrespective of the name in
which legal title to such Partnership Assets is held. 
  
 7.10 Reliance by
Third Parties 
  
 (a) Notwithstanding anything to the contrary
in this Agreement, any Person dealing with the Partnership shall be entitled to assume that the General Partner has full power and authority, without the consent or approval of any other Partner or Person, to encumber, sell or otherwise use in any
manner any and all Partnership Assets and to enter into any contracts on behalf of the Partnership, and take any and all actions on behalf of the Partnership, and such Person shall be entitled to deal with the General Partner as if the General
Partner were the Partnership’s sole party in interest, both legally and beneficially. 
  
 (b) Each Limited Partner hereby waives any and all defenses or other remedies which may be available against such Person to contest, negate or disaffirm any action of the General Partner in connection with any such
dealing. 
  
 (c) In no event shall any Person dealing with the
General Partner or its representatives be obligated to ascertain that the terms of this Agreement have been complied with or to inquire into the necessity or expediency of any act or action of the General Partner or its representatives. 

 

 - 37 - 

 (d) Each and every certificate, document or other instrument executed on behalf of the Partnership by the
General Partner or its representatives shall be conclusive evidence in favor of any and every Person relying thereon or claiming thereunder that: 
  
 (i) at the time of the execution and delivery of such certificate, document or instrument, this Agreement was in full force and effect;

  
 (ii) the Person executing and delivering such
certificate, document or instrument was duly authorized and empowered to do so for and on behalf of the Partnership; and 
  
 (iii) such certificate, document or instrument was duly executed and delivered in accordance with the terms and provisions of this
Agreement and is binding upon the Partnership. 
  
 ARTICLE 8

 RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS 
  
 8.1 Limitation of Liability 
  
 The Limited Partners shall have no liability under this Agreement, except as expressly provided in this Agreement, including Section 10.5 hereof, or under
the Act. 
  
 8.2 No Right to Participate in the Management of Business

  
 No Limited Partner shall take part in the management or
control of the Partnership’s investment or other activities, transact any business in the Partnership’s name or have the power to sign documents for or otherwise bind the Partnership. Except as expressly provided herein, no Limited Partner
shall have the right to vote for the election, removal or replacement of the General Partner. The exercise by any Limited Partner of any right conferred herein shall not be construed to constitute participation by such Limited Partner in the control
of the business of the Partnership so as to make such Limited Partner liable as a general partner for the debts and obligations of the Partnership for purposes of the Act, laws of non-U.S. jurisdictions or otherwise. 
  
 8.3 Outside Activities of Limited Partners 
  
 Subject to any agreements entered into by a Limited Partner or its
Affiliates, or any Assignee, with the Partnership or any of its Subsidiaries, any Limited Partner or Assignee and any officer, director, employee, agent, trustee, Affiliate or shareholder or other equity owner of any Limited Partner or Assignee
shall be entitled to and may have business interests and engage in business activities in addition to those relating to the Partnership, including business interests and activities that are in direct competition with the Partnership or that are
enhanced by the activities of the Partnership. Neither the Partnership nor any of the other Partners shall have any rights by virtue of this Agreement in any business ventures of any Limited Partner or Assignee. None of the Limited Partners nor any
other Person shall have any rights by virtue of this Agreement or the Partnership relationship established hereby in any business ventures of any other Person and such Person shall have no obligation pursuant to this Agreement to offer any interest
in any such business ventures to the Partnership, any Limited Partner or any such other 

  

 - 38 - 

 
Person, even if such opportunity is of a character which, if presented to the Partnership, any Limited Partner or such other Person, could be taken by such
Person. 
  
 8.4 Return of Capital 
  
 No Limited Partner shall be entitled to the withdrawal or return of its
Capital Contribution, except (a) to the extent of such Limited Partner’s right of redemption set forth in Section 8.6, and (b) to the that extent the General Partner (or the Liquidation Trustee) determines to make distributions made pursuant to
this Agreement or upon termination of the Partnership as provided herein. Except as otherwise expressly provided in this Agreement, no Limited Partner or Assignee shall have priority over any other Limited Partner or Assignee, either as to the
return of Capital Contributions or as to distributions or allocations of Profits or Losses. 
  
 8.5 Rights of Limited Partners Relating to the Partnership 
  
 (a) General. In addition to the other rights provided by this Agreement and any rights granted to limited partners of a limited partnership under
the Act that such limited partners are not permitted to waive under the Act, and except as limited by Section 8.5(b) hereof, each Limited Partner shall have the right, for a purpose reasonably related to such Limited Partner’s interest as a
limited partner in the Partnership, upon written demand with a statement of the purpose of such demand and at such Limited Partner’s own expense (including such reasonable copying and administrative charges as the General Partner may establish
from time to time): 
  
 (i) to obtain a copy of
the most recent annual and quarterly reports filed with the Securities and Exchange Commission by the General Partner pursuant to the Securities Exchange Act of 1934; 
  
 (ii) to obtain a copy of the Partnership’s Federal, state and local income tax returns for each Fiscal
Year; 
  
 (iii) to obtain a current list of the
name and last known business, residence or mailing address of each Partner; and 
  
 (iv) to obtain a copy of this Agreement and the Certificate and all amendments thereto, together with executed copies of all powers of
attorney pursuant to which this Agreement, the Certificate and all amendments thereto have been executed. 
  
 Each Limited Partner hereby waives any and all rights that such Limited Partner may have under the Act that the Act permits limited partners to waive, except any such right that is granted expressly to such Limited
Partner under this Agreement. 
  
 (b) Confidentiality.
Notwithstanding any other provision of this Section 8.5, the General Partner may keep confidential from the Limited Partners, for such period of time as the General Partner determines in its sole and absolute discretion to be reasonable, any
information that: 
  
 (i) the General Partner
reasonably believes to be in the nature of trade secrets or other information, the disclosure of which the General Partner in good faith believes is 

  

 - 39 - 

 
not in the best interests of the Partnership or could damage the Partnership or its business; or 
  
 (ii) the Partnership is required by law or by agreements
with an unaffiliated third party to keep confidential. 
  
 8.6 Redemption Right

  
 (a) Redemption Right. Subject to the provisions of
this Section 8.6, at any time on or after the first anniversary date of the issuance of a Partnership Unit to a Partner, such Partner shall have the right (the “Redemption Right”) to require the Partnership to redeem on a Specified
Redemption Date all or a portion of the Partnership Units held by such Partner, at a redemption price equal to and in the form of the Redemption Amount. The Redemption Right shall be exercised pursuant to a Notice of Redemption Request delivered to
the General Partner by the Partner who is exercising the Redemption Right (the “Redeeming Partner”). 
  
 (b) Distributions and Allocations. 
  
 (i) Subject to Section 8.6(c), the Redeeming Partner shall have no right to receive any distributions that are paid after the Specified
Redemption Date with respect to any Partnership Units redeemed pursuant to this Section 8.6. 
  
 (ii) If any Partnership Interest is redeemed (other than pursuant to Section 8.6(c)) on any day other than the first day of a Fiscal Year,
then Profit, Losses, each item thereof and all other items attributable to such Partnership Interest for such Fiscal Year shall be divided and allocated to the Redeeming Partner by taking into account the Redeeming Partner’s ownership of such
Partnership Interest during the Fiscal Year in accordance with Section 706(d) of the Code, using the interim closing of the books method (unless the General Partner, in its sole and absolute discretion, elects to adopt a daily, weekly or monthly
proration period, in which event Profits, Losses, each item thereof and all other items attributable to such redeemed Partnership Interest for such Fiscal Year shall be prorated based upon the applicable method selected by the General Partner).

  
 (c) General Partner Assumption of Obligation.
Notwithstanding the provisions of Section 8.6(a), the General Partner may, in its sole and absolute discretion (subject to the limitations on ownership and transfer of shares of REIT Stock in the Articles of Incorporation), assume directly the
obligation to satisfy a Redemption Right and satisfy such Redemption Right by paying to the Redeeming Partner the Redemption Amount on the Specified Redemption Date, whereupon the General Partner shall acquire the Partnership Units offered for
redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Partnership Units. In the event that the General Partner shall exercise this right to satisfy the Redemption Right in the manner
described in the preceding sentence and shall fully perform its obligation to pay the Redemption Amount on the Specified Redemption Date, the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such
Redeeming Partner’s exercise of the Redemption Right, and each of the Redeeming Partner, the Partnership and the General Partner shall treat the transaction between the General Partner and 

  

 - 40 - 

 
the Redeeming Partner as a sale of the Redeeming Partner’s Partnership Units to the General Partner for Federal income tax purposes. Distributions and
allocations with respect to Partnership Units acquired by the General Partner pursuant to this Section 8.6(c) shall be made in accordance with Sections 11.6(c) and 11.6(d). 
  
 (d) Fractional Shares. If the General Partner elects, either on its own behalf or on behalf of the Partnership, to
satisfy the Redemption Right by paying the REIT Stock Amount, and the REIT Stock Amount is not equal to a whole number of shares of REIT Stock, the Redeeming Partner shall be paid (i) that number of shares of REIT Stock which equals the nearest
whole number less than the REIT Stock Amount, plus (ii) (A) an amount of cash equal to the Value of one share of REIT Stock on the applicable Valuation Date, multiplied by (B) the REIT Stock Amount minus the whole number of shares of REIT Stock
pursuant to clause (i) of this Section 8.6(d). 
  
 (e)
Execution of Documents. Each Redeeming Partner agrees to execute such documents as the General Partner may reasonably require in connection with (i) the exercise and satisfaction of the Redemption Right, (ii) any assumption by the General
Partner pursuant to Section 8.6(c), and (iii) any issuance of REIT Stock in connection with the Partnership or the General Partner paying the Redemption Amount to the Redeeming Partner. 
  
 (f) Exceptions to Redemption Right. Notwithstanding the provisions of Section 8.6(a), unless the General Partner
elects for payment of the Redemption Amount by the Partnership to be the Cash Amount, a Partner shall not be entitled to exercise the Redemption Right if the delivery of REIT Stock to such Partner on the Specified Redemption Date would (i) be
prohibited under the Articles of Incorporation or the bylaws of the General Partner, (ii) adversely affect the ability of the General Partner to continue to qualify as a REIT or would subject the General Partner to any additional taxes under Section
857 or Section 4981 of the Code, (iii) constitute or be likely to constitute a violation of any applicable federal or state securities laws or regulations, or (iv) be prohibited under Section 11.6(f) of this Agreement (in each case regardless of
whether the General Partner would in fact assume and satisfy the Redemption Right). 
  
 (g) Exercise of the Redemption Right by the General Partner. The receipt of a notice of redemption with respect to shares of REIT Stock held by stockholders of the General Partner (a “REIT Notice)
shall be deemed to be a Notice of Redemption Request given by the General Partner to the Partnership and an exercise of the Redemption Right with respect to a number of Partnership Units equal to the number of shares of REIT Stock identified in the
REIT Notice. With respect to any Redemption Right exercised by the General Partner pursuant to this Section 8.6(g), the General Partner will elect for payment of the Redemption Amount by the Partnership to the General Partner to be the Cash Amount.

  
 (h) Assignees. The Assignee of any Limited Partner may
exercise the rights of such Limited Partner pursuant to this Section 8.6 with respect to any Partnership Units Transferred by such Limited Partner to such Assignee, and such Limited Partner shall be deemed to have assigned such rights to such
Assignee and shall be bound by the exercise of such rights by such Assignee. In connection with any exercise of such rights by such Assignee on behalf of such 

  

 - 41 - 

 
Limited Partner, the Redemption Amount shall be paid by the Partnership directly to such Assignee and not to such Limited Partner. 
  
 (i) No Liens on Partnership Units Delivered for Redemption. Each
Partner covenants and agrees that all Partnership Units delivered for redemption pursuant to this Section 8.6 shall be delivered to the Partnership or the General Partner, as the case may be, free and clear of all Liens. Notwithstanding anything
contained herein to the contrary, neither the General Partner nor the Partnership shall be under any obligation to acquire Partnership Units which are or may be subject to any Liens. Each Partner further agrees that, if any state or local property
transfer tax is payable as a result of the Transfer of its Partnership Units to the Partnership or the General Partner pursuant to this Section 8.6, such Partner shall assume and pay such transfer tax. 
  
 (j) Cancellation of Units; Amendments to Exhibit A. Upon the
redemption of Partnership Units pursuant to this Section 8.6, (i) all such redeemed Partnership Units (other than Partnership Units redeemed pursuant to Section 8.6(c)) shall be cancelled, and (ii) the General Partner shall amend Exhibit A to
reflect the new Percentage Interests of the Partners and to (A) either adjust the number of Partnership Units and the Percentage Interest of the Redeeming Partner or eliminate the Redeeming Partner from Exhibit A, as applicable, and (B) in
the event that the General Partner assumes the obligation to satisfy a Redemption Right pursuant to Section 8.6(c), adjust the number of Partnership Units and the Percentage Interest of the General Partner to reflect the Transfer of such Partnership
Units to the General Partner. 
  
 (k) Additional Partnership
Interests. If the Partnership issues Partnership Interests to any Additional Limited Partner pursuant to Article 4, the General Partner shall make such revisions to this Section 8.6 as the General Partner determines are necessary to reflect the
issuance of such Partnership Interests (including setting forth any restrictions on the exercise of the Redemption Right with respect to such Partnership Interests). 
  
 (l) Redemptions by the Advisor. For so long as the Advisor remains the advisor to the Partnership and General Partner
under the Advisory Agreement, neither the Advisor nor any Affiliate of the Advisor (other than the General Partner) may redeem any portion of the Partnership Units held by such Person; provided that, upon the occurrence of a Listing Event,
immediately following the distribution to the Advisor of all amounts required to be distributed to the Advisor pursuant to Section 5.1(d), the Partnership shall redeem all of the Partnership Units held by the Advisor and its Affiliates (other than
the General Partner), at a redemption price equal to and in the form of the Redemption Amount. In addition, upon the occurrence of a Termination Event, immediately following the distribution to the Advisor of all amounts required to be distributed
to the Advisor pursuant to Section 5.1(e), the Partnership shall redeem all of the Partnership Units held by the Advisor and its Affiliates (other than the General Partner), at a redemption price equal to and in the form of the Redemption Amount.
With respect to any automatic redemption of Partnership Units held by the Advisor or its Affiliates (other than the General Partner) pursuant to this Section 8.6(l), the General Partner will elect for payment of the Redemption Amount by the
Partnership to the Advisor and/or any such Affiliate to be the Cash Amount. 
  

 - 42 - 

 ARTICLE 9 
 BOOKS, RECORDS, ACCOUNTING AND REPORTS 
  
 9.1 Records and Accounting 
  
 (a) Books and
Records. The General Partner shall keep or cause to be kept at the principal office of the Partnership those records and documents required to be maintained by the Act and other books and records deemed by the General Partner to be appropriate
with respect to the Partnership’s business, including, without limitation, all books and records necessary for the General Partner to comply with applicable REIT Requirements and to provide to the Limited Partners any information, lists and
copies of documents required to be provided pursuant to Sections 8.5(a) and 9.2 hereof. 
  
 (b) Accounting Method. The books of the Partnership shall be maintained, for financial and tax reporting purposes, on an accrual basis in accordance with GAAP. 
  
 9.2 Reports 
  
 (a) Annual Reports. As soon as practicable after the end of each Fiscal Year, but in no event later than the date on
which the General Partner mails its annual report to its stockholders, the General Partner shall cause to be mailed to each Limited Partner as of the close of the Fiscal Year, an annual report containing financial statements of the Partnership, or
of the General Partner, if such statements are prepared on a consolidated basis with the Partnership, for such Fiscal Year, presented in accordance with GAAP, such statements to be audited by a nationally recognized firm of independent public
accountants selected by the General Partner in its sole discretion. 
  
 (b) Quarterly Reports. If and to the extent that the General Partner mails quarterly reports to its stockholders, then as soon as practicable after the end of each fiscal quarter of the Partnership, but in no event later than the
date such reports are mailed, the General Partner shall cause to be mailed to each Limited Partner a report containing unaudited financial statements as of the last day of the calendar quarter of the Partnership, or of the General Partner, if such
statements are prepared on a consolidated basis with the Partnership, and such other information as may be required by applicable law or regulation, or as the General Partner determines to be appropriate. 
  
 (c) Delivery. Notwithstanding the foregoing, the General Partner may
deliver to the Limited Partners each of the reports described above, as well as any other communications that it may provide hereunder, by e-mail or by any other electronic means. 
  
 ARTICLE 10 
 TAX MATTERS 
  
 10.1 Preparation of Tax Returns 

 
 The General Partner shall arrange for the preparation and timely filing of
all returns of Partnership income, gains, deductions, losses and other items required of the Partnership for federal and state income tax purposes and shall use all reasonable efforts to furnish, within ninety 

  

 - 43 - 

 
(90) days of the close of each taxable year, the tax information reasonably required by Limited Partners for federal and state income tax reporting purposes.

  
 10.2 Tax Elections 
  
 Except as otherwise provided herein, the General Partner shall, in its sole
and absolute discretion, determine whether to make any available election pursuant to the Code; provided, however, that the General Partner shall make the election under Section 754 of the Code in accordance with applicable regulations thereunder.
The General Partner shall have the right to seek to revoke any such election it makes, including, without limitation, the election under Section 754 of the Code, upon the General Partner’s determination, in its sole and absolute discretion,
that such revocation is in the best interests of the Partners. 
  
 10.3 Tax
Matters Partner 
  
 (a) General. The General Partner
shall be the “tax matters partner” of the Partnership for federal income tax purposes. Pursuant to Section 6223(c)(3) of the Code, upon receipt of notice from the Internal Revenue Service of the beginning of an administrative proceeding
with respect to the Partnership, the tax matters partner shall furnish the Internal Revenue Service with the name, address, taxpayer identification number, and profit interest of each of the Limited Partners and the Assignees; provided, that such
information is provided to the Partnership by the Limited Partners and the Assignees. 
  
 (b) Powers. The tax matters partner is authorized, but not required: 
  
 (i) to enter into any settlement with the Internal Revenue Service with respect to any administrative or judicial proceedings for the
adjustment of Partnership items required to be taken into account by a Partner for income tax purposes (such administrative proceedings being referred to as a “tax audit” and such judicial proceedings being referred to as “judicial
review”), and in the settlement agreement the tax matters partner may expressly state that such agreement shall bind all Partners, except that such settlement agreement shall not bind any Partner: 
  
 (A) who (within the time prescribed pursuant to the Code and
the Treasury Regulations) files a statement with the Internal Revenue Service providing that the tax matters partner shall not have the authority to enter into a settlement agreement on behalf of such Partner; or 
  
 (B) who is a “notice partner” (as defined in
Section 6231(a)(8) of the Code) or a member of a “notice group” (as defined in Section 6223(b)(2) of the Code); 
  
 (ii) in the event that a notice of a final administrative adjustment at the Partnership level of any item required to be taken into
account by a Partner for tax purposes (a “final adjustment”) is mailed to the tax matters partner, to seek judicial review of such final adjustment, including the filing of a petition for readjustment with the Tax Court or the filing of a
complaint for refund with the United States Claims Court 

  

 - 44 - 

 
or the District Court of the United States for the district in which the Partnership’s principal place of business is located; 
  
 (iii) to intervene in any action brought by any other
Partner for judicial review of a final adjustment; 
  
 (iv) to file a request for an administrative adjustment with the Internal Revenue Service and, if any part of such request is not allowed by the Internal Revenue Service, to file an appropriate pleading (petition or complaint) for judicial
review with respect to such request; 
  
 (v) to
enter into an agreement with the Internal Revenue Service to extend the period for assessing any tax which is attributable to any item required to be taken account of by a Partner for tax purposes, or an item affected by such item; and 

 
 (vi) to take any other action on behalf of the Partners
or the Partnership in connection with any tax audit or judicial review proceeding to the extent permitted by applicable law or regulations. 
  
 The taking of any action and the incurring of any expense by the tax matters partner in connection with any such proceeding, except to the extent required
by law, is a matter in the sole and absolute discretion of the tax matters partner and the provisions relating to indemnification of the General Partner set forth in Section 7.6 of this Agreement shall be fully applicable to the tax matters partner
in its capacity as such. 
  
 (c) Reimbursements. The tax
matters partner shall receive no compensation for its services. All third party costs and expenses incurred by the tax matters partner in performing its duties as such (including legal and accounting fees and expenses) shall be borne by the
Partnership. Nothing herein shall be construed to restrict the Partnership from engaging an accounting firm to assist the tax matters partner in discharging its duties hereunder, so long as the compensation paid by the Partnership for such services
is reasonable. 
  
 10.4 Organizational Expenses 
  
 The Partnership shall elect to deduct expenses, if any, incurred by it in
organizing the Partnership ratably over a sixty (60) month period as provided in Section 709 of the Code. 
  
 10.5 Withholding 
  
 (a)
General. Each Limited Partner hereby authorizes the Partnership to withhold from, or pay on behalf of or with respect to, such Limited Partner any amount of federal, state, local, or foreign taxes that the General Partner determines that the
Partnership is required to withhold or pay with respect to any amount distributable or allocable to such Limited Partner pursuant to this Agreement, including, without limitation, any taxes required to be withheld or paid by the Partnership pursuant
to Sections 1441, 1442, 1445 or 1446 of the Code. 
  
 (b)
Treatment of Amounts Withheld. Any amount paid on behalf of or with respect to a Limited Partner shall constitute a loan by the Partnership to such Limited Partner, which 

  

 - 45 - 

 
loan shall be repaid by such Limited Partner within fifteen (15) days after notice from the General Partner that such payment must be made unless:

  
 (i) the Partnership withholds such payment
from a distribution which would otherwise be made to the Limited Partner; or 
  
 (ii) the General Partner determines, in its sole and absolute discretion, that such payment may be satisfied out of the available funds of the Partnership which would, but for such payment, be distributed to the
Limited Partner. 
  
 Any amounts withheld from amounts otherwise distributable to
a Limited Partner as described in clause (i) or (ii) of this Section 10.5(b) shall be treated as having been distributed to such Limited Partner. 
  
 (c) Security Interest. Each Limited Partner hereby unconditionally and irrevocably grants to the Partnership a security interest in such Limited
Partner’s Partnership Interest to secure such Limited Partner’s obligation to pay to the Partnership any amounts required to be paid pursuant to this Section 10.5. Each Limited Partner shall take such actions as the Partnership or the
General Partner shall request in order to perfect or enforce the security interest created hereunder. 
  
 (d) Default. In the event that a Limited Partner fails to pay when due any amounts owed to the Partnership pursuant to this Section 10.5, the
General Partner may, in its sole and absolute discretion, elect to make the payment to the Partnership on behalf of such defaulting Limited Partner, and in such event shall be deemed to have loaned such amount to such defaulting Limited Partner and
shall succeed to all rights and remedies of the Partnership as against such defaulting Limited Partner. Without limitation, in such event, the General Partner shall have the right to receive distributions that would otherwise be distributable to
such defaulting Limited Partner until such time as such loan, together with all interest thereon, has been paid in full, and any such distributions so received by the General Partner shall be treated as having been distributed to the defaulting
Limited Partner and immediately paid by the defaulting Limited Partner to the General Partner in repayment of such loan. 
  
 (e) Interest. Any amount payable by a Limited Partner under this Section 10.5 shall bear interest at the lesser of (i) the base rate on corporate
loans at large United States money center commercial banks, as published from time to time in The Wall Street Journal, plus four (4) percentage points, and (ii) the maximum lawful rate of interest on such obligation, such interest to accrue
from the date such amount is due (i.e., fifteen (15) days after demand) until such amount is paid in full. 
  
 ARTICLE 11 
 TRANSFERS AND WITHDRAWALS 
  
 11.1 Transfer 
  
 (a) Definition. The term “Transfer,” when used in this Article 11 with respect to a Partnership Interest or
a Partnership Unit, shall be deemed to refer to a transaction by which the General Partner purports to assign all or any part of its General Partner Interest to another Person 

  

 - 46 - 

 
or a Limited Partner purports to assign all or any part of its Limited Partner Interest to another Person, and includes a sale, assignment, gift, pledge,
encumbrance, hypothecation, mortgage, exchange or any other disposition by law or otherwise. The term “Transfer” when used in this Article 11 does not include any redemption of Partnership Units or other Partnership Interests for cash or
REIT Stock pursuant to Section 8.6. 
  
 (b) Restriction on
Transfer. No Partnership Interest shall be Transferred, in whole or in part, except in accordance with the terms and conditions set forth in this Article 11. Any Transfer or purported Transfer of a Partnership Interest not made in accordance
with this Article 11 shall be null and void. 
  
 11.2 Transfer of the General
Partner’s General Partner Interest 
  
 (a) The General
Partner may not Transfer any of its General Partner Interest or withdraw as General Partner, except: 
  
 (i) with the Consent of the Outside Limited Partners; or 
  
 (ii) if such Transfer is to an entity which is wholly-owned, directly or indirectly, by the General Partner;

  
 (b) In the event the General Partner withdraws as general
partner of the Partnership in accordance with Section 11.2(a), the General Partner’s General Partner Interest shall immediately be converted into a Limited Partner Interest. 
  
 11.3 Limited Partners’ Rights to Transfer 
  
 (a) General. Subject to the provisions of Section 11.3(b), no Limited Partner shall have the right to Transfer all or
a portion of such Limited Partner’s Partnership Interest, or any of such Limited Partner’s rights as a Limited Partner, without the consent of the General Partner, which may be given or withheld by the General Partner in its sole and
absolute discretion. 
  
 (b) Transfers to Permitted
Transferees. Notwithstanding the provisions of Section 11.3(a), but subject to the provisions of Sections 11.3(c), 11.3(d), and 11.3(e) and other applicable restrictions on Transfers contained in this Article 11, a Limited Partner may Transfer,
with or without the consent of the General Partner, all or a portion of his Partnership Units to a Permitted Transferee; provided that, such Permitted Transferee qualifies as “accredited investor” as such term is defined in Rule 501(a) of
Regulation D promulgated under the Securities Act; and provided further that, no Transfer pursuant to this Section 11.3(b) shall be effective until the General Partner receives notice of such Transfer. 
  
 (c) No Transfers Violating Securities Laws. The General Partner may
prohibit any Transfer by a Limited Partner of its Partnership Units if, in the opinion of legal counsel to the Partnership, such Transfer would require the filing of a registration statement under the Securities Act, or would otherwise violate any
federal or state securities laws or regulations applicable to the Partnership or the Partnership Units. 
  

 - 47 - 

 (d) No Transfers to Certain Lenders. No Transfer of any Partnership Units may be made to a lender
to the Partnership or any Person who is related (within the meaning of Treasury Regulations Section 1.752-4(b)) to any lender to the Partnership whose loan constitutes a nonrecourse liability (within the meaning of Treasury Regulations Section
1.752-1(a)(2)), without the consent of the General Partner, which may be withheld in its sole and absolute discretion. 
  
 (e) Additional Prohibited Transfers. No Transfer by a Limited Partner of its Partnership Units may be made to any Person if: 
  
 (i) in the opinion the General Partner based on the advice
of legal counsel, if appropriate, it would adversely affect the ability of the General Partner to continue to qualify as a REIT or would subject the General Partner to any additional taxes under Section 857 or Section 4981 of the Code; 

 
 (ii) in the opinion of the General Partner based on the
advice of legal counsel, if appropriate, it would result in the Partnership being treated as an association taxable as a corporation for federal income tax purposes; 
  
 (iii) such Transfer would subject the Partnership to regulation under the Investment Company Act of 1940,
the Investment Advisers Act of 1940, as amended or ERISA; 
  
 (iv) such Transfer is effectuated through an “established securities market” or a “secondary market (or the substantial equivalent thereof)” within the meaning of Section 7704 of the Code; or

  
 (v) such Transfer is to a Prohibited
Transferee. 
  
 (f) Incapacitated Limited Partners. If a
Limited Partner is Incapacitated, the executor, administrator, trustee, committee, guardian, conservator or receiver of such Limited Partner’s estate shall have all of the rights of a Limited Partner, but not more rights than those enjoyed by
other Limited Partners, for the purpose of settling or managing the estate and such power as the Incapacitated Limited Partner possessed to Transfer all or any part of his or its interest in the Partnership. The Incapacity of a Limited Partner, in
and of itself, shall not dissolve or terminate the Partnership. 
  
 (g) Transfers by the Advisor. For so long as the Advisor remains the advisor to the Partnership and General Partner under the Advisory Agreement, neither the Advisor nor any Affiliate of the Advisor (other than the General Partner)
may Transfer any portion of the Partnership Units held by the Advisor to any Person, other than (i) Transfers to any Affiliate of the Advisor, and (ii) deemed Transfers to the General Partner pursuant to Section 8.6(c). 
  
 11.4 Substituted Limited Partners 
  
 (a) Consent of the General Partner. No Limited Partner shall have the
right to substitute a Permitted Transferee in such Limited Partner’s place. The General Partner shall, however, have the right to consent to the admission of a Permitted Transferee of the Partnership 

  

 - 48 - 

 
Interest of a Limited Partner pursuant to this Section 11.4 as a Substitute Limited Partner, which consent may be given or withheld by the General Partner in
its sole and absolute discretion. The General Partner’s failure or refusal to permit such transferee to become a Substituted Limited Partner shall not give rise to any cause of action against the Partnership or any Partner. 
  
 (b) Rights of a Substituted Limited Partner. A transferee who has been
admitted as a Substituted Limited Partner in accordance with this Article 11 shall have all the rights and powers and be subject to all the restrictions and liabilities of a Limited Partner under this Agreement. The admission of any transferee as a
Substituted Limited Partner shall be conditioned upon the transferee executing and delivering to the Partnership an acceptance of all of the terms and conditions of this Agreement, including, without limitation, the power of attorney granted in
Section 2.6, and such other documents or instruments as may be required in the reasonable discretion of the General Partner in order to effect such Person’s admission as a Substituted Limited Partner. 
  
 (c) Amendments to Exhibit A. Upon the admission of a Substituted
Limited Partner, the General Partner shall amend Exhibit A to reflect the name, address, number of Partnership Units, and Percentage Interest of such Substituted Limited Partner and to eliminate or adjust, if necessary, the name, address and
interest of the predecessor of such Substituted Limited Partner. 
  
 11.5
Assignees 
  
 If the General Partner, in its sole and absolute
discretion, does not consent to the admission of any transferee as a Substituted Limited Partner, as described in Section 11.4(a), such transferee shall be considered an Assignee for purposes of this Agreement. An Assignee shall be deemed to have
had assigned to it, and shall be entitled to receive distributions from the Partnership and the share of Profit, Losses and any other items of gain, loss, deduction or credit of the Partnership attributable to the Partnership Units assigned to such
transferee, but shall not be deemed to be a holder of Partnership Units for any other purpose under this Agreement except as otherwise provided in this Agreement, and shall not be entitled to vote such Partnership Units in any matter presented to
the Limited Partners for a vote (such Partnership Units being deemed to have been voted on such matter in the same proportion as all other Partnership Units held by Limited Partners are voted). In the event any such transferee desires to make a
further assignment of any such Partnership Units, such transferee shall be subject to all of the provisions of this Article 11 to the same extent and in the same manner as any Limited Partner desiring to make an assignment of Partnership Units.

  
 11.6 General Provisions 
  
 (a) Withdrawal of a Limited Partner. No Limited Partner may withdraw
from the Partnership other than as a result of a Transfer of all of such Limited Partner’s Partnership Units pursuant to which the transferee is admitted as a Substituted Limited Partner or a redemption of all of the Partnership Units held by
such Limited Partner pursuant to Section 8.6. 
  
 (b)
Termination of Status as a Limited Partner. Any Limited Partner that (i) Transfers all of such Limited Partner’s Partnership Units (or other Partnership Interests) in a Transfer pursuant to which the transferee is admitted as a
Substituted Limited Partner, or (ii) 

  

 - 49 - 

 
redeems all of such the Partnership Units held by such Limited Partner pursuant to Section 8.6 shall cease to be a Limited Partner. 
  
 (c) Allocations. If any Partnership Interest is Transferred during the
Partnership’s Fiscal Year in compliance with the provisions of this Article 11 (including Transfers to the General Partner pursuant to Section 8.6(c)) on any day other than the first day of a Fiscal Year, then Profit, Losses, each item thereof
and all other items attributable to such Partnership Interest for such Fiscal Year shall be divided and allocated between the transferor Partner and the transferee Partner by taking into account their varying interests during the Fiscal Year in
accordance with Section 706(d) of the Code, using the interim closing of the books method (unless the General Partner, in its sole and absolute discretion, elects to adopt a daily, weekly or monthly proration period, in which event Profits, Losses,
each item thereof and all other items attributable to such transferred Partnership Interest for such Fiscal Year shall be prorated based upon the applicable method selected by the General Partner). 
  
 (d) Distributions. All distributions of Available Operating Cash, Net
Capital Event Proceeds or other Partnership Assets attributable to Partnership Units, with respect to which the Partnership Record Date is before the date of a Transfer of such Partnership Units (including any Transfer to the General Partner
pursuant to Section 8.6(c)), shall be made to the transferor Partner, and all distributions of Available Operating Cash, Net Capital Event Proceeds or other Partnership Assets thereafter attributable to such Partnership Units shall be made to the
transferee Partner. 
  
 (e) Capital Accounts. The original
Capital Account established for each transferee shall be in the same amount as the Capital Account or portion thereof of the Partner to which such transferee succeeds, at the time such transferee is admitted to the Partnership. The Capital Account
of any Partner whose Percentage Interest shall be increased by means of the Transfer to it of all or part of the Partnership Interest of another Partner shall be appropriately adjusted to reflect such Transfer. Any reference in this Agreement to a
Capital Contribution of, or distribution to, a then-Partner shall include a Capital Contribution or distribution previously made by or to any prior Partner on account of the Partnership Interest of such then-Partner. 
  
 (f) Additional Restrictions. In addition to any other restrictions on
transfer contained in this Agreement, in no event may any Transfer of a Partnership Interest by any Partner or any redemption pursuant to Section 8.6 be made without the express consent of the General Partner, in its sole and absolute discretion,
(i) to any person or entity who lacks the legal right, power or capacity to own a Partnership Interest; (ii) in violation of applicable law; (iii) of any component portion of a Partnership Interest, such as the Capital Account, or rights to
distributions, separate and apart from all other components of a Partnership Interest; (iv) if in the opinion of the General Partner based on the advice of legal counsel, if appropriate, such Transfer would cause a termination of the Partnership for
Federal or state income tax purposes (except as a result of a redemption of all Partnership Units held by all Limited Partners); (v) if in the opinion of the General Partner based on the advice of legal counsel, if appropriate, such Transfer would
cause the Partnership to cease to be classified as a partnership for Federal income tax purposes (except as a result of a redemption of all Partnership Units held by all Limited Partners); (vi) if such Transfer requires the registration of such
Partnership Interest pursuant to any applicable federal or state securities laws; (vii) if such Transfer would cause the Partnership to become a “publicly 

  

 - 50 - 

 
traded partnership,” as such term is defined in Section 7704(b) of the Code (provided that this clause (vii) shall not be the basis for limiting or
restricting in any manner the exercise of the Redemption Right under Section 8.6 unless, and only to the extent that, outside tax counsel advises the General Partner that, in the absence of such limitation or restriction, there is a significant risk
that the Partnership will be treated as a “publicly traded partnership” and, by reason thereof, taxable as a corporation); (viii) if such Transfer would cause the General Partner to own 10% or more of the ownership interests of any tenant
of a property held by the Partnership within the meaning of Section 856(d)(2)(B) of the Code; (ix) if such Transfer would result in the General Partner being “closely held” within the meaning of Section 856(h) of the Code; or (x) if in the
opinion the General Partner based on the advice of legal counsel, if appropriate, such Transfer would adversely affect the ability of the General Partner to continue to qualify as a REIT or subject the General Partner to any additional taxes under
Section 857 or Section 4981 of the Code. 
  
 ARTICLE 12

 ADMISSION OF PARTNERS 
  
 12.1 Admission of Successor General Partner 
  
 A successor to all of the General Partner Interest pursuant to Article 11 hereof who is proposed to be admitted as a successor General Partner shall be
admitted to the Partnership as the General Partner, effective immediately following the successor General Partner’s execution and delivery to the Partnership of an acceptance of all of the terms and conditions of this Agreement and such other
documents or instruments as may be required or appropriate to effect such Person’s admission as General Partner. In the case of such admission on any day other than the first day of a Fiscal Year, all items attributable to the General Partner
Interest for such Fiscal Year shall be allocated between the transferring General Partner and such successor as provided in Section 11.6(c) hereof. Any such successor General Partner shall carry on the business of the Partnership without
dissolution. 
  
 12.2 Admission of Additional Limited Partners 

 
 (a) General. A Person other than the General Partner and the
Initial Limited Partner who makes a Capital Contribution to the Partnership in accordance with this Agreement shall be admitted to the Partnership as an Additional Limited Partner only upon executing and delivering to the General Partner:

  
 (i) evidence of acceptance in form
satisfactory to the General Partner of all of the terms and conditions of this Agreement, including, without limitation, the power of attorney granted in Section 2.6 hereof; and 
  
 (ii) such other documents or instruments as may be required in the discretion of the General Partner in
order to effect such Person’s admission as an Additional Limited Partner. 
  
 (b) General Partner’s Consent Required. Notwithstanding anything to the contrary in this Section 12.2, no Person shall be admitted as an Additional Limited Partner without the consent of the General
Partner, which consent may be given or withheld in the General Partner’s 

  

 - 51 - 

 
sole and absolute discretion. The admission of any Person as an Additional Limited Partner shall become effective on the date upon which the name of such
Person is recorded on the books and records of the Partnership, following the consent of the General Partner to such admission and the satisfaction of the conditions set forth in Section 12.2(a). 
  
 (c) Allocations to Additional Limited Partners. If any Additional
Limited Partner is admitted to the Partnership on any day other than the first day of a Fiscal Year, then Profit, Losses, each item thereof and all other items allocable among Partners and Assignees for such Fiscal Year shall be allocated among such
Additional Limited Partner and all other Partners and Assignees by taking into account their varying interests during the Fiscal Year in accordance with Section 706(d) of the Code, using the interim closing of the books method. Solely for purposes
of making such allocations, each of such items for the calendar month in which an admission of any Additional Limited Partner occurs shall be allocated among all of the Partners and Assignees, including such Additional Limited Partner. 

 
 12.3 Amendment of Agreement and Certificate of Limited Partnership 
  
 For the admission to the Partnership of any Partner, the General Partner
shall take all steps necessary and appropriate under the Act to amend the records of the Partnership and, if necessary, to prepare as soon as practical an amendment of this Agreement (including an amendment of Exhibit A) and, if required by
law, shall prepare and file an amendment to the Certificate and may for this purpose exercise the power of attorney granted pursuant to Section 2.6 hereof. 
  
 ARTICLE 13 
 DISSOLUTION, LIQUIDATION
AND TERMINATION 
  
 13.1 Dissolution 
  
 The Partnership shall not be dissolved by the admission of Substituted
Limited Partners or Additional Limited Partners or by the admission of a successor General Partner in accordance with the terms of this Agreement. Subject to Section 13.1(b), upon the withdrawal of the General Partner, any successor General Partner
shall continue the business of the Partnership. The Partnership shall dissolve, and its affairs shall be wound up, only upon the first to occur of any of the following (“Liquidating Events”): 
  
 (a) the expiration of its term as provided in Section 2.5 hereof; 

 
 (b) an event of withdrawal of the General Partner, as defined in the Act
(other than an event of bankruptcy), unless, within ninety (90) days after such event of withdrawal, a “majority in interest” (as defined below) of the remaining Partners Consent in writing to continue the business of the Partnership and
to the appointment, effective as of the date of withdrawal, of a successor General Partner; 
  
 (c) an election to dissolve the Partnership made by the General Partner, in its sole and absolute discretion; 
  

 - 52 - 

 (d) entry of a decree of judicial dissolution of the Partnership pursuant to the provisions of the Act;

  
 (e) the occurrence of a Terminating Capital Transaction; or

  
 (f) a final and non-appealable judgment is entered by a court
of competent jurisdiction ruling that the General Partner or the Partnership is bankrupt or insolvent, or a final and non-appealable order for relief is entered by a court with appropriate jurisdiction against the General Partner or the Partnership,
in each case under any federal or state bankruptcy or insolvency laws as now or hereafter in effect, unless prior to the entry of such order or judgment a “majority in interest” (as defined below) of the remaining Partners Consent in
writing to continue the business of the Partnership and to the appointment, effective as of a date prior to the date of such order or judgment, of a substitute General Partner, if applicable. 
  
 As used in this Article 13, a “majority in interest” shall refer to Partners
(excluding the General Partner) who hold Partnership Units that constitute more than fifty percent (50%) of the aggregate number of outstanding Partnership Units not held by the General Partner. 
  
 13.2 Winding Up; Liquidation 
  
 (a) Upon dissolution of the Partnership, the business and affairs of the
Partnership shall be wound up as provided in this Section 13.2. The General Partner shall act as the “Liquidator” (or, in the event there is no remaining General Partner, any Person elected by Limited Partners holding more than 50%
of the total number of Partnership Units then issued and outstanding). The Liquidator shall wind up the affairs of the Partnership, shall dispose of such Partnership Assets as it deems necessary or appropriate and shall pay and distribute the assets
of the Partnership, including the proceeds of any such disposition, as follows: 
  
 (i) first, to creditors, including Partners who are creditors, to the extent otherwise permitted by law, in satisfaction of liabilities of
the Partnership (whether by payment or by establishment or reserves as determined by the Liquidator in its sole discretion), other than distributions to Partners pursuant to Article 5, and 
  
 (ii) second, to the Partners in accordance with their
positive Capital Account balances. 
  
 It is intended that such
distributions will result in the Partners receiving aggregate distributions in the order of and equal to the amount of distributions that would have been received if the liquidating distributions were made in accordance with Section 5.1. However, if
the balances in the Capital Accounts do not result in such intention being satisfied, items of Profits and Losses will be reallocated among the Partners for the Fiscal Year of the liquidation (and, at the election of the General Partner, if
necessary and permissible, prior Fiscal Years) so as to cause the balances in the Capital Accounts to be in the amounts necessary to assure that such result is achieved. Notwithstanding anything herein to the contrary, in the event the Partnership
is liquidated within the meaning of Treasury Regulation §§ 1.704-1(b)(2)(ii)(g), liquidation distributions shall be made by the end of the taxable year in which the Partnership liquidates or, if later, within ninety (90) days of the date
of such liquidation. 
  

 - 53 - 

 (b) In the discretion of the Liquidator, a pro rata portion of the distributions that would otherwise be
made to the Partners pursuant to this Article 13 may be: 
  
 (i) distributed to a trust established for the benefit of the General Partner and Limited Partners for the purposes of liquidating Partnership assets, collecting amounts owed to the Partnership, and paying any
contingent or unforeseen liabilities or obligations of the Partnership or the General Partner arising out of or in connection with the Partnership; the assets of any such trust shall be distributed to the General Partner and Limited Partners from
time to time, in the reasonable discretion of the Liquidator, in the same proportions as the amount distributed to such trust by the Partnership would otherwise have been distributed to the General Partner and Limited Partners pursuant to this
Agreement; or 
  
 (ii) withheld or escrowed to
provide a reasonable reserve for Partnership liabilities (contingent or otherwise) and to reflect the unrealized portion of any installment obligations owed to the Partnership, provided that such withheld or escrowed amounts shall be distributed to
the General Partner and Limited Partners in the manner and order of priority set forth in Section 13.2(a) as soon as practicable. 
  
 (c) The Liquidator shall, in its sole discretion, determine whether to sell any Partnership Assets, including, without limitation, Real Estate Assets, and
if so, whether at a public or private sale, for what price and on what terms. If the Liquidator determines to sell or otherwise dispose of any Partnership Asset or any interest therein, the Liquidator shall do so expeditiously and for its fair
market value under the circumstances, giving due regard to the activity and condition of the relevant market and general financial and economic conditions. If the Liquidator determines not to sell or otherwise dispose of any Partnership Asset or any
interest therein, the Liquidator shall not be required to distribute the same to the Partners promptly but shall have full right and discretion to determine the time and manner of such distribution and distributions giving due regard to the
interests of the Partners. 
  
 13.3 No Obligation to Contribute Deficit

  
 If any Partner has a deficit balance in his Capital
Account (after giving effect to all contributions, distributions and allocations for all taxable years, including the year during which such liquidation occurs), such Partner shall have no obligation to make any contribution to the capital of the
Partnership with respect to such deficit, and such deficit shall not be considered a debt owed to the Partnership or to any other Person for any purpose whatsoever. 
  
 13.4 Notice of Dissolution 
  
 In the event a Liquidating Event occurs or an event occurs that would, but for the provisions of an election or objection by one or more Partners pursuant
to Section 13.1, result in a dissolution of the Partnership, the General Partner shall, within thirty (30) days thereafter, provide written notice thereof to each of the Partners. 
  

 - 54 - 

 13.5 Termination of Partnership and Cancellation of Certificate of Limited Partnership 
  
 Upon the completion of the liquidation of the Partnership’s assets, as
provided in Section 13.2 hereof, the Partnership shall be terminated, a certificate of cancellation shall be filed, and all qualifications of the Partnership as a foreign limited partnership in jurisdictions other than the state of Delaware shall be
canceled and such other actions as may be necessary to terminate the Partnership shall be taken. 
  
 13.6 Reasonable Time for Winding-Up 
  
 A reasonable time shall be allowed for the orderly winding-up of the business and affairs of the Partnership and the liquidation of its assets pursuant to Section 13.2 hereof in order to minimize any losses otherwise
attendant upon such winding-up, and the provisions of this Agreement shall remain in effect among the Partners during the period of liquidation. 
  
 13.7 Waiver of Partition 
  
 Each Partner hereby waives any right to partition of the Partnership property. 
  
 ARTICLE 14 
 AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS 
  
 14.1
Amendments 
  
 (a) By the General Partner. The General
Partner shall have the power, without the consent of the Limited Partners, to amend this Agreement except as set forth in Section 14.1(b) hereof. The General Partner shall provide notice to the Limited Partners when any action under this Section
14.1(a) is taken in the next regular communication to the Limited Partners. The Limited Partners shall not have the power to amend this Agreement. 
  
 (b) Restrictions on General Partner’s Ability to Amend this Agreement. Notwithstanding Section 14.1(a) hereof, this Agreement shall not be
amended with respect to any Partner adversely affected without the Consent of such Partner adversely affected if such amendment would: 
  
 (i) convert a Limited Partner’s interest in the Partnership into a General Partner Interest; 
  
 (ii) impose on the Limited Partners any obligation to make
additional Capital Contributions to the Partnership; 
  
 (iii) modify the limited liability of a Limited Partner in a manner adverse to such Limited Partner; or 
  
 (iv) amend this Section 14.1(b). 
  

 - 55 - 

 14.2 Meetings of the Partners 
  
 (a) General. Meetings of the Partners may be called by the General Partner and shall be called upon the receipt by
the General Partner of a written request by Limited Partners holding 25 percent or more of the Partnership Interests. The request shall state the nature of the business to be transacted. Notice of any such meeting shall be given to all Partners not
less than seven (7) days nor more than thirty (30) days prior to the date of such meeting. Partners may vote in person or by proxy at such meeting. 
  
 (b) Vote Required. Whenever the vote or Consent of the Partners is permitted or required under this Agreement, such vote or Consent may be given at
a meeting of the Partners or may be given in accordance with the procedure prescribed in Section 14.2(c) hereof. Except as otherwise expressly provided in this Agreement, the Consent of holders of Partnership Units that constitute more than fifty
percent (50%) of the aggregate number of outstanding Partnership Units held by the Partners (including the General Partner) shall constitute the consent of the Partners. 
  
 (c) Action Without a Meeting. Any action required or permitted to be taken at a meeting of the Partners may be taken
without a meeting if a written consent setting forth the action so taken is signed by holders of Partnership Units that constitute more than fifty percent (50%) (or such other percentage as is expressly required by this Agreement) of the aggregate
number of outstanding Partnership Units held by the Partners (including the General Partner). Such consent may be in one instrument or in several instruments, and shall have the same force and effect as a vote the holders of Partnership Units that
constitute more than fifty percent (50%) (or such other percentage as is expressly required by this Agreement) of the aggregate number of outstanding Partnership Units held by the Partners (including the General Partner). Such consent shall be filed
with the General Partner. An action so taken shall be deemed to have been taken at a meeting held on the effective date of the consent as certified by the General Partner. 
  
 (d) Proxy. Each Partner may authorize any Person or Persons to act for him by proxy on all matters in which a Partner
is entitled to participate, including waiving notice of any meeting, or voting or participating at a meeting. Every proxy must be signed by the Partner or his attorney-in-fact and a copy thereof delivered to the Partnership. No proxy shall be valid
after the expiration of eleven (11) months from the date thereof unless otherwise provided in the proxy. Every proxy shall be revocable at the pleasure of the Partner executing it, such revocation to be effective upon the General Partner’s
receipt of written notice of such revocation from the Partner executing such proxy. 
  
 (e) Conduct of Meeting. Each meeting of the Partners shall be conducted by the General Partner or such other Person as the General Partner may appoint pursuant to such rules for the conduct of the meeting as
the General Partner or such other Person deems appropriate. Meetings of Partners may be conducted in the same manner as meetings of the stockholders of the General Partner and may be held at the same time, and as part of, meetings of the
stockholders of the General Partner. 
  

 - 56 - 

 ARTICLE 15 
 GENERAL PROVISIONS 
  
 15.1 Addresses
and Notice 
  
 Any notice, demand, request or report required
or permitted to be given or made to a Partner or Assignee under this Agreement shall be in writing and shall be deemed given or made when delivered if delivered in person, sent by first class United States mail, by overnight delivery or via
facsimile to the Partner or Assignee at the address set forth in Exhibit A or such other address of which the Partner shall notify the General Partner in writing. Notwithstanding the foregoing, the General Partner may elect to deliver any
such notice, demand, request or report by E-mail or by any other electronic means, in which case such communication shall be deemed given or made one day after being sent. 
  
 15.2 Titles and Captions 
  
 All article or section titles or captions in this Agreement are for convenience of reference only, shall not be deemed part of this Agreement and shall in
no way define, limit, extend or describe the scope or intent of any provisions hereof. Except as specifically provided otherwise, references to “Articles” and “Sections” are to Articles and Sections of this Agreement. 

 
 15.3 Pronouns and Plurals 
  
 Whenever the context may require, any pronoun used in this Agreement shall
include the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa. 
  
 15.4 Further Action 
  
 The parties shall execute and deliver all documents, provide all information and take or refrain from taking action as may be necessary or appropriate to
achieve the purposes of this Agreement. 
  
 15.5 Binding Effect 

 
 This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their heirs, executors, administrators, successors, legal representatives and permitted assigns. 
  
 15.6 Creditors 
  
 Other than as expressly set forth herein with respect to the Indemnitees, none of the provisions of this Agreement shall be for the benefit of, or shall
be enforceable by, any creditor of the Partnership. 
  
 15.7 Waiver

  
 No failure by any party to insist upon the strict
performance of any covenant, duty, agreement or condition of this Agreement or to exercise any right or remedy consequent upon a 

  

 - 57 - 

 
breach thereof shall constitute waiver of any such breach or any other covenant, duty, agreement or condition. 
  
 15.8 Counterparts 
  
 This Agreement may be executed in counterparts, all of which together shall constitute one agreement binding on all of the
parties hereto, notwithstanding that all such parties are not signatories to the original or the same counterpart. Each party shall become bound by this Agreement immediately upon affixing its signature hereto. 
  
 15.9 Applicable Law 
  
 This Agreement shall be construed and enforced in accordance with and governed by the laws of the State of Delaware, without
regard to the principles of conflicts of laws thereof. 
  
 15.10 Invalidity of
Provisions 
  
 If any provision of this Agreement is or
becomes invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not be affected thereby. 
  
 15.11 Merger 
  
 Subject to Section 11.2, the Partnership may merge with, or consolidate into, any Person or Entity in accordance with Section 17-211 of the Act.

  
 15.12 No Rights as Stockholders 
  
 Nothing contained in this Agreement shall be construed as conferring upon the
holders of the Partnership Units any rights whatsoever as stockholders of the General Partner, including, without limitation, any right to receive dividends or other distributions made to such stockholders or to vote or to consent or receive notice
as stockholders in respect to any meeting or stockholders for the election of directors of the General Partner or any other matter. 
  
 15.13 Entire Agreement 
  
 This Agreement contains the entire understanding and agreement among the Partners with respect to the subject matter hereof and supersedes any other prior
written or oral understandings or agreements among them with respect thereto. 
  
 [SIGNATURE PAGE FOLLOWS] 
  

 - 58 - 

 IN WITNESS WHEREOF, the parties hereto have executed and delivered this Amended and Restated
Agreement of Limited Partnership as of the day and year first-above written. 
  

			
	GENERAL PARTNER:
	
	PALADIN REALTY INCOME PROPERTIES, INC.
		
	 By:
	 	 
	 Name:
	 	 
	 Title:
	 	 

  

			
	LIMITED PARTNER:
	
	PALADIN REALTY ADVISORS, LLC
		
	 By:
	 	 
	 Name:
	 	 
	 Title:
	 	 

  

 Corporate/Limited Liability Company Additional Limited Partner 
 Signature Page to Amended and Restated Agreement of Limited Partnership 
 of Paladin Realty Income Properties, L.P., by and among the 
 undersigned and the other parties
thereto. 
  

									
	 Dated___________________ __, 200_
	 	 	 	LIMITED PARTNER:
			
	 	 	 	 	[Name of Corporation/LLC]
				
	 	 	 	 	 By:
	 	 
	 	 	 	 	 	 	 Name:
	 	 
	 	 	 	 	 	 	 Title:
	 	 

  

 Partnership Additional Limited Partner Signature Page to Amended and Restated 
 Agreement of Limited Partnership of Paladin Realty Income Properties, L.P., 
 by and among the undersigned and the other parties thereto. 
  

									
	 Dated___________________ __, 200_
	 	 	 	LIMITED PARTNER:
			
	 	 	 	 	[Name of Partnership]
				
	 	 	 	 	 By:
	 	 
	 	 	 	 	 	 	 Name:
	 	 
	 	 	 	 	 	 	 Title:
	 	 

  

 Individual Additional Limited Partner Signature Page to Amended and Restated 
 Agreement of Limited Partnership of Paladin Realty Income Properties, L.P., 
 by and among the undersigned and the other parties thereto. 
  

									
	 Dated___________________ __, 200_
	 	 	 	LIMITED PARTNER:
			
	 	 	 	 	[Name of Individual]
			
	 	 	 	 	 

  

 Exhibit A 
  
 Partners’ Contributions and Partnership Interests 
  

											
	 Name and Address of Partner

	  	 Type of
 Interest

	  	Capital
Contribution

	  	Number of
Partnership
Units

	  	Percentage
Interest

	 
	 Paladin Realty Income Properties, Inc., Inc.
	  	 General Partnership Interest
	  	$	2,000	  	200	  	1.00	%
	 Paladin Realty Advisors, LLC
	  	 Limited Partnership Interest
	  	$	200,000	  	20,000	  	99.00	%
	 TOTAL
	  	 	  	$	202,000	  	20,200	  	100.00	%

  

 Exhibit B 
  
 NOTICE OF REDEMPTION REQUEST 
  
 The undersigned Limited Partner hereby irrevocably (i) requests that Paladin Realty Income Properties, L.P. (the
“Partnership”) redeem              Partnership Units in the Partnership held by such Limited Partner in accordance with the terms of the Amended and Restated Agreement of
Limited Partnership of the Partnership (the “Partnership Agreement”) and the Redemption Right referred to therein; (ii) agrees to surrender such Partnership Units and all right, title, and interest therein promptly upon payment of the
Redemption Amount; (iii) directs that the Redemption Amount deliverable upon exercise of the Redemption Right be delivered to such Limited Partner at the address as specified in the Partnership Agreement; and (iv) directs that, if the General
Partner determines that the Redemption Amount shall be the REIT Stock Amount, the REIT Stock be registered or placed in the name of such Limited Partner and at such address specified in the Partnership Agreement. The undersigned hereby represents,
warrants, and certifies that the undersigned (a) has not transferred or encumbered title to such Partnership Units; (b) has the full right, power and authority to redeem and surrender such Partnership Units as provided herein; and (c) has obtained
the consent or approval of all Persons, if any, having the right to consent or approve such redemption and surrender. 
  
 Dated:                                 
  

			
	[Name of Limited Partner]
		
	By:	 	 
		
	Name:	 	 
		
	Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00072-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00072-of-00352.parquet"}]]