S-1

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As filed with the Securities and Exchange Commission on December 29, 2006

Registration No. 333-             

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

OMNEON VIDEO NETWORKS, INC.
(Exact name of Registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization) 3572
(Primary standard industrial
code number) 77-0483655
(I.R.S. employer identification no.)

965 Stewart Drive
Sunnyvale, CA 94085-3913
(408) 585-5000
(Address, including zip code, and telephone number, including
area code, of Registrant's principal executive offices)

Joseph S. Kennedy
President and Chief Executive Officer
Omneon Video Networks, Inc.
965 Stewart Drive Sunnyvale, CA 94085-3913
(408) 585-5000
(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Gordon K. Davidson, Esq.
Mark A. Leahy, Esq.
Jeffrey R. Vetter, Esq.
Fenwick & West LLP
801 California Street
Mountain View, California 94041
(650) 988-8500 Martin A. Wellington, Esq.
Davis Polk & Wardwell
1600 El Camino Real
Menlo Park, California 94025
(650) 752-2000

Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this Registration Statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.    o

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

CALCULATION OF REGISTRATION FEE

Title of each class of securities to be registered	Proposed maximum aggregate offering price(1)	Amount of registration fee
Common Stock, $0.001 par value per share	$115,000,000	$12,305

(1)

Estimated pursuant to Rule 457(o) solely for the purpose of calculating the amount of the registration fee.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment that specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. Neither we nor the selling stockholders may sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities, and neither we nor the selling stockholders are soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

Subject to completion, dated December 29, 2006.

Prospectus

                    shares

Common stock

This is an initial public offering of shares of common stock by Omneon Video Networks, Inc. Omneon is selling                    shares of common stock. The selling stockholders included in this prospectus are selling an additional                    shares of common stock. We will not receive any proceeds from the sale of shares of common stock by the selling stockholders. The estimated initial offering price is between $         and $         per share.

We have applied for listing of our common stock on The NASDAQ Global Market under the symbol OMNE.

		Per share		Total
Initial public offering price.	$		$
Underwriting discounts and commissions	$		$
Proceeds to Omneon, before expenses	$		$
Proceeds to selling stockholders, before expenses	$		$

We have granted the underwriters an option for a period of 30 days to purchase up to             additional shares of common stock.

Investing in our common stock involves a high degree of risk. See "Risk factors" beginning on page 9.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed on the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

JPMorgan
 Sole bookrunner Deutsche Bank Securities

Canaccord Adams
Needham & Company, LLC
	JMP Securities

                        , 2007

Table of contents

	Page
Prospectus summary	1
Risk factors	9
Forward-looking statements and industry data	26
Use of proceeds	27
Dividend policy	27
Capitalization	28
Dilution	30
Selected consolidated financial data	33
Management's discussion and analysis of financial condition and results of operations	35
Business	56
Management	73
Principal and selling stockholders	97
Related party transactions	102
Description of capital stock	105
Material U.S. federal income tax consequences to non-U.S. holders	110
Shares eligible for future sale	113
Underwriting	115
Legal matters	120
Experts	120
Where you can find more information	120
Index to consolidated financial statements	F-1

You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with information different from that contained in this prospectus. We and the selling stockholders are offering to sell, and seeking offers to buy, common stock only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale or our common stock.

No action is being taken in any jurisdiction outside the United States to permit a public offering of the common stock or possession or distribution of this prospectus in that jurisdiction. Persons who come into possession of this prospectus in jurisdictions outside the United States are required to inform themselves about and to observe any restrictions as to this offering and the distribution of this prospectus applicable to that jurisdiction.

Until                           , 2007, all dealers that buy, sell or trade in our common stock, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

i

Prospectus summary

The following summary should be read together with the more detailed information and consolidated financial statements and related notes thereto appearing elsewhere in this prospectus. This summary highlights what we believe is the most important information about us and this offering. Before you decide to invest in our common stock, you should read the entire prospectus carefully, including the risk factors and the consolidated financial statements and related notes included in this prospectus. In this prospectus, unless the context otherwise requires, the terms "Omneon," "we," "us" and "our" refer to Omneon Video Networks, Inc., a Delaware corporation, and its subsidiaries.

Omneon overview

Omneon is a leading provider of digital content storage and processing systems used by media companies to enable efficient production and distribution of high-quality digital video and audio. We develop, market and sell a range of video servers, active storage systems and related software applications that media companies use to simultaneously ingest, process, store, manage and deliver digital media in a wide range of formats. When used for television production and on-air operations, our products provide both continuous real-time record and playback capabilities as well as file-based access to digital media content. As the means by which media distribution to consumers rapidly evolves, our systems also provide a platform for media companies to produce more content for delivery to a wider range of devices.

We are a leading provider of broadcast video servers and are actively extending our leadership by addressing new segments of this market and expanding into the complementary digital media storage and content management markets. Our products include Spectrum video servers, MediaGrid active storage systems and MediaTool software applications. In designing our products, we combine an understanding of media workflow requirements, knowledge of information technologies and advanced system design capabilities to provide high-performance, standards-based solutions that are optimized for the large-capacity and high-bandwidth requirements of digital media. Our products are commonly integrated with complementary technologies and applications, and we encourage a broad ecosystem of partners to ensure interoperability with our platforms by supporting industry-standard interface protocols and offering application programming interfaces, or APIs.

Our flexible and scalable products are designed to meet the needs of media companies worldwide, including multi-national media conglomerates, commercial and public broadcast television networks, content networks, satellite broadcasters, television service providers, local television stations and mobile television providers. To date, our systems have been sold to more than 350 customers in over 45 countries. Our customers include system integrators, such as Ascent Media Group and Netorium, and end users, such as British Broadcasting Corporation, British Sky Broadcasting, Discovery Communications and Turner Entertainment, a division of Time Warner. We have grown our total revenues at a 109% compound annual growth rate over the past three years from $12.4 million in 2003 to $54.1 million in 2005. In the nine months ended September 30, 2006, we generated total revenues and net income of $60.3 million and $6.3 million, respectively.

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Industry overview

The advent of new technologies and distribution platforms is driving fundamental changes in the way video content is produced, programmed, distributed and consumed. Consumers are increasingly demanding broader access to both existing and new forms of content. This content is being distributed to a growing number of platforms, including high-definition, or HD, televisions, personal computers, mobile devices and portable media players. As a result, the need to produce different types of content in multiple formats is growing rapidly. For example, existing content producers, programmers and distributors are transitioning to HD video and surround sound audio, while emerging mobile and online video services need short program clips at lower bit rates. This diversity requires producers to create more content more efficiently. Raw program material must be shared among production teams creating content for different audiences and distribution channels. Content distributors must expand their operations to support a growing number of channels, as well as new formats intended for multiple distribution platforms.

The transformations occurring across the digital content value chain are changing the way production and distribution facilities are designed and operated. Disk-based storage is rapidly replacing tape-based storage to enable simultaneous access to raw content by multiple individuals and production teams. Disk-based storage also better supports the distribution of different content formats and multiple channels. The use of disk-based storage for both production and distribution coincides with the emergence of applications and systems capable of working with file-based media, rather than legacy video tapes. As a result, production and distribution facilities are upgrading their digital content infrastructure to take advantage of file-based workflows.

Our market opportunity

To address the changes in the industry, media companies must invest in solutions that allow them to better integrate their production and distribution workflows, enabling more collaborative production and efficient repurposing of their media assets. Workflow integration with file-based media can translate into significant reductions in labor costs, improved quality and increased flexibility to quickly deploy new revenue-generating services. As a result, media companies are investing in digital content infrastructure that enables them to reliably deploy best-of-breed production and distribution solutions. According to Frost & Sullivan, the market for video servers is expected to grow from $583 million in 2006 to $1.2 billion in 2010. Further, according to IDC, the market for capacity-optimized disk storage systems is expected to grow from $2.2 billion in 2006 to $8.6 billion in 2010.

Our solutions

Omneon solutions allow our customers to deploy a digital content infrastructure that accommodates both real-time video processing and faster-than-real-time file-based workflows for the production and distribution of digital media content. Our Spectrum server and MediaGrid storage product lines complement each other to support this mixed operating environment.

Our Spectrum video server is optimized for high-reliability, real-time applications such as multi-channel broadcast playout. Broad adoption of Spectrum has established us as a leader in the

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broadcast video server market. Our recently introduced MediaGrid active storage system is optimized for high-availability file-based content storage and provides high-bandwidth simultaneous multi-user access to content. MediaGrid also incorporates grid computing capabilities, enabling integrated digital media processing functions such as format conversion and quality control.

Our systems are typically managed and controlled by third-party applications. The combination of our products and these third-party applications is often part of a larger system designed and installed by independent system integrators. To date, over 140 application developers have licensed our APIs to enhance their level of integration with our systems. We encourage and support these developers by offering open, standards-based platforms to provide an integrated solution to our mutual customers.

Our strengths

We have expertise in developing open, scalable and reliable digital content storage and processing systems for media companies. Working closely with our customers, we develop products and technologies optimized for media workflows and enable them to reduce costs and address new revenue opportunities. Our key strengths include:

•

focus and strong reputation in the digital media market;

•

expertise in integrating digital media and information technologies into cost-effective solutions;

•

extensive knowledge of the technical infrastructure required to support complex workflows within a production and distribution facility;

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development of platforms designed to interoperate with best-of-breed technologies; and

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strong relationships and a proven ability to collaborate with global media companies.

Our strategy

We seek to become the leading provider of digital asset infrastructure to the media industry. The key elements of our strategy are to:

•

continue to expand our leadership in the broadcast video server market;

•

provide active storage solutions to the digital media industry;

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expand our portfolio of content management applications;

•

continue to involve customers in strategic product planning;

•

pursue partnerships and complementary acquisitions; and

•

opportunistically expand into new and adjacent markets.

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Corporate information

We were incorporated in Delaware in May 1998. Our principal offices are located at 965 Stewart Drive, Sunnyvale, CA 94085-3913, and our telephone number is (408) 585-5000. Our website address is www.omneon.com. The information contained in or that can be accessed through our website is not part of this prospectus.

Omneon®, Omneon Video Networks®, MediaGrid, Spectrum, MediaPort, MultiPort, MediaDirector, MediaStore and the Omneon logo are our trademarks in the U.S. and in other countries. All other trademarks or service marks appearing in this prospectus are trademarks of the respective companies that use them.

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The offering

Common stock offered by Omneon	shares
Common stock offered by the selling stockholders	shares
Over-allotment option	shares
Common stock to be outstanding after this offering	shares
Use of proceeds	We intend to use the net proceeds to us from this offering for working capital and general corporate purposes, which may include possible acquisitions of complementary businesses, technologies or other assets. We will not receive any of the proceeds from the sale of common stock by the selling stockholders.
Proposed NASDAQ Global Market symbol	OMNE

The share amounts listed here are based on shares outstanding as of September 30, 2006. These amounts exclude:

•

3,289,042 shares of common stock issuable upon the exercise of outstanding stock options as of September 30, 2006 under our 1998 stock option plan at a weighted average exercise price of $0.71 per share;

•

372,653 shares of common stock issuable upon exercise of options granted between October 1, 2006 and December 15, 2006 under our 1998 stock option plan at a weighted average exercise price of $7.20 per share;

•

158,313 shares of common stock reserved for future issuance under our 1998 stock option plan as of September 30, 2006, which reserve was increased by 400,000 shares subsequent to September 30, 2006;

•

shares of common stock reserved for future issuance under our 2007 equity incentive plan and 2007 employee stock purchase plan, which we have adopted to become effective upon the completion of this offering and which contain provisions that automatically increase their share reserve each year, as more fully described in "Management—Employee benefit plans;" and

•

479,505 shares of common stock issuable upon exercise of outstanding warrants as of September 30, 2006 at a weighted average exercise price of $0.79 per share, of which warrants to purchase 69 shares of common stock will, unless earlier exercised, expire in January 2007, and the remaining warrants will automatically be exercised on a net exercise basis upon completion of this offering, unless earlier exercised.

Unless otherwise noted, the information in this prospectus assumes:

•

the conversion of all outstanding shares of convertible preferred stock into an aggregate of 17,047,446 shares of common stock upon the completion of this offering;

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•

the adoption of our restated certificate of incorporation and restated bylaws upon the completion of this offering; and

•

no exercise of the underwriters' over-allotment option.

6

Summary consolidated financial data

The following summary consolidated financial data should be read with our consolidated financial statements and related notes and "Management's discussion and analysis of financial condition and results of operations," all included elsewhere in this prospectus. We derived the summary consolidated statement of operations data for the years ended December 31, 2003, 2004 and 2005 from our audited consolidated financial statements included elsewhere in this prospectus. The summary consolidated statement of operations data for the nine months ended September 30, 2005 and 2006 and the summary consolidated balance sheet data as of September 30, 2006 are derived from our unaudited consolidated financial statements included elsewhere in this prospectus. We have prepared the unaudited consolidated information on the same basis as the audited consolidated financial statements and have included, in our opinion, all adjustments, consisting only of normal recurring adjustments, that we consider necessary for a fair presentation of the financial information set forth in those statements. Our historical results are not necessarily indicative of the results to be expected in the future.

		Year ended December 31,								Nine months ended September 30,
(in thousands, except per share data)		2003			2004			2005		2005		2006
Consolidated statement of operations data:
Total revenues		$	12,434		$	31,428		$	54,112	$	36,328	$	60,271
Total cost of revenues(1)			6,510			12,321			21,061		14,244		23,661
Gross profit			5,924			19,107			33,051		22,084		36,610
Total operating expenses(1)			12,972			19,127			28,171		19,842		30,801
Income (loss) from operations			(7,048	)		(20	)		4,880		2,242		5,809
Income (loss) before cumulative effect of change in accounting principle			(7,021	)		27			4,698		1,964		6,328
Net income (loss)		$	(7,021	)	$	27		$	4,141	$	1,407	$	6,328
Pro forma net income (loss) per share(2):
	Basic							$	0.27			$	0.36
	Diluted								0.23				0.32
Shares used to compute pro forma net income (loss) per share(2):
	Basic								18,086				19,711
	Diluted								20,908				21,747

(1)

Includes stock-based compensation as follows (in thousands):

Total cost of revenues	$	—	$	—	$	—	$	—	$	119
Research and development		—		—		—		—		274
Sales and marketing		—		—		—		—		240
General and administrative		—		—		—		—		103
Total stock-based compensation	$	—	$	—	$	—	$	—	$	736

(2)

See Note 1 to our consolidated financial statements for a description of the method used to compute basic and diluted pro forma net income per share and shares used in computing basic and diluted pro forma net income per share.

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The consolidated balance sheet data as of September 30, 2006 is presented:

•

on an actual basis;

•

on a pro forma basis to reflect (1) the automatic conversion of all outstanding shares of our preferred stock into an aggregate of 17,047,446 shares of common stock upon the completion of this offering, (2) the reclassification of the convertible preferred stock warrant liability to additional paid-in capital and (3) the issuance of 479,436 shares of common stock assuming the exercise of outstanding warrants to purchase shares of preferred stock and the automatic conversion of these shares of preferred stock into shares of common stock; and

•

on a pro forma as adjusted basis to reflect the adjustments described above and the sale by us of                           shares of common stock at the assumed initial public offering price of $    per share, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

September 30, 2006	Actual			Pro forma		Pro forma as adjusted(1)
(in thousands)
Consolidated balance sheet data:
Cash and cash equivalents	$	16,871		$	16,871	$
Working capital		20,750			20,750
Total assets		45,189			45,189
Convertible preferred stock warrant liability		1,467			—		—
Total convertible preferred stock		39,785			—		—
Total stockholders' equity (deficit)		(11,785	)

(1)

Each $1.00 increase or decrease in the assumed initial public offering price of $             per share would increase or decrease, as applicable, our cash and cash equivalents, working capital, total assets and total stockholders' equity by approximately $    million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions payable by us.

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Risk factors

Investing in our common stock involves a high degree of risk. You should carefully consider the following risk factors and all other information contained in this prospectus before purchasing our common stock. If any of the following risks occur, our business, financial condition or results of operations could be seriously harmed. In that case, the trading price of our common stock could decline, and you may lose some or all of your investment.

Risks related to our business

We may not be able to continue to maintain or increase our profitability and our recent growth rates may not be indicative of our future growth.

We have been profitable in recent periods; however, we had an accumulated deficit of $56.0 million as of September 30, 2006. This accumulated deficit is attributable to net losses incurred from our inception in 1998 through 2004, before we first achieved profitability. We may not succeed in maintaining or increasing our profitability and could incur losses in future periods. We expect to incur additional operating expenses associated with being a public company, and we intend to continue to increase our operating expenses, including stock-based compensation, in all areas as we grow our business. If our revenues do not increase to offset these expected increases in costs or operating expenses, our operating results would be negatively affected. You should not consider our historic revenues and net income growth rates as indicative of future growth rates. Accordingly we cannot assure you that we will be able to maintain or increase our profitability in the future.

Our quarterly operating results have fluctuated in the past and may continue to fluctuate in the future, which could cause our stock price to decline.

Our quarterly results of operations have fluctuated in the past and may continue to fluctuate as a result of a variety of factors, some of which may be outside of our control. If our quarterly results of operations fall below the expectations of securities analysts or investors, the price of our common stock could decline substantially. Fluctuations in our quarterly results of operations may be due to a number of factors, including:

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the timing and volume of shipments of our products during a particular quarter;

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the timing and success of new product introductions by us or our competitors;

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seasonal variations in the demand for our products;

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the amount and timing of operating costs related to the maintenance and expansion of our business, operations and infrastructure;

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our ability to control costs, including third-party manufacturing costs and costs of components;

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changes in our or our competitors' pricing policies or sales terms;

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our ability to obtain sufficient supplies of components;

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our ability to maintain sufficient production volumes for our products;

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•

volatility in our stock price, which may lead to higher stock compensation expenses pursuant to Statement of Financial Accounting Standards No. 123(R), Share-Based Payments;

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the timing of costs related to the development or acquisition of technologies or businesses;

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general economic, industry and market conditions and those conditions specific to the broadcasting and digital media markets;

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the purchasing and budgeting cycles of our customers; and

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geopolitical events such as war, threat of war or terrorist actions.

In addition, our revenues in a given quarter are largely dependent upon sales closed in that quarter. Typically, a large percentage of these sales occurs in the last month of the quarter. Because our operating expenses are largely fixed in the short-term, any reported shortfalls in revenues in a given quarter would have a direct and material adverse effect on our operating results in that quarter. We believe that our quarterly revenues and results of operations may vary significantly in the future and that period-to-period comparisons of our operating results may not be meaningful. You should not rely on the results of one quarter as an indication of future performance.

We face intense competition and if we are unable to compete effectively, we may experience decreased sales or pricing pressure, which would negatively impact our future operating results.

The markets for our products are highly competitive. Our Spectrum product competes with products produced by Avid Technology, Inc., Harris Corporation, SeaChange International, Inc. and Thomson S.A. We believe that our MediaGrid product will compete with products offered by manufacturers of general purpose storage products. These competitors have various advantages over us, including the following:

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greater market presence and greater name recognition;

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substantially greater financial, technical, research and development, sales and marketing, manufacturing, distribution and other resources;

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substantially larger patent portfolios;

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longer operating histories;

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a broader offering of products and services;

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more established relationships with industry participants, suppliers and other technology companies; and

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the ability to acquire technologies or consolidate with other companies in the industry to compete more effectively.

Because our competitors have greater financial strength than we do and are able to offer a more diversified bundle of products and services, they may have the ability to significantly undercut our prices, which could make us less competitive or force us to reduce our average selling prices, negatively impacting our margins. In addition to price, we also compete on the basis of feature set, reliability and scalability. Our competitors may also be able to develop

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products that are superior to our products in these respects. In addition, if demand for our competitors' products increases relative to our products, our competitive position will be impaired and we may not be able to increase our revenues.

As the industry evolves and as we introduce additional products, we expect to encounter additional competitors, including companies in adjacent technology businesses and other emerging companies that may announce video server or storage product offerings. Moreover, our current and potential competitors, including companies with whom we currently have strategic alliances, may establish cooperative relationships among themselves or with other third-parties. If this occurs, new competitors or alliances may emerge that could negatively affect our competitive position and negatively impact our future operating results.

We have significant international operations and derive a large portion of our revenues from international customers, which exposes us to significant risks.

For the nine months ended September 30, 2006 and for 2005, we derived 63% and 61%, respectively, of our total revenues from international customers. We have employees in international locations such as the United Kingdom, Singapore, Hong Kong and Japan. We intend to expand into other geographic areas. The success of our business will depend, in large part, on our ability to continue to operate successfully worldwide and to further expand our international operations and sales. Operating in international markets requires significant resources and management attention and will subject us to regulatory, economic and political risks that are different from those in the United States. We cannot be sure that further international expansion will be successful. In addition, we face risks in doing business internationally that could expose us to reduced demand for our products, lower prices for our products or other adverse effects on our operating results. Among the risks we believe are most likely to affect us are:

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our ability to comply with differing technical and environmental standards and certification requirements outside the United States;

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difficulties and costs associated with staffing and managing foreign operations;

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longer and more difficult customer qualification and credit checks;

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greater difficulty collecting accounts receivable and longer payment cycles;

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unexpected changes in regulatory requirements;

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reduced protection for intellectual property rights in some countries;

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adverse tax consequences, including additional tax exposure if we are in the future deemed to have established a permanent establishment outside of the United States;

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compliance with the Foreign Corrupt Practices Act;

•

fluctuations in currency exchange rates, which could increase the price of our products to customers outside of the United States, increase the expenses of our international operations by reducing the purchasing power of the U.S. dollar and expose us to foreign currency exchange rate risk if, in the future, we denominate our international sales in currencies other than the U.S. dollar;

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•

our dependence on third-parties to provide international back-office support;

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new and different sources of competition; and

•

political and economic instability or terrorism.

Our failure to manage any of these risks successfully could harm our international operations and reduce our international revenues.

We use system integrators to sell our products, and our business could be harmed if these parties do not market and support our systems successfully.

We derived approximately 70% of our total revenues for the nine months ended September 30, 2006 from sales through system integrators. Accordingly, we are dependent on these entities to sell our products. These entities can have a substantial influence on purchase decisions by end users. These entities may not promote or market our products effectively, or could experience financial difficulties or even close operations. These entities are generally not contractually obligated to sell or promote our products, and may also offer competitive products. If our competitors were to offer more favorable terms to these entities for sales of their products, sales of our products through these entities could be adversely affected. If these system integrators do not promote our products effectively, or if we lose the services of a key system integrator, we would have to develop additional relationships with other third parties or devote more resources to directly selling our products, either of which could harm our future operating results.

We derive a substantial majority of our revenues from customers in the broadcast industry. If we fail to generate continued revenues from this market or if there is a downturn in this market, our revenues could decline.

We have derived the substantial majority of our historical revenues from customers in the broadcast industry. Our future success depends upon the continued demand for our products from customers in this industry. This industry is cyclical and reactive to geopolitical and general economic conditions. There have in the past been restructurings, consolidations and reorganizations in this industry. These can cause delays and reductions in capital and operating expenditures by broadcasters, which could reduce demand for the type of equipment we sell. In addition, if this industry were to widely adopt products of our competitors, our revenues and operating results could be adversely affected.

Our future financial performance depends on growth in the markets for video servers and digital content storage systems. If these markets do not continue to grow at the rate that we forecast, our operating results would be materially and adversely impacted.

Our products are designed to address the markets for video servers and digital content storage systems that enable and enhance the ingest, processing, storage, management and delivery of digital media. Accordingly, our future financial performance will depend in large part on growth in these markets and on our ability to adapt to evolving customer requirements. A reduction in demand for video servers and digital content storage systems caused by lack of customer acceptance, weakening economic conditions, competing technologies and products, decreases in corporate spending or otherwise would result in decreased revenues or a lower revenue growth rate.

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We depend on sales of our Spectrum video server products. If market demand for these products does not continue, our future operating results could be harmed.

We have derived a substantial majority of our historical revenues from sales of our Spectrum video server products. Because of the relatively recent introduction of our MediaGrid product, we expect that we will continue to be dependent on the Spectrum products for a substantial portion of our future revenues. If our Spectrum products are unable to remain competitive, or if we experience pricing pressure or reduced demand for these products, our future revenues and business would be harmed.

We have not yet derived a material amount of revenues from sales of our MediaGrid product and if this product is not accepted, our future operating results could be harmed.

We introduced our MediaGrid product in April 2006 and only began deriving revenues from sales of this product during the third quarter of 2006. As is commonly the case with the introduction of complex products, our MediaGrid system may require further refinements before broad customer adoption can be achieved. We have invested, and expect to continue to invest, substantial resources in our MediaGrid product. We cannot assure you that this product will become widely accepted or that we will be able to derive substantial revenues from the sale of this product. If this product is not accepted, our future revenue growth could be negatively affected, which would harm our future operating results and future profitability.

Our sales cycle can be lengthy and unpredictable, which may make it difficult to predict sales in any particular quarter.

The sales cycle for our products can be lengthy, in some cases over 12 months. In addition, we may expend significant resources during the sales cycle and ultimately fail to produce a sale. The success of our product sales process is subject to many factors, some of which we have little or no control over, including:

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the timing of our end customers' budget cycles and approval processes;

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customers' or system integrators' willingness to use our products as part of a larger system implementation;

•

our ability to introduce new products, features or functionality in a timely manner;

•

the announcement or introduction of competing products; and

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established relationships between our competitors and our potential customers.

We expend substantial time, effort and money educating our current and prospective customers as to the value of our products. If we are unsuccessful in closing sales after expending significant resources, our revenues and operating results will be adversely affected.

Our business may be harmed if our contract manufacturers are not able to provide us with adequate supplies of our products.

We outsource the manufacturing of our products. We also rely on third parties to perform quality control testing of our products before they are shipped to customers. We submit purchase orders to these manufacturers that describe, among other things, the type and quantities of our products to be manufactured by the applicable manufacturer and the delivery date and other delivery terms applicable to the products. We do not have other written

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agreements with these manufacturers. Our reliance on outside manufacturers involves a number of potential risks, including the absence of adequate capacity, the unavailability of, or interruptions in access to, necessary manufacturing processes and reduced control over delivery schedules. In addition, our manufacturers do not have any written contractual obligation to accept any purchase order that we submit for the manufacture of any of our products nor do we have any assurance that our manufacturers will agree to manufacture and supply any or all of our requirements for our products. Even if our manufacturers accept and fulfill our orders, it is possible that the products may not meet our specifications. Because we do not control the final assembly and quality assurance of our products, there is a chance that these products may contain defects or otherwise not meet our quality standards, which could result in warranty claims that could adversely affect our operating results and future sales.

If our manufacturers are unable or unwilling to continue manufacturing our products in required volumes in a timely manner and at a reasonable price or fail to meet our quality specifications, or if they significantly increase their prices, we will have to identify one or more acceptable alternative manufacturers. The process of identifying and qualifying a new manufacturer can be time consuming. Additionally transitioning to new manufacturers may cause delays in supply if the new manufacturers have difficulty manufacturing products to our specifications or quality standards.

If we experience delays, shortages or quality issues from our component suppliers, our product sales could suffer.

We or our contract manufacturers purchase several key components used in the manufacture of our products from limited or, in some cases, single sources. Generally, there are no written agreements with any of these suppliers to guarantee the supply of key components used in our products. Accordingly, we cannot be certain or provide any assurance that we will have at all times a sufficient supply of these key components to meet our needs. If any of these limited or single source component suppliers experience capacity constraints, work stoppages, financial difficulties or other reductions or disruptions in output, they may not be able to meet, or may choose not to meet, our delivery schedules. Also, our component suppliers may:

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provide us with components that do not meet our quality or performance specifications;

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stop selling their products or components to us at commercially reasonable prices;

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refuse to sell their products or components to us at any price; or

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be unable to obtain or have difficulty obtaining components for our products from their suppliers.

If the supply of any key component is disrupted, we may be unable to deliver our products to our customers on a timely basis, which could result in lost or delayed revenues, injury to our reputation, increased manufacturing costs or exposure to claims by our customers. Even if alternate suppliers are available, we may have difficulty identifying them in a timely manner, incur significant additional expense in changing suppliers and experience difficulties or delays in the manufacturing of our products. In addition, we must successfully manage the supply of components to our contract manufacturers. Any failure by us to effectively manage our supply chain could adversely affect our supply of finished goods and our ability to fulfill customer demand.

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The average selling price of our products may decrease, which could negatively impact our operating results.

It is possible that the average selling prices of our products will decrease in the future in response to competitive pricing pressures, new product introductions by us or our competitors or other factors. If the average selling prices of our products decline and we are unable to respond in a timely manner by developing and introducing new products and continually reducing our product costs, our revenues and gross margin may decline, which will harm our business and results of operations.

Our end users require a high degree of product reliability. If we are unable to provide high quality products, our relationships with system integrators and end users could be harmed.

Because our end users rely on our products for applications that are critical to their business, any failure to provide high quality and reliable products and services, whether caused by our own failure or failures by our contract manufacturers or suppliers, could damage our reputation and reduce demand for our products. In addition, delays in our ability to fill product orders as a result of quality control issues, such as an increase in failure rates or warranty claims, could negatively affect our relationships with system integrators and end users and harm our revenues, operating results and growth.

If we fail to develop and introduce new products or enhancements to existing products in a timely manner, or if we fail to manage product transitions, we could experience decreased revenues in the future.

Our future growth depends on our ability to develop and introduce new products successfully. Due to the complexity of the type of products we produce, there are significant technical risks that may affect our ability to introduce new products successfully. If we are unable to develop and introduce new products and enhancements to our existing products in a timely manner or in response to changing market conditions or customer requirements, or if these products do not achieve market acceptance, our operating results could be materially and adversely affected.

In addition, components used in our existing products periodically reach end of life which results in our having to change our product designs. We are also periodically required to redesign some of our products in order to remain competitive because of increased functionality or higher performance afforded by new components. For instance, we expect to transition our Spectrum products to new processors in future versions. If these redesigns are not timely, or if they result in unexpected issues related to quality or performance, sales of these products could be adversely affected.

Product introductions by us in future periods may also reduce demand for our existing products. As new or enhanced products are introduced, we must successfully manage the transition from older products, avoid excessive levels of older product inventories and ensure that sufficient supplies of new products can be delivered to meet customer demand. Our failure to do so could adversely affect our operating results.

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If we fail to respond to technological changes and evolving industry standards, our products could become obsolete or less competitive in the future.

Our products must respond to technological changes and evolving industry standards. If we are unable to develop enhancements to, and new features for, our existing products or acceptable new products that keep pace with technological developments or industry standards, our products may become obsolete, less marketable and less competitive and our business will be harmed.

If our products do not interoperate with other systems, installations could be delayed or cancelled.

Our products may be required to interface with additional end-user equipment, applications or systems, each of which may have different specifications. A lack of interoperability may result in significant support and repair costs and harm relations with our end users. If our products do not interoperate with end-user systems or applications, installations could be delayed or orders for our products could be cancelled, which would result in loss of revenues that could significantly impair our business and operating results.

Our products are highly complex and may contain undetected software or hardware errors, which could harm our reputation and future product sales.

Our products are highly complex and, when deployed, are critical to our end users' business operations. Our products have in the past contained, and may in the future contain, undetected errors, defects or security vulnerabilities. Some errors in our products may only be discovered after a product has been installed and deployed. Any errors, defects or security vulnerabilities discovered in our products after commercial release could result in loss of revenues, loss of customers and increased service and warranty costs, any of which could adversely affect our business. In addition, we could face claims for product liability, tort or breach of warranty. Our purchase orders contain provisions relating to warranty disclaimers and liability limitations, which may not be upheld. Defending a lawsuit, regardless of its merit, is costly and may divert management's attention and adversely affect the market's perception of us and our products. In addition, if our business liability insurance coverage proves inadequate or future coverage is unavailable on acceptable terms or at all, our business, operating results and financial condition could be adversely affected.

Our future success depends on our ability to attract and retain key personnel, and our failure to do so could harm our ability to grow our business.

Our future success will depend on our ability to attract and retain our key personnel, namely our management team and experienced sales and engineering personnel. We must also attract, assimilate and retain other highly qualified employees, including technology, marketing and support personnel. There is substantial competition for highly skilled employees. Our management and key employees are not bound by agreements that could prevent them from terminating their employment at any time. If we fail to attract and retain key employees, our ability to grow our business could be harmed.

If we fail to manage our growth effectively, our business could be harmed.

We are currently experiencing a period of rapid growth in our headcount and operations, which has placed, and will continue to place, a significant strain on our management, administrative, operational and financial infrastructure. Our success will depend in part upon

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the ability of our senior management to manage this growth effectively. To manage the expected growth of our operations and personnel, we will need to continue to improve our operational, financial and management controls and our reporting systems and procedures. If we fail to successfully manage our growth, we will be unable to execute our business plan and our business could be harmed.

Our use of open source software and other third-party technology and intellectual property could impose limitations on our ability to market our products.

We incorporate open source software into our products. Although we monitor our use of open source closely, the terms of many open source licenses have not been interpreted by United States courts, and there is a risk that such licenses could be construed in a manner that could impose unanticipated conditions or restrictions on our ability to market our products. In such event, we could be required to seek licenses from third parties in order to continue offering our products, to disclose and offer royalty-free licenses in connection with our own source code, to re-engineer our products or to discontinue the sale of our products in the event re-engineering cannot be accomplished on a timely basis, any of which could adversely affect our business.

We also incorporate certain third-party technologies, including software programs and patented standards such as MPEG-2, into our products and may need to utilize additional third-party technologies in the future. However, licenses to relevant third-party technology may not continue to be available to us on commercially reasonable terms, or at all. Therefore, we could face delays in product releases until equivalent technology can be identified, licensed or developed, and integrated into our current products. These delays, if they occur, could materially adversely affect our business.

Failure to protect our intellectual property could substantially harm our business.

Our success and ability to compete are substantially dependent upon our intellectual property. We rely on patent, trademark and copyright law, trade secret protection and confidentiality or license agreements with our employees, customers, strategic partners and others to protect our intellectual property rights. However, the steps we take to protect our intellectual property rights may be inadequate. We currently have nine issued patents and 13 patent applications in the United States. We also have one issued patent and nine patent applications in foreign countries based on our issued patents and patent applications in the United States. We cannot assure you that any additional patents will be issued. Even if patents are issued, they may not adequately protect our intellectual property rights or our products against competitors, and third parties may challenge the scope, validity and/or enforceability of our issued patents. In addition, other parties may independently develop similar or competing technologies designed around any patents that may be issued to us.

We intend to enforce our intellectual property rights vigorously, and from time to time we may initiate claims against third parties that we believe are infringing our intellectual property rights if we are unable to resolve matters satisfactorily through negotiation. Litigation brought to protect and enforce our intellectual property rights could be costly, time-consuming and distracting to management and could result in the impairment or loss of portions of our intellectual property. Our failure to secure, protect and enforce our intellectual property rights could seriously harm our business.

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If a third party asserts that we are infringing its intellectual property, whether successful or not, it could subject us to costly and time-consuming litigation or expensive licenses, which could harm our business.

Third parties have in the past sent us correspondence regarding their intellectual property and in the future we may receive claims that our products infringe or violate their intellectual property rights. For example, Harris Corporation has asserted that our Spectrum video servers infringe certain of its patents. While we believe we do not infringe any valid patent held by Harris, we cannot assure you that Harris will not initiate a lawsuit against us. Any claims or litigation could cause us to incur significant expenses and, if successfully asserted against us, could require that we pay substantial damages and prevent us from selling our products. Even if we were to prevail, any litigation regarding our intellectual property could be costly and time-consuming and divert the attention of our management and key personnel from our business operations. We may also be obligated to indemnify our customers or business partners in connection with any such litigation, which could further exhaust our resources. Furthermore, as a result of an intellectual property challenge, we may be required to enter into royalty, license or other agreements. We may not be able to obtain these agreements at all or on terms acceptable to us. Litigation over patent rights and other intellectual property rights is not uncommon with respect to digital media technologies and network storage technologies, and sometimes involves patent holding companies or other adverse patent owners who have no relevant product revenues and against whom our own patents may provide little or no deterrence.

We are subject to governmental export controls that could subject us to liability or adversely affect our ability to sell our products in international markets.

Our products are subject to U.S. export controls and may be exported outside the U.S. only with the required level of export license or through an export license exception, because we incorporate encryption technology into our products. Various countries regulate the import of certain encryption technology and have enacted laws that could limit our ability to distribute our products or could limit our customers' ability to deploy our products in those countries. Changes in our products or changes in export and import regulations may create delays in the introduction of our products in international markets, prevent our customers with international operations from deploying our products throughout their global systems or, in some cases, prevent the export or import of our products to certain countries altogether. Any change in export or import regulations or related legislation, shift in approach to the enforcement or scope of existing regulations, or change in the countries, persons or technologies targeted by such regulations, could result in decreased use of our products by, or in our decreased ability to export or sell our products to, existing or potential customers with international operations. Failure to comply with these and similar laws on a timely basis, or at all, could have a material adverse effect on our business, operating results and financial condition. Any decreased use of our products or limitation on our ability to export or sell our products would likely adversely affect our business.

We are subject to environmental and other health and safety regulations that may increase our costs of operations or limit our activities.

We are subject to environmental and other health and safety regulations relating to matters such as reductions in the use of harmful substances, the use of lead-free soldering and the recycling of products and packaging materials. The European Parliament and the Council of the

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European Union have published directives on waste electrical and electronic equipment and on the restriction of the use of certain hazardous substances in electrical and electronic equipment. These directives generally require electronics producers to bear the cost of collection, treatment, recovery and safe disposal of past and future products from end users and to ensure that new electrical and electronic equipment does not contain specified hazardous substances. While the cost of these directives to us cannot be determined before regulations are adopted in individual member states of the European Union, it may be substantial and may divert resources, which could detract from our ability to develop new products or operate our business. We may not be able to comply in all cases with applicable environmental and other regulations, and if we do not, we may incur remediation costs or we may not be able to offer our products for sale in certain countries, which could adversely affect our results.

We may expand through acquisitions of, or investments in, other companies, each of which may divert our management's attention, result in additional dilution to stockholders or use resources that are necessary to operate other parts of our business.

As part of our business strategy, we may seek to acquire or invest in businesses, products or technologies that we believe could complement or expand our products, enhance our technical capabilities or otherwise offer growth opportunities. Acquisitions could create risks for us, including:

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difficulties in assimilating acquired personnel, operations and technologies;

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unanticipated costs or liabilities associated with the acquisition;

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incurrence of acquisition-related costs;

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diversion of management's attention from other business concerns;

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use of resources that are needed in other parts of our business; and

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use of substantial portions of our available cash to consummate the acquisition.

In addition, a significant portion of the purchase price of companies we acquire may be allocated to acquired goodwill and other intangible assets, which must be assessed for impairment at least annually. In the future, if our acquisitions do not yield expected returns, we may be required to take charges to our earnings based on this impairment assessment process, which could harm our results of operations.

We may be unable to complete acquisitions at all or on commercially reasonable terms, which could limit our future growth. Acquisitions could also result in dilutive issuances of equity securities or the incurrence of debt, which could adversely affect our operating results. In addition, if an acquired business fails to meet our expectations, our operating results may suffer.

The issuance of new accounting standards or future interpretations of existing accounting standards could adversely affect our operating results.

We prepare our financial statements to conform to accounting principles generally accepted in the United States. A change in those principles could have a significant effect on our reported results and might affect our reporting of transactions completed before a change is announced. Generally accepted accounting principles in the United States are issued by and are subject to interpretation by the Public Company Accounting Oversight Board, the Financial Accounting Standards Board, the American Institute of Certified Public Accountants, or AICPA,

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the Securities and Exchange Commission, or SEC, and various other bodies formed to promulgate and interpret appropriate accounting principles. A change in these principles or interpretations could have a significant effect on our reported financial results, and could affect the reporting of transactions completed before the announcement of a change. The AICPA continues to issue interpretations and guidance for applying the relevant accounting standards to a wide range of sales practices and business arrangements. The issuance of new accounting standards or future interpretations of existing accounting standards, or changes in our business practices could result in future changes in our revenue recognition or other accounting policies that could have a material adverse effect on our results of operations.

Maintaining and improving our financial controls and the requirements of being a public company may strain our resources and, divert management's attention or affect our ability to attract and retain qualified board members.

As a public company, we will be subject to the reporting requirements of the Securities Exchange Act of 1934, the Sarbanes-Oxley Act of 2002 and the rules and regulations of The NASDAQ Stock Market. We expect these rules and regulations to significantly increase our legal and financial compliance costs and to make some activities more time-consuming and costly. The Sarbanes-Oxley Act will require, among other things, that we maintain disclosure controls and procedures and internal control over financial reporting. This can be difficult to do. In order to maintain and improve our disclosure controls and procedures and internal control over financial reporting, significant resources and management oversight will be required. As a result, management's attention may be diverted from other business concerns, which could harm our business, financial condition and results of operations. These efforts will also involve substantial accounting related costs. In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on The NASDAQ Global Market.

Under the Sarbanes-Oxley Act and the rules and regulations of The NASDAQ Stock Market, we are required to maintain a board of directors with a majority of independent directors. As a public company, we may have difficulty recruiting and retaining qualified directors, especially those directors who may be considered independent for purposes of The NASDAQ Stock Market rules.

We might require additional capital to support business operations, and this capital might not be available on acceptable terms, or at all.

If our cash and cash equivalents balances and any cash generated from operations and from this offering are not sufficient to meet our cash requirements, we will need to seek additional capital, potentially through debt or equity financings, to fund our operations. We cannot assure you that we will be able to raise needed cash on terms acceptable to us or at all. Financings, if available, may be on terms that are dilutive or potentially dilutive to our stockholders, and the prices at which new investors would be willing to purchase our securities may be lower than the initial public offering price. The holders of new securities may also receive rights, preferences or privileges that are senior to those of existing holders of common stock. In addition, if we were to raise cash through a debt financing, such debt may impose conditions or restrictions on our operations, which could adversely affect our business. If new sources of financing are required but are insufficient or unavailable, we would be required to modify our operating plans to the extent of available funding, which would harm our ability to grow our business.

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Our principal offices and the facilities of our third-party manufacturers are located near known earthquake fault zones, and the occurrence of an earthquake or other catastrophic disaster could damage our facilities or the facilities of our third-party manufacturers, which could cause us to curtail our operations.

Our principal offices and the facilities of our third-party manufacturers are located in California near known earthquake fault zones and, therefore, are vulnerable to damage from earthquakes. We are also vulnerable to damage from other types of disasters, such as power loss, fire, floods and similar events. If any disaster were to occur, our ability to operate our business could be seriously impaired. In addition, we may not have adequate insurance to cover our losses resulting from disasters or other similar significant business interruptions. Any significant losses that are not recoverable under our insurance policies could seriously impair our business and financial condition.

Risks related to this offering

There has been no prior market for our common stock, our stock price may be volatile or may decline regardless of our operating performance, and you may not be able to resell your shares at or above the initial public offering price.

There has been no public market for our common stock prior to this offering. The initial public offering price for our common stock will be determined through negotiations between the underwriters, the selling stockholders and us. The initial public offering price may vary from the market price of our common stock following this offering. If you purchase shares of our common stock, you may not be able to resell those shares at or above the initial public offering price. An active or liquid market in our common stock may not develop upon completion of this offering or, if it does develop, it may not be sustainable. In addition, the market price of our common stock may fluctuate significantly in response to numerous factors, many of which we cannot control, including:

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price and volume fluctuations in the overall stock market;

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changes in operating performance and stock market valuations of other technology companies generally, or those in our industry in particular;

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actual or anticipated fluctuations in our operating results;

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changes in financial estimates by any securities analysts who follow our company, our failure to meet these estimates or failure of those analysts to initiate or maintain coverage of our stock;

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ratings downgrades by securities analysts, if any, who follow our company;

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the public's response to our press releases or other public announcements, including our filings with the SEC;

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announcements by us or our competitors of significant technical innovations, acquisitions, strategic partnerships, joint ventures or capital commitments;

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introduction of technologies or product enhancements that reduce the need for our products;

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market conditions or trends in our industry or the economy as a whole;

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additions or departures of key personnel;

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lawsuits threatened or filed against us;

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future sales of our common stock by our executive officers, directors and significant stockholders; and

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other events or factors, including those resulting from war, incidents of terrorism or responses to these events.

In addition, the stock markets, and in particular The NASDAQ Global Market on which our common stock will be listed, have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many technology companies. Stock prices of many technology companies have fluctuated in a manner unrelated or disproportionate to the operating performance of those companies.

Purchasers in this offering will suffer immediate dilution.

If you purchase shares of our common stock in this offering, you will experience dilution of $             per share in the tangible book value of our common stock from the initial public offering price, based on the number of shares outstanding as of September 30, 2006 and assuming an initial public offering price of $    per share. This is due in large part to earlier investors in our company having paid less than the assumed initial public offering price when they purchased their shares. In addition, the exercise of currently outstanding options and warrants to purchase common stock and future equity issuances, including future public or private securities offerings and any additional shares issued in connection with acquisitions, will result in further dilution. Investors purchasing shares of common stock in this offering will contribute approximately    % of the total amount we have raised since our inception, but will own only approximately    % of our total common stock immediately following the completion of this offering.

We do not intend to pay dividends for the foreseeable future.

We have never declared or paid any dividends on our common stock. We intend to retain any earnings to finance the operation and expansion of our business, and we do not anticipate paying any cash dividends in the future. As a result, you may only receive a return on your investment in our common stock if the market price of our common stock increases.

A significant portion of our total outstanding shares are restricted from immediate resale but may be sold into the market in the near future. If there are substantial sales of shares of our common stock, the price of our common stock could decline.

The price of our common stock could decline if there are substantial sales of our common stock or if there is a large number of shares of our common stock available for sale. After this offering, we will have outstanding                           shares of our common stock based on the number of shares outstanding as of September 30, 2006. This includes the shares that we and the selling stockholders are selling in this offering, which may be resold in the public market immediately. The remaining                           shares, or    % of our outstanding shares after this

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offering, are currently restricted as a result of market standoff and/or lock-up agreements but will be able to be sold in the near future as set forth below:

Number of shares and % of total outstanding	Date available for sale into public market
shares, or       %	180 days after the date of this prospectus upon the expiration of the lock-up period, subject in some cases to the provisions of Rule 144 under the Securities Act of 1933.
shares, or       %	Various dates thereafter upon the lapse of our right of repurchase with respect to unvested shares.

After this offering, the holders of an aggregate of                           shares of our common stock will have rights, subject to some conditions, to require us to file registration statements covering their shares or to include their shares in registration statements that we may file for ourselves or other stockholders. We also intend to register the issuance of all shares of common stock that we have issued and may issue under our employee equity incentive plans. Effective upon the completion of this offering, an aggregate of                           shares of our common stock will be reserved for issuance under these plans, and the shares reserve under our 2007 equity incentive plan and our 2007 employee stock purchase plan will also be subject to annual increases in accordance with the terms of these plans. Once we register the issuance of these shares, they can be freely sold in the public market upon issuance, subject to certain lock-up agreements.

The market price of the shares of our common stock could decline due to sales of a substantial number of our shares in the public market or the perception in the market that the holders of a large number of shares intend to sell their shares.

Our directors, executive officers and principal stockholders will continue to have substantial control over Omneon after this offering and could act in a manner with which other stockholders may disagree or that is not necessarily in the interests of other stockholders.

After this offering, based upon beneficial ownership as of September 30, 2006, our directors, executive officers and holders of more than 5% of our common stock, together with their affiliates, will beneficially own, in the aggregate, approximately             % of our outstanding common stock. As a result, these stockholders, if acting together, may have the ability to determine the outcome of matters submitted to our stockholders for approval, including the election of directors and any merger, consolidation or sale of all or substantially all of our assets. In addition, these persons, acting together, may have the ability to control the management and affairs of our company. Some of these persons or entities may have interests that are different from yours. For example, these stockholders may support proposals and actions with which you may disagree or which are not in your interests. The concentration of ownership could delay or prevent a change in control of our company or otherwise discourage a potential acquirer from attempting to obtain control of our company, which in turn could reduce the price of our common stock. In addition, these stockholders, some of whom have representatives sitting on our board of directors, could use their voting influence to maintain our existing management and directors in office, delay or prevent changes of control of our

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company, or support or reject other management and board proposals that are subject to stockholder approval, such as amendments to our employee stock plans and approvals of significant financing transactions.

We have broad discretion in the use of the net proceeds from this offering and may not use them effectively.

We intend to use the net proceeds of this offering for working capital and general corporate purposes. However, we cannot specify with certainty the particular uses of the net proceeds that we will receive from this offering, nor have we performed studies or had preliminary discussions with respect to the best use of the capital resources resulting from this offering. As such, our management will have broad discretion in the application of the net proceeds, including working capital, capital expenditures, possible acquisitions and other general corporate purposes. Our stockholders may not agree with the manner in which our management chooses to allocate and spend the net proceeds. The failure by our management to apply these funds effectively could harm our business. Pending their use, we may invest the net proceeds from this offering in a manner that does not produce income or that loses value.

Some provisions in our certificate of incorporation and bylaws and Delaware law could make an acquisition of us, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our management.

Our certificate of incorporation and bylaws contain provisions that may make the acquisition of our company more difficult without the approval of our board of directors, including the following:

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only our chairman, our chief executive officer, our president or a majority of our board of directors is authorized to call a special meeting of stockholders;

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our stockholders may take action only at a meeting of stockholders and not by written consent;

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vacancies on our board of directors may be filled only by our board of directors and not by stockholders;

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our certificate of incorporation authorizes undesignated preferred stock, or "blank check" preferred stock, the terms of which may be established and shares of which may be issued without stockholder approval; and

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advance notice procedures apply for stockholders to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders.

These provisions could discourage, delay or prevent a transaction involving a change in control of our company. These provisions could also discourage proxy contests and make it more difficult for you and other stockholders to elect directors of your choosing and cause us to take other corporate actions you desire.

In addition, we are subject to Section 203 of the Delaware General Corporation Law, which, subject to some exceptions, prohibits "business combinations" between a Delaware corporation and an "interested stockholder," which is generally defined as a stockholder who becomes a beneficial owner of 15% or more of a Delaware corporation's voting stock, for a three-year period following the date that the stockholder became an interested stockholder. Section 203

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could have the effect of delaying, deferring or preventing a change in control that our stockholders might consider to be in their best interests.

If securities analysts do not publish research or reports about our business or if they downgrade our stock, the price of our stock could decline.

The trading market for our common stock will rely in part on the research and reports that industry or financial analysts publish about us or our business. We do not control these analysts. There are many large, well-established publicly traded companies active in our industry and market, which may mean it will be less likely that we receive widespread analyst coverage. Furthermore, if one or more of the analysts who do cover us downgrade our stock, our stock price would likely decline rapidly. If one or more of these analysts cease coverage of our company, we could lose visibility in the market, which in turn could cause our stock price to decline.

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Forward-looking statements and industry data

This prospectus contains forward-looking statements that are based on our management's beliefs and assumptions and on information currently available to our management. The forward-looking statements are contained principally in the sections entitled "Prospectus summary," "Risk factors," "Management's discussion and analysis of financial condition and results of operations" and "Business." Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies, financing plans, competitive position, industry environment, potential growth opportunities and the effects of competition. Forward-looking statements include all statements that are not historical facts and can be identified by terms such as "anticipates," "believes," "could," "seeks," "estimates," "expects," "intends," "may," "plans," "potential," "predicts," "should," "will," "would" or similar expressions and the negatives of those statements.

Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. We discuss these risks in greater detail in "Risk factors." Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our management's beliefs and assumptions only as of the date of this prospectus. You should read this prospectus and the documents that we have filed as exhibits to the registration statement, of which this prospectus is a part, completely and with the understanding that our actual future results may be materially different from what we expect.

Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

This prospectus also contains estimates and other information concerning our industry, including market size and growth rates of the markets in which we participate, that are based on industry publications, surveys and forecasts generated by Frost & Sullivan and IDC. These publications typically indicate that they have obtained their information from sources they believe to be reliable, but do not guarantee the accuracy and completeness of their information. The industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors, including those described in "Risk factors." These and other factors could cause results to differ materially from those expressed in these publications, surveys and forecasts.

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Use of proceeds

We estimate that the net proceeds to us from this offering will be approximately $             million, based upon an assumed initial public offering price of $             per share, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. We will not receive any of the proceeds from the sale of shares by the selling stockholders.

A $1.00 increase (decrease) in the assumed initial public offering price of $    per share would increase (decrease) the net proceeds to us from this offering by approximately $    million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions payable by us.

The principal purposes of this offering are to obtain additional working capital, to create a public market for our common stock and to facilitate our future access to the public equity markets. We also may use a portion of the net proceeds to us for possible acquisitions of complementary businesses, technologies or other assets.

We currently have no specific plans for the use of the net proceeds to us from this offering and we have no ongoing negotiations or current agreements or commitments with respect to any material acquisitions. We cannot specify with certainty the particular uses of the net proceeds that we will receive from this offering, nor have we performed studies or made preliminary decisions with respect to the best use of the capital resources resulting from this offering. Accordingly, our management will have broad discretion in the application of the net proceeds of this offering to us, and investors will be relying on the judgment of our management regarding the application of these proceeds.

Pending their use, we plan to invest the net proceeds to us from this offering in short- and intermediate-term, interest-bearing obligations, investment-grade instruments, certificates of deposit or direct or guaranteed obligations of the U.S. government.

Dividend policy

We have never declared or paid any cash dividends on our capital stock. We currently intend to retain all available funds and any future earnings to support our operations and finance the growth and development of our business. We do not intend to pay cash dividends on our common stock for the foreseeable future. Any future determination related to dividend policy will be made at the discretion of our board of directors.

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Capitalization

The following table sets forth our cash, cash equivalents and capitalization as of September 30, 2006:

•

on an actual basis;

•

on a pro forma basis to reflect (1) the automatic conversion of all outstanding shares of our preferred stock into shares of common stock upon the completion of this offering, (2) the reclassification of the convertible preferred stock warrant liability to additional paid-in capital and (3) the issuance of 479,436 shares of common stock assuming the exercise of outstanding warrants to purchase shares of preferred stock and the automatic conversion of these shares of preferred stock into shares of common stock; and

•

on a pro forma as adjusted basis to reflect the adjustments described above and (1) the sale by us of                           shares of common stock at the assumed initial public offering price of $             per share, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us, and (2) the filing of our restated certificate of incorporation to authorize 200,000,000 shares of common stock and 5,000,000 shares of undesignated preferred stock.

You should read this table together with our consolidated financial statements and notes thereto and "Management's discussion and analysis of financial condition and results of operations" included elsewhere in this prospectus.

September 30, 2006				Actual			Pro forma			Pro forma as adjusted(1)
(in thousands, except per share data)
Cash and cash equivalents				$	16,871		$	16,871		$
Convertible preferred stock warrant liability				$	1,467		$	—		$	—
Convertible preferred stock: $0.001 par value per share; 17,527 shares authorized, 17,047 shares issued and outstanding, actual; no shares authorized, issued and outstanding, pro forma and pro forma as adjusted					39,785			—			—
Stockholders' equity (deficit):
	Preferred stock: $0.001 par value per share; no shares authorized, issued and outstanding, actual and pro forma; 5,000 shares authorized, no shares issued and outstanding, pro forma as adjusted				—			—			—
	Common stock: $0.001 par value per share; 36,103 shares authorized, 2,412 shares issued and outstanding, actual; 36,103 shares authorized, 19,939 shares issued and outstanding, pro forma; 200,000 shares authorized,              shares issued and outstanding, pro forma as adjusted				2			20
	Additional paid-in capital				45,388
	Deferred stock-based compensation				(1,184	)		(1,184	)		(1,184	)
	Accumulated deficit				(55,991	)		(55,991	)		(55,991	)
		Total stockholders' equity (deficit)			(11,785	)
			Total capitalization	$	29,467		$			$

(1)

Each $1.00 increase or decrease in the assumed initial public offering price of $             per share would increase or decrease, as applicable, the amount of cash and cash equivalents, additional paid-in capital, total stockholders' equity (deficit) and total capitalization by approximately $    million, assuming the number of

28

shares offered by us, as set forth on the cover of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions payable by us.

The number of shares of common stock outstanding as of September 30, 2006 on the table above does not reflect:

•

3,289,042 shares of common stock issuable upon the exercise of outstanding stock options as of September 30, 2006 under our 1998 stock option plan at a weighted average exercise price of $0.71 per share;

•

372,653 shares of common stock issuable upon exercise of options granted between October 1, 2006 and December 15, 2006 under our 1998 stock option plan at a weighted average exercise price of $7.20 per share;

•

158,313 shares of common stock reserved for future issuance under our 1998 stock option plan as of September 30, 2006, which reserve was increased by 400,000 shares subsequent to September 30, 2006;

•

shares of common stock reserved for future issuance under our 2007 equity incentive plan and 2007 employee stock purchase plan, which we have adopted to become effective upon the completion of this offering and which contain provisions that automatically increase their share reserve each year, as more fully described in "Management—Employee benefit plans;"

•

except on a pro forma basis and a pro forma as adjusted basis, 479,505 shares of common stock issuable upon exercise of outstanding warrants as of September 30, 2006 at a weighted average exercise price of $0.79 per share, of which warrants to purchase 69 shares of common stock will, unless earlier exercised, expire in January 2007, and the remaining warrants will be automatically exercised on a net exercise basis upon the completion of this offering, unless earlier exercised; and

•

337,217 shares of our common stock that are issued and outstanding but that were subject to a right of repurchase by us as of September 30, 2006 and therefore not included in stockholders' (deficit) equity pursuant to U.S. generally accepted accounting principles.

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Dilution

If you invest in our common stock in this offering, your ownership interest will be diluted to the extent of the difference between the initial public offering price per share and the pro forma as adjusted net tangible book value per share of our common stock after this offering. Pro forma net tangible book value per share is determined by dividing the number of shares of common stock outstanding, after giving effect to the conversion of all outstanding shares of preferred stock into 17,047,446 shares of common stock in this offering and the issuance of 479,436 shares of common stock assuming the exercise of outstanding warrants to purchase shares of preferred stock and the automatic conversion of these shares of preferred stock into shares of common stock, as of September 30, 2006 into our total tangible assets (total assets less intangible assets) less total liabilities. Our pro forma net tangible book value as of September 30, 2006 would have been approximately $        million, or approximately $         per share.

After giving effect to the sale of common stock offered by us in this offering at an assumed initial public offering price of $         per share, net of estimated underwriting discounts and commissions and estimated offering expenses payable by us, our pro forma as adjusted net tangible book value as of September 30, 2006 would have been approximately $        million, or approximately $         per share of common stock. This represents an immediate increase in pro forma as adjusted net tangible book value of $          per share to existing stockholders, and an immediate dilution of $         per share to investors participating in this offering. The following table illustrates this per share dilution:

Assumed initial public offering price per share		$
Pro forma net tangible book value per share as of September 30, 2006	$
Increase in pro forma net tangible book value per share attributable to new investors
Pro forma as adjusted net tangible book value per share after this offering
Dilution per share to new investors		$

A $1.00 increase (decrease) in the assumed initial public offering price of $         per share would increase (decrease) our pro forma as adjusted net tangible book value as of September 30, 2006 by approximately $          million, the pro forma as adjusted net tangible book value per share after this offering by $          and the dilution in pro forma as adjusted net tangible book value to new investors in this offering by $         per share, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions payable by us.

The following table summarizes, on a pro forma as adjusted basis as of September 30, 2006, the differences between the number of shares of common stock purchased from us, the total consideration and the average price per share paid to us by existing stockholders and by investors participating in this offering, before deducting estimated underwriting discounts and

30

commissions and estimated offering expenses payable by us, at an assumed initial public offering price of $    per share:

	Shares purchased			Total consideration
							Average price per share
	Number	Percent		Amount	Percent
Existing stockholders before this offering			%	$		%	$
Investors participating in this offering							$
Total		100	%	$	100	%

A $1.00 increase (decrease) in the assumed initial public offering price of $         per share would increase (decrease) total consideration paid to us by investors participating in this offering by approximately $          million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions payable by us.

The discussion and tables above assume no sale of shares by the selling stockholders and no exercise of the underwriters' over-allotment option or any outstanding options or warrants. The sale of             shares of common stock to be sold by the selling stockholders in this offering will reduce the number of shares held by existing stockholders to                           , or     % of the total shares outstanding, and will increase the number of shares held by investors participating in this offering to                           , or    % of the total shares outstanding. In addition, if the underwriters' over-allotment option is exercised in full, the number of shares of common stock held by investors participating in this offering will be further increased to                           , or    % of the total number of shares of common stock to be outstanding after this offering, and the number of shares of common stock held by existing stockholders will be further reduced to                           , or             % of the total number of shares of common stock to be outstanding after this offering.

The number of shares outstanding as of September 30, 2006 excludes:

•

3,289,042 shares of common stock issuable upon the exercise of outstanding stock options as of September 30, 2006 under our 1998 stock option plan at a weighted average exercise price of $0.71 per share;

•

372,653 shares of common stock issuable upon exercise of options granted between October 1, 2006 and December 15, 2006 under our 1998 stock option plan at a weighted average exercise price of $7.20 per share;

•

158,313 shares of common stock reserved for future issuance under our 1998 stock option plan as of September 30, 2006, which reserve was increased by 400,000 shares subsequent to September 30, 2000; and

•

shares of common stock reserved for future issuance under our 2007 equity incentive plan and 2007 employee stock purchase plan, which we have adopted to become effective upon the completion of this offering and which contain provisions that automatically increase their share reserve each year, as more fully described in "Management—Employee benefit plans."

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To the extent that any options or warrants are exercised, new options or shares of common stock are issued under our 2007 equity incentive plan or our 2007 employee stock purchase plan or we issue additional shares of common stock in the future, there will be further dilution to investors participating in this offering.

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Selected consolidated financial data

The following selected consolidated financial data should be read together with our consolidated financial statements and notes and "Management's discussion and analysis of financial condition and results of operations" appearing elsewhere in this prospectus. The selected consolidated statement of operations data for the years ended December 31, 2003, 2004 and 2005 and the selected consolidated balance sheet data as of December 31, 2004 and 2005 are derived from our audited consolidated financial statements, which are included elsewhere in this prospectus. The selected consolidated balance sheet data as of December 31, 2001, 2002 and 2003 and the selected consolidated financial data as of and for the years ended December 31, 2001 and 2002 are derived from our audited consolidated financial statements, which are not included in this prospectus. The selected consolidated statement of operations data for the nine months ended September 30, 2005 and 2006 and the selected consolidated balance sheet data as of September 30, 2006 have been derived from our unaudited consolidated financial statements, which are included elsewhere in this prospectus. We have prepared the unaudited consolidated financial information set forth below on the same basis as our audited consolidated financial statements and have included all adjustments, consisting only of normal recurring adjustments, that we consider necessary for a fair presentation of our financial position and operating results for such periods. The pro forma basic net income per share data are unaudited and give effect to the conversion into common stock of all outstanding shares of our preferred stock for the periods indicated. The interim results set forth below are not necessarily indicative of results for future periods.

		Year ended December 31,															Nine months ended September 30,
(in thousands, except per share data)		2001			2002			2003			2004			2005			2005			2006
Consolidated statement of operations data:
Revenues:
	Product revenues	$	1,635		$	7,424		$	12,167		$	30,372		$	51,148		$	34,263		$	56,575
	Service revenues		—			—			267			1,056			2,964			2,065			3,696
Total revenues			1,635			7,424			12,434			31,428			54,112			36,328			60,271
Cost of revenues:
	Cost of product revenues(1)		1,091			4,685			6,408			11,672			18,818			13,065			20,266
	Cost of service revenues(1)		—			—			102			649			2,243			1,179			3,395
Total cost of revenues			1,091			4,685			6,510			12,321			21,061			14,244			23,661
Gross profit			544			2,739			5,924			19,107			33,051			22,084			36,610
Operating expenses:
	Research and development(1)		10,943			5,258			4,935			6,385			9,756			6,755			12,392
	Sales and marketing(1)		7,021			5,223			6,435			10,947			15,427			10,987			15,228
	General and administrative(1)		2,127			1,419			1,602			1,795			2,988			2,100			3,181
Total operating expenses			20,091			11,900			12,972			19,127			28,171			19,842			30,801
Income (loss) from operations			(19,547	)		(9,161	)		(7,048	)		(20	)		4,880			2,242			5,809
Interest and other income (expense), net:
	Interest income and other		798			(70	)		59			94			282			178			470
	Interest expense and other		(555	)		(393	)		—			—			—			—			—
	Foreign currency losses		—			(5	)		(14	)		(47	)		(64	)		(32	)		(11	)
	Convertible preferred stock warrant revaluation expense		—			—			—			—			(157	)		(71	)		(739	)
	Loss on disposal of asset		—			(140	)		(18	)		—			—			—			—
Total interest and other income (expense), net			243			(468	)		27			47			61			75			(280	)
Income (loss) before income taxes and cumulative effect of change in accounting principle			(19,304	)		(9,629	)		(7,021	)		27			4,941			2,317			5,529
Income tax benefit (provision)			—			—			—			—			(243	)		(353	)		799
Income (loss) before cumulative effect of change in accounting principle			(19,304	)		(9,629	)		(7,021	)		27			4,698			1,964			6,328
Cumulative effect of change in accounting principle			—			—			—			—			(557	)		(557	)		—
Net income (loss)		$	(19,304	)	$	(9,629	)	$	(7,021	)	$	27		$	4,141		$	1,407		$	6,328

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		Year ended December 31,													Nine months ended September 30,
(in thousands, except per share data)		2001			2002			2003			2004		2005		2005		2006
Net income (loss) per share allocable to common stockholders(2):
	Basic	$	(235.41	)	$	(65.95	)	$	(22.94	)	$	—	$	0.07	$	—	$	0.17
	Diluted		(235.41	)		(65.95	)		(22.94	)		—		0.01		—		0.08
Shares used to compute net income (loss) per share(2):
	Basic		82			146			306			314		560		526		2,184
	Diluted		82			146			306			2,740		3,826		3,653		4,678
Pro forma net income per share(3):
	Basic												$	0.27			$	0.36
	Diluted													0.23				0.32
Shares used to compute pro forma net income per share(3):														18,086				19,711
	Basic													20,908				21,747
	Diluted

(1)

Includes stock-based compensation as follows (in thousands):

Total cost of revenues	$	—	$	—	$	—	$	—	$	—	$	—	$	119
Research and development		—		—		—		—		—		—		274
Sales and marketing		—		—		—		—		—		—		240
General and administrative		—		—		—		—		—		—		103
Total stock-based compensation	$	—	$	—	$	—	$	—	$	—	$	—	$	736

(2)

See Note 1 to our consolidated financial statements for a description of the method used to compute basic and diluted net income (loss) per share allocable to common stockholders and shares used in computing basic and diluted net income (loss) per share allocable to common stockholders.

(3)

See Note 1 to our consolidated financial statements for a description of the method used to compute basic and diluted pro forma net income per share and shares used in computing basic and diluted pro forma net income per share.

	December 31,															September 30,
(in thousands)	2001			2002			2003			2004			2005			2006
Consolidated balance sheet data:
Cash and cash equivalents	$	8,082		$	10,103		$	3,402		$	11,368		$	16,616		$	16,871
Working capital		7,604			11,961			4,738			14,624			17,562			20,750
Total assets		12,338			16,659			9,693			23,436			34,971			45,189
Total debt		3,674			—			—			—			—			—
Convertible preferred stock warrant liability		—			—			—			—			729			1,467
Convertible preferred stock		56,839			29,334			29,412			39,798			39,785			39,785
Total stockholders' deficit		(49,476	)		(16,270	)		(23,283	)		(23,232	)		(19,038	)		(11,785	)

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Management's discussion and analysis of financial condition and results of operations

You should read the following discussion and analysis of our financial condition and results of our operations in conjunction with our consolidated financial statements and the notes to those statements included elsewhere in this prospectus. This discussion contains forward-looking statements reflecting our current expectations that involve risks and uncertainties. Our actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors, including those discussed in the section entitled "Risk factors," and elsewhere in this prospectus.

Omneon overview

Omneon is a leading provider of digital content storage and processing systems used by media companies to enable efficient production and distribution of high-quality digital video and audio. We develop, market and sell a range of video servers, active storage systems and related software applications that media companies use to simultaneously ingest, process, store, manage and deliver digital media content in a wide range of formats.

We were founded in May 1998, and from inception through 2001, we were focused on designing and developing our Spectrum video server products. Our revenues have grown rapidly since we began shipping our Spectrum products in 2001, driven in part by industry trends such as the migration of tape-based to file-based workflows, analog to digital formats, standard-definition to high-definition television and single channel to multi-channel playout. We sell our products indirectly through system integrators and directly to end users. Historically, a substantial portion of our revenues has been derived through indirect sales. Our products are used by media companies worldwide, and we have historically generated a substantial portion of our revenues from international sales. In the nine months ended September 30, 2006 and in 2005, 2004 and 2003, our total revenues were $60.3 million, $54.1 million, $31.4 million and $12.4 million, respectively, and our net income (loss) was approximately $6.3 million, $4.1 million, $27,000 and ($7.0) million, respectively.

Sources of revenues

Our products include Spectrum video servers, MediaGrid active storage systems, and related software applications. Sales of our Spectrum products accounted for substantially all of our product revenues through September 30, 2006. We began recognizing revenues from the sale of our MediaGrid storage systems in the third quarter of 2006. Our service revenues consist of service fees relating to the maintenance contracts on our products and to a lesser extent technical support fees. Service revenues can experience variability due to the timing of maintenance contract renewals and technical support delivery. In the nine months ended September 30, 2006 and in 2005, 2004 and 2003, total revenues grew 66%, 72%, 153% and 67%, respectively, as compared to the corresponding prior period.

In the nine months ended September 30, 2006 and in 2005, 2004 and 2003, our revenues from customers outside the United States comprised 63%, 61%, 61% and 50%, respectively, of our total revenues. We expect revenues from customers outside of the United States to continue to constitute a substantial portion of our revenues.

35

In the nine months ended September 30, 2006 and in 2005, 2004 and 2003, we derived approximately 70%, 65%, 74% and 74%, respectively, of our total revenues through indirect sales. We expect revenues from indirect sales to continue to constitute a substantial portion of our revenues.

Ascent Media Group, a system integrator, represented 11%, 10% and 12% of our total revenues in the nine months ended September 30, 2006, and in 2005 and 2004, respectively. In 2004, Netorium, a system integrator, accounted for 15% of our total revenues. No customer represented greater than 10% of our total revenues in 2003.

Cost of revenues

Cost of product revenues consists of the costs of product hardware, manufacturing, shipping and logistics costs and expenses for estimated warranty obligations and inventory obsolescence. We utilize third parties to manufacture our product hardware, embed our proprietary software and conduct functionality testing. Cost of service revenues is primarily comprised of the cost of personnel providing technical support. Since 2005, our cost of service revenues has grown faster than our service revenues due to our investment in increased services headcount and the development of our maintenance and service infrastructure. We do not expect our cost of service revenues to grow at the historic growth rates we have experienced.

Gross margin

Gross margin remained consistent in the nine months ended September 30, 2006 and in 2005 and 2004. Gross margin will be affected by a variety of factors, including the mix and average selling prices of our products and services, new products and enhancements, the cost of product hardware, the mix of distribution channels through which our products are sold and warranty claim experience. In the nine months ended September 30, 2006 and in 2005, 2004 and 2003, our gross margin was 61%, 61%, 61% and 48%, respectively.

Operating expenses

Operating expenses consist of research and development, sales and marketing and general and administrative expenses. Personnel-related costs are the most significant component of each of these expense categories. Our workforce grew to 209 employees as of September 30, 2006 from 106 employees as of December 31, 2004. We expect to continue to hire additional personnel to support our growth. The timing of additional hires could materially affect our operating expenses, both in absolute dollars and as a percentage of total revenues, in any particular period. We anticipate that each of these categories of operating expenses will continue to increase in absolute dollars in future periods.

Research and development

Research and development expenses primarily consist of employee compensation costs, including salaries and stock-based compensation, prototype materials, depreciation of equipment used in research and development activities and allocable overhead. Research and development costs, including software development costs, have been expensed as incurred. Our headcount for research and development-related personnel was 84, 63, 44 and 26 as of September 30, 2006 and December 31, 2005, 2004, and 2003, respectively. We believe that

36

investments in research and development, including the recruiting and hiring of engineers, are critical to our ability to remain competitive.

Sales and marketing

Sales and marketing expenses primarily consist of employee compensation costs, including salaries, sales commissions and stock-based compensation, travel costs, trade show and marketing program costs and allocable overhead. Our headcount for sales and marketing personnel was 62, 49, 31 and 19 as of September 30, 2006 and December 31, 2005, 2004 and 2003, respectively. We intend to hire additional employees for our sales and marketing staff and to increase our sales and marketing budget in the future.

General and administrative

General and administrative expenses primarily consist of employee compensation costs, including salaries and stock-based compensation, outside professional services and allocable overhead. Our headcount for general and administrative personnel was 16, 14, nine and eight as of September 30, 2006 and December 31, 2005, 2004 and 2003, respectively. We expect our general and administrative expenses to increase as we incur additional expenses associated with being a public company, including expenses associated with analyzing, documenting, testing and maintaining our system of internal controls and disclosure controls and procedures as a result of the regulatory requirements of the Sarbanes-Oxley Act.

Critical accounting policies and estimates

This discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States, or U.S. GAAP. The preparation of these financial statements in accordance with U.S. GAAP requires us to use accounting policies and make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingencies as of the date of the financial statements and the reported amounts of revenues and expenses during a fiscal period. We consider an accounting policy to be critical if it is important to our financial condition and results of operations, and if it requires significant judgment and estimates on the part of management in its application. Although we believe that our judgments and estimates are appropriate and correct, actual results may differ from those estimates. We believe the following to be our critical accounting policies.

Revenue recognition

We derive substantially all of our revenues from sales of servers and storage systems, with the remaining revenues generated primarily from service fees relating to the maintenance contracts for our products. We generally recognize product revenues at the time of shipment, provided that persuasive evidence of an arrangement exists, title and risk of loss passes to the customer, the price is fixed or determinable and collection of the receivable is reasonably assured. In instances where we are required to obtain customer acceptance, revenues are deferred until the terms of acceptance are satisfied. Revenues under maintenance contracts are deferred and recognized ratably over the contractual service period. Our maintenance contracts typically have terms that range from one to two years.

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In connection with sales arrangements that involve multiple elements, such as hardware and service contracts, the entire revenue is allocated to each respective element based on its relative fair value and recognized when the revenue recognition criteria for each element have been met. We use the fair-value method to recognize revenues when an arrangement includes one or more elements to be delivered at a future date and objective and reliable evidence of the fair value of all the undelivered elements exists. If objective and reliable evidence of fair value of one or more undelivered elements does not exist, revenue is deferred for all elements and recognized when delivery of those elements occurs or when fair value can be established.

For the sale of products that contain software that is more than incidental to the sale of the hardware, we recognize revenues when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable and collection is reasonably assured. In instances where there are undelivered elements that did not have an established fair value, revenue for the entire arrangement is deferred until fair value is established or those elements have been delivered.

Our total maintenance and support deferred revenues were $3.5 million, $3.2 million and $1.3 million as of September 30, 2006 and December 31, 2005 and 2004, respectively. Total deferred revenues were $4.2 million, $4.6 million and $1.7 million as of September 30, 2006 and December 31, 2005 and 2004, respectively.

Accounting for income taxes

In preparing our financial statements we are required to make estimates and judgments that affect our accounting for income taxes. This process includes estimating current tax exposure together with assessing temporary differences resulting from differing treatment of items for tax and financial accounting purposes. These differences result in deferred tax assets and liabilities. We also assess the likelihood that our deferred tax assets will be recovered from future taxable income and, to the extent we believe recovery to be unlikely, we have established a valuation allowance. Significant judgment is required in determining the provision for income taxes, deferred tax assets and liabilities and any valuation allowance against our deferred tax assets. Our financial position and results of operations may be materially affected if actual results significantly differ from these estimates or the estimates are adjusted in future periods.

Historically, we have recorded a valuation allowance on our deferred tax assets, the majority of which relates to net operating loss tax carryforwards generated before we achieved profitability. During the first quarter of 2006, we concluded that it was more likely than not that we would be able to realize the benefit of these deferred tax assets in the future. Consequently, we recorded a tax benefit of $3.3 million in the first quarter of 2006 resulting primarily from the release of the entire net deferred tax valuation allowance. We expect that our consolidated effective tax rate will increase to approximate the combined federal and state statutory rates.

At September 30, 2006, we had $40,000 and $200,000 in federal and state net operating loss carryforwards, respectively, which begin to expire in 2007 and 2024, respectively. At September 30, 2006, we had no federal and $500,000 of state research tax credit carryforwards to offset future taxable income. These state carryforwards will expire commencing in 2023.

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Stock-based compensation

How we account for stock-based awards

Prior to January 1, 2006, we accounted for employee stock options using the intrinsic-value method in accordance with the provisions of Accounting Principles Board, or APB, Opinion No. 25, Accounting for Stock Issued to Employees, FASB Interpretation No. 44, Accounting for Certain Transactions Involving Stock Compensation, an Interpretation of APB Opinion No. 25, and related interpretations and we complied with the disclosure provisions of SFAS No. 123, Accounting for Stock-Based Compensation, and SFAS No. 148, Accounting for Stock-Based Compensation—Transition and Disclosure.

Effective January 1, 2006, we adopted the fair value recognition provisions of SFAS No. 123(R), Share-Based Payment, or SFAS 123(R), using the prospective transition method, which requires us to apply the provisions of SFAS 123(R) only to awards newly granted, modified, repurchased or cancelled, after the adoption date. Under this transition method, our stock-based compensation expense recognized beginning January 1, 2006 is based on the grant date fair value of stock option awards we grant or modify after January 1, 2006. We recognize this expense on a straight-line basis over the options' expected vesting terms. We estimated the grant date fair value of stock option awards under the provisions of SFAS 123(R) using the Black-Scholes option valuation model with the following assumptions:

	Nine months ended September 30, 2006
Expected life	6.0 years
Interest rate range	4.29% - 5.10	%
Volatility	60	%
Dividend yield	0	%

During the nine months ended September 30, 2006, we recorded non-cash stock-based compensation expense of $53,000 under SFAS 123(R). In future periods, stock-based compensation expense is expected to increase as we issue additional equity-based awards to continue to attract and retain key employees. Additionally, SFAS 123(R) requires that we recognize compensation expense only for the portion of stock options that are expected to vest, assuming an expected forfeiture rate in determining stock-based compensation expense, which could affect the stock-based compensation expense recorded if there is a significant difference between actual and estimated forfeiture rates. Our estimated forfeiture rate in the nine months ended September 30, 2006 was 3.35%. As of September 30, 2006, total unrecognized compensation cost related to stock-based awards granted to employees and non-employee directors was $372,000, which is expected to be recognized through 2009.

Historical grant practices and reassessment of fair value

Valuation at the time of grant.    Given the absence of an active market for our common stock, our board of directors, the members of which we believe had extensive business, financial and investment experience, were required to estimate the fair value of our common stock at the time of each option grant. Our board of directors considered numerous objective and subjective factors in determining the value of our common stock at each option grant date, including the following factors: (1) prices for our preferred stock that we had sold to outside

39

investors in arms-length transactions, and the rights, preferences and privileges of our preferred stock and our common stock; (2) contemporaneous valuations performed as of March 31, 2006, September 30, 2006, and December 1, 2006, by an independent valuation firm; (3) our actual financial condition and results of operations relative to our operating plan during the relevant period; (4) the development status of our products, technical and regulatory issues encountered and adherence to product completion dates; (5) forecasts of our financial results and market conditions affecting the digital media industry; (6) the fact that the option grants involved illiquid securities in a private company; and (7) the likelihood of achieving a liquidity event for the shares of common stock underlying the options, such as an initial public offering or sale of the company, given prevailing market conditions at the time of grant. Based on these factors, our board of directors granted stock options during 2005 and the nine months ended September 30, 2006 at exercise prices ranging from $0.50 to $2.50 per share.

At the date of each option grant, our board of directors determined that the exercise price for each option was equivalent to the then-existing fair value of our common stock. Our board of directors believes it properly valued our common stock in all periods, although we also understand that the judgments required in such efforts necessarily involve an element of subjectivity.

Contemporaneous third-party valuations.    We engaged an independent valuation firm to perform contemporaneous valuations of our common stock at March 31, 2006, September 30, 2006 and December 1, 2006. The valuations used a probability-weighted combination of the income approach, the similar transaction approach and the public company market multiple method to estimate the aggregate enterprise value of our company at each valuation date. The income approach involves applying appropriate risk-adjusted discount rates to estimated debt-free cash flows, based on forecasted revenues and costs. The projections used in connection with this valuation were based on our expected operating performance over the forecast period. The similar transaction approach involves applying the valuation multiples associated with recent merger and acquisition activity in related industries. The public company market multiple method focuses on comparing our company to similar publicly traded entities. There is inherent uncertainty in these estimates. If different discount rates or assumptions had been used, the valuation would have been different.

For the March 31, 2006 and September 30, 2006 valuations, a 75% weighting was applied to the income approach and a 25% weighting to the similar transaction approach. We applied a greater weighting to the income approach because it more appropriately captured company-specific risks, whereas the similar transaction approach is primarily based on market data of recently acquired publicly traded companies. The public company market multiple method was not used for these valuations as there were no directly comparable publicly traded companies. The companies used for comparison under the similar transaction approach were selected based on a number of factors, including, but not limited to, the similarity of their industry, financial risk, size and number of employees relative to those of our company.

For the December 1, 2006 valuation, a 50% weighting was applied to the income approach, a 15% weighting was applied to the similar transaction approach and a 35% weighting was applied to the public company market multiple method. The changes in the weighted values reflect (1) the increased likelihood of achieving a liquidity event for the shares of common stock underlying the options, such as an initial public offering, (2) lack of recent similar

40

transactions and changing market dynamics and (3) the fact that, with our recent introduction of our MediaGrid product, we became more comparable to public companies.

Non-marketability discount.    In determining the estimated fair value of our stock at each option grant date, our board of directors considered the fact that our stockholders cannot freely trade our stock in the public markets. The estimated fair value of our common stock at each stock option grant date reflected the anticipated likelihood and timing of a future liquidity event.

In the valuations of our common stock performed by the independent valuation firm as of March 31, 2006, September 30, 2006 and December 1, 2006, the non-marketability discounts used were 20%, 15% and 10%, respectively. The 20% discount applied in March 2006 reflected the expectation that a successful liquidity event was not likely to occur within the 12 months following March 2006. In September and December 2006, the discount applied was reduced to 15% and 10%, respectively, reflecting an increased likelihood of a liquidity event.

Reassessment of fair value.    The exercise prices per share of common stock underlying our option grants were historically determined by our board of directors with input from management. Prior to March 31, 2006, contemporaneous valuations of our common stock by an unrelated party were not obtained because we believed that our board of directors had considerable experience in the valuation of emerging companies and could make a reasonable determination of fair value.

In connection with the preparation of the consolidated financial statements necessary for this prospectus and solely for the purposes of accounting for stock-based compensation for financial statement purposes, we engaged an independent valuation firm to assist us in the retrospective reassessments of our common stock to determine whether there was a compensatory element in our historical option grants. We undertook the retrospective reassessments of the values of our common stock as of April 14, 2004, the date of the last sale of our Series B-1 convertible preferred stock, and as of 15 additional dates from May 2004 through February 2006. We do not believe that there was any compensatory element to our option grants prior to April 2004 based on our early stage of development through that date.

These retrospective reassessments applied the probability-weighted combination of the income approach and the similar transaction approach consistent with the March 31, 2006 valuation methodology described above to estimate the aggregate enterprise value of our company at the reassessment dates. The non-marketability discount used for the retrospective reassessments was 32% as of April 14, 2004 and declined to 24% as of February 14, 2006. The discounts applied reflected the expectation that a successful liquidity event would not occur within the 12 months following the applicable option grant dates.

Conclusions.    After making the above judgments, assumptions and estimates in the retrospective reassessments described above, we have determined that, for accounting purposes, at the date of each option grant prior to April 2004, the exercise price for each option was equivalent to the then-existing fair value of our common stock. For grants made from April 2004 through December 2005, we recorded deferred stock-based compensation of $1.9 million during 2006, representing the amount by which the reassessed value of our common stock at the date of the grant exceeded the exercise price of the equity awards. During 2006, we recognized stock-based compensation of $336,000 as an out of period

41

adjustment and $346,000, representing amortized expense for the nine months ended September 30, 2006 for grants for which the adjusted fair value from the retrospective reassessment exceeded the initial grant price. As of September 30, 2006, we had $1.2 million of deferred stock-based compensation related to option grants made from April 2004 through February 2006 that will be amortized through 2010.

Information regarding our stock option grants for April 2004 through September 30, 2006 is summarized as follows:

Date of issuance	Number of shares subject to options granted	Exercise price per share		Deemed fair market value per share		Intrinsic value per share
April 14, 2004	53,000	$	0.30	$	0.60	$	0.30
May 14, 2004	39,250		0.30		0.82		0.52
August 10, 2004	178,500		0.30		1.10		0.80
October 12, 2004	1,016,667		0.30		0.79		0.49
December 2, 2004	106,000		0.30		0.90		0.60
January 20, 2005	137,000		0.50		1.01		0.51
February 15, 2005	14,800		0.50		1.07		0.57
April 26, 2005	80,000		0.50		1.26		0.76
May 24, 2005	315,000		0.50		1.28		0.78
July 19, 2005	59,000		0.50		1.42		0.92
August 23, 2005	250,750		0.50		1.50		1.00
September 29, 2005	50,000		0.50		1.61		1.11
October 18, 2005	464,225		0.85		1.65		0.80
November 17, 2005	69,000		1.00		1.88		0.88
January 18, 2006	137,500		1.50		1.89		0.39
February 14, 2006	33,700		1.50		1.96		0.46
April 18, 2006	77,500		2.27		2.27		—
May 16, 2006	29,000		2.27		2.27		—
July 18, 2006	46,500		2.50		2.50		—
August 22, 2006	19,050		2.50		2.50		—

Estimation of fair value of warrants to purchase convertible preferred stock

In 2005, we adopted FASB Staff Position No. 150-5, Issuer's Accounting under FASB Statement No. 150 for Freestanding Warrants and Other Similar Instruments on Shares That Are Redeemable, or FSP 150-5. FSP 150-5 requires us to classify warrants to purchase shares of our convertible preferred stock as current liabilities and to adjust the value of these warrants to their fair value at the end of each reporting period. At the time of adoption, we recorded an adjustment of $557,000 for the cumulative effect of this change in accounting principle, to reflect the estimated fair value of these warrants as of that date. We recorded $157,000 and $739,000 of additional expense in interest and other income (expense), net, for the remainder of 2005 and the nine months ended September 30, 2006, respectively, to reflect further increases in the estimated fair value of the warrants. We estimated the fair value of these warrants at the respective balance sheet dates using the Black-Scholes option valuation model. This model utilizes the estimated fair value of the underlying convertible preferred stock at the valuation measurement date, the remaining contractual term of the warrant, risk-free interest

42

rates, expected dividends and expected volatility of the price of the underlying convertible preferred stock.

Upon the closing of this offering, if these warrants have not been exercised, they will be exercised on a net exercise basis for shares of our common stock based on the initial public offering price and, as a result, will no longer be subject to FSP 150-5. At that time, the then-current aggregate fair value of these warrants will be reclassified from current liabilities to common stock and additional paid-in capital, and we will cease to record any related periodic fair value adjustments.

Results of operations

The following table presents selected results of operations data as a percentage of total revenues for the periods indicated:

		Year ended December 31,						Nine months ended September 30,
		2003		2004		2005		2005		2006
Consolidated statement of operations data:
Revenues:
	Product revenues	98	%	97	%	95	%	94	%	94	%
	Service revenues	2		3		5		6		6
Total revenues		100		100		100		100		100
Cost of revenues:
	Cost of product revenues	52		37		35		36		34
	Cost of service revenues	—		2		4		3		5
Total cost of revenues		52		39		39		39		39
Gross margin		48		61		61		61		61
Operating expenses:
	Research and development	40		20		18		19		21
	Sales and marketing	52		35		29		30		25
	General and administrative	12		6		5		6		5
Total operating expenses		104		61		52		55		51
Income (loss) from operations		(56	)	—		9		6		10
Interest and other income (expense), net		—		—		—		1		(1	)
Income (loss) before income taxes and cumulative effect of change in accounting principle		(56	)	—		9		7		9
Income tax benefit (provision)		—		—		—		(1	)	1
Income (loss) before cumulative effect of change in accounting principle		(56	)	—		9		6		10
Cumulative effect of change in accounting principle		—		—		(1	)	(2	)	—
Net income (loss)		(56	)%	—	%	8	%	4	%	10	%

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Nine months ended September 30, 2006 and 2005

Revenues

The following table summarizes and analyzes our revenues for the nine months ended September 30, 2006 and 2005:

		Nine months ended September 30,						2005 to 2006 change
(in thousands)		2005			2006			$		%
Revenues:
	Product revenues	$	34,263		$	56,575		$	22,312	65	%
	Service revenues		2,065			3,696			1,631	79
		$	36,328		$	60,271		$	23,943	66	%
% of revenues
	Product revenues		94	%		94	%
	Service revenues		6	%		6	%
Revenues by geography:
	Domestic	$	14,502		$	22,279		$	7,777	54	%
	International		21,826			37,992			16,166	74
		$	36,328		$	60,271		$	23,943	66	%
% of revenues by geography:
	Domestic		40	%		37	%
	International		60	%		63	%
Revenues by sales channel:
	Direct	$	10,872		$	18,126		$	7,254	67	%
	Indirect		25,456			42,145			16,689	66
		$	36,328		$	60,271		$	23,943	66	%
% of revenues by sales channel:
	Direct		30	%		30	%
	Indirect		70	%		70	%

        Product revenues.    The $22.3 million, or 65%, increase in product revenues from the nine months ended September 30, 2005 to the nine months ended September 30, 2006 was largely driven by increased demand for our Spectrum servers. We sold to 180 customers in the nine months ended September 30, 2006 compared to 127 customers in the nine months ended September 30, 2005. One customer, a system integrator, represented 12% and 15% of our product revenues for the nine months ended September 30, 2006 and 2005, respectively. The percentage of our product revenues derived through indirect sales remained consistent in the nine months ended September 30, 2006 and 2005.

        Service revenues.    The $1.6 million, or 79%, increase in service revenues from the nine months ended September 30, 2005 to the nine months ended September 30, 2006 resulted from increased purchases of maintenance contracts in connection with the corresponding

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increase in product revenues during the same periods. Service revenues represented 6% of our total revenues in both periods.

Gross profit and gross margin

The following table shows gross profit on each of our revenue components for the nine months ended September 30, 2006 and 2005 in absolute dollars and the related gross margin:

			Nine months ended September 30,						2005 to 2006 change
(in thousands)			2005			2006			$			%
Gross Profit:
	Product		$	21,198		$	36,309		$	15,111		71	%
		Gross margin		62	%		64	%
	Service			886			301			(585	)	(66	)
		Gross margin		43	%		8	%
		Total gross profit	$	22,084		$	36,610		$	14,526		66	%
		Total gross margin		61	%		61	%

        Product gross margin.    Gross margin for product revenues increased two percentage points due primarily to a decline in manufacturing overhead as a percentage of product revenues from the nine months ended September 30, 2005 to the nine months ended September 30, 2006.

        Service gross margin.    Gross margin for service revenues decreased from the nine months ended September 30, 2005 to the nine months ended September 30, 2006 primarily due to greater compensation cost of $2.2 million from the increased services headcount from 17 to 27 and the development of our maintenance and service infrastructure.

Operating expenses

The following table summarizes and analyzes our operating expenses for the nine months ended September 30, 2006 and 2005:

			Nine months ended September 30,						2005 to 2006 change
(in thousands)			2005			2006			$		%
Operating expenses:
	Research and development		$	6,755		$	12,392		$	5,637	83	%
		% of total revenues		19	%		21	%
	Sales and marketing			10,987			15,228			4,241	39
		% of total revenues		30	%		25	%
	General and administrative			2,100			3,181			1,081	51
		% of total revenues		6	%		5	%
Total operating expenses			$	19,842		$	30,801		$	10,959	55	%

        Research and development.    The $5.6 million, or 83%, increase in research and development expense from the nine months ended September 30, 2005 to the nine months

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ended September 30, 2006 was primarily due to a $3.3 million increase in payroll and benefit costs resulting from an increase in research and development employee headcount from 53 to 84, a $1.2 million increase in depreciation expenses and consumable supplies and materials used in development and testing functions and a $701,000 increase in outsourced engineering services and outside contractor expense.

        Sales and marketing.    The $4.2 million, or 39%, increase in sales and marketing expense from the nine months ended September 30, 2005 to the nine months ended September 30, 2006 was primarily due to a $1.8 million increase in payroll and benefit costs resulting from an increase in sales and marketing employee headcount from 43 to 62 and an increase in sales commissions, a $576,000 increase in travel and entertainment costs, a $289,000 increase in facilities expense, a $279,000 increase in depreciation due to additional capital equipment for new employees and a $243,000 increase in marketing costs, particularly related to seminars and advertising expenses.

        General and administrative.    The $1.1 million, or 51%, increase in general and administrative expense from the nine months ended September 30, 2005 to the nine months ended September 30, 2006 was primarily due to a $751,000 increase in payroll and benefit costs due to an increase in general and administrative employee headcount from 14 to 16 and a $421,000 increase in outside contractor expense.

Interest and other income (expense), net

Interest and other income (expense), net, consists primarily of warrant revaluation expense, interest income and foreign currency translation adjustments. During the nine months ended September 30, 2006 and the nine months ended September 30, 2005, we recognized $739,000 and $71,000, respectively, of warrant revaluation expense in accordance with FSP 150-5. Interest income increased in the nine months ended September 30, 2006 compared to the nine months ended September 30, 2005 due to higher interest earned on greater cash balances, primarily resulting from cash generated from operating activities.

Income tax provision

The income tax benefit was $799,000 for the nine months ended September 30, 2006 compared to a provision of $353,000 for the nine months ended September 30, 2005 due to changes in our effective tax rate as a result of releasing our valuation allowance in the first quarter of 2006.

During the first quarter of 2006, we released $3.3 million of our tax valuation allowance on specific deferred tax assets, primarily as a result of achieving sustained profitability in all tax jurisdictions. As part of releasing our valuation allowance, we restored tax reserves related to our uncertain tax position for research and development credits in the amount of approximately $251,000. With the exception of these discrete items, our annual effective tax rate on operating income is approximately 40%. This rate differs from the statutory rate primarily due to the non-deductibility of certain stock and warrant costs and state taxes. The tax rate for the nine months ended September 30, 2006 increased to 42% due to additional state taxes incurred in 2005. Our benefit from income taxes for the nine months ended September 30, 2006 was $799,000 compared to a tax provision of $353,000 in the nine months ended September 30, 2005.

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Years ended December 31, 2005, 2004 and 2003

Revenues

The following table summarizes and analyzes our revenues for 2005, 2004 and 2003:

			Year ended December 31,									Change from 2003 to 2004				Change from 2004 to 2005
(in thousands)			2003			2004			2005			$		%		$		%
Revenues:
	Product revenues		$	12,167		$	30,372		$	51,148		$	18,205	150	%	$	20,776	68	%
	Service revenues			267			1,056			2,964			789	296			1,908	181
			$	12,434		$	31,428		$	54,112		$	18,994	153	%	$	22,684	72	%
% of revenues
		Product revenues		98	%		97	%		95	%
		Service revenues		2	%		3	%		5	%
Revenues by geography:
		Domestic	$	6,219		$	12,114		$	20,943		$	5,895	95	%	$	8,829	73	%
		International		6,215			19,314			33,169			13,099	211			13,855	72
			$	12,434		$	31,428		$	54,112		$	18,994	153	%	$	22,684	72	%
% of revenues by geography:
		Domestic		50	%		39	%		39	%
		International		50	%		61	%		61	%
Revenues by sales channel:
		Direct	$	3,240		$	8,216		$	19,080		$	4,976	154	%	$	10,864	132	%
		Indirect		9,194			23,212			35,032			14,018	152			11,820	51
			$	12,434		$	31,428		$	54,112		$	18,994	153	%	$	22,684	72	%
% of revenues by sales channel:
		Direct		26	%		26	%		35	%
		Indirect		74	%		74	%		65	%

        Product revenues.    The $20.8 million, or 68%, increase in product revenues from 2004 to 2005, and the $18.2 million, or 150%, increase from 2003 to 2004 were due to increased demand for our Spectrum server products. We sold to 155 customers in 2005 compared to 100 customers in 2004 and 67 customers in 2003. One customer, a system integrator, represented 10% and 12% of our product revenues for 2005 and 2004. In 2004, an additional system integrator, accounted for 15% of our product revenues. No customer represented greater than 10% of our product revenues in 2003.

        Service revenues.    The $1.9 million, or 181%, and $789,000, or 296%, increase in service revenues from 2004 to 2005 and from 2003 to 2004, respectively, resulted from the corresponding increases in product revenues during the same periods. The increases during 2004 and 2005 were also due to increased renewal rates and improved pricing for maintenance contracts.

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Gross profit and gross margin

The following table shows the gross profit on each of our revenue components in 2005, 2004 and 2003 in absolute dollars and the related gross margin:

			Year ended December 31,									Change from 2003 to 2004				Change from 2004 to 2005
(in thousands)			2003			2004			2005			$		%		$		%
Gross profit:
	Product		$	5,759		$	18,700		$	32,330		$	12,941	225	%	$	13,630	73	%
		Gross margin		47	%		62	%		63	%
	Service			165			407			721			242	147			314	77
		Gross margin		62	%		39	%		24	%
		Total gross profit	$	5,924		$	19,107		$	33,051		$	13,183	223	%	$	13,944	73	%
		Total gross margin		48	%		61	%		61	%

        Product gross margin.    Gross margin for product revenues remained relatively consistent from 2004 to 2005. Product gross margin increased significantly from 2003 to 2004 due to manufacturing overhead costs remaining relatively flat as sales volume increased. Increased sales volume also allowed us to negotiate better volume pricing from our vendors.

        Service gross margin.    We began selling maintenance and technical support services in 2003, and in 2004 and 2005, continued developing our maintenance and service infrastructure, increasing our headcount to 22 as of December 31, 2005 from six as of December 31, 2003. Gross margin for service revenues decreased from 2003 to 2005 as we continued to develop our maintenance and service infrastructure.

Operating expenses

The following table summarizes and analyzes our operating expenses for 2005, 2004 and 2003:

			Year ended December 31,									Change from 2003 to 2004				Change from 2004 to 2005
(in thousands)			2003			2004			2005			$		%		$		%
Operating expenses:
	Research and development		$	4,935		$	6,385		$	9,756		$	1,450	29	%	$	3,371	53	%
		% of total revenues		40	%		20	%		18	%
	Sales and marketing			6,435			10,947			15,427			4,512	70			4,480	41
		% of total revenues		52	%		35	%		29	%
	General and administrative			1,602			1,795			2,988			193	12			1,193	66
		% of total revenues		12	%		6	%		5	%
Total operating expenses			$	12,972		$	19,127		$	28,171		$	6,155	47	%	$	9,044	47	%

        Research and development.    The $3.4 million, or 53%, increase in research and development expense from 2004 to 2005 was primarily due to a $2.3 million increase in payroll and benefit costs resulting from an increase in research and development employee headcount from 44 to 63, a $513,000 increase in depreciation expenses and consumable supplies and

48

materials used in development and testing functions and a $287,000 increase in outsourced engineering services expense. The $1.5 million, or 29%, increase in research and development expense from 2003 to 2004 was primarily due to a $1.4 million increase in payroll and benefit costs resulting from an increase in research and development employee headcount from 26 to 44.

        Sales and marketing.    The $4.5 million, or 41%, increase in sales and marketing expense from 2004 to 2005 was primarily due to a $2.6 million increase in payroll and benefit costs resulting from an increase in sales and marketing employee headcount from 31 to 49 and an increase in sales commissions, a $542,000 increase in travel and entertainment costs for our sales and marketing functions, a $371,000 increase in depreciation and facilities expenses and a $262,000 increase in marketing costs, particularly tradeshow expenses. The $4.5 million, or 70%, increase in sales and marketing expenses from 2003 to 2004 was primarily due to a $3.3 million increase in payroll and benefit costs resulting from an increase in sales and marketing employee headcount from 19 to 31 and an increase in sales commissions, a $721,000 increase in marketing costs, particularly tradeshow and market research expenses and a $576,000 increase in travel and entertainment costs for our sales and marketing personnel.

        General and administrative.    The $1.2 million, or 66%, increase in general and administrative expense from 2004 to 2005 was primarily due to a $744,000 increase in payroll and benefit costs due to an increase in general and administrative employee headcount from eight to 14, a $255,000 increase in professional services expenses and a $214,000 increase in outside contractor expenses. The $193,000, or 12%, increase in general and administrative expense from 2003 to 2004 was primarily due to an increase in payroll and benefit costs resulting from an increase in general and administrative employee headcount from six to eight.

Interest and other income (expense), net

In 2005, 2004 and 2003, we reported interest and other income of $218,000, $47,000 and $27,000, respectively. Interest income increased over these periods due to higher interest earned on greater cash balances. During 2005, 2004 and 2003, we recognized $157,000, $0 and $0, respectively, of warrant revaluation expense in accordance with FSP 150-5.

Income tax provision

We generated approximately $4.9 million and $27,000 in income before income taxes and $7.0 million in loss before income taxes in 2005, 2004 and 2003, respectively. We recorded a provision for income taxes for 2005 of $243,000 resulting in an effective tax rate of approximately 5%. We recorded no provision for income taxes in 2004 and 2003 primarily due to the net operating loss carryforwards and other tax benefits we had accumulated. Due to the occurrence of a change in ownership of our company as contemplated by Section 382 of the Internal Revenue Code, our utilization of net operating loss carryforwards to offset taxable income was limited.

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Quarterly results of operations data

The following table sets forth our unaudited quarterly consolidated statement of income data for each of the seven quarters in the period ended September 30, 2006. In management's opinion, the data has been prepared on the same basis as the audited consolidated financial statements included in this prospectus, and reflects all necessary adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of this data. The results of historical periods are not necessarily indicative of the results of operations for a full year or any future period.

		For the three months ended
(in thousands)		March 31, 2005			June 30, 2005			Sept. 30, 2005			Dec. 31, 2005			March 31, 2006		June 30, 2006			Sept. 30, 2006
Consolidated statement of income data:
Revenues:
	Product revenues	$	9,806		$	11,329		$	13,129		$	16,884		$	17,607	$	18,786		$	20,182
	Service revenues		414			921			729			900			1,109		1,318			1,269
Total revenues			10,220			12,250			13,858			17,784			18,716		20,104			21,451
Cost of revenues:
	Cost of product revenues(1)		3,765			4,629			4,672			5,752			6,211		6,691			7,364
	Cost of service revenues(1)		192			238			749			1,064			1,102		1,088			1,205
Total cost of revenues			3,957			4,867			5,421			6,816			7,313		7,779			8,569
Gross profit			6,263			7,383			8,437			10,968			11,403		12,325			12,882
Operating expenses:
	Research and development(1)		1,978			2,208			2,570			3,000			3,930		4,113			4,349
	Sales and marketing(1)		3,340			3,705			3,942			4,440			4,612		5,195			5,421
	General and administrative(1)		609			684			806			889			1,018		1,124			1,039
Total operating expenses			5,927			6,597			7,318			8,329			9,560		10,432			10,809
Income from operations			336			786			1,119			2,639			1,843		1,893			2,073
Interest and other income (expense), net			46			33			(5	)		(13	)		79		(210	)		(149	)
Income before income taxes and cumulative effect of change in accounting principle			382			819			1,114			2,626			1,922		1,683			1,924
Income tax benefit (provision)			(26	)		(25	)		(302	)		110			2,270		(663	)		(808	)
Income before cumulative effect of change in accounting principle			356			794			812			2,736			4,192		1,020			1,116
Cumulative effect of change in accounting principle			—			—			(557	)		—			—		—			—
Net income		$	356		$	794		$	255		$	2,736		$	4,192	$	1,020		$	1,116

(1)

Includes stock-based compensation as follows (in thousands):

Total cost of revenues	$	—	$	—	$	—	$	—	$	76	$	17	$	26
Research and development		—		—		—		—		155		47		72
Sales and marketing		—		—		—		—		149		36		55
General and administrative		—		—		—		—		72		15		16
Total stock-based compensation	$	—	$	—	$	—	$	—	$	452	$	115	$	169

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The following table sets forth our unaudited quarterly statement of income data as a percentage of total revenues for each of the seven quarters in the period ended September 30, 2006.

		For the three months ended
		March 31, 2005		June 30, 2005		Sept. 30, 2005		Dec. 31, 2005		March 31, 2006		June 30, 2006		Sept. 30, 2006
Revenues:
	Product revenues	96	%	92	%	95	%	95	%	94	%	93	%	94	%
	Service revenues	4		8		5		5		6		7		6
Total revenues		100		100		100		100		100		100		100
Cost of revenues:
	Cost of product revenues	37		38		34		32		33		33		34
	Cost of service revenues	2		2		5		6		6		6		6
Total cost of revenues		39		40		39		38		39		39		40
Gross profit		61		60		61		62		61		61		60
Operating expenses:
	Research and development	19		18		19		17		21		20		20
	Sales and marketing	33		30		28		25		25		26		25
	General and administrative	6		6		6		5		5		6		5
Total operating expenses		58		54		53		47		51		52		50
Income from operations		3		6		8		15		10		9		10
Interest and other income (expense), net		—		—		—		—		—		(1	)	(1	)
Income before income taxes and cumulative effect of change in accounting principle		3		6		8		15		10		8		9
Income tax benefit (provision)		—		—		(2	)	—		12		(3	)	(4	)
Income before cumulative effect of change in accounting principle		3		6		6		15		22		5		5
Cumulative effect of change in accounting principle		—		—		(4	)	—		—		—		—
Net income		3	%	6	%	2	%	15	%	22	%	5	%	5	%

Revenues have increased sequentially in each of the quarters presented, due to increases in the number of products sold to new and existing customers, ongoing development of indirect and direct sales channels, and international expansion. Cost of service revenues increased in the second half of 2005 due to increased service headcount and the development of our maintenance and service infrastructure. Operating expenses increased sequentially as we added headcount and related costs to accommodate our growing business on a quarterly basis. The quarter ended March 31, 2006 includes a $336,000 out of period adjustment for stock-based compensation expense for 2004 and 2005, as discussed in Note 1 to the consolidated financial

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statements. The income tax benefit occurring in the quarter ended March 31, 2006 arose from release of the deferred tax asset valuation allowance as discussed in Note 4 to the consolidated financial statements. The quarters ended March 31, 2006, June 30, 2006 and September 30, 2006 include accretion of convertible preferred stock warrant expense of $41,000, $358,000 and $339,000, respectively.

Liquidity and capital resources

From our inception through 2004, we financed our operations primarily through private sales of convertible preferred stock totaling approximately $80.0 million. In the nine months ended September 30, 2006 and in 2005, we generated positive cash flow from operations, whereas in years prior to 2005, our operating activities used cash. As of September 30, 2006, we had cash and cash equivalents of $16.9 million. We believe our cash, cash equivalents and cash flows from operations will be sufficient to satisfy our financial obligations through at least the next 12 months. In the future, we may acquire complementary businesses or technologies or license complementary technologies from third parties, and we may decide to raise additional capital through future debt or equity financings to the extent we believe necessary to successfully complete these acquisitions or licenses. However, additional financing may not be available to us on favorable terms, if at all, at the time we make such determinations, which could have a material adverse affect on our ability to maintain or improve our liquidity and cash position in the future.

Cash flows

The following table presents our cash flows from operating activities, investing activities and financing activities for 2003, 2004 and 2005 and for the nine months ended September 30, 2005 and 2006:

	Year ended December 31,									Nine months ended September 30,
(in thousands)	2003			2004			2005			2005			2006
Net cash provided by (used in) operating activities	$	(6,141	)	$	(1,295	)	$	7,035		$	4,530		$	2,964
Net cash used in investing activities		(568	)		(1,148	)		(1,840	)		(1,119	)		(2,951	)
Net cash provided by financing activities		8			10,409			53			13			242
Increase (decrease) in cash and cash equivalents	$	(6,701	)	$	7,966		$	5,248		$	3,424		$	255

Operating activities.    Cash provided by operating activities in the nine months ended September 30, 2006 consisted primarily of $6.3 million of net income, $2.5 million of depreciation and amortization expense, a $1.7 million increase in accounts payable reflecting increased vendor purchases and timing of payments, an increase in accrued liabilities of $789,000 principally due to an increase in income and liabilities, $739,000 of convertible preferred stock warrant accretion and $736,000 of stock-based compensation expense, which was partially offset by a $5.1 million increase in accounts receivable, a $3.1 million increase in deferred tax assets arising from the release of our valuation allowance and a $1.2 million increase in inventory. The increase in accounts receivable was primarily due to increased

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revenues for the nine months ended September 30, 2006 as compared to the year ended December 31, 2005 and to fluctuations in the timing of payments received by customers. Although our accounts receivable balance has increased, we have not experienced any write-offs of delinquent accounts during 2006. Cash provided by operating activities in the nine months ended September 30, 2005 consisted primarily of $1.4 million of net income, a $3.0 million increase in deferred revenues, a $2.2 million increase in accrued liabilities and accounts payable reflecting increased vendor purchases and timing of payments, $1.5 million of depreciation and amortization as a result of capital expenditures and $628,000 of convertible preferred stock warrant accretion, which was partially offset by a $2.6 million increase in accounts receivable and a $1.6 million increase in inventory. The increase in deferred revenues during the nine months ended September 30, 2005 included deferred product revenues for certain customer orders that were subject to customer acceptance criteria.

Cash provided by operating activities in 2005 consisted primarily of $4.1 million of net income, a $3.8 million increase in accrued liabilities and accounts payable reflecting increased vendor purchases and timing of payments, a $2.8 million increase in deferred revenue as a result of sales of product subject to customer acceptance provisions and $2.2 million of depreciation and amortization as a result of capital expenditures, which was partially offset by a $3.5 million increase in accounts receivable as a result of our increase in revenues and a $2.8 million increase in inventory as a result of our increase in revenues. The increase in accrued liabilities and accounts payable in 2005 were primarily due to an increase in sales compensation expense resulting from increased revenue during the period and to increases in professional services and outside consultant expenses as well as increased vendor purchases. Cash used in operating activities in 2004 was $1.3 million and consisted of a $3.7 million increase in accounts receivable as a result of our increase in revenues and a $2.1 million increase in inventory as a result of our increase in revenues, which was partially offset by increases of $2.3 million in accounts payable and accrued liabilities reflecting increased vendor purchases and timing of payments, $1.3 million of depreciation and amortization and $1.0 million in deferred revenue. Cash used in operating activities in 2003 was $6.1 million and consisted of a net loss of $7.0 million to fund our operations and changes in working capital accounts of $719,000, which were partially offset by $1.4 million of depreciation and amortization expense.

Investing activities.    We used $3.0 million, $1.1 million, $1.8 million, $1.1 million and $568,000 in investing activities in the nine months ended September 30, 2006 and 2005, and in 2005, 2004 and 2003, respectively, primarily for the purchase of property and equipment to support the growth of our company. We expect to increase our capital expenditures in future periods as we continue to invest in computer and office equipment and leasehold improvements as we expand our business.

Financing activities.    During the nine months ended September 30, 2006 and 2005 and during 2005 and 2003, cash generated from financing activities related solely to the exercise of common stock options. During 2004, we generated $10.4 million in cash from our financing activities, primarily due to net proceeds of $10.4 million from the issuance of Series B-1 convertible preferred stock.

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Contractual obligations

Our contractual obligations as of December 31, 2005 were as follows:

(in thousands)	Total		Less than 1 year		1-3 Years		3-5 Years		More than 5 years
Contractual obligations:
Operating leases	$	1,890	$	588	$	1,196	$	106	$	—
Purchase obligations		3,508		3,508		—		—		—
Total contractual obligations	$	5,398	$	4,096	$	1,196	$	106	$	—

Purchase obligations in the above table represent non-cancelable contractual obligations as of December 31, 2005.

Off-balance sheet arrangements

As of September 30, 2006 and December 31, 2005 and 2004, we did not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special-purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Recent accounting pronouncements

In June 2006, Financial Accounting Standards Board, or FASB, issued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes—an Interpretation of FASB Statement No. 109, or FIN 48. FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements in accordance with FASB Statement No. 109, Accounting for Income Taxes, and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. We are required to adopt the provisions of FIN 48 beginning in 2007. We are currently in the process of assessing what impact FIN 48 may have on our consolidated financial position, results of operations or cash flows.

In September 2006, the SEC issued Staff Accounting Bulleting No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, or SAB No. 108, regarding the process of quantifying financial statement misstatements. SAB No. 108 states that registrants should use both a balance sheet approach and an income statement approach when quantifying and evaluating materiality of a misstatement. The interpretations in SAB No. 108 contain guidance on correcting errors under the dual approach as well as provide transition guidance for correcting errors. This interpretation does not change the requirements within Statement of Financial Accounting Standards, or SFAS, No. 154, Accounting Changes and Error Corrections, for the correction of an error in financial statements. SAB No. 108 is effective for annual financial statements covering the first fiscal year ending after November 15, 2006. We will be required to adopt this interpretation in 2006. We do not expect the adoption of SAB No. 108 to have a material impact on our results of operations or financial position.

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In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. This Statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. This Statement applies under other accounting pronouncements that require or permit fair value measurements, the Board having previously concluded in those accounting pronouncements that fair value is the relevant measurement attribute. Accordingly, this Statement does not require any new fair value measurements. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. We do not expect the adoption of SFAS No. 157 in 2008 to have a material impact on our results of operations or financial position.

Quantitative and qualitative disclosures about market risk

Interest rate sensitivity

As of September 30, 2006, we had cash and cash equivalents of $16.9 million, which consisted of highly liquid money market instruments with original maturities of three months or less. Because of the short-term nature of these instruments, a sudden change in market interest rates would not be expected to have a material effect on our financial condition or results of operations. However, as the yield curve of debt instruments may return to a standard profile, we may begin investing in longer-term debt instruments. Should we begin to invest in longer-term debt instruments, such fluctuations could reduce future interest income.

Foreign currency exchange risk

Although a majority of our revenues is derived from customers who reside outside of the United States, all of our revenues are derived from transactions denominated in U.S. dollars. Because of this, increases in the value of the U.S. dollar could require us to reduce our prices to remain competitive in foreign markets, which could have a material adverse effect on our consolidated results of operations or financial position. We have periodically reviewed and revised the pricing of our products available to our customers in foreign countries in response to these transaction-related risks.

Given that the only expenses that we incur in currencies other than U.S. dollars are certain costs which historically have not been a significant percentage of our revenues, we do not believe that our foreign currency exchange rate fluctuation risk is significant.

We have not hedged exposures denominated in foreign currencies or used any other derivative financial instruments as we do not believe that we currently have any significant direct foreign currency exchange rate risk. Although we transact our business in U.S. dollars, future fluctuations in the value of the U.S. dollar may affect the competitiveness of our products and results of operations.

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Business

Omneon overview

Omneon is a leading provider of digital content storage and processing systems used by media companies to enable efficient production and distribution of high-quality digital video and audio. We develop, market and sell a range of video servers, storage systems and related software applications that media companies use to simultaneously ingest, process, store, manage and deliver digital media in a wide range of formats. When used for television production and on-air operations, our products provide both continuous real-time record and playback capabilities as well as file-based access to digital media content. As the means by which media distribution to consumers rapidly evolves, our systems also provide a platform for media companies to produce more content needed for delivery to a wider range of devices.

We leverage our understanding of media workflow requirements, knowledge of information technologies and advanced system design capabilities to provide high performance, standards-based storage and processing solutions optimized for the large-capacity and high-bandwidth requirements of digital media content. Our products include Spectrum video servers, MediaGrid active storage systems and MediaTool software applications. Our Spectrum video servers provide reliable real-time recording and playback of multiple channels of high-quality program content. Our MediaGrid active storage systems enable high-bandwidth simultaneous access to stored content by multiple users, as well as high-performance media processing. Our MediaTool software applications provide basic content management and system control functionality. Together, these products deliver an integrated solution that enables more efficient digital media production and distribution workflows. Our products are commonly combined with complementary technologies and applications, and we encourage a broad ecosystem of partners to ensure interoperability with our platforms by supporting industry-standard interface protocols and offering application programming interfaces, or APIs.

Our products are used by media companies worldwide including multi-national media conglomerates, commercial and public broadcast television networks, content networks, satellite broadcasters, television service providers, local television stations and mobile television providers. We sell our products both indirectly through system integrators and directly to end users. To date, our systems have been sold to more than 350 customers in over 45 countries. Our customers include system integrators, such as Ascent Media Group and Netorium, and end users, such as British Broadcasting Corporation, British Sky Broadcasting, Discovery Communications and Turner Entertainment, a division of Time Warner.

We are a leading provider of broadcast video servers and are actively extending our leadership by addressing new segments of this market and expanding into the complementary digital media storage and content management markets. We have grown our total revenues at a 109% compound annual growth rate over the past three years from $12.4 million in 2003 to $54.1 million in 2005. In the nine months ended September 30, 2006, we generated total revenues and net income of $60.3 million and $6.3 million, respectively.

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Industry overview

The advent of new technologies and distribution platforms is driving fundamental changes in the way video content is produced, programmed, distributed and consumed. These changes are affecting all of the participants in the digital content value chain as shown below:

Content production.    Production and post-production facilities create programming, advertisements and promotional content. National broadcasters create syndicated news and other programming, while individual stations produce local-interest content, as well as local and regional news programming. Traditionally, these companies have used analog, tape-based video production equipment to support the creation of content for a limited number of channels in a single format. The proliferation of new channels and platforms is driving the need for different types of content in multiple formats, forcing producers to create more content with greater efficiency. As a result, content producers are increasingly transitioning to digital production tools that take advantage of file-based workflows and disk-based shared storage platforms to improve workflow by enabling more collaborative production. The increasing use of file-based workflows requires high-performance storage systems that can support these new production processes.

Content programming.    Broadcasters of all sizes combine and package content from production companies to create television programming. These international, national, regional or local organizations then use a variety of distribution services, such as over-the-air, cable, satellite and telecommunication companies, to deliver their programs to consumers. Historically, programs and interstitials, such as commercials, promotions and other inserted material, were either manually compiled on a single tape or stored on multiple individual tapes. The process of programming a channel required that programs be compiled in advance or that large numbers of tapes had to be managed and sequentially played back. Increasingly, broadcasters are using servers to replace tape-based operations. Servers enable true non-linear access to

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shared content to support multi-channel operations and effectively eliminate the need for pre-compiled programs or tape-based workflows. Programs and interstitials can be ingested into a server, sequenced in any order and then played back as the continuous stream of a television channel. Further, once programs reside as a file within a server, it becomes easier to repackage and reformat those programs for distribution to new platforms. As the number of channels and platforms continues to increase, broadcasters are using server technology to streamline the creation of new channels and more quickly launch new program services. The increasing need to repurpose content requires scaleable storage to hold growing libraries of media files, as well as integration between server and storage platforms.

Content distribution.    Over-the-air broadcasters and television service providers, including cable and satellite operators and, increasingly, certain telecommunications companies, distribute television programming to consumers. Most of these service providers must support a large number of channels, often combining content from a number of content programmers. The proliferation of specialty channels and new consumer video platforms is further driving content distributors to expand the number of channels offered, integrating content from a wider range of providers. More recently, new Internet-based content distribution companies have emerged in response to consumer demand for downloadable or Internet Protocol, or IP, streamed content. The use of server technology has been a key enabler of these trends, making it more cost-effective and efficient to operate a complex multi-channel environment and to take advantage of new distribution mediums.

Content consumption.    Consumers are demanding broader access to both existing and new forms of content. Driven by advancements in consumer electronics, many consumers now want higher quality content in the form of high-definition, or HD, television. Additionally, consumers are increasingly obtaining content directly, on their own schedule, rather than as part of a pre-packaged program channel delivered on a fixed schedule. The proliferation of video-enabled devices such as personal video players and mobile phones is further driving the demand for content to be available anywhere at anytime. These changes in consumer behavior require new ways of formatting and distributing content, forcing producers and distributors to invest in new production and delivery platforms.

Changing environment for media companies

Across the digital content value chain, several key trends are driving changes in how production and distribution facilities are being designed and operated:

Analog to digital conversion.    Media companies are embracing digital formats to ingest, process, store, manage and deliver content. The conversion of media into a digital format generally enables higher quality and more efficient production and distribution of content, due to its more accurate reproduction and data compression characteristics. A variety of compression standards now exist that enable more efficient transport and storage of digital video files. The growing demand for content in multiple formats for new platforms will further require advanced compression algorithms and the ability to quickly convert from one format to another.

Tape to disk-based storage.    While tape-based systems have been the primary method used for television program production and delivery, these systems are rapidly being converted to disk-based systems as the number of channels of programming continues to grow and new forms of content become more prevalent. Disk-based storage enables simultaneous access to

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raw content by multiple individuals and production teams and provides a means to better support the distribution of different content formats across multiple distribution channels. Digital content storage and processing systems have evolved to support the new workflow needs of media companies as they seek to manage the changes in how content is produced and distributed. For example, media server technology has advanced to where it is possible to store hundreds of hours of content and simultaneously play back many channels of continuous programming.

Standard-definition to high-definition content.    In order to meet growing viewer demand for HD content, media companies are upgrading their applications and the infrastructure needed to produce and deliver HD programming. HD material is particularly challenging because it requires both larger capacity and higher bandwidth systems to transport, manipulate, archive and access the content. The adoption of HD is driving the need for enhanced servers, storage and software applications capable of ingesting, processing, storing, managing and delivering HD content.

Transition towards file-based workflow and file-based distribution.    File-based systems are being used across all aspects of the digital content workflow, from acquisition with the emergence of file-based cameras, to production using video editing platforms, to distribution, which often utilizes file-based delivery services. File-based production allows for more collaborative work, as multiple individuals and production teams can access the same content from a shared storage resource. Once finished programs are available as digital files, new distribution models become possible, allowing content to pass more efficiently through the value chain and creating greater flexibility in how programs are delivered to consumers.

Our market opportunity

To address the changes in the industry, media companies must invest in solutions that allow them to better integrate their production and distribution workflows, enabling more collaborative production and efficient repurposing of their media assets. Workflow integration with file-based media can translate into significant reductions in labor costs, improved quality and increased flexibility to quickly deploy new revenue-generating services. As a result, media companies are investing in digital content infrastructure that enables them to reliably deploy best-of-breed production and distribution solutions.

As shown below, the workflow within a media company typically consists of several stages:

•

ingest, where content is either captured in real-time and digitized or copied as a file from an outside source;

•

production, where content is accessed by multiple applications such as video editors, audio workstations or other preparation utilities to create finished programming; and

•

distribution, where content is delivered to a service provider or the consumer either as a real-time television signal or as a digital media file.

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Across the workflow, new technologies and processes are being implemented to address the changing requirements of the media industry:

Ingest and production.    Media companies are moving from manual dubbing, labeling and tape delivery processes to deployment of real-time server architectures to ingest digital media and make it immediately available for edit and production. The use of server and file-based storage technology enables more collaborative production activities and speeds the time-to-air, which is critical for a fast paced newsroom production environment.

Distribution.    Distribution is evolving from a tape-based playout model to a file-based media server infrastructure capable of both multi-channel real-time playout as well as file-based content delivery. The growing need for more HD programming across more distribution channels is continuing to drive the utilization of media servers for playout.

According to Frost & Sullivan, the market for video servers used for ingest, production and distribution activities is expected to grow from $583 million in 2006 to $1.2 billion in 2010, representing a compound annual growth rate of 20%.

Workflow and storage.    As digital media workflow migrates to a file-based approach, the need for centralized, high-bandwidth digital media file storage increases. Media storage needs to support simultaneous access by multiple applications, including editing and archiving, as well as a seamless interface between ingest and distribution servers. According to IDC, the market for capacity-optimized disk storage systems is expected to grow from $2.2 billion in 2006 to $8.6 billion in 2010, representing a compound annual growth rate of 41%.

Digital content management.    As more content exists in file format, media companies will need robust content management solutions to address the challenges of indexing and archiving all their digital content files. To enable content management applications to function efficiently, storage and processing platforms must provide open interfaces, support industry standard protocols and file formats and provide efficient media metadata access. According to Frost & Sullivan, spending on digital asset management solutions is estimated to be

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$643 million in 2006, and is expected to grow at a compound annual growth rate of 27% to $1.7 billion in 2010.

Content repurposing.    To increase the value of their digital assets, content providers are seeking ways to repurpose content across multiple platforms, hoping to reach new audiences viewing content in new forms and on new devices. Each of these new platforms requires content to be reformatted for that platform, a process that takes time and consumes significant processing resources. Digital media files lend themselves to this process since they can be easily broken up and reassembled as needed.

Our solutions

Omneon solutions allow customers to deploy a digital content infrastructure that accommodates both real-time video processing and faster-than-real-time file-based workflows for the production and distribution of digital media content. Our Spectrum server and MediaGrid storage product lines complement each other to support this mixed operating environment.

Our Spectrum video server is optimized for high-reliability, real-time applications such as multi-channel broadcast playout. The recently introduced MediaGrid active storage system is optimized for high-availability file-based content storage and provides high-bandwidth simultaneous multi-user access to content. MediaGrid also incorporates grid computing capabilities, enabling integrated digital media processing functions such as format conversion and quality control.

Together, our products form the basis of a digital content infrastructure that can deliver a high level of workflow integration, linking both real-time and file-based requirements. This is critical to support evolving digital media content management and content repurposing workflows. Our products are designed to provide:

•

data type or format flexibility, supporting many types of audio, video and file metadata;

•

shared storage access, allowing simultaneous access to the same content;

•

storage capacity scalability, creating accessible storage capacity that can scale to large sizes;

•

system bandwidth scalability, supporting growth in both real-time channels and storage user access;

•

access and capability modularity, enabling additional real-time channels, system bandwidth and storage capacity in small, economical increments; and

•

open systems, enabling compatibility with legacy and industry-standard control protocols, interfaces and interchange formats.

Omneon solutions address key elements of the workflow requirements for media companies:

Ingest and production.    When used for ingest and production, Spectrum servers can execute frame-accurate video recording from a variety of sources, including video tape recorders, live cameras or microwave and satellite feeds. Our systems are designed to support multiple control protocols with minimal latency, allowing for manual dubbing, crash records and scheduled

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recording. We are increasingly deploying systems into the production market, where digital media accessibility and processing capabilities are key requirements.

Distribution.    Spectrum servers deliver highly scalable, reliable and cost-effective real-time, multi-channel digital video playback. Because the use of our systems for on-air transmission is core to the revenue-generating function of broadcasters, these systems are designed to be redundant and fault-resilient to ensure maximum reliability. To address the industry's transition from standard definition, or SD, to HD, we have designed Spectrum to support simultaneous SD and HD program playout.

Workflow and storage.    The high-performance MediaGrid storage system provides a shared repository for media files, allowing high-bandwidth file access over IP networks. It enables fast access to high-demand digital media content and support for a large number of simultaneous users. We also provide a media API, giving applications a higher level of control over media file creation, modification and transfers. MediaGrid provides centralized storage for all ingested and archived content, production access by a wide range of applications, including multiple editors and staging platform for all content to be transmitted or distributed.

Digital content management.    Our products are used to support the digital content management requirements of customers. Our systems can be used with our own applications or with a wide range of third-party applications to set, manage and change various attributes of their digital media assets, either automatically or manually. Combining our server and storage systems with related content management applications provides media companies with a comprehensive solution for managing their digital content.

Content repurposing.    Our products extend the functionality of basic content storage to provide a media processing platform for the manipulation of content while it is being stored within our system. We are leveraging advancements in grid computing technology and are working closely with customers to extend our active storage platforms to make excess processing power available for applications that are part of the content repurposing workflow.

Our strengths

We have expertise in developing open, scalable and reliable digital content storage and processing systems for media companies. Working closely with our customers, we develop products and technologies optimized for media workflows and enable them to reduce costs and address new revenue opportunities. Our strengths include:

Focus and strong reputation in the digital media market.    We are focused entirely on storage and processing solutions for digital media content. Our products are specifically designed to meet the workflow needs of the media industry, including real-time video servers and highly scalable media file storage and grid-based media processing systems.

Expertise in integrating digital media and information technologies into cost-effective solutions.    We have extensive technical expertise and development experience with information technologies, or IT, and storage and video technologies. Our engineering, sales and marketing staff has a deep understanding of the market and the workflow needs of customers. As a result, we are able to offer best-of-breed solutions that meet their needs.

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Extensive knowledge of the technical infrastructure required to support complex workflows within a production and distribution facility.    We have expertise in real-time services, which are required to enable continuous recording and playback of video and audio material, as well as in file-based workflows, which are required for high-bandwidth access to media files and used to support functions such as material preparation, editing and archiving. Combining this expertise enables us to provide integrated solutions to customers, as compared to alternative solutions which generally provide one or the other, but not both.

Development of platforms designed to interoperate with best-of-breed technologies.    We provide an open platform that supports any digital file format and allows third-party applications to interface with our products. Our APIs have been licensed by over 140 application developers, many of whom are influential in the selection of our products.

Strong relationships and a proven ability to collaborate with global media companies.    We have deployed our products at some of the largest media facilities in the world, including British Broadcasting Corporation, British Sky Broadcasting, Discovery Communications and Turner Entertainment. As we develop plans for new products, we often engage some of our key customers in the definition process, which gives us insight into the products that will be most valuable to them and can be deployed immediately into their facilities.

Our strategy

We seek to become the leading provider of digital asset infrastructure to the media industry. The key elements of our strategy are to:

Continue to expand our leadership in the broadcast video server market.    We will continue to invest in our Spectrum product line and expand its functionality to address additional market opportunities. We are also expanding into new market segments, such as news, sports and post-production. Through these efforts, we intend to expand our customer base as well as deepen our relationships with existing customers.

Provide active storage solutions to the digital media industry.    We are currently focused on selling and deploying MediaGrid to customers in the digital media industry. We designed and developed MediaGrid based on specific input from customers who needed a high-bandwidth digital content storage platform. When combined with our Spectrum servers and related software applications, MediaGrid provides our customers with an end-to-end digital media infrastructure solution.

Expand our portfolio of content management applications.    We intend to further expand our portfolio of MediaTool software applications to support our customers' needs for system control and content management. For example, we believe that content management capabilities that ease search, retrieval, movement and repurposing of digital media files will be critical to media companies as they transition to file-based workflows.

Continue to involve customers in strategic product planning.    We rely on close customer relationships to gain unique insights into evolving market requirements. By developing new features and products in collaboration with our customers, we increase our value to them across a wider range of their workflows.

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Pursue partnerships and complementary acquisitions.    We intend to continue to foster partner relations to allow customers to leverage our products by interoperating with other best-of-breed solutions. We will continue to partner with application developers, third-party system integrators and technology suppliers to ensure interoperability with other content infrastructure technologies to deliver integrated, value-added solutions to our customers. As opportunities arise, we will consider strategic acquisitions of products, technologies and capabilities that extend our ability to provide solutions that further improve the digital media workflow for customers.

Opportunistically expand into new and adjacent markets. We believe that there is significant opportunity for our products beyond the markets we currently serve. These markets have similar characteristics to those of the media industry in that they also work with digital media content or require high-bandwidth transmission and storage of large files. The opportunity for MediaGrid includes media-related as well as other non-adjacent markets. We intend to explore these markets and, where appropriate, begin sales and marketing efforts targeting these new segments.

Our customers

To date our systems have been sold to more than 350 customers in over 45 countries. We sell a substantial portion of our products through indirect sales channels, such as system integrators,

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which sell systems to end users. Our largest sales channel partners include Ascent Media Group, Itochu Cable Systems and Netorium.

The following is a list of representative end users who have deployed our technology:

Category	End User
Media conglomerates	• Time Warner (U.S.) • Viacom (U.S.)
Broadcast television networks	• British Broadcasting Corporation (U.K.) • Global Television Networks (Canada) • Public Broadcasting Service (U.S.)
Content networks	• Discovery Communications (U.S.) • Lifetime Networks (U.S.) • Scripps Networks (U.S.)
Satellite broadcasters	• British Sky Broadcasting (U.K.) • SKY Perfect Communications (Japan) • Star TV (Hong Kong)
Television service providers	• Chellomedia Programming (Netherlands) • Samacom (U.A.E.) • Technicolor Network Services (U.K.)
Local television stations	• KCBS (Los Angeles, CA) • KYW-TV (Philadelphia, PA) • WFOR (Miami, FL)
Mobile television providers	• Crown Castle (U.S.) • Qualcomm (U.S.)

In the nine months ended September 30, 2006 and in 2005, 2004 and 2003, our revenues from customers outside the United States comprised 63%, 61%, 61% and 50%, respectively, of our total revenues. In the nine months ended September 30, 2006 and in 2005, 2004 and 2003, we derived approximately 70%, 65%, 74% and 74%, respectively, of our total revenues through indirect sales. Ascent Media Group represented 11%, 10% and 12% of our total revenues in the nine months ended September 30, 2006 and in 2005 and 2004, respectively. In 2004, Netorium represented 15% of our total revenues. No customer represented greater than 10% of our total revenues in 2003.

Products

Our products include video servers, active storage systems and related software applications. Our video server and storage products are based on proprietary system designs that integrate our file system and management software with hardware built using industry-standard components. Our software applications are designed to provide system control and media management functions for digital content stored within our hardware platforms.

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Spectrum video servers

Spectrum video servers provide a platform to record, store and play back multiple channels of television content. A Spectrum video server system is comprised of modular components connected by various networking technologies that can be deployed in a wide range of configurations. This flexible architecture allows customers to configure a system to meet precise channel count, storage capacity, system bandwidth and media format requirements and to easily change the system configuration as their needs evolve.

Omneon Spectrum Video Server System

Spectrum video servers are comprised of a combination of MediaDirectors, MediaPorts and MediaStores, each providing a specific aspect of the system's functionality:

MediaDirectors.    As the core system processing unit, MediaDirectors provide basic system functionality including file system management, data throughput and bandwidth allocation, data protection and support for external interface protocols.

MediaDirectors

MediaPorts and MultiPorts.    Acting as the system's interface adapters for video, audio, timecode and control, MediaPorts and MultiPorts record and encode content for storage, and decode and playout content for production or transmission. MediaPorts are designed to support a variety of video compression formats for a single channel of record or playback. MultiPorts are designed to support multiple channels of playback of either HD or SD content.

MediaPorts

MultiPorts

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MediaStores.    MediaStores serve as the system's storage elements. MediaStores connect to MediaDirectors via industry-standard fibre channel networking protocol.

MediaStore

MediaGrid active storage systems

MediaGrid active storage systems combine high-capacity storage, high-bandwidth data access and integrated computing power in a central storage system capable of supporting the demanding performance, scalability and reliability requirements of media companies. MediaGrid combines grid storage with grid computing through the use of multiple independent storage servers and can scale in manageable increments of capacity, bandwidth and media processing power.

MediaGrid was designed to provide storage capacities from as little as a few terabytes to several petabytes of data all within a single file system. Data access bandwidth can scale to many hundreds of gigabits per second of aggregate throughput.

Omneon MediaGrid Active Storage System

A MediaGrid system has two major operational components:

ContentDirectors.    ContentDirectors store the overall file system for MediaGrid and manage access to, and ensure integrity of, all data contained within the system.

ContentDirector

ContentServers.    ContentServers house the data storage for MediaGrid, monitor that storage and the file elements being stored as part of the distributed file system and can also provide available computing power to grid-based Linux applications.

ContentServer

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MediaTool software applications

We have developed a family of software applications that provide basic content management and system control functionality. These applications are designed to address specific aspects of our customers' workflows as they transition to file-based content management. These tools include:

ProBrowse – a comprehensive media proxy system that makes content available to networked personal computers in a media facility and provides access to a low-resolution copy of all full resolution material contained on either Spectrum or MediaGrid systems

ClipTool and ClipTool Pro – controls the recording or playback of a single channel on a Spectrum server

PlayTool – builds a playlist and controls playout of content on a Spectrum server

RecordTool – schedules and manages media recordings on a Spectrum server

DelayTool – manages delayed broadcast transmissions, such as time zone delays

TransferTool – moves video and audio clips between Omneon systems

MirrorTool – synchronizes content across multiple Omneon systems

DemuxTool – extracts programming material from an MPEG program transport stream

System management products

For configuration, monitoring and system maintenance functions, we offer comprehensive system management tools that our customers use to manage systems:

SystemManager – a management platform for configuring, monitoring, troubleshooting and servicing Spectrum, MediaGrid and ProBrowse systems

ContentManager – an application that is used to manage the attributes of data stored within MediaGrid

Technology

System architecture design

Our modular hardware and software components are interconnected by various standard IT networking technologies, enabling high-performance media processing, high-bandwidth access to media content and resilience to individual component failure:

Industry-standard components.    We integrate standard IT components into our systems, allowing us to capitalize on the development and cost economies of the broader IT market.

Modular design.    We design our systems around the use of multiple modular components that are interconnected with standard IT networking technologies. Each of the functional elements of our servers and storage systems, such as system controllers, storage devices and codec devices, are discrete components that can be configured to specific and changing customer requirements.

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Reliability.    We have designed our systems to minimize single points of failure, such that in the event of a component failure, the overall system can continue to operate.

File system technologies

Our server and storage systems are designed to support the workflows of customers using our proprietary file system software.

Spectrum file system.    We designed a proprietary distributed file system that allows multiple servers to be connected to the same shared pool of storage, allowing multiple users to read and write operations to storage simultaneously and enabling the high bandwidth needed for multi-channel real-time media operations. Our advanced buffering and caching algorithms are designed to ensure that access to data is highly deterministic, which supports continuous low-latency real-time operations.

MediaGrid file system.    The MediaGrid active storage system is based on our proprietary cluster file system that aggregates multiple independent storage nodes into a single global name space. We developed advanced data replication techniques that are designed to ensure data protection as well as hardware and software fault tolerance and recovery. We designed a grid-style architecture to enable scaling of both capacity and bandwidth as new nodes are added, and to function as a large-scale grid computing platform, allowing applications to spread their computing tasks across the processors in each node. For certain client platforms, we have optimized data access on MediaGrid to enable a direct connection between the client and all nodes of the system. This approach allows each client platform to access data from all nodes in parallel, optimizing access bandwidth across the system.

Media processing

Based on our expertise in real-time media processing, we have optimized our systems for the recording and delivery of continuous media, and have designed specific capabilities for handling digital media files and video streams.

Media management.    We have developed proprietary techniques that enable our systems to deliver multiple continuous streams of high-quality video and audio content. These techniques include managing storage subsystem latencies, data retrieval, rapid opening and closing of multiple files and enabling of high performance file creation, deletion and status processes.

Video compression.    Our systems are designed to support both compressed and uncompressed digital media. Spectrum incorporates codec technology that either encodes or decodes media in real-time using one of several compression formats.

Metadata.    Our systems are designed to construct and interpret complex metadata for digital media files. We have developed APIs that expose this complex metadata and allow third-party application developers to create, access and modify content within these systems.

Sales and marketing

We sell our products indirectly through system integrators and directly to end users. For the nine months ended September 30, 2006, we derived approximately 70% of our total revenues from sales to system integrators.

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Our field sales personnel are located throughout the United States, Europe, Japan and Asia Pacific. We have hired regional sales personnel for specific emerging markets such as Russia, India, the Middle East, China and Latin America. Our field sales personnel are responsible for managing our relationships with both system integrator partners and end users. They work closely with system integrators to provide assistance throughout the sales process and they also engage directly with end users to provide education about Omneon solutions and influence them to specify our products.

System Integrators.    System integrators use our products as a key component of an overall system that they sell to their customers. In most cases, system integrators directly purchase our products based on orders from their customers.

Direct Sales.    For sales of our products made directly to end user customers, our field sales personnel manage the entire sales process.

We focus our marketing efforts on generating product awareness, communicating product advantages and generating qualified leads for our sales force. We rely on a variety of marketing vehicles, including our website, trade shows, advertising, public relations, industry research and collaborative relationships with system integrators, application developers and technology vendors to gain wider market access.

Customer support

We believe that our ability to provide consistent, high-quality worldwide customer service and technical support is an important factor in attracting customers. Product support can include Internet access to technical content, as well as telephone access to technical support personnel on a 24-hour-a-day, seven-day-a-week basis from our technical assistance center located at our headquarters in Sunnyvale, California. We also have regional support personnel located in Atlanta, Boston, Denver and Raleigh. We have international support centers or support teams in the United Kingdom, Singapore and Japan. As we expand internationally, we will continue to hire additional local technical support personnel and work with local third-party service providers to service our international customer base. We also offer our customers a variety of other education and training programs.

Research and development

We believe our future success depends on our ability to develop new products, features and applications that address the rapidly changing technology and needs of the media industry. Our engineering staff is responsible for the design, development, quality, documentation and release of our products. We have engineering groups located at our headquarters in Sunnyvale, California and in Beaverton, Oregon. Research and development expenses were $12.4 million, $9.8 million, $6.4 million and $4.9 million for the nine months ended September 30, 2006 and for 2005, 2004 and 2003, respectively.

Manufacturing

We outsource the manufacturing of our products to third-party manufacturers who purchase components on our approved vendor list, build products per our specifications, install our software and conduct the functionality testing that we have developed. Internally, we are

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focused on quality control, supply chain management, new product introductions and order fulfillment. We currently do not have written contracts with our third-party manufacturers. We maintain direct relationships with key suppliers in order to manage continuity of supply and pricing.

Competition

The market for our products is highly competitive, rapidly evolving and subject to changing technology, customer needs and new product introductions. Our Spectrum product competes with products from Avid Technology, Inc., Harris Corporation, SeaChange International, Inc. and Thomson S.A. We believe that our MediaGrid product will compete with products offered by manufacturers of general purpose storage products. As we introduce additional products or address new market opportunities, we expect to encounter additional competitors, including established and emerging companies in adjacent technology businesses. We currently compete principally on the basis of:

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product features and performance;

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pricing;

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total cost of ownership; and

•

customer service.

We believe we compete favorably in each of these areas.

Intellectual property

Our success and ability to compete are substantially dependent upon our intellectual property. We rely on patent, trademark and copyright law, trade secret protection and confidentiality or license agreements with our employees, customers, strategic partners and others to protect our intellectual property rights. We have nine patents issued in the United States, which expire between 2023 and 2026, and have 13 patent applications in the United States. We also have one issued patent and nine patent applications in foreign countries based on our issued patents and patent applications in the United States. In addition, we have a number of non-exclusive licenses from third-party hardware and software vendors that allow us to resell certain hardware products and incorporate their software in our products.

The steps we have taken to protect our intellectual property rights may not be adequate. Third-parties may infringe or misappropriate our intellectual property rights and may challenge our issued patents. In addition, other parties may independently develop similar or competing technologies designed around any patents that may be issued to us. We intend to enforce our intellectual property rights vigorously, and from time to time, we may initiate claims against third-parties that we believe are infringing our intellectual property rights if we are unable to resolve matters satisfactorily through negotiation. If we fail to protect our intellectual property rights adequately, our competitors could offer similar products, potentially significantly harming our competitive position and decreasing our revenues.

Employees

As of September 30, 2006, we had 209 employees, of which 27 are engaged in service and support, 62 are engaged in sales and marketing, 84 are engaged in research and development,

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14 are engaged in manufacturing and operations, 16 are engaged in general and administrative functions and six are engaged in facilities and information technology functions. None of our employees are represented by a labor union or are covered by a collective bargaining agreement. We have never experienced any employment-related work stoppages, and we consider our employee relations to be good.

Facilities

We lease approximately 41,000 square feet of space for our headquarters in Sunnyvale, California under an agreement that expires in April 2008. We also lease additional offices in Beaverton, Oregon, the United Kingdom, Singapore, Japan, Hong Kong, Russia and France. We expect to require additional facilities to accommodate our future growth. We believe that suitable additional space will be available in the future as needed on commercially reasonably terms.

Legal proceedings

We are currently not a party to any material legal proceedings.

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Management

Executive officers and directors

The following table sets forth information regarding our executive officers and directors as of December 28, 2006:

Name	Age	Position
Joseph S. Kennedy	60	President, Chief Executive Officer and Director
Lawrence R. Kaplan	56	Chairman and Director
Donald M. Craig	57	Chief Technology Officer
Laura A. Perrone	49	Vice President of Finance and Chief Financial Officer
Daniel J. Marshall	43	Senior Vice President of Worldwide Sales
Geoffrey G. Stedman	39	Vice President of Marketing
Jonathan P. Turk	34	Vice President of Operations
Vincent G. O'Malley	45	Vice President of Video Systems Engineering
Charles F. Morris	46	Vice President of Storage and Applications Engineering
Ronald D. Howe	48	Vice President of Worldwide Services
Basil H. Alwan	44	Director
Jon S. Castor	55	Director
Matthew D. Howard(1)	42	Director
Esfandiar Lohrasbpour	54	Director
Wes Raffel(2)	51	Director
William J. Schroeder(1)	62	Director
J. Peter Wagner(2)	40	Director

(1)

Member of our audit committee.

(2)

Member of our compensation committee.

Executive officers

Joseph S. Kennedy has served as our President and Chief Executive Officer and as a member of our board of directors since June 2003. Prior to joining us, Mr. Kennedy served as President, Chief Executive Officer and Chairman of the Board of Directors of Pluris Inc., a developer of scalable Internet routers, from June 1999 to March 2002. Prior to that, Mr. Kennedy was the founder and Chief Executive Officer of Rapid City Communications, developer of routing switch technologies, from February 1996 until that company was acquired by Bay Networks, Inc., a provider of networking products, in June 1997, after which time he served as President and General Manager of Bay Networks' switching products division until June 1998. In addition to Omneon, Mr. Kennedy currently serves on the boards of directors of Adaptec, Inc., a provider of storage solutions, and several privately-held companies. Mr. Kennedy holds an M.S. in Electrical Engineering and Computer Science, and an A.B. in Computer Science, both from the University of California, Berkeley.

Lawrence R. Kaplan is a co-founder of Omneon and has served as our Chairman since June 2003 and as a member of our board of directors since our inception. Mr. Kaplan served as our President and Chief Executive Officer from our inception until June 2003. Prior to co-founding Omneon, Mr. Kaplan served as Senior Vice President—Sony Broadcast at Sony Electronics Inc., a provider of audio, video, communications and information technology

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products, from June 1995 to May 1998, and the Vice President and General Manager of the Computer Graphics and Television Groups at Tektronix, Inc., a supplier of test, measurement, and monitoring products, solutions and services, from 1989 to 1992. Mr. Kaplan holds an M.B.A. from Rutgers University and a B.S. in Electrical Engineering from the University of Wisconsin. Mr. Kaplan is a Fellow of the Society of Motion Picture and Television Engineers.

Donald M. Craig is a co-founder of Omneon. He served as our Vice President of Engineering from May 1998 until January 2001, when he assumed his present role of Chief Technology Officer. From 1996 until 1997, Mr. Craig was a director of engineering at Sony Electronics Inc. in San Jose, California. From 1984 until 1996, Mr. Craig held a number of engineering positions at Tektronix, Inc. in Beaverton, Oregon, and London, England, attaining the senior technical position of engineering fellow in 1995. His Tektronix engineering teams received Emmy® awards in 1988 for the VM-700 television analyzer, and in 1996 for the Profile video server. Mr. Craig is a Fellow of the Society of Motion Picture and Television Engineers.

Laura A. Perrone has served as our Vice President of Finance and Chief Financial Officer since September 2003. Ms. Perrone was on sabbatical from March 2002 to September 2003. Prior to that, Ms. Perrone served as a consultant to the Chief Executive Officer of Icarian, Inc., a human resources software company, from January 2002 to March 2002, following Icarian's acquisition by Workstream, Inc. She was Vice President and Chief Financial Officer of Icarian from April 1999 through December 2001. From 1998 to March 1999, Ms. Perrone was an employee at Micron Technology, Inc., a provider of semiconductor solutions. From 1995 to 1998, Ms. Perrone was Vice President and Chief Financial Officer of Rendition, Inc., a developer of 3D graphics chipsets, which was acquired by Micron in 1998. Ms. Perrone holds a B.S. in Economics from the University of San Francisco.

Daniel J. Marshall has served as our Senior Vice President of Worldwide Sales since June 2005 and previously served as our Vice President of Worldwide Sales from August 2001 to June 2005. Prior to joining us, Mr. Marshall was a co-founder and served as Vice President of Sales of StorageWay Inc., a storage service provider, from November 1999 to August 2001. Prior to that Mr. Marshall served as Vice President of Sales of MTI Corporation, a manufacturer of storage systems, from March 1998 to October 1999, Vice President of Sales at Mylex Corporation, a provider of input/output devices and storage management products, from April 1994 to March 1998, Director of Sales and Marketing at Kalok Corporation, a hard disk drive manufacture, from March 1993 to March 1994, and Regional Sales Manager at Storage Dimensions, a manufacturer of optical and disk-based storage systems, from February 1988 to March 1993. Mr. Marshall holds a B.S. in Business Administration and Economics from San Jose State University.

Geoffrey G. Stedman has served as our Vice President of Marketing since April 2003. Prior to joining us, Mr. Stedman served as Senior Director of Marketing at SonicWALL, an Internet security company, from October 2001 to April 2003. Prior to that, Mr. Stedman served as Director of Marketing at Preview Systems, a commerce platform and services provider for the secure delivery of digital goods over the Internet, from March 2000 until that company was acquired by Aladdin Knowledge Systems, a supplier of information security solutions for software developers, in May 2001, after which time he served as Vice President of Marketing at Aladdin Knowledge Systems until October 2001. Prior to Preview Systems, Mr. Stedman held a variety of marketing positions with Silicon Graphics, Inc., from 1995 to March 2000.

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Mr. Stedman holds an M.B.A. from the Wharton School of Business at the University of Pennsylvania and a B.S. in Business Administration from Houghton College.

Jonathan P. Turk has served as our Vice President of Operations since October 2004. Prior to joining us, Mr. Turk served as a Director of Manufacturing at Cisco Systems, Inc., a provider of networking products, from June 1997 to October 2004. Mr. Turk holds an M.B.A. from the Stanford Graduate School of Business and a B.A. in Economics from Wabash College.

Vincent G. O'Malley has served as our Vice President of Video Systems Engineering since May 2005. Prior to joining us, Mr. O'Malley held various senior management positions at nCUBE Corporation, a provider of video-on-demand systems, including Vice President of Engineering, Vice President of Integration and Delivery, and Director of Hardware Engineering from 1999 through December 2004. Mr. O'Malley holds a B.S. in Electrical Engineering from California State University, Chico.

Charles F. Morris has served as our Vice President of Storage and Applications Engineering since August 2005. Prior to joining us, Mr. Morris was Vice President of Engineering at Venturi Wireless, a provider of mobile broadband services optimization for mobile and wireless operators, from April 2004 to August 2005, Vice President of Engineering at MobileSmarts Inc., an automotive semiconductor and software company, from November 2001 to April 2004, and Vice President of Engineering at Minerva Networks, Inc., a provider of video networking and management products, from April 2000 to November 2001. Mr. Morris holds an M.S. in Computer Science from the University of Lowell and a B.A. in Business and Economics from Saint Anselm College.

Ronald D. Howe has served as our Vice President of Worldwide Services since May 2005. Prior to joining us, Mr. Howe served as Vice President of Global Services at BlueArc Corporation, a provider of network attached storage systems, from May 2001 to April 2005, Vice President of Professional Services at Minerva Networks, Inc. from April 2000 to April 2001, and Director of Worldwide Systems Engineering & Integration Services (DiviSys) at DiviCom, Inc., a provider of standards-based MPEG-2 encoding products and systems for digital video broadcasting from 1996 to March 2000. Mr. Howe holds an M.B.A. from Golden Gate University and a B.S. in Liberal Arts & Sciences, Business and Russian Language from the University of New York.

Directors

Basil H. Alwan has served as a member of our board of directors since September 2005. Since July 2003, Mr. Alwan has served as President of IP Products at Alcatel, a provider of communications solutions to telecommunication carriers, Internet service providers and enterprises for delivery of voice, data and video applications. Prior to that Mr. Alwan was a founder and President and Chief Executive Officer of TiMetra Networks, a provider of service routing technology, from January 2000 until the acquisition of TiMetra by Alcatel in July 2003. In addition to Omneon, Mr. Alwan currently serves on the boards of directors of several privately-held companies. Mr. Alwan holds a B.S. in Electrical Engineering from the University of Illinois.

Jon S. Castor has served as a member of our board of directors since December 2006. Since June 2004, Mr. Castor has been a private investor. Prior to that, Mr. Castor served as an Executive Advisor to the Chief Executive Officer of Zoran Corporation, a provider of digital solutions for applications in the digital entertainment and imaging markets, from January 2004

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to June 2004, Senior Vice President of Zoran's DTV Division from August 2003 to December 2003 and Senior Vice President and General Manager of the TeraLogic Group at Oak Technology Inc., a developer of integrated circuits and software for digital televisions and printers, from October 2002 to August 2003, when it was acquired by Zoran. In 1996, Mr. Castor co-founded TeraLogic, Inc., a developer of digital television integrated circuits, software and systems, where he served in several capacities, including as its Chief Executive Officer and director from November 2000 to October 2002, when it was acquired by Oak Technology. In addition to Omneon, Mr. Castor currently serves on the boards of directors of Adaptec, Inc., a provider of storage solutions, Genesis Microchip, Inc., a provider of image processing systems, and a privately-held company. Mr. Castor holds an M.B.A. from the Stanford Graduate School of Business and a B.A. from Northwestern University.

Matthew D. Howard has served as a member of our board of directors since November 2002. Since August 2000, Mr. Howard has been with Norwest Venture Partners, a venture capital firm, and is currently a General Partner. In addition to Omneon, Mr. Howard currently serves on the boards of directors of several privately-held companies. Mr. Howard holds a bachelor of business administration with an emphasis in information systems from Chaminade University of Honolulu and an M.S. in telecommunications management from Golden Gate University.

Esfandiar Lohrasbpour has served as a member of our board of directors since March 2004. Since August 1998, Mr. Lohrasbpour has been a General Partner of INVESCO Private Capital, a venture capital firm. In addition to Omneon, Mr. Lohrasbpour currently serves on the boards of directors of several privately-held companies. Mr. Lohrasbpour holds a Ph.D. in Operations Research from the University of California, Los Angeles, an M.S. in Operations Research from the University of North Carolina and a B.A. in Mathematics from Berea College. Mr. Lohrasbpour intends to resign from our board of directors immediately prior to the completion of this offering.

Wes Raffel has served as a member of our board of directors since November 2002. Since January 2000, Mr. Raffel has been a Managing Director of Advanced Technology Ventures, a venture capital firm. In addition to Omneon, Mr. Raffel currently serves on the boards of directors of several privately-held companies. Mr. Raffel holds an M.B.A. from the University of Chicago and an A.B. in Economics from Harvard College.

William J. Schroeder has served as a member of our board of directors since November 2001 and as our Chairman from November 2001 until June 2003. From February 2002 until his retirement from full-time employment in October 2004, Mr. Schroeder served as President and Chief Executive Officer of Vormetric, Inc., an enterprise data storage security company. Prior to that, Mr. Schroeder served as a consultant to various technology companies from January 2001 to February 2002. In addition to Omneon, Mr. Schroeder currently serves on the boards of directors of Con-way Inc., a provider of transportation and supply chain management services, and several privately-held companies. Mr. Schroeder holds an M.B.A. from the Harvard Business School and an M.S.E.E. and a B.E.E. from Marquette University.

J. Peter Wagner has served as a member of our board of directors since May 1998. Since 1996, Mr. Wagner has been a General Partner of Accel Venture Partners, a venture capital firm. In addition to Omneon, Mr. Wagner currently serves on the boards of directors of several privately-held companies. Mr. Wagner holds an M.B.A. from the Harvard Business School and an A.B. in Physics from Harvard College.

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Board composition

We have an authorized board size of 10 directors. Our board currently consists of nine members.

Pursuant to a voting agreement among us and our stockholders, investors affiliated with Norwest Venture Partners, of which Mr. Howard is a General Partner; INVESCO Private Capital, of which Mr. Lohrasbpour is a General Partner; Advanced Technology Ventures, of which Mr. Raffel is a Managing Director; and Accel Venture Partners, of which Mr. Wagner is a General Partner, have the right to designate a representative to our board of directors. Upon the closing of this offering, these board representation rights will terminate and no stockholders will have any contractual rights with respect to board representation, but members previously elected to our board of directors pursuant to this agreement will continue to serve as directors until their resignation or until their successors are duly elected by holders of our common stock.

Board committees

Our board of directors has an audit committee and a compensation committee, and intends to establish a corporate governance and nominating committee.

Audit committee.    Our audit committee consists of Messrs. Schroeder, who is the committee chair, and Howard, each of whom is a non-employee director of our board of directors. Our board of directors has determined that Mr. Schroeder is a financial expert and has determined that each of the directors serving on our audit committee is independent within the meaning of the rules of the SEC and the listing standards of The NASDAQ Stock Market. The functions of this committee include, among other things:

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reviewing and pre-approving the engagement of our independent auditors to perform audit services and any permissible non-audit services;

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reviewing our annual and quarterly consolidated financial statements and reports and discussing the statements and reports with our independent auditors and management;

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reviewing with our independent auditors and management significant issues that arise regarding accounting principles and financial statement presentation, and matters concerning the scope, adequacy and effectiveness of our financial controls; and

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establishing procedures for the receipt, retention and treatment of complaints received by us regarding financial controls, accounting or auditing matters.

Both our independent auditors and management periodically meet privately with our audit committee.

Compensation committee.    Our compensation committee consists of Messrs. Wagner, who is the committee chair, and Raffel, each of whom is a non-employee director of our board of directors. Our board of directors has determined that each of the directors serving on our compensation committee is independent within the meaning of the rules of the SEC and the

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listing standards of The NASDAQ Stock Market. The functions of this committee include, among other things:

•

determining the compensation and other terms of employment of our executive officers and reviewing and approving corporate performance goals and objectives relevant to such compensation;

•

recommending to our board of directors the type and amount of compensation to be paid or awarded to board members;

•

evaluating and recommending to our board of directors the equity incentive plans, compensation plans and similar programs advisable for us, as well as modification or termination of existing plans and programs;

•

establishing policies with respect to equity compensation arrangements; and

•

reviewing and approving the terms of any employment agreements, severance arrangements, change-in-control protections and any other compensatory arrangements for our executive officers.

Corporate governance and nominating committee.    We intend to establish a corporate governance and nominating committee, the functions of which will include, among other things:

•

developing and maintaining a current list of the functional needs and qualifications of members of our board of directors;

•

evaluating director performance on the board and applicable committees of the board and determining whether continued service on our board is appropriate;

•

interviewing, evaluating, nominating and recommending individuals for membership on our board of directors;

•

evaluating nominations by stockholders of candidates for election to our board;

•

developing, reviewing and amending a set of corporate governance policies and principles, including a code of ethics;

•

considering questions of possible conflicts of interest of directors as such questions arise; and

•

recommending to our board of directors the establishment of such special committees as may be desirable or necessary from time to time to address ethical, legal, business or other matters that may arise.

Compensation committee interlocks and insider participation

No member of our compensation committee has ever been an executive officer or employee of ours. None of our executive officers currently serves, or has served during the last completed year, on the compensation committee or board of directors of any other entity that has one or more executive officers serving as a member of our board of directors or compensation committee. Prior to establishing the compensation committee, our full board of directors made decisions relating to compensation of our executive officers.

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Director compensation

Our directors do not receive cash compensation for their services as directors. However, all of our directors, including our non-employee directors, are eligible to receive stock options under our 1998 stock option plan. We intend to adopt a compensation policy for our non-employee board members prior to the closing of this offering.

In September 2005, Mr. Alwan received a stock option to purchase 50,000 shares of our common stock in connection with his service as a director at an exercise price of $0.50 per share and vesting ratably over 36 months. In addition, the vesting of the shares subject to this option accelerates in full upon a change in our control.

In December 2006, Mr. Castor received a stock option to purchase 50,000 shares of our common stock in connection with his service as a director at an exercise price of $12.50 per share and vesting ratably over 36 months. In addition, the vesting of the shares subject to this option accelerates in full upon a change in our control.

In April 2003, Mr. Schroeder received a stock option to purchase 30,300 shares of our common stock in connection with his service as a director at an exercise price of $0.10 per share and vesting ratably over 36 months. In October 2005, Mr. Schroeder received an additional stock option to purchase 20,000 shares of our common stock in connection with his service as a director at an exercise price of $0.85 per share and vesting ratably over 36 months. In addition, the vesting of the shares subject to these options accelerates in full upon a change in our control.

The following table provides information for 2005 regarding all plan and non-plan compensation awarded to, earned by or paid to each person who served as a non-employee director for some portion or all of 2005. Other than as set forth in the table and the narrative that follows it, to date we have not paid any fees to or reimbursed any expenses of our directors, made any equity or non-equity awards to directors, or paid any other compensation to directors.

Name	Fees earned or paid in cash		Option awards(1)			Non-equity incentive plan compensation		All other compensation		Total
Basil H. Alwan	$	—	$	—	(2)	$	—	$	—	$	—
Esfandiar Lohrasbpour		—		—			—		—		—
Matthew D. Howard		—		—			—		—		—
Wes Raffel		—		—			—		—		—
William J. Schroeder		—		—	(3)		—		—		—
J. Peter Wagner		—		—			—		—		—

(1)

The dollar values in this column represent the dollar amount recognized for financial statement reporting purposes with respect to the fiscal year, computed in accordance with FAS No. 123R. Under the FAS 123R modified prospective transition method, we did not record any amounts in our consolidated financial statements for 2005 with respect to these awards. Please see note 1 of the notes to our consolidated financial statements for a discussion of all assumptions made in determining the grant date fair values.

(2)

As of December 31, 2005, Mr. Alwan held an outstanding stock option to purchase 50,000 shares of our common stock. This stock option vests ratably over 36 months from the date of

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grant and contains a provision that provides for accelerated vesting in full upon a change in our control.

(3)

As of December 31, 2005, Mr. Schroeder held outstanding stock options to purchase an aggregate of 50,300 shares of our common stock. Each of these stock options vests ratably over 36 months from the date of grant and contains a provision that provides for accelerated vesting in full upon a change in our control.

Executive compensation

Compensation discussion and analysis

Our executive compensation program is designed to attract, as needed, individuals with the skills necessary for us to achieve our business plan, to reward those individuals fairly over time, to retain those individuals who continue to perform at or above the levels that we expect and to closely align the compensation of those individuals with the performance of our company on both a short-term and long-term basis. To that end, our executive officers' compensation has three primary components—base compensation or salary, annual cash performance bonuses and stock option awards. In addition, we provide our executive officers a variety of benefits that are available generally to all salaried employees.

General.    We view the components of compensation as related but distinct. Although our compensation committee reviews total compensation of our executive officers, we do not believe that significant compensation derived from one component of compensation should negate or reduce compensation from other components. We determine the appropriate level for each compensation component based in part, but not exclusively, on competitive benchmarking consistent with our recruiting and retention goals, our view of internal equity and consistency, overall company performance and other considerations we deem relevant. To this end, we review a number of executive compensation surveys of high technology companies located in the Silicon Valley area when making a crucial executive officer hiring decision and annually when we review executive compensation. Except as described below, our compensation committee has not adopted any formal or informal policies or guidelines for allocating compensation between long-term and currently paid out compensation, between cash and non-cash compensation or among different forms of non-cash compensation. However, the compensation committee's philosophy is to make a greater percentage of an employee's compensation performance-based and to keep cash compensation to a nominally competitive level while providing the opportunity to be well rewarded through equity if the company performs well over time. We also believe that for technology companies stock-based compensation is the primary motivator in attracting employees, rather than base salary or cash bonuses.

Our compensation committee's current intent is to perform at least annually a strategic review of our executive officers' overall compensation packages to determine whether they provide adequate incentives and motivation and whether they adequately compensate our executive officers relative to comparable officers in other companies with which we compete for executives. Our compensation committee's most recent overall compensation review occurred in January 2006. Compensation committee meetings typically have included, for all or a portion of each meeting, not only the committee members but also our chief executive officer and our chief financial officer. For compensation decisions, including decisions regarding the grant of equity compensation, relating to executive officers other than to our chief executive officer, the

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compensation committee typically considers recommendations from the chief executive officer and/or other members of management.

We account for equity compensation paid to our employees under SFAS 123R, which requires us to estimate and record an expense over the service period of the award. Our cash compensation is recorded as an expense at the time the obligation is accrued. We receive a tax deduction for the compensation expense. We structure cash bonus compensation so that it is taxable to our executives at the time it becomes available to them. We currently intend that all cash compensation paid will be tax deductible for us. However, with respect to equity compensation awards, while any gain recognized by employees from nonqualified options granted at fair market value should be deductible, to the extent that an option constitutes an incentive stock option gain recognized by the optionee will not be deductible if there is no disqualifying disposition by the optionee. In addition, if we grant restricted stock or restricted stock unit awards that are not subject to performance vesting, they may not be fully deductible by us at the time the award is otherwise taxable to employees.

Base compensation.    We fix executive officer base compensation at a level we believe enables us to hire and retain individuals in a competitive environment and rewards satisfactory individual performance and a satisfactory level of contribution to our overall business goals. We also take into account the base salaries that are payable by companies with which we believe we generally compete for executives.

The salaries of Messrs. Kennedy and Craig and Ms. Perrone were increased by approximately 10%, 4% and 9%, respectively, in 2006. These increases were part of our normal annual salary review process and reflect our compensation committee's review of the compensation levels of similar positions at comparable companies.

Cash bonuses.    We utilize cash bonuses to reward performance achievements with a time horizon of one year or less. Annual bonus targets are determined by our compensation committee as a percentage of each executive officer's base salary. Our compensation committee also determines the performance measures and other terms and conditions of these cash bonuses for executive officers. For 2005, the bonus targets for the executive officers ranged from 10% to 30% of base salary. Bonus targets for our executive officers are established as a pre-determined percentage of base salary or specific dollar amounts, based on performance against a specific plan or specified criteria that are intended to provide a competitive level of compensation when the executive officers achieve their performance objectives as approved by our compensation committee. This specified percentage or dollar amount is fixed in the officer's employment offer letter or subsequently by our compensation committee. The actual bonus award is determined according to each executive officer's level of achievement against these performance objectives. The bonus for 2005 for our chief executive officer was based entirely on company performance targets, consisting of annual revenues and operating results. The performance objectives for other executive officers generally included both company performance targets, as well as individual performance objectives determined by our chief executive officer. For those executives that perform sales functions, the amount of bonus is also determined based on an individualized sales commission plan that is directly related to the amount of products sold and that person's role in the sale. The compensation committee chose revenues and operating results because it believed that, as a "growth company," we should reward revenue growth, but only if that revenue growth is achieved cost effectively. Thus, the compensation committee considered the chosen metrics to be the best indicators of financial success and stockholder value creation. We do not have a formal policy regarding adjustment

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or recovery of awards or payments if the relevant performance measures upon which they are based are restated or otherwise adjusted in a manner that would reduce the size of the award or payment.

For 2005, Mr. Kennedy and Ms. Perrone received a bonus equal to approximately 62% and 20%, respectively, of his or her base salary. As our Senior Vice President of Worldwide Sales, Mr. Marshall's bonus was largely based upon sales commissions and specific sales targets contained in his sales compensation plan, together with an additional bonus equal to approximately 20% of his base salary, which was due to achievement of specific milestones determined by our chief executive officer. The amount of Mr. Kaplan's bonus was largely based upon sales commissions and specific sales targets contained in his sales compensation plan. In addition to his annual bonus, Mr. Kaplan received loan forgiveness of approximately $51,000 during 2005, representing monthly forgiveness of principle of $5,000 and interest, as required pursuant to the terms of his existing retention agreement from 2002. For 2006, the bonus targets for the executive officers range from 15% to 33% of base salary.

Stock options and equity awards.    We utilize stock options to ensure that our executive officers have a continuing stake in our long-term success. Because our executive officers are awarded stock options with an exercise price equal to the fair market value of our common stock on the date of grant, the determination of which is discussed below, these options will have value to our executive officers only if the market price of our common stock increases after the date of grant. Typically, our stock options vest at a rate of 25% of the shares subject to the option on the first anniversary of the grant date, and with respect to approximately 2.1% of the shares each month thereafter. The stock options that we have granted under our 1998 stock option plan typically may be exercised by the recipient at any time, however, any shares purchased are subject to a lapsing right of repurchase in our favor. This repurchase right lapses on the same schedule as the vesting of the option.

Authority to make stock option grants to executive officers has historically rested with our board of directors, and we expect our board of directors will delegate that authority to our compensation committee in the future. In determining the size of stock option grants to executive officers, our board of directors considers our performance against the strategic plan, individual performance against the individual's objectives, comparative share ownership data from compensation surveys of high technology companies in our area, the extent to which shares subject to previously granted options are vested and the recommendations of our Chief Executive Officer and other members of management.

In 2006, we hired an independent valuation firm to determine the fair market value of our common stock as of March 31, 2006, September 30, 2006 and December 1, 2006. Prior to the engagement of an outside valuation firm, our board of directors determined the value of our common stock based on internal reports and other relevant factors.

We do not have any program, plan or obligation that requires us to grant equity compensation on specified dates and, because we have not been a public company, we have not made equity grants in connection with the release or withholding of material non-public information. However, we intend to implement policies to ensure that equity awards are granted at fair market value on the date that the grant action occurs.

During 2005, we granted options to purchase 25,000 shares of our common stock to each of Messrs. Kennedy, Marshall and Kaplan, 20,000 shares to Mr. Craig and 10,000 shares to

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Ms. Perrone. Each of the grants had an exercise price of $0.85 per share. These grants were made by our board of directors as part of our process of reviewing equity positions of our employees, and the board determined that, in light of the individuals' performance, equity ownership and level of vesting, it was appropriate to provide additional incentive for each of these personnel. To date, substantially all of our options have been granted under our 1998 stock option plan, which is described below under "Management—Employee Benefit Plans."

Prior to the completion of this offering, we plan to adopt a new equity incentive plan and a new employee stock purchase plan, both of which are described below under "Management—Employee benefit plans." The 2007 equity incentive plan will replace our existing 1998 stock option plan immediately following this offering and will afford greater flexibility in making a wide variety of equity awards, including stock options, shares of restricted stock and stock appreciation rights, to executive officers and our other employees. The 2007 employee stock purchase plan will enable eligible employees to periodically purchase shares of our common stock at a discount. Participation in the 2007 employee stock purchase plan will be available to all executive officers following this offering on the same basis as our other employees.

Other than the equity plans described above, we do not have any equity security ownership guidelines or requirements for our executive officers.

Severance and change of control payments.    Some of our executive officers are entitled to receive severance payments equal to a specified number of months of base salary, as well as accelerated vesting of stock options as to the number of shares that would have vested over that same monthly period in the event that their employment is terminated other than for "cause" or if they terminate their employment for "good reason." Additionally, all of our executive officers are entitled to severance payments equal to six months of base salary and accelerated vesting of stock options as to the number of shares that would have vested over the one year period following the termination if the executive officer's employment was so terminated by the acquiring company within one year following a change of control.

We believe these severance and change of control arrangements mitigate some of the risk that exists for executives working in a smaller company. These arrangements are intended to attract and retain qualified executives that could have other job alternatives that may appear to them to be less risky absent these arrangements. Because of the significant acquisition activity in the high technology industry, there is a possibility that we could be acquired in the future. Accordingly, we believed that the larger severance packages resulting from terminations related to change of control transactions would provide an incentive for these executives to continue to help successfully execute such a transaction from its early stages until closing.

For a description and quantification of these severance and change of control benefits, please see the section entitled "Management—Executive compensation—Employment, severance and change of control arrangements."

Other benefits.    Executive officers are eligible to participate in all of our employee benefit plans, such as medical, dental, vision, group life, disability, and accidental death and dismemberment insurance and our 401(k) plan, in each case on the same basis as other employees, subject to applicable law. We also provide vacation and other paid holidays to all employees, including our executive officers, which are comparable to those provided at peer companies.

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Executive compensation tables

The following table presents compensation information for our fiscal year ended December 31, 2005 paid to or accrued for our Chief Executive Officer, Chief Financial Officer and each of our three other most highly compensated executive officers whose aggregate salary and bonus was more than $100,000. We refer to these executive officers as our "named executive officers" elsewhere in this prospectus.

Summary compensation table

Name and principal position	Salary(1)		Bonus(2)			Option awards(3)		All other compensation		Total
Joseph S. Kennedy President and Chief Executive Officer	$	248,250	$	154,130		$	—	$	—	$	402,380
Laura A. Perrone Vice President of Finance and Chief Financial Officer		180,000		37,500			—		—		217,500
Daniel J. Marshall Senior Vice President of Worldwide Sales		207,500		245,637	(4)		—		—		453,137
Lawrence R. Kaplan Chairman		208,125		182,445	(5)		—		—		390,570
Donald M. Craig Chief Technology Officer		180,000		—			—		—		180,000

(1)

The amounts in this column include payments in respect of accrued vacation, holidays, and sick days.

(2)

Includes amounts earned in 2005 but paid in 2006.

(3)

The amounts in this column represent the dollar amount recognized for financial statement reporting purposes with respect to the fiscal year computed in accordance with FAS 123R. Under the FAS 123R modified prospective transition method, we did not record any amounts in our consolidated financial statements for 2005 with respect to these awards. Please see note 1 of the notes to our consolidated financial statements for a discussion of all assumptions made in determining the grant date fair values. All option awards were made under our 1998 stock option plan, which is described below under "Management—Employee benefit plans." Each of these options is immediately exercisable in full and vests as to 1/4 of the shares underlying the option on the first anniversary of the grant date and as to 1/48 of the underlying shares monthly thereafter. These options also contain provisions that provide for accelerated vesting upon the occurrence of certain events following a change of control of our company, as discussed below in "Management—Executive compensation—Employment, severance and change of control arrangements."

(4)

Includes sales commissions in the amount of $204,284.

(5)

Includes sales commissions in the amount of $116,053 and loan forgiveness in the amount of $51,393.

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Grants of plan-based awards in last fiscal year

The following table provides information with regard to each stock option granted to each named executive officer during 2005.

Name	Grant date	Number of securities underlying options(1)	Exercise price of option awards(2)
Joseph S. Kennedy	10/18/2005	25,000	$	0.85
Laura A. Perrone	10/18/2005	10,000		0.85
Daniel J. Marshall	10/18/2005	25,000		0.85
Lawrence R. Kaplan	10/18/2005	25,000		0.85
Donald M. Craig	10/18/2005	20,000		0.85

(1)

Each of these options is immediately exercisable in full and vests as to 1/4 of the shares underlying the option on the first anniversary of the grant date and as to 1/48 of the underlying shares monthly thereafter. Each of these options expires 10 years from the date of grant. These options also contain provisions that provide for accelerated vesting upon the occurrence of certain events following a change of control of our company, as discussed below in "Management—Executive compensation—Employment, severance and change of control arrangements."

(2)

Represents the fair market value of a share of our common stock, as determined by our board of directors, on the option's grant date.

In December 2006, we granted to each of Messrs. Kennedy, Marshall, Kaplan and Craig and Ms. Perrone a stock option to purchase 15,000 shares of our common stock at an exercise price of $7.76 per share. Each of these options is immediately exercisable and expires 10 years from the date of grant. Each of these options vests as to 25% of the shares underlying the option on the first anniversary of the grant date and as to 1/48 of the underlying shares monthly thereafter and contains provisions that provide for accelerated vesting upon the occurrence of certain events following a change of control of our company, as discussed below in "Management—Executive Compensation—Employment, severance and change of control arrangements."

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Outstanding option awards at December 31, 2005

The following table presents the outstanding option awards held as of December 31, 2005 by each named executive officer.

	Number of securities underlying unexercised options(1)
			Option exercise price(2)		Option expiration date
Name	Exercisable	Unexercisable
Joseph S. Kennedy	761,340 175,000 25,000	— — —	$	0.10 0.30 0.85	6/9/2013 10/12/2014 10/18/2015
Laura A. Perrone	152,268 10,000	— —		0.10 0.85	11/7/2013 10/18/2015
Daniel J. Marshall	5,000 288,536 24,167 25,000	— — — —		60.00 0.10 0.30 0.85	8/29/2011 10/31/2012 10/12/2014 10/18/2015
Lawrence R. Kaplan	180,335 50,000 25,000	— — —		0.10 0.30 0.85	10/31/2012 10/12/2014 10/18/2015
Donald M. Craig	66,123 50,000 20,000	— — —		0.10 0.30 0.85	10/31/2012 10/12/2014 10/18/2015

(1)

Each of these options is immediately exercisable in full and vests as to 1/4 of the shares underlying the option on the first anniversary of the grant date and as to 1/48 of the underlying shares monthly thereafter. These options also contain provisions that provide for accelerated vesting upon the occurrence of certain events following a change of control of our company, as discussed below in "Management—Executive compensation—Employment, severance and change of control arrangements."

(2)

Represents the fair market value of a share of our common stock, as determined by our board of directors, on the option's grant date.

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Option exercises in last fiscal year

The following table shows the number of shares acquired pursuant to the exercise of options by each named executive officer during 2005 and the aggregate dollar amount realized by the named executive officer upon exercise of the option.

Name	Number of shares acquired on exercise	Value realized on exercise(1)
Joseph S. Kennedy	—	—
Laura A. Perrone	50,000
Daniel J. Marshall	15,833
Lawrence R. Kaplan	57,500
Donald M. Craig	—	—

(1)

The aggregate dollar amount realized upon the exercise of an option represents the difference between the aggregate market price of the shares of our common stock underlying that option on the date of exercise (assumed to be the midpoint of the price range set forth on the cover page of this prospectus) and the aggregate exercise price of the option.

Employment, severance and change of control arrangements

Joseph S. Kennedy.    We entered into an employment offer letter with Mr. Kennedy dated June 8, 2003. The written offer of employment does not provide a specific term for Mr. Kennedy's employment; rather, Mr. Kennedy's employment with us is "at-will" and may be terminated at any time with or without notice, for any or no reason, at either Mr. Kennedy's or our option. Mr. Kennedy's current annual base salary is $275,000, and he is eligible to earn a bonus for 2006 of up to 30% of his base salary upon the achievement of certain operational milestones determined by our compensation committee. If we (or our successor) terminate Mr. Kennedy for any reason other than as a result of an act of material dishonesty made by Mr. Kennedy, his conviction of a felony, his gross misconduct or his continued substantial violations of his employment duties after receiving a written demand for performance from us, or Mr. Kennedy terminates his employment with us as a result of a significant reduction in, or removal from, his duties, position or responsibilities, a reduction in his base salary (other than in connection with a company-wide salary reduction applicable to similarly-situated executives), or his relocation to a location more than 50 miles from his current location, in each case without his consent, and he signs and does not revoke a standard release of claims, then he will be entitled to receive his then current base salary and continuing healthcare coverage for a period of three months following termination, or six months following termination if his termination was within one year following a change of control, and his stock options will become vested as to that number of shares that would have vested had he remained employed with us through the three-month period following the date of termination, or the 12-month period following the date of termination if his termination was within one year following a change of control.

Laura A. Perrone.    We entered into an employment offer letter with Ms. Perrone dated August 29, 2003. The written offer of employment does not provide a specific term for Ms. Perrone's employment; rather, Ms. Perrone's employment with us is "at-will" and may be terminated at any time with or without notice, for any or no reason, at either Ms. Perrone's or our option. Ms. Perrone's current annual base salary is $205,000, and she is eligible to earn a

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bonus for 2006 of up to 20% of her base salary upon the achievement of certain operational milestones determined by our chief executive officer. In December 2005, our compensation committee approved certain amendments to the terms of Ms. Perrone's offer letter relating to the benefits to which Ms. Perrone is entitled upon a change in our control. Pursuant to these amended terms, if we (or our successor) terminate Ms. Perrone for any reason other than as a result of an act of material dishonesty made by Ms. Perrone, her conviction of a felony, her gross misconduct or her continued substantial violations of her employment duties after receiving a written demand for performance from us, or Ms. Perrone terminates her employment with us as a result of a significant reduction in, or removal from, her duties, position or responsibilities, a reduction in her base salary (other than in connection with a company-wide salary reduction applicable to similarly-situated executives), or her relocation to a location more than 50 miles from her current location, in each case without her consent, and she signs and does not revoke a standard release of claims, then she will be entitled to receive her then current base salary and continuing healthcare coverage for a period of two months following termination, or six months following termination if her termination was within one year following a change of control, and her stock options will become vested as to that number of shares that would have vested had she remained employed with us through the two-month period following the date of termination, or the 12-month period following the date of termination if her termination was within one year following a change of control.

Daniel J. Marshall.    We entered into an employment offer letter with Mr. Marshall dated August 2, 2001. The written offer of employment does not provide a specific term for Mr. Marshall's employment; rather, Mr. Marshall's employment with us is "at-will" and may be terminated at any time with or without notice, for any or no reason, at either Mr. Marshall's or our option. Mr. Marshall's current annual base salary is $210,000, and he is eligible to earn sales commissions for 2006 of up to $175,000 depending on our performance against our revenue plan, plus an additional $15,000 bonus upon achievement of certain milestones determined by our chief executive officer. In December 2005, our compensation committee approved certain amendments to the terms of Mr. Marshall's offer letter relating to the benefits to which Mr. Marshall is entitled upon a change in our control. Pursuant to these amended terms, if we (or our successor) terminate Mr. Marshall for any reason other than as a result of an act of material dishonesty made by Mr. Marshall, his conviction of a felony, his gross misconduct or his continued substantial violations of his employment duties after receiving a written demand for performance from us, or Mr. Marshall terminates his employment with us as a result of a significant reduction in, or removal from, his duties, position or responsibilities, a reduction in his base salary (other than in connection with a company-wide salary reduction applicable to similarly-situated executives), or his relocation to a location more than 50 miles from his current location, in each case without his consent, within one year following a change in our control, and he signs and does not revoke a standard release of claims, then he will be entitled to receive his then current base salary and continuing healthcare coverage for a period of six months following termination and his stock options will become vested as to that number of shares that would have vested had he remained employed with us through the 12-month period following the date of termination.

Lawrence R. Kaplan.    We entered into an amended and restated retention agreement with Mr. Kaplan dated November 1, 2002. The retention agreement does not provide a specific term for Mr. Kaplan's employment; rather, Mr. Kaplan's employment with us is "at-will" and may be terminated at any time with or without notice, for any or no reason, at either Mr. Kaplan's or

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our option. Mr. Kaplan's current annual base salary is $210,000, and he is eligible to earn sales commissions for 2006 of up to $90,000 depending on our performance against our revenue plan, plus an additional $15,000 bonus upon achievement of certain milestones determined by our chief executive officer. The retention agreement also provided for a monthly bonus until October 2005 of $5,000 in the form of forgiveness of a loan from us to Mr. Kaplan, as described below in the section entitled "Transactions with related persons, promoters and certain control persons." If we (or our successor) terminate Mr. Kaplan for any reason other than as a result of an act of material dishonesty made by Mr. Kaplan, his conviction of a felony, his gross misconduct or his continued substantial violations of his employment duties after receiving a written demand for performance from us, or Mr. Kaplan terminates his employment with us as a result of a significant reduction in, or removal from, his duties, position or responsibilities, a reduction in his base salary (other than in connection with a company-wide salary reduction applicable to similarly-situated executives), or his relocation to a location more than 50 miles from his current location, in each case without his consent, then he will be entitled to receive his then current base salary and continuing healthcare coverage for a period of three months following termination, or six months following termination if his termination was within one year following a change of control (as defined in the retention agreement), and his stock options will become vested as to that number of shares that would have vested had he remained employed with us through the three-month period following the date of termination, or the 12-month period following the date of termination if his termination was within one year following a change of control.

Donald M. Craig.    Mr. Craig's current annual base salary is $192,400 and he is eligible to earn a bonus for 2006 of up to 15% of his base salary upon the achievement of certain operational milestones determined by our chief executive officer. In December 2005, our compensation committee approved our entering into a letter agreement with Mr. Craig that provides Mr. Craig with certain benefits upon a change in our control. If we (or our successor) terminate Mr. Craig for any reason other than as a result of an act of material dishonesty made by Mr. Craig, his conviction of a felony, his gross misconduct or his continued substantial violations of his employment duties after receiving a written demand for performance from us, or Mr. Craig terminates his employment with us as a result of a significant reduction in, or removal from, his duties, position or responsibilities, a reduction in his base salary (other than in connection with a company-wide salary reduction applicable to similarly-situated executives), or his relocation to a location more than 50 miles from his current location, in each case without his consent, within one year following a change of control (as defined in the letter), and he signs and does not revoke a standard release of claims, then he will be entitled to receive his then current base salary and continuing healthcare coverage for a period of six months following termination and his stock options will become vested as to that number of shares that would have vested had he remained employed with us through the 12-month period following the date of termination.

Vesting acceleration.    In addition to the acceleration of vesting provisions described above, all options to purchase common stock issued to our named executive officers may be subject to accelerated vesting upon a change of control as described below in the section entitled "Management—Employee Benefit Plans."

Termination of employment for death or disability.    If the employment of any of our named executive officers is terminated as a result of his or her disability, that officer will be entitled to

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long-term disability insurance benefits under our long-term disability insurance program equal to 60% of his or her monthly salary, up to $10,000 per month. If the employment of any of our named executive officers is terminated as a result of his or her death, the beneficiaries of that officer will be entitled to life insurance benefits under our group life insurance program equal to two times his or her annual base salary up to $500,000.

The following table summaries the potential payments and benefits payable to each of our named executive officers upon termination of employment or a change in our control under each situation listed below, assuming, in each situation, that our named executive officers were terminated on December 31, 2005.

				Not within 1 year following a change of control				Within 1 year following a change of control
Executive benefits and payments upon termination:		Voluntary termination or termination for cause		Involuntary termination not for cause		Termination for good reason		Involuntary termination not for cause		Termination for good reason		Death		Disability
Joseph S. Kennedy:
	Base salary	$	—	$	62,500	$	62,500	$	125,000	$	125,000	$	—	$	—
	Bonus		—		—		—		—		—		—		—
	Medical continuation		—		4,245		4,245		8,491		8,491		—		—
	Death benefits		—		—		—		—		—		500,000		—
	Monthly disability benefits		—		—		—		—		—		—		10,000
	Value of accelerated stock options(1)		—										—		—
Laura A. Perrone:
	Base salary		—		31,250		31,250		93,750		93,750		—		—
	Bonus		—		—		—		—		—		—		—
	Medical continuation		—		2,830		2,830		8,491		8,491		—		—
	Death benefits		—		—		—		—		—		375,000		—
	Monthly disability benefits		—		—		—		—		—		—		9,375
	Value of accelerated stock options(1)		—										—		—
Daniel J. Marshall:
	Base salary		—		—		—		105,000		105,000		—		—
	Bonus		—		—		—		—		—		—		—
	Medical continuation		—		—		—		5,075		5,075		—		—
	Death benefits		—		—		—		—		—		420,000		—
	Monthly disability benefits		—		—		—		—		—		—		10,000
	Value of accelerated stock options(1)		—		—		—						—		—
Lawrence R. Kaplan:
	Base salary		—		52,500		52,500		105,000		105,000		—		—
	Bonus		—		—		—		—		—		—		—
	Medical continuation		—		4,245		4,245		8,491		8,491		—		—
	Death benefits		—		—		—		—		—		420,000		—
	Monthly disability benefits		—		—		—		—		—		—		10,000
	Value of accelerated stock options(1)		—										—		—
Donald M. Craig:
	Base salary		—		—		—		92,500		92,500		—		—
	Bonus		—		—		—		—		—		—		—
	Medical continuation		—		—		—		—		—		—		—
	Death benefits		—		—		—		—		—		370,000		—
	Monthly disability benefits		—		—		—		—		—		—		9,250
	Value of accelerated stock options(1)		—		—		—						—		—

(1)

Calculated based on the assumed initial public offering price of $             per share.

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Employee benefit plans

1998 stock option plan

Background.    Our board of directors adopted, and our stockholders approved, our 1998 stock option plan, which we refer to as our 1998 plan, in July 1998.

Administration.    Our board of directors currently administers our 1998 plan. Our compensation committee will be responsible for administering all of our equity compensation plans upon the closing of this offering. Under our 1998 plan, the plan administrator has the power to determine the terms of the awards, including the service providers who will receive awards, the exercise price, the number of shares subject to each award, the vesting schedule and exercisability of awards and the form of consideration payable upon exercise of an option.

Share reserve.    As of September 30, 2006, options to purchase 3,289,042 shares of our common stock at a weighted average exercise price of $0.71 per share were outstanding under our 1998 plan and 158,313 shares of our common stock remained available for issuance upon the exercise of options that may be granted in the future. In October 2006 and December 2006, we increased by 400,000 in the aggregate the number of shares reserved for issuance under the 1998 plan. Following the closing of this offering, all shares of our common stock reserved but not ultimately issued or subject to options that have expired or otherwise terminated under our 1998 plan without having been exercised in full will become available for issuance under our 2007 equity incentive plan, which we refer to as our 2007 plan. We intend to grant all future stock option awards under our 2007 plan upon and after the closing of this offering. However, all stock options outstanding upon the closing of this offering will continue to be governed by the terms and conditions of the 1998 plan.

Eligibility and types of option grants.    With respect to stock options, our 1998 plan provides for the grant of both incentive stock options (commonly referred to as ISOs), which qualify for favorable tax treatment under Section 422 of the Internal Revenue Code for their recipients, and nonqualified stock options (commonly referred to as NSOs). ISOs may be granted only to employees. NSOs may be granted to our employees, officers, directors and consultants.

Terms of option grants.    The exercise price of options is determined by the plan administrator, subject to applicable statutory requirements. The exercise price of ISOs granted to a person who directly or by attribution owns more than 10% of the total combined voting power of all classes of our stock, or a 10% stockholder, must be at least equal to 110% of the fair market value of our common stock on the date of grant. All other ISOs must be granted with an exercise price at least equal to 100% of the fair market value of our common stock on the date of grant. Stock options become vested and exercisable, as applicable, within such periods, or upon such events, as determined by the plan administrator and as set forth in the related stock option agreement. To date, as a matter of practice, options have generally been subject to a four-year vesting period (25% on the first anniversary of the grant date and ratably monthly thereafter). Our 1998 plan also allows for the early exercise of unvested options, provided that right is permitted in the applicable stock option agreement. All outstanding unvested shares of our common stock acquired through early exercised options are subject to repurchase by us. The maximum permitted term of options granted under our 1998 plan is ten years (and five years for certain persons holding ISOs).

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After termination of an optionee, he or she may exercise his or her vested option for the period of time stated in the stock option agreement. Generally, if termination is due to death or disability, the vested option will generally remain exercisable for six months. In all other cases, the vested option will generally remain exercisable for three months. However, an option may not be exercised later than its expiration date.

Change in control.    In the event of a liquidation, dissolution or change in control transaction, outstanding options under our 1998 plan may be assumed or replaced by the successor company (if any). Outstanding options that are not assumed or replaced by the successor company (if any) will expire on the consummation of the liquidation, dissolution or change in control transaction at such time and on such conditions as our board of directors determines (including the ability to partially or totally accelerate the vesting of stock options granted under our 1998 plan).

Transferability of awards.    Generally, a participant may not transfer options other than by will or the laws of descent and distribution. During the lifetime of an optionee, the option is exercisable only by the optionee.

Amendment and Termination.    Our board of directors may amend or terminate our 1998 plan at any time, subject to stockholder approval where required. In addition, no amendment that is detrimental to a participant in our 1998 plan may be made to an outstanding option without the consent of the affected participant.

2007 equity incentive plan

Background.    Our 2007 plan will serve as the successor equity compensation plan to our 1998 stock option plan. Our board of directors adopted our 2007 plan in                        2007 and our stockholders approved the 2007 plan in                        2007. Our 2007 plan will become effective on the date of our initial public offering and will terminate in                        2017. Our 2007 plan provides for the grant of incentive stock options, nonqualified stock options, restricted stock awards, stock appreciation rights, restricted stock units and stock bonuses.

Administration.    Our 2007 plan will be administered by our compensation committee. This committee will act as the plan administrator and will determine which individuals are eligible to receive awards under our 2007 plan, the time or times when such awards are to be made, the number of shares subject to each such award, the status of any granted option as either an ISO or an NSO under United States federal tax laws, the vesting schedule applicable to an award and the maximum term for which any award is to remain outstanding (subject to the limits set forth in our 2007 plan). The committee will also determine the exercise price of options granted, the purchase price for rights to purchase restricted stock and, if applicable, restricted stock units, and the strike price for stock appreciation rights. Unless the committee provides otherwise, our 2007 plan does not allow for the transfer of awards and only the recipient of an award may exercise an award during his or her lifetime.

Share reserve.    We have reserved                  shares of our common stock for issuance under our 2007 plan plus:

•

all shares of our common stock reserved under our 1998 plan that are not issued or subject to outstanding grants as of the completion of this offering;

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•

any shares of our common stock issued under our 1998 plan that are forfeited or repurchased by us at the original purchase price; and

•

any shares of our common stock issuable upon exercise of options granted under our 1998 plan that expire without having been exercised in full.

Additionally, our 2007 plan provides for automatic increases in the number of shares available for issuance under it as follows:

•

on January 1, 2008, the number of shares of our common stock available for issuance under our 2007 plan will be automatically increased by an amount equal to the product of    % of the number of shares of our common stock issued and outstanding on December 31, 2007 multiplied by a fraction, the numerator of which is the number of days between the completion of this offering and December 31, 2007 and the denominator of which is 365;

•

on the first day of each January from 2009 through 2017, the number of shares of our common stock available for issuance under our 2007 plan will be increased by          % of the number of shares of our common stock issued and outstanding on the preceding December 31st; or

•

a lesser number of shares of our common stock as determined by our board of directors.

Equity awards.    Our 2007 plan permits us to grant the following types of awards:

        Stock options.    Our 2007 plan provides for the grant of ISOs to employees, and NSOs to employees, directors and consultants. Options may be granted with terms determined by the committee, provided that ISOs are subject to statutory limitations. The committee determines the exercise price for a stock option, within the terms and conditions of our 2007 plan and applicable law, provided that the exercise price of an ISO may not be less than 100% (or higher in the case of certain recipients of ISOs) of the fair market value of our common stock on the date of grant. ISOs exercisable for no more than                  shares may be granted over the life of our 2007 plan. Options granted under our 2007 plan will vest at the rate specified by the committee and such vesting schedule will be set forth in the stock option agreement to which such stock option grant relates. Generally, the committee determines the term of stock options granted under our 2007 plan, up to a term of ten years, except in the case of certain ISOs.

After termination of an optionee, he or she may exercise his or her vested option for the period of time stated in the stock option agreement to which such option relates, up to a maximum of five years from the date of termination. Generally, if termination is due to death or disability, the vested option will remain exercisable for 12 months. In all other cases, the vested option will generally remain exercisable for three months. However, an option may not be exercised later than its expiration date.

Notwithstanding the foregoing, if an optionee is terminated for cause (as defined in our 2007 plan), then the optionee's options shall expire on the optionee's termination date or at such later time and on such conditions as determined by our compensation committee.

        Restricted stock.    A restricted stock award is an offer by us to sell shares of our common stock subject to restrictions that the committee may impose. These restrictions may be based on completion of a specified period of service with us or upon the completion of performance goals during a performance period. The price of a restricted stock award will be determined by

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the committee. Unless otherwise determined by the committee at the time of award, vesting ceases on the date the participant no longer provides services to us and unvested shares are forfeited to us or subject to repurchase by us.

        Stock appreciation rights.    Stock appreciation rights provide for a payment, or payments, in cash or shares of common stock, to the holder based upon the difference between the fair market value of our common stock on the date of exercise and the stated exercise price. Stock appreciation rights may vest based on time or achievement of performance conditions.

        Restricted stock units.    Restricted stock units represent the right to receive shares of our common stock at a specified date in the future, subject to forfeiture of such right due to termination of employment or failure to achieve specified performance conditions. If the restricted stock unit has not been forfeited, then on the date specified in the restricted stock unit agreement, we will deliver to the holder of the restricted stock unit whole shares of our common stock, cash or a combination of our common stock and cash.

        Stock bonuses.    Stock bonuses are granted as additional compensation for performance and therefore are not issued in exchange for cash.

        Change in control.    In the event of a liquidation, dissolution or corporate transaction (as defined in our 2007 plan), except for options granted to non-employee directors (which vest and become exercisable in full upon a change in control event (as defined in our 2007 plan)), outstanding awards may be assumed or replaced by the successor company (if any). Outstanding awards that are not assumed or replaced by the successor company (if any) will expire on the consummation of the liquidation, dissolution or change in control transaction at such time and on such conditions as our board of directors determines (including, without limitation, full or partial vesting and exercisability of any or all outstanding awards issued under our 2007 plan).

Transferability of awards.    Generally, a participant may not transfer an award other than by will or the laws of descent and distribution unless, in the case of awards other than ISOs, the committee permits the transfer of an award to certain authorized transferees (as set forth in our 2007 plan).

Eligibility.    The individuals eligible to participate in our 2007 plan include our officers and other employees, our non-employee directors and any consultants.

Payment for purchase of shares of our common stock.    Payment for shares of our common stock purchased pursuant to our 2007 plan may be made by any of the following methods (provided such method is permitted in the applicable award agreement to which such shares relate): (1) cash (including by check); (2) cancellation of indebtedness; (3) surrender of shares; (4) waiver of compensation due or accrued for services rendered; (5) through a "same day sale" program or through a "margin" commitment or (6) by any other method approved by our board of directors.

Limit on Awards.    Under our 2007 plan, during any calendar year, no person will be eligible to receive more than                  shares of our common stock, and in the case of new employees during their first fiscal year of employment with us,                  shares of our common stock.

Amendment and Termination.    Our board of directors may amend or terminate our 2007 plan at any time, subject to stockholder approval where required. In addition, no amendment that is

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detrimental to a participant in our 2007 plan made to an outstanding award without the consent of the affected participant.

2007 employee stock purchase plan

Background.    Our 2007 employee stock purchase plan is designed to enable eligible employees to periodically purchase shares of our common stock at a discount. Purchases are accomplished through participation in discrete offering periods. Our 2007 employee stock purchase plan is intended to qualify as an employee stock purchase plan under Section 423 of the Internal Revenue Code of 1986, as amended. Our board of directors adopted our 2007 employee stock purchase plan in                        2007 and our stockholders approved the plan in                        2007.

Share reserve.    We have initially reserved                    shares of our common stock for issuance under our 2007 employee stock purchase plan. The number of shares reserved for issuance under our 2007 employee stock purchase plan will increase automatically on the first day of each January, starting with January 1, 2008, by the number of shares equal to         % of our total outstanding shares as of the immediately preceding December 31st (rounded to the nearest whole share; provided, however, that, for the increase on January 1, 2008, such addition shall equal the product of         % of our total outstanding shares as of December 31, 2007, multiplied by a fraction, the numerator of which is the number of days between the effective date of this registration statement and December 31, 2007 and the denominator of which is 365 (rounded to the nearest whole share)). Our board of directors or compensation committee may reduce the amount of the increase in any particular year. No more than                    shares of our common stock may be issued under our 2007 employee stock purchase plan and no other shares may be added to this plan without the approval of our stockholders.

Administration.    Our compensation committee will administer our 2007 employee stock purchase plan. Employees who are 5% stockholders, or would become 5% stockholders as a result of their participation in our 2007 employee stock purchase plan, are ineligible to participate in our 2007 employee stock purchase plan. We may impose additional restrictions on eligibility as well. Under our 2007 employee stock purchase plan, eligible employees may acquire shares of our common stock by accumulating funds through payroll deductions. Our eligible employees may select a rate of payroll deduction between 1% and 15% of their cash compensation. We also have the right to amend or terminate our 2007 employee stock purchase plan, except that, subject to certain exceptions, no such action may adversely affect any outstanding rights to purchase stock under the plan. Our 2007 employee stock purchase plan will terminate on the tenth anniversary of the first offering date, unless it is terminated earlier by our board of directors.

Purchase rights.    When an offering period commences, our employees who meet the eligibility requirements for participation in that offering period are automatically granted a non-transferable option to purchase shares in that offering period. Each offering period may run for no more than 19 months and consist of no more than three purchase periods. An employee's participation automatically ends upon termination of employment for any reason.

No participant will have the right to purchase our shares at a rate which, when aggregated with purchase rights under all our employee stock purchase plans that are also outstanding in the same calendar year(s), have a fair market value of more than $             , determined as of the first day of the applicable offering period, for each calendar year in which such right is

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outstanding. The purchase price for shares of our common stock purchased under our 2007 employee stock purchase plan will be 85% of the lesser of the fair market value of our common stock on (1) the first trading day of the applicable offering period and (2) the last trading day of each purchase period in the applicable offering period.

Change in control.    In the event of a change in control transaction, our 2007 employee stock purchase plan and any offering periods that commenced prior to the closing of the proposed transaction may terminate on the closing of the proposed transaction and the final purchase of shares will occur on that date, but our compensation committee may instead terminate any such offering period at a different date.

401(k) plan

We offer a 401(k) plan to all employees who meet specified eligibility requirements. Eligible employees may contribute up to 75% of their respective compensation subject to limitations established by the Internal Revenue Code. We presently do not match participant contributions, but have the discretion to do so.

Indemnification of directors and executive officers and limitation of liability

Our certificate of incorporation includes a provision that eliminates, to the fullest extent permitted by law, the personal liability of a director for monetary damages resulting from breach of his fiduciary duty as a director.

Our bylaws provide that:

•

we are required to indemnify our directors and officers to the fullest extent permitted by the Delaware General Corporation Law, subject to very limited exceptions;

•

we may indemnify our other employees and agents as provided in indemnification contracts entered into between us and our employees and agents;

•

we are required to advance expenses, as incurred, to our directors and officers in connection with a legal proceeding to the fullest extent permitted by the Delaware General Corporation Law, subject to very limited exceptions; and

•

the rights conferred in the bylaws are not exclusive.

In addition to the indemnification required in our certificate of incorporation and bylaws, we will enter into indemnity agreements with each of our current directors and officers before the completion of this offering. These agreements will provide for the indemnification of our directors and officers for all reasonable expenses and liabilities incurred in connection with any action or proceeding brought against them by reason of the fact that they are or were our agents. We have also obtained directors' and officers' insurance to cover our directors, officers and some of our employees for liabilities, including liabilities under securities laws. We believe that these indemnification provisions and agreements and this insurance are necessary to attract and retain qualified directors and officers.

A stockholder's investment may be adversely affected to the extent we pay the costs of settlement and damage awards against directors and officers as required by these indemnification provisions. At present, there is no pending litigation or proceeding involving any of our directors, officers or employees regarding which indemnification by us is sought, nor are we aware of any threatened litigation that may result in claims for indemnification.

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Principal and selling stockholders

The following table presents information as to the beneficial ownership of our common stock as of November 30, 2006, and as adjusted to reflect the sale of the common stock in this offering, by:

•

each stockholder known by us to be the beneficial owner of more than 5% of our common stock;

•

each of our directors;

•

each of our named executive officers;

•

all of our directors and executive officers as a group; and

•

each selling stockholder.

Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Unless otherwise indicated below, to our knowledge, the persons and entities named in the table have sole voting and sole investment power with respect to all shares beneficially owned, subject to community property laws where applicable. Shares of our common stock subject to options and warrants that are currently exercisable or exercisable within 60 days of November 30, 2006 are deemed to be outstanding and to be beneficially owned by the person holding the options or warrants for the purpose of computing the percentage ownership of that person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person.

The number of shares of our common stock outstanding after this offering includes                           shares of common stock being offered by us and does not include the shares that are subject to the underwriters' over-allotment option. The percentage of our common stock outstanding before and after the offering is based on 19,815,812 shares of our common stock outstanding on November 30, 2006. Unless otherwise indicated, the address of each of

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the individuals and entities named below is c/o Omneon Video Networks, Inc., 965 Stewart Drive, Sunnyvale, CA 94085-3913.

		Number of shares beneficially owned prior to offering				Shares beneficially owned after offering
					Number of shares being offered
Name of beneficial owner		Number	Percent			Number	Percent
5% Stockholders:
Entities affiliated with Norwest Venture Partners(1)		3,497,459	17.6	%				%
Entities affiliated with Accel Venture Partners(2)		3,496,775	17.6
Entities affiliated with Advanced Technology Ventures(3)		3,496,241	17.6
Entities affiliated with INVESCO Private Capital(4)		2,195,122	11.1
Entities affiliated with Meritech Capital Partners(5)		1,649,034	8.3
Lucent Venture Partners I, L.L.C.(6)		1,187,295	6.0
Directors and Named Executive Officers:
Matthew D. Howard(7)		3,497,459	17.6
J. Peter Wagner(8)		3,496,775	17.6
Wes Raffel(9)		3,496,241	17.6
Esfandiar Lohrasbpour(10)		2,195,122	11.1
Joseph S. Kennedy(11)		961,340	4.8
Lawrence R. Kaplan(12)		542,000	2.7
Daniel J. Marshall(13)		358,536	1.8
Donald M. Craig(14)		235,565	1.2
Laura A. Perrone(15)		212,268	1.1
William J. Schroeder(16)		50,300	*
Basil H. Alwan(17)		50,000	*
Jon S. Castor(18)		—	—
	All directors and executive officers as a group (17 persons) (19)	15,921,021	75.1
Selling Stockholders:

*

Represents beneficial ownership of less than 1%.

(1)

Includes 2,803,543 shares held by Norwest Venture Partners VII, L.P. and 606,096 shares held by Norwest Venture Partners VII-A, L.P. Also includes 87,820 shares issuable upon exercise of warrants held by Norwest Venture Partners II, L.P., which warrants will be automatically exercised on a net exercise basis prior to the completion of this offering. Voting and dispositive power of these shares is shared by George Stills and Promod Haque, the managing partners of ITASCA VC Partners VII, LP, which is the general partner of Norwest Venture Partners VII, L.P., and the managing directors of ITASCA VC Partners VII-A, LLC, which is the general partner of Norwest Venture Partners VII-A, L.P. Each of Messrs. Stills and Haque disclaims beneficial ownership of these shares except to the extent of their respective pecuniary interests therein. The address of each of these funds is c/o Norwest Venture Partners, 525 University Avenue, Suite 800, Palo Alto, California 94301.

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(2)

Includes 2,676,822 shares held by Accel VI-S, L.P., 414,254 shares held by Accel Investors '98-S, L.P., 203,345 shares held by Accel Investors '98, L.P., 59,550 shares held by Accel VI, L.P., 44,278 shares held by Accel Keiretsu VI, L.P. and 7,609 shares held by Accel Internet Fund II, L.P. Also includes 73,021 shares issuable upon exercise of warrants held by Accel VI-S, L.P., 11,300 shares issuable upon exercise of warrants held by Accel Investors '98-S, L.P., 5,411 shares issuable upon exercise of warrants held by Accel Investors '98, L.P. and 1,185 shares issuable upon exercise of warrants held by Accel Keiretsu VI L.P., which warrants will be automatically exercised on a net exercise basis prior to the completion of this offering. Accel VI Associates L.L.C. is the general partner of Accel VI L.P., Accel VI-S L.P. and Accel Investors '98-S L.P., and has the sole voting and investment power. James W. Breyer, Arthur C. Patterson, James R. Swartz, and Mr. Wagner are the managing members of Accel VI Associates L.L.C. and share such powers. Accel Internet Fund II Associates L.L.C. is the general partner of Accel Internet Fund II L.P. and has the sole voting and investment power. James W. Breyer, Arthur C. Patterson, James R. Swartz, and Mr. Wagner are the managing members of Accel Internet Fund II Associates L.L.C. and share such powers. Accel Keiretsu VI Associates L.L.C. is the general partner of Accel Keiretsu VI L.P. and has the sole voting and investment power. James W. Breyer, Arthur C. Patterson, James R. Swartz, and Mr. Wagner are the managing members of Accel Keiretsu VI Associates L.L.C. and share such powers. James W. Breyer, Arthur C. Patterson, James R. Swartz, and Mr. Wagner are the general partners of Accel Investors '98 L.P. and share voting and investment power. Mr. Wagner, and each other managing member disclaims beneficial ownership except to the extent of his pecuniary interest therein. The address of each of these funds is c/o Accel Partners, 428 University Avenue, Palo Alto, California 94301.

(3)

Includes 3,170,778 shares held by Advanced Technology Ventures VII, L.P., 127,082 shares held by Advanced Technology Ventures VII (B), L.P., 61,079 shares held by Advanced Technology Ventures VII (C), L.P., 18,872 shares held by ATV Entrepreneurs VII, L.P., 16,764 shares held by ATV Alliance 2001, L.P. and 8,382 shares held by ATV Alliance 2002, L.P. Also includes 86,765 shares issuable upon exercise of warrants held by Advanced Technology Ventures VII, L.P., 3,483 shares issuable upon exercise of warrants held by Advanced Technology Ventures VII (B), L.P., 1,675 shares issuable upon exercise of warrants held by Advanced Technology Ventures VII (C), L.P., 561 shares issuable upon exercise of warrants held by ATV Alliance 2001, L.P., 519 shares issuable upon exercise of warrants held by ATV Entrepreneurs VII, L.P. and 281 shares issuable upon exercise of warrants held by ATV Alliance 2002, L.P., which warrants will be automatically exercised on a net exercise basis prior to the completion of this offering. Voting and dispositive power over the shares held by Advanced Technology Ventures VII, L.P., Advanced Technology Ventures VII (B), L.P., Advanced Technology Ventures VII (C), L.P. and ATV Entrepreneurs VII, L.P. (together, the "ATV VII Investing Entities") is held by ATV Associates VII, LLC, the sole general partner of each of the ATV VII Investing Entities. Decisions of ATV Associates VII, LLC are made by a board of six managing directors, of which Mr. Raffel is one. Each of ATV Associates VII, LLC, Mr. Raffel and each of the other managing directors of ATV Associates VII, LLC disclaims beneficial ownership of the shares held by the ATV VII Investing Entities except to the extent of their respective pecuniary interests therein. Voting and dispositive power over the shares held by ATV Alliance 2001, L.P. and ATV Alliance 2002, L.P. (together, the "ATV Alliance Investing Entities") is held by ATV Alliance Associates, LLC, the sole general partner of each of the ATV Alliance Investing Entities. Jean George is the sole manager of ATV Alliance Associates, LLC and ATV Capital Management, Inc., of which Mr. Raffel is a shareholder, is the sole member of ATV Alliance Associates, LLC. Each of ATV Alliance Associates, LLC, Jean George, ATV Capital Management, Inc., Mr. Raffel and each of the other shareholders of ATV Capital Management, Inc. disclaims beneficial ownership of the shares held by the ATV Alliance Investing Entities except to the extent of their respective pecuniary interests therein. The address of each of the ATV VII Investing Entities and ATV Alliance Investing Entities is c/o Advanced Technology Ventures, 485 Ramona Street, Palo Alto, California 94301.

(4)

Represents 861,951 shares held by Chancellor V, L.P., 400,976 shares held by Chancellor V-A, L.P., 134,634 shares held by Citiventure 2000, L.P. and 797,561 shares held by Euromedia Venture Fund. INVESCO Private Capital, Inc. is the managing member of IPC Direct Associates V, LLC, which is the general partner of each of Chancellor V, L.P., Chancellor V-A, L.P. and Citiventure 2000, L.P., and IPC Euromedia Associates, L.L.C., which is the managing partner of Euromedia Venture Fund. The address of each of these funds is c/o INVESCO Private Capital, 1166 Avenue of the America, New York, New York 10036.

(5)

Represents 12,205 shares held by MCP Entrepreneur Partners II, L.P., 41,062 shares held by Meritech Capital Affiliates II, L.P. and 1,595,767 shares held by Meritech Capital Partners II, L.P. Meritech Management

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Associates II L.L.C., a managing member of Meritech Capital Associates II L.L.C., the general partner of each of these funds, and Paul S. Madera and Michael B. Gordon, the managing members of Meritech Management Associates II L.L.C., may be deemed to share voting and dispositive power over these shares. Each of Meritech Management Associates II, L.L.C., Meritech Capital Associates II, L.L.C. and Messrs. Madera and Gordon disclaims beneficial ownership of these shares except to the extent of their respective pecuniary interests therein. The address of each of these funds is c/o Meritech Capital Partners, 245 Lytton Avenue, Suite 350, Palo Alto, California 94301.

(6)

Includes 54,547 shares issuable upon exercise of warrants, which warrants will be automatically exercised on a net exercise basis prior to the completion of this offering. Lucent Venture Partners I, L.L.C. The address of Lucent Venture Partners I, L.L.C. is c/o Lucent Technologies Inc., 600 Mountain Avenue, Murray Hill, New Jersey 07974.

(7)

Represents the shares referred to in footnote (1) above. Mr. Howard is a General Partner of Norwest Venture Partners. Mr. Howard disclaims beneficial ownership of these shares except to the extent of his pecuniary interest in these entities.

(8)

Represents the shares referred to in footnote (2) above. Mr. Wagner is a General Partner of Accel Venture Partners. Mr. Wagner disclaims beneficial ownership of these shares except to the extent of his pecuniary interest in these entities.

(9)

Represents the shares referred to in footnote (3) above. Mr. Raffel is a Managing Director of Advanced Technology Ventures. Mr. Raffel disclaims beneficial ownership of these shares except to the extent of his pecuniary interest in these entities.

(10)

Represents the shares referred to in footnote (4) above. Mr. Lohrasbpour is a General Partner of INVESCO Private Capital. Mr. Lohrasbpour disclaims beneficial ownership of these shares except to the extent of his pecuniary interest in these entities.

(11)

Includes 79,307 shares that are subject to vesting and a lapsing right of repurchase in our favor upon Mr. Kennedy's cessation of service and 200,000 shares issuable upon exercise of options exercisable within 60 days after November 30, 2006, of which 75,522 shares, if these options are exercised in full, will be subject to vesting and a lapsing right of repurchase in our favor upon Mr. Kennedy's cessation of service.

(12)

Includes 22,728 shares jointly held by Mr. Kaplan and Barbara Kaplan and 546 shares issuable upon exercise of warrants jointly held by Mr. Kaplan and Barbara Kaplan, which warrants will be automatically exercised on a "net exercise" basis prior to the completion of this offering. Also includes 75,000 shares issuable upon exercise of options exercisable within 60 days after November 30, 2006, of which 53,022 shares, if these options are exercised in full, will be subject to vesting and a lapsing right of repurchase in our favor upon Mr. Kaplan's cessation of service.

(13)

Includes 78,212 shares issuable upon exercise of options exercisable within 60 days after November 30, 2006, of which 30,522 shares, if these options are exercised in full, will be subject to vesting and a lapsing right of repurchase in our favor upon Mr. Marshall's cessation of service.

(14)

Includes 136,123 shares issuable upon exercise of options exercisable within 60 days after November 30, 2006, of which 30,417 shares, if these options are exercised in full, will be subject to vesting and a lapsing right of repurchase in our favor upon Mr. Craig's cessation of service.

(15)

Includes 42,134 shares that are subject to vesting and a lapsing right of repurchase in our favor upon Ms. Perrone's cessation of service and 10,000 shares issuable upon exercise of an option exercisable within 60 days after November 30, 2006, of which 6,875 shares, if these options are exercised in full, will be subject to vesting and a lapsing right of repurchase in our favor upon Ms. Perrone's cessation of service.

(16)

Includes 11,667 shares that are subject to vesting and a lapsing right of repurchase in our favor upon Mr. Schroeder's cessation of service. Also includes 4,000 shares held by Kimberly J. Schroeder, Mr. Schroeder's daughter.

(17)

Represents 50,000 shares issuable upon exercise of an option exercisable within 60 days after November 30, 2006, of which 27,778 shares, if this option is exercised in full, will be subject to vesting and a lapsing right of repurchase in our favor upon Mr. Alwan's cessation of service.

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(18)

Mr. Castor was appointed to our board of directors in December 2006 and was granted an option to purchase 50,000 shares of our common stock at an exercise price of $12.50 per share.

(19)

Includes a total of 171,546 shares held by our executive officers and directors that are subject to vesting and a lapsing right of repurchase in our favor upon our executive officers' and directors' cessation of service and a total of 1,376,965 shares issuable upon exercise of options held by our executive officers and directors exercisable within 60 days after November 30, 2006, of which 575,648 shares, if these options are exercised in full, will be subject to vesting and a lapsing right of repurchase in our favor upon our executive officers' or directors' cessation of service.

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Related party transactions

In addition to the executive and director compensation arrangements, including the employment, termination of employment and change in control arrangements, discussed above under "Management," the following is a description of transactions since January 1, 2003 to which we have been a party, in which the amount involved in the transaction exceeded or will exceed $120,000, and in which any of our directors, executive officers or beneficial holders of more than 5% of our capital stock, or any immediate family member of, or person sharing the household with, any of these individuals, had or will have a direct or indirect material interest.

Sales of our Series B-1 preferred stock

In March and April 2004, we sold an aggregate of 5,121,952 shares of our Series B-1 preferred stock at $2.05 per share for an aggregate purchase price of approximately $10.5 million. Each share of preferred stock will convert automatically into one share of our common stock upon the completion of this offering. The following table identifies the number of shares of Series B-1 preferred stock purchased by current holders of more than 5% of our outstanding stock. None of our executive officers or directors purchased Series B-1 preferred stock, although certain of our executive officers or directors may currently be considered to beneficially own shares held by entities with which they are affiliated. Please see "Principal and selling stockholders." The terms of these purchases were the same as those made available to unaffiliated purchasers.

Investor	Series B-1 preferred stock	Aggregate purchase price		Percentage of total issued
Entities affiliated with INVESCO Private Capital(1)	2,195,122	$	4,500,000.10	42.9	%
Norwest Venture Partners VII-A, L.P.(2)	606,096		1,242,496.80	11.8
Entities affiliated with Accel Venture Partners(3)	605,421		1,241,113.05	11.8
Entities affiliated with Advanced Technology Ventures(4)	604,904		1,240,053.20	11.8
Entities affiliated with Meritech Capital Partners(5)	273,141		559,939.05	5.3
Lucent Venture Partners I L.L.C.	201,356		412,779.80	3.9

(1)

Represents 861,951 shares held by Chancellor V, L.P., 400,976 shares held by Chancellor V-A, L.P., 134,634 shares held by Citiventure 2000, L.P. and 797,561 shares held by Euromedia Venture Fund. Esfandiar Lohrasbpour, one of our directors, is a General Partner of INVESCO Private Capital.

(2)

Matthew D. Howard, one of our directors, is a General Partner of Norwest Venture Partners.

(3)

Represents 486,276 shares held by Accel VI-S L.P., 75,253 shares held by Accel Investors '98-S L.P., 36,022 shares held by Accel Investors '98 L.P. and 7,870 shares held by Accel Keiretsu VI, L.P. J. Peter Wagner, one of our directors, is a General Partner of Accel Venture Partners.

(4)

Represents 567,783 shares held by Advanced Technology Ventures VII, L.P., 22,785 shares held by Advanced Technology Ventures VII (B), L.P., 10,952 shares held by Advanced Technology

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Ventures VII (C), L.P. and 3,384 shares held by ATV Entrepreneurs VII, L.P. Wes Raffel, one of our directors, is a Managing Director of Advanced Technology Ventures.

(5)

Represents 264,319 shares held by Meritech Capital Partners II, L.P., 6,801 shares held by Meritech Capital Affiliates II, L.P. and 2,021 shares held by MCP Entrepreneur Partners II, L.P.

Stockholder and other agreements

In connection with the sale of our Series B-1 preferred stock, we entered into agreements that grant customary preferred stock rights to all of our major preferred stock investors, including holders of more than 5% of our outstanding stock. These rights include registration rights, rights of first refusal, information rights, co-sale rights with respect to stock transfers, a voting agreement providing for the election of investor designees to the board of directors, board observer rights and other similar rights. The Fourth Amended and Restated Investor Rights Agreement, which contains the registration rights and many of the other rights described above, is filed as an exhibit to the registration statement of which this prospectus is a part. All of these rights, other than the registration rights, will terminate upon the completion of this offering. For a description of the registration rights, please see Description of Capital Stock—Registration Rights.

Loan to executive officer

On September 24, 1998, we entered into a loan agreement with Lawrence R. Kaplan, our chairman and a member of our board of directors who was then also our chief executive officer, which allowed for maximum borrowings by Mr. Kaplan from us of up to a total principal amount of $480,000. On April 1, 2003, we entered into an amendment to this loan agreement which modified the maximum total principal amount to $180,000, the total principal amount and accrued interest then outstanding under the loan. As amended, the loan was subject to interest at the prime rate, compounded quarterly. Mr. Kaplan also entered into a retention agreement with us in April 2003, which provided for, among other things, a bonus in the form of monthly forgiveness of loan principle of $5,000 plus interest. This bonus was paid over a period of three years ending in October 2005, at which time the loan was forgiven in full.

Indemnification agreements

We will enter into indemnity agreements with each of our current directors and officers before the completion of this offering, in addition to the indemnification provided for in our bylaws. These agreements will require us to indemnify each such person against expenses and liabilities incurred by such person in connection with a proceeding related to such person's services for us, and to advance expenses incurred in connection with such proceeding, all subject to limited exceptions. Please see "Executive Compensation—Indemnification of directors and executive officers and limitation of liability."

Sales to Ascent Media Group

From September 2005 through September 2006, we generated approximately $7.7 million in revenues from sales of our products to Ascent Media Group. Since September 2005, Margaret

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Craig, the spouse of Donald Craig, our chief technology officer, has served as the chief operating officer of Ascent Media Network Services, a subsidiary of Ascent Media Group.

Review, approval or ratification of transactions with related parties

We have adopted a policy requiring that any transaction, subject to limited exceptions and other than one that involves compensation, between us and any of our directors, executive officers or beneficial holders of more than 5% of our capital stock, or any immediate family member of, or person sharing the household with, any of these individuals, be consummated only if approved by our audit committee and only if the terms of the transaction are comparable to those that could be obtained in arm's length dealings with an unrelated third-party. The approval of our compensation committee is required to approve any transaction that involves compensation to our directors and executive officers. This approval process does not apply to any transaction that is available to all employees generally.

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Description of capital stock

Immediately following the closing of this offering, our authorized capital stock will consist of:

•

200,000,000 shares of common stock, $0.001 par value per share; and

•

5,000,000 shares of preferred stock, $0.001 par value per share.

As of November 30, 2006, and assuming the conversion of all outstanding convertible preferred stock into common stock, there were outstanding:

•

19,814,573 shares of our common stock held by approximately 155 stockholders, of which 290,230 shares were subject to our right of repurchase;

•

options to purchase 3,326,314 shares of our common stock at a weighted average exercise price of $0.80 per share; and

•

warrants to purchase 479,505 shares of our common stock at a weighted average exercise price of $0.79 per share, of which warrants to purchase 69 shares of common stock will, unless earlier exercised, expire in January 2007, and the remaining warrants will be automatically exercised on a net exercise basis upon completion of this offering, unless earlier exercised.

The following is a summary of the rights of our common stock and preferred stock. This summary is not complete. For more detailed information, please see our restated certificate of incorporation and restated bylaws, which are filed as exhibits to the registration statement of which this prospectus is a part.

Common stock

Dividend rights.    Subject to preferences that may apply to shares of preferred stock outstanding at the time, the holders of outstanding shares of our common stock are entitled to receive dividends out of funds legally available at the times and in the amounts that our board of directors may determine.

Voting rights.    Each holder of common stock is entitled to one vote for each share of common stock held on all matters submitted to a vote of stockholders. Cumulative voting for the election of directors is not provided for in our certificate of incorporation, which means that the holders of a majority of the shares voted can elect all of the directors then standing for election.

No preemptive or similar rights.    Our common stock is not entitled to preemptive rights and is not subject to conversion or redemption.

Right to receive liquidation distributions.    Upon our liquidation, dissolution or winding-up, the assets legally available for distribution to our stockholders are distributable ratably among the holders of our common stock, subject to the preferential rights and payment of liquidation preferences, if any, on any outstanding shares of preferred stock.

Fully paid and nonassessable.    All of our outstanding shares of common stock are, and the shares of common stock to be issued in this offering will be, fully paid and nonassessable.

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Preferred stock

Upon the closing of this offering, each outstanding share of convertible preferred stock will be converted into common stock.

Following this offering, our board of directors will have the authority, subject to limitations prescribed by Delaware law, without further action by the stockholders, to issue up to 5,000,000 shares of preferred stock in one or more series, to establish from time to time the number of shares to be included in each series, to fix the designation, powers, preferences and rights of the shares of each series and any of its qualifications, limitations or restrictions. Our board of directors can also increase or decrease the number of shares of any series, but not below the number of shares of that series then outstanding, by the affirmative vote of the holders of a majority of our capital stock entitled to vote, unless a vote of any other holders is required by the certificate of designation establishing the series. Our board of directors may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect the voting power or other rights of the holders of the common stock. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions and other corporate purposes, could, among other things, have the effect of delaying, deferring or preventing a change in control of Omneon and may adversely affect the market price of our common stock and the voting and other rights of the holders of common stock. We have no current plan to issue any shares of preferred stock.

Warrants

As of September 30, 2006, we had one warrant outstanding to purchase 69 shares of our common stock at an exercise price of $35.00 per share. This warrant expires in January 2007. We also have warrants outstanding to purchase an aggregate of 152,140 shares of our Series A-6 preferred stock at an exercise price of $0.10 per share and warrants outstanding to purchase an aggregate of 327,296 shares of our Series A-6 preferred stock at an exercise price of $1.10 per share. These warrants to purchase preferred stock will be exercised on a net exercise basis in connection with the closing of this offering.

Registration rights

Following this offering, the holders of approximately             shares of our common stock issued upon conversion of our convertible preferred stock will be entitled to rights with respect to the registration of these shares under the Securities Act, as described below.

Demand registration rights

At any time beginning six months after the completion of this offering, the holders of shares having registration rights can request that we file a registration statement covering registrable securities with an anticipated aggregate offering price of greater than $10 million, net of any underwriters' discounts and commissions. The holders of at least 20% of the shares having registration rights can also request that we file a registration statement covering registrable securities regardless of the aggregate offering price. We will only be required to file two registration statements upon exercise of these demand registration rights. We may postpone the filing of a registration statement for up to 120 days once in a 12-month period if we determine that the filing would be seriously detrimental to us or our stockholders.

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Piggyback registration rights

After the completion of this offering, if we register any of our securities for public sale, the stockholders with registration rights will have the right to include their shares in the registration statement. However, this right does not apply to a registration relating to any of our employee benefit plans or a corporate reorganization. The managing underwriter of any underwritten offering will have the right to limit, due to marketing reasons, the number of shares registered by these holders to 30% of the total shares covered by the registration statement.

Form S-3 registration rights

The holders of at least 20% of the shares having registration rights can request that we register all or a portion of their shares on Form S-3 if we are eligible to file a registration statement on Form S-3 and the aggregate price to the public of the shares offered is greater than $500,000, net of any underwriters' discounts and commissions. We may postpone the filing of a registration statement on Form S-3 for up to 120 days once in a 12-month period if we determine that the filing would be seriously detrimental to us or our stockholders.

Registration expenses

We will pay all expenses incurred in connection with each of the registrations described above, except for underwriters' and brokers' discounts and commissions. However, we will not pay for any expenses of any demand registration if the request is subsequently withdrawn by a majority of the holders requesting that we file such a registration statement, subject to limited exceptions.

Termination of registration rights

The registration rights described above will terminate five years after this offering is completed. In addition, the registration rights will terminate earlier with respect to a particular stockholder to the extent the shares held by and issuable to such holder may be sold under Rule 144 of the Securities Act in any three month period. Holders of all of our shares with these registration rights have signed agreements with the underwriters prohibiting the exercise of their registration rights for 180 days, subject to a possible extension under certain circumstances, following the date of this prospectus. These agreements are described below in "Underwriting."

Anti-takeover provisions

The provisions of Delaware law, our restated certificate of incorporation and our restated bylaws may have the effect of delaying, deferring or discouraging another person from acquiring control of Omneon.

Delaware law

We are subject to Section 203 of the Delaware General Corporation Law. Section 203 generally prohibits a public Delaware corporation from engaging in a "business combination" with an

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"interested stockholder" for a period of three years after the date of the transaction in which the person became an interested stockholder, unless:

•

prior to the date of the transaction, the board of directors of the corporation approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;

•

the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares outstanding (a) shares owned by persons who are directors and also officers and (b) shares owned by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or

•

on or subsequent to the date of the transaction, the business combination is approved by the board and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66.67% of the outstanding voting stock which is not owned by the interested stockholder.

Section 203 defines a business combination to include:

•

any merger or consolidation involving the corporation and the interested stockholder;

•

any sale, transfer, pledge or other disposition involving the interested stockholder of 10% or more of the assets of the corporation;

•

subject to exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder;

•

subject to exceptions, any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series of the corporation beneficially owned by the interested stockholder; and

•

the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation.

In general, Section 203 defines an interested stockholder as any entity or person beneficially owning 15% or more of the outstanding voting stock of the corporation and any entity or person affiliated with or controlling or controlled by the entity or person.

Restated certificate of incorporation and restated bylaws

Our restated certificate of incorporation and restated bylaws which will become effective upon the completion of this offering provide that:

•

our board of directors may permit the issuance of up to 5,000,000 shares of preferred stock, with any rights, preferences and privileges as they may designate (including the right to approve an acquisition or other change of control);

•

no action shall be taken by our stockholders except at an annual or special meeting of our stockholders called in accordance with our restated bylaws and our stockholders may not act by written consent;

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•

our stockholders may not call special meetings of our stockholders or fill vacancies on our board of directors;

•

there are no cumulative voting rights (therefore allowing the holders of a majority of the shares of common stock entitled to vote in any election of directors to elect all of the directors standing for election); and

•

we will indemnify directors and officers against losses that they may incur in investigations and legal proceedings resulting from their services to us, which may include services in connection with takeover defense measures.

These provisions of our restated certificate of incorporation and restated bylaws may have the effect of delaying, deferring or discouraging another person or entity from acquiring control of us. The approval of two-thirds of the shares entitled to vote shall be required to amend any of the provisions of our restated certificate of incorporation or restated bylaws.

Transfer agent and registrar

The transfer agent and registrar for our common stock is                           .

Listing on The NASDAQ Global Market

We have applied to list our common stock on The NASDAQ Global Market under the trading symbol OMNE.

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Material U.S. federal income tax
consequences to non-U.S. holders

The following is a general discussion of the material U.S. federal income tax consequences of the ownership and disposition of our common stock to a non-U.S. holder. For the purpose of this discussion, a non-U.S. holder is any holder that for U.S. federal income tax purposes is not a U.S. person. For purposes of this discussion, the term U.S. person means:

•

an individual citizen or resident of the U.S.;

•

a corporation or other entity taxable as a corporation or a partnership or entity taxable as a partnership created or organized in the U.S. or under the laws of the U.S. or any political subdivision thereof;

•

an estate whose income is subject to U.S. federal income tax regardless of its source; or

•

a trust (x) whose administration is subject to the primary supervision of a U.S. court and which has one or more U.S. persons who have the authority to control all substantial decisions of the trust or (y) which has made an election to be treated a U.S. person.

If a partnership holds our common stock, the tax treatment of a partner will generally depend on the status of the partner and upon the activities of the partnership. Accordingly, we urge partnerships that hold our common stock and partners in such partnerships to consult their tax advisors.

This discussion assumes that a non-U.S. holder will hold our common stock issued pursuant to the offering as a capital asset (generally, property held for investment). This discussion does not address all aspects of U.S. federal income taxation that may be relevant in light of a non-U.S. holder's special tax status or special tax situations. U.S. expatriates, life insurance companies, tax-exempt organizations, dealers in securities or currencies, banks or other financial institutions and investors that hold common stock as part of a hedge, straddle or conversion transaction are among those categories of potential investors that are subject to special rules not covered in this discussion. This discussion does not address any tax consequences arising under the laws of any state, local or non-U.S. taxing jurisdiction. Furthermore, the following discussion is based on current provisions of the Internal Revenue Code and Treasury Regulations and administrative and judicial interpretations thereof, all as in effect on the date hereof, and all of which are subject to change, possibly with retroactive effect. Accordingly, we urge each non-U.S. holder to consult a tax advisor regarding the U.S. federal, state, local and non-U.S. income and other tax consequences of acquiring, holding and disposing of shares of our common stock.

Dividends

We have not paid any dividends on our common stock and we do not plan to pay any dividends for the foreseeable future. However, if we do pay dividends on our common stock, those payments will constitute dividends for U.S. tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. To the extent those dividends exceed our current and accumulated earnings and

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profits, the dividends will constitute a return of capital and will first reduce a holder's basis, but not below zero, and then will be treated as gain from the sale of stock.

Any dividend (out of earnings and profits) paid to a non-U.S. holder of common stock generally will be subject to U.S. withholding tax either at a rate of 30% of the gross amount of the dividend or such lower rate as may be specified by an applicable tax treaty. To receive a reduced treaty rate, a non-U.S. holder must provide us with an IRS Form W-8BEN or other appropriate version of Form W-8 certifying qualification for the reduced rate.

Dividends received by a non-U.S. holder that are effectively connected with a U.S. trade or business conducted by the non-U.S. holder are exempt from such withholding tax. To obtain this exemption, a non-U.S. holder must provide us with an IRS Form W-8ECI properly certifying such exemption. Such effectively connected dividends, although not subject to withholding tax, are taxed at the same graduated rates applicable to U.S. persons, net of certain deductions and credits, subject to any applicable tax treaty providing otherwise. In addition to the graduated tax described above, dividends received by corporate non-U.S. holders that are effectively connected with a U.S. trade or business of the corporate non-U.S. holder may also be subject to a branch profits tax at a rate of 30% or such lower rate as may be specified by an applicable tax treaty.

A non-U.S. holder of common stock that is eligible for a reduced rate of withholding tax pursuant to a tax treaty may obtain a refund of any excess amounts currently withheld if an appropriate claim for refund is filed with the IRS.

Gain on disposition of common stock

A non-U.S. holder generally will not be subject to U.S. federal income tax on any gain realized upon the sale or other disposition of our common stock unless:

•

the gain is effectively connected with a U.S. trade or business of the non-U.S. holder (which gain, in the case of a corporate non-U.S. holder, must also be taken into account for branch profits tax purposes), subject to any applicable tax treaty providing otherwise;

•

the non-U.S. holder is an individual who is present in the U.S. for a period or periods aggregating 183 days or more during the calendar year in which the sale or disposition occurs and certain other conditions are met; or

•

our common stock constitutes a U.S. real property interest by reason of our status as a "U.S. real property holding corporation" for U.S. federal income tax purposes at any time within the shorter of the five-year period preceding the disposition or the holder's holding period for our common stock. We believe that we are not currently, and that we will not become, a "U.S. real property holding corporation" for U.S. federal income tax purposes.

Backup withholding and information reporting

Generally, we must report annually to the IRS the amount of dividends paid, the name and address of the recipient, and the amount, if any, of tax withheld. A similar report is sent to the holder. Pursuant to tax treaties or other agreements, the IRS may make its reports available to tax authorities in the recipient's country of residence.

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Payments of dividends or of proceeds on the disposition of stock made to a non-U.S. holder may be subject to backup withholding (currently at a rate of 28%) unless the non-U.S. holder establishes an exemption, for example, by properly certifying its non-U.S. status on a Form W-8BEN or another appropriate version of Form W-8. Notwithstanding the foregoing, backup withholding may apply if either we or our paying agent has actual knowledge, or reason to know, that the holder is a U.S. person.

Backup withholding is not an additional tax. Rather, the U.S. income tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained, provided that the required information is furnished to the IRS.

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Shares eligible for future sale

Immediately prior to this offering, there has been no public market for our common stock. Future sales of substantial amounts of common stock in the public market could adversely affect prevailing market prices. Furthermore, since only a limited number of shares will be available for sale shortly after this offering because of contractual and legal restrictions on resale described below, sales of substantial amounts of common stock in the public market after the restrictions lapse could adversely affect the prevailing market price for our common stock as well as our ability to raise equity capital in the future.

Based on the number of shares of common stock outstanding as of September 30, 2006, upon completion of this offering,                  shares of common stock will be outstanding, assuming no exercise of the underwriters' over-allotment option and no exercise of outstanding options. All of the shares sold in this offering will be freely tradable unless held by an affiliate of ours. Except as set forth below, the remaining shares of common stock outstanding after this offering will be restricted as a result of securities laws or lock-up agreements. These remaining shares will generally become available for sale in the public market as follows:

•

no restricted shares will be eligible for immediate sale upon the completion of this offering;

•

up to                  restricted shares will be eligible for sale upon expiration of lock-up agreements at least 180 days after the date of this offering, subject in some cases to the provisions of Rule 144 under the Securities Act of 1933; and

•

the remainder of the restricted shares will be eligible for sale from time to time thereafter upon the lapse of our right of repurchase with respect to unvested shares.

Rule 144

In general, under Rule 144 under the Securities Act of 1933, as in effect on the date of this prospectus, a person who has beneficially owned shares of our common stock for at least one year would be entitled to sell within any three-month period a number of shares that does not exceed the greater of:

•

1% of the number of shares of our common stock then outstanding, which will equal approximately                  shares immediately after this offering; or

•

the average weekly trading volume of our common stock on The NASDAQ Global Market during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.

Sales under Rule 144 are also subject to manner of sale provisions and notice requirements and to the availability of current public information about us.

Rule 144(k)

Under Rule 144(k) under the Securities Act as in effect on the date of this prospectus, a person who is not deemed to have been one of our affiliates at any time during the 90 days preceding a sale, and who has beneficially owned the shares proposed to be sold for at least two years, is entitled to sell the shares without complying with the manner of sale, public information, volume limitation or notice provisions of Rule 144.

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Rule 701

Rule 701 under the Securities Act, as in effect on the date of this prospectus, permits resales of shares in reliance upon Rule 144 but without compliance with certain restrictions of Rule 144, including the holding period requirement. Most of our employees, executive officers, directors or consultants who purchased shares under a written compensatory plan or contract may be entitled to rely on the resale provisions of Rule 701, but all holders of Rule 701 shares are required to wait until 90 days after the date of this prospectus before selling their shares. However, substantially all Rule 701 shares are subject to lock-up agreements as described below and under "Underwriting" and will become eligible for sale at the expiration of those agreements.

Lock-up agreements

We, our directors and executive officers, and substantially all of our stockholders have entered into lock-up agreements with the underwriters prior to the commencement of this offering pursuant to which we and each of these persons or entities, with limited exceptions, for a period of 180 days after the date of the final prospectus, subject to possible extension under certain circumstances as described in "Underwriting," may not, without the prior written consent of J.P. Morgan Securities Inc., (1) offer, pledge, announce the intention to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares of our common stock (including, without limitation, common stock which may be deemed to be beneficially owned by such directors, executive officers, managers and members in accordance with the rules and regulations of the SEC and securities which may be issued upon exercise of a stock option or warrant) or (2) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the common stock, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of common stock or such other securities, in cash or otherwise. These lock-up restrictions may be extended in specified circumstances and are subject to exceptions specified in the lock-up agreements. See "Underwriting."

Registration rights

Upon completion of this offering, the holders of                  shares of our common stock have rights with respect to the registration of their shares under the Securities Act, subject to the lock-up arrangement described above. Registration of these shares under the Securities Act would result in the shares becoming freely tradable without restriction under the Securities Act. Any sales of securities by these stockholders could have a material adverse effect on the trading price of our common stock. See "Description of capital stock—registration rights."

Equity incentive plans

We intend to file with the SEC a registration statement under the Securities Act covering the shares of common stock reserved for issuance under our 1998 stock option plan, our 2007 equity incentive plan and our 2007 employee stock purchase plan. The registration statement is expected to be filed and become effective as soon as practicable after the completion of this offering. Accordingly, shares registered under the registration statement will be available for sale in the open market following its effective date, subject to Rule 144 volume limitations and the lock-up arrangement described above, if applicable.

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Underwriting

We and the selling stockholders are offering the shares of common stock described in this prospectus through a number of underwriters. J.P. Morgan Securities Inc. is acting as sole book-running manager. J.P. Morgan Securities Inc., Deutsche Bank Securities Inc., Canaccord Adams Inc., Needham & Company, LLC and JMP Securities LLC are acting as representatives of the underwriters. We and the selling stockholders have entered into an underwriting agreement with the underwriters. Subject to the terms and conditions of the underwriting agreement, we and the selling stockholders have agreed to sell to the underwriters, and each underwriter has severally agreed to purchase, at the initial public offering price less the underwriting discounts and commissions set forth on the cover page of this prospectus, the number of shares of common stock listed next to its name in the following table:

Name	Number of shares
J.P. Morgan Securities Inc.
Deutsche Bank Securities Inc.
Canaccord Adams Inc.
Needham & Company, LLC
JMP Securities LLC
Total

The underwriters are committed to purchase all the shares of common stock offered by us and the selling stockholders if they purchase any shares. The underwriting agreement also provides that if an underwriter defaults, the purchase commitments of non-defaulting underwriters may also be increased or the offering may be terminated.

The underwriters propose to offer the shares of common stock directly to the public at the initial public offering price set forth on the cover page of this prospectus and to certain dealers at that price less a concession not in excess of $                        per share. Any such dealers may resell shares to certain other brokers or dealers at a discount of up to $                                  per share from the initial public offering price. After the initial public offering of the shares, the offering price and other selling terms may be changed by the underwriters. The representatives have advised us that the underwriters do not intend to confirm discretionary sales in excess of 5% of the shares of common stock offered in this offering.

The underwriters have an option to buy up to                           additional shares of common stock from us to cover sales of shares by the underwriters which exceed the number of shares specified in the table above. The underwriters have 30 days from the date of this prospectus to exercise this over-allotment option. If any shares are purchased with this over-allotment option, the underwriters will purchase shares in approximately the same proportion as shown in the table above. If any additional shares of common stock are purchased, the underwriters will offer the additional shares on the same terms as those on which the shares are being offered.

The underwriting fee is equal to the initial public offering price per share of common stock less the amount paid by the underwriters to us and the selling stockholders per share of common stock. The underwriting fee is $                    per share. The following table shows the per share and total underwriting discounts and commissions to be paid to the underwriters assuming both no exercise and full exercise of the underwriters' option to purchase additional shares.

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Underwriting discounts and commissions

	Without over-allotment exercise	With full over-allotment exercise
Per share	$	$
Total	$	$

We estimate that the total expenses of this offering, including registration, filing and listing fees, printing fees and legal and accounting expenses, but excluding the underwriting discounts and commissions, will be approximately $    million.

A prospectus in electronic format may be made available on the websites maintained by one or more underwriters, or selling group members, if any, participating in the offering. The underwriters may agree to allocate a number of shares to underwriters and selling group members for sale to their online brokerage account holders. Internet distributions will be allocated by the representatives to underwriters and selling group members that may make Internet distributions on the same basis as other allocations.

We have agreed that we will not offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, or file with the SEC a registration statement under the Securities Act relating to, any shares of our common stock or securities convertible into or exchangeable or exercisable for any shares of our common stock, or publicly disclose the intention to make any offer, sale, pledge, disposition or filing, without the prior written consent of J.P. Morgan Securities Inc. for a period of 180 days after the date of this prospectus. Notwithstanding the foregoing, if (1) during the last 17 days of the 180-day restricted period, we issue an earnings release or material news or a material event relating to us occurs; or (2) prior to the expiration of the 180-day restricted period, we announce that we will release earnings results during the 16-day period beginning on the last day of the 180-day period, the restrictions described above shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event. These restrictions shall not apply to (a) sales of common stock in this offering, (b) grants of restricted stock and options under our equity incentive plans, (c) issuances of shares of common stock upon the exercise of options granted under our equity incentive plans or upon the exercise or conversion of warrants or preferred stock described in this prospectus where the recipients agree to be bound by the lock-up agreements described below, or (d) issuance of up to                           shares of common stock, or securities convertible into our common stock, in connection with mergers or acquisitions, joint ventures, commercial relationships or other strategic transactions where the recipients agree to be bound by the restrictions described below.

Our directors and executive officers, and substantially all of our stockholders have entered into lock-up agreements with the underwriters prior to the commencement of this offering pursuant to which each of these persons or entities, with limited exceptions, for a period of 180 days after the date of the final prospectus, may not, without the prior written consent of J.P. Morgan Securities Inc., (1) offer, pledge, announce the intention to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares of our common stock (including, without limitation, common stock that may be deemed

116

to be beneficially owned by such persons in accordance with the rules and regulations of the SEC and securities that may be issued upon exercise of a stock option or warrant) or (2) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the common stock, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of common stock or such other securities, in cash or otherwise. Notwithstanding the foregoing, if (1) during the last 17 days of the 180-day restricted period, we issue an earnings release or material news or a material event relating to our company occurs; or (2) prior to the expiration of the 180-day restricted period, we announce that we will release earnings results during the 16-day period beginning on the last day of the 180-day period, the restrictions described above shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event. These restrictions shall not apply to (a) sales of common stock by selling stockholders in this offering, (b) transactions relating to common stock acquired in open market transactions after the completion of this offering, provided that no filing by any party under the Securities Exchange Act of 1934 shall be required or shall be voluntarily made in connection with subsequent sales of common stock or other securities acquired in such open market transactions, (c) exercises of any option or warrant to acquire common stock or conversions of any convertible securities into common stock, provided that any shares of common stock obtained by such exercises or conversion shall remain subject to the terms of the lock-up agreements, (c) transfers of common stock or any security convertible into or exercisable or exchangeable for common stock (i) as a bona fide gift, (ii) as a contribution by a person to any trust for the direct or indirect benefit of that person or the immediate family of that person, (iii) as a distribution by a partnership to its partners or former partners or by a limited liability company to its members or retired members or (iv) to any affiliate, as defined in Rule 405 under the Securities Act of 1933, of the undersigned; provided that in the case of any transfer pursuant to clause (c), (A) each transferee shall sign and deliver a lock-up agreement and (B) the undersigned shall not be required to, and shall not voluntarily, file a report under Section 16(a) of the Securities Exchange Act of 1934, reporting a reduction in beneficial ownership of common stock during the restricted period referred to in the foregoing paragraph.

We and the selling stockholders have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act of 1933.

We have applied to have our common stock approved for listing on The NASDAQ Global Market under the symbol OMNE.

In connection with this offering, the underwriters may engage in stabilizing transactions, which involves making bids for, purchasing and selling shares of common stock in the open market for the purpose of preventing or retarding a decline in the market price of the common stock while this offering is in progress. These stabilizing transactions may include making short sales of the common stock, which involves the sale by the underwriters of a greater number of shares of common stock than they are required to purchase in this offering, and purchasing shares of common stock on the open market to cover positions created by short sales. Short sales may be "covered" shorts, which are short positions in an amount not greater than the underwriters' over-allotment option referred to above, or may be "naked" shorts, which are short positions in excess of that amount. The underwriters may close out any covered short position either by exercising their over-allotment option, in whole or in part, or by purchasing

117

shares in the open market. In making this determination, the underwriters will consider, among other things, the price of shares available for purchase in the open market compared to the price at which the underwriters may purchase shares through the over-allotment option. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the common stock in the open market that could adversely affect investors who purchase in this offering. To the extent that the underwriters create a naked short position, they will purchase shares in the open market to cover the position.

The underwriters have advised us that, pursuant to Regulation M of the Securities Act of 1933, they may also engage in other activities that stabilize, maintain or otherwise affect the price of the common stock, including the imposition of penalty bids. This means that if the representatives of the underwriters purchase common stock in the open market in stabilizing transactions or to cover short sales, the representatives can require the underwriters that sold those shares as part of this offering to repay the underwriting discount received by them.

These activities may have the effect of raising or maintaining the market price of the common stock or preventing or retarding a decline in the market price of the common stock, and, as a result, the price of the common stock may be higher than the price that otherwise might exist in the open market. If the underwriters commence these activities, they may discontinue them at any time. The underwriters may carry out these transactions on The NASDAQ Global Market, in the over-the-counter market or otherwise.

Prior to this offering, there has been no public market for our common stock. The initial public offering price will be determined by negotiations between us and the representatives of the underwriters. In determining the initial public offering price, we and the representatives of the underwriters expect to consider a number of factors including:

•

the information set forth in this prospectus and otherwise available to the representatives;

•

our prospects and the history and prospects for the industry in which we compete;

•

an assessment of our management;

•

our prospects for future earnings;

•

the general condition of the securities markets at the time of this offering;

•

the recent market prices of, and demand for, publicly traded common stock of generally comparable companies; and

•

other factors deemed relevant by the underwriters and us.

Neither we nor the underwriters can assure investors that an active trading market will develop for our common stock, or that the shares of common stock will trade in the public market at or above the initial public offering price.

Certain of the underwriters and their affiliates have provided in the past to us and our affiliates and may provide from time to time in the future certain commercial banking, financial advisory, investment banking and other services for us and such affiliates in the ordinary course of their business, for which they have received and may continue to receive customary fees and commissions. In addition, from time to time, certain of the underwriters

118

and their affiliates may effect transactions for their own account or the account of customers, and hold on behalf of themselves or their customers, long or short positions in our debt or equity securities or loans, and may do so in the future.

J.P. Morgan Partners (BHCA), L.P. holds an aggregate of 87,508 shares of our common stock. J.P. Morgan Partners and J.P. Morgan Securities Inc. are affiliated entities and subsidiaries of J.P. Morgan Chase & Co.

119

Legal matters

The validity of the shares of common stock being offered by us in this prospectus will be passed upon for us by Fenwick & West LLP, Mountain View, California. A partner of Fenwick & West LLP may be deemed to beneficially own 45,000 shares of common stock held by his spouse, an employee of Omneon. Davis Polk & Wardwell, Menlo Park, California, is representing the underwriters in this offering.

Experts

The consolidated financial statements as of December 31, 2005 and 2004 and for each of the three years in the period ended December 31, 2005, included in this prospectus, have been so included in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.

Where you can find more information

We have filed with the SEC a registration statement on Form S-1 under the Securities Act of 1933, as amended, with respect to the shares of common stock being offered by this prospectus. This prospectus, which constitutes a part of the registration statement, does not contain all of the information in the registration statement and its exhibits. For further information with respect to us and the common stock offered by this prospectus, you should refer to the registration statement and the exhibits filed as part of that document. Statements contained in this prospectus as to the contents of any contract or any other document referred to are not necessarily complete, and in each instance, we refer you to the copy of the contract or other document filed as an exhibit to the registration statement. Each of these statements is qualified in all respects by this reference.

You can read our SEC filings, including the registration statement, over the Internet at the SEC's website at http://www.sec.gov. You may also read and copy any document we file with the SEC at its public reference facilities at 100 F Street, N.E., Washington, D.C. 20549. You may also obtain copies of these documents at prescribed rates by writing to the Public Reference Section of the SEC at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference facilities. You may also request a copy of these filings, at no cost, by writing or telephoning us at: 965 Stewart Drive, Sunnyvale, CA 94085-3913, (408) 585-5000.

Upon completion of this offering, we will be subject to the information and periodic reporting requirements of the Securities Exchange Act of 1934, as amended, and we will file periodic reports, proxy statements and other information with the SEC. These reports, proxy statements and other information will be available for inspection and copying at the public reference room and website of the SEC referred to above. We also maintain a website at www.omneon.com, at which you may access these materials free of charge as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC. The information contained in, or that can be accessed through, our website is not part of this prospectus.

120

Omneon Video Networks, Inc.
Index to consolidated financial statements

	Page
Report of Independent Registered Public Accounting Firm	F-2
Consolidated Financial Statements
Consolidated Balance Sheets	F-3
Consolidated Statements of Operations	F-4
Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity (Deficit)	F-5
Consolidated Statements of Cash Flows	F-6
Notes to Consolidated Financial Statements	F-7

F-1

Report of independent registered public accounting firm

To the Board of Directors and Stockholders
of Omneon Video Networks, Inc.

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, of stockholders' equity and of cash flows present fairly, in all material respects, the financial position of Omneon Video Networks, Inc. and its subsidiaries at December 31, 2005 and December 31, 2004, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2005 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

As discussed in Note 1 to the consolidated financial statements, Omneon Video Networks, Inc. adopted FASB Staff Position 150-5 (FSP 150-5) "Issuer's Accounting under FASB Statement No. 150 for Freestanding Warrants and Other Similar Instruments on Shares That Are Redeemable," during the year ended December 31, 2005.

/s/ PricewaterhouseCoopers LLP

San Jose, California
July 24, 2006, except as to Notes 1 and 9 which are as of December 28, 2006

F-2

Omneon Video Networks, Inc.
Consolidated balance sheets

		December 31,									Pro forma stockholders' equity as of September 30, 2006
								September 30, 2006
		2004			2005
(in thousands, except share and per share data)								(unaudited)			(unaudited)
Assets
Current assets:
	Cash and cash equivalents	$	11,368		$	16,616		$	16,871
	Restricted cash		164			13			40
	Accounts receivable, net		6,913			10,365			15,478
	Inventory, net		1,949			3,059			2,768
	Prepaid expenses and other currrent assets		572			716			706
	Deferred income taxes		—			—			858
Total current assets			20,966			30,769			36,721
Property and equipment, net			2,449			3,962			5,894
Other assets			21			240			312
Long-term deferred income taxes			—			—			2,262
Total assets		$	23,436		$	34,971		$	45,189
Liabilities, convertible preferred stock and stockholders' equity (deficit)
Current liabilities:
	Accounts payable	$	2,992		$	4,461		$	6,204
	Accrued liabilities		2,130			4,458			5,264
	Deferred revenues, current		1,220			3,559			3,036
	Convertible preferred stock warrant liability		—			729			1,467		$	—
Total current liabilities			6,342			13,207			15,971
Deferred revenues, long term			520			1,010			1,175
Other long term liabilities			8			7			43
Total liabilities			6,870			14,224			17,189
Convertible preferred stock:
	Series A-1 Convertible Preferred Stock, $0.001 par value; 11,363,661 shares authorized, issued and outstanding at December 31, 2004, 2005 and September 30, 2006 (unaudited); no shares issued and outstanding, pro forma (unaudited); liquidation preference—$25,000 at December 31, 2004, 2005 and September 30, 2006 (unaudited) and none pro forma		12,265			12,265			12,265			—
	Series A-2.1 Convertible Preferred Stock, $0.001 par value; 512,901 shares authorized, issued and outstanding at December 31, 2004, 2005 and September 30, 2006 (unaudited); no shares issued and outstanding, pro forma (unaudited); liquidation preference—$2,370 at December 31, 2004, 2005 and September 30, 2006 (unaudited) and none pro forma		2,370			2,370			2,370			—
	Series A-2.2 Convertible Preferred Stock, $0.001 par value; 1 share authorized, issued and outstanding at December 31, 2004, 2005 and September 30, 2006 (unaudited); no shares issued and outstanding, pro forma (unaudited); liquidation preference—$1,513 at December 31, 2004, 2005 and September 30, 2006 (unaudited) and none pro forma		757			757			757			—
	Series A-3 Convertible Preferred Stock, $0.001 par value; 27,557 shares authorized, issued and outstanding at December 31, 2004, 2005 and September 30, 2006 (unaudited); no shares issued and outstanding, pro forma (unaudited); liquidation preference—$9,369 at December 31, 2004, 2005 and September 30, 2006 (unaudited) and none pro forma		9,341			9,341			9,341			—
	Series A-4 Convertible Preferred Stock, $0.001 par value; 21,275 shares authorized, issued and outstanding at December 31, 2004, 2005 and September 30, 2006 (unaudited); no shares issued and outstanding, pro forma (unaudited); liquidation preference—$4,681 at December 31, 2004, 2005 and September 30, 2006 (unaudited) and none pro forma		4,669			4,669			4,669			—
	Series A-5 Convertible Preferred Stock, $0.001 par value; 99 shares authorized, issued and outstanding at December 31, 2004, 2005 and September 30, 2006 (unaudited); no shares issued and outstanding, pro forma (unaudited); liquidation preference—$10 at December 31, 2004, 2005 and September 30, 2006 (unaudited) and none pro forma		10			10			10			—
	Series A-6 Convertible Preferred Stock, $0.001 par value; 479,436 shares authorized; no shares issued and outstanding at December 31, 2004, 2005 and September 30, 2006 (unaudited); no shares issued and outstanding, pro forma (unaudited); and none pro forma		—			—			—			—
	Series B-1 Convertible Preferred Stock, $0.001 par value; 5,121,952 shares authorized, issued and outstanding at December 31, 2004, 2005 and September 30, 2006 (unaudited); no shares issued and outstanding, pro forma (unaudited); liquidation preference—$21,000 at December 31, 2004, 2005 and September 30, 2006 (unaudited) and none pro forma		10,386			10,373			10,373			—
Total convertible preferred stock			39,798			39,785			39,785			—
Commitments (See Note 3)
Stockholders' equity (deficit):
	Common stock, $0.001 par value; 36,103,049 shares authorized; 615,945, 871,589 and 2,412,142 shares issued and outstanding at December 31, 2004, 2005 and September 30, 2006 (unaudited) and 19,939,024 shares issued and outstanding pro forma (unaudited)		1			1			2			20
	Additional paid-in capital		43,227			43,280			45,388			86,622
	Deferred stock-based compensation		—			—			(1,184	)		(1,184	)
	Accumulated deficit		(66,460	)		(62,319	)		(55,991	)		(55,991	)
Total stockholders' equity (deficit)			(23,232	)		(19,038	)		(11,785	)	$	29,467
Total liabilities, convertible preferred stock and stockholders' equity (deficit)		$	23,436		$	34,971		$	45,189

The accompanying notes are an integral part of these consolidated financial statements.

F-3

Omneon Video Networks, Inc.
Consolidated statements of operations

			Year ended December 31,									Nine months ended September 30,
			2003			2004			2005			2005			2006
(in thousands, except per share data)												(unaudited)
Revenues:
	Product revenues		$	12,167		$	30,372		$	51,148		$	34,263		$	56,575
	Service revenues			267			1,056			2,964			2,065			3,696
Total revenues				12,434			31,428			54,112			36,328			60,271
Cost of revenues:
	Cost of product revenues(1)			6,408			11,672			18,818			13,065			20,266
	Cost of service revenues(1)			102			649			2,243			1,179			3,395
Total cost of revenues				6,510			12,321			21,061			14,244			23,661
Gross profit				5,924			19,107			33,051			22,084			36,610
Operating expenses:
	Research and development(1)			4,935			6,385			9,756			6,755			12,392
	Sales and marketing(1)			6,435			10,947			15,427			10,987			15,228
	General and administrative(1)			1,602			1,795			2,988			2,100			3,181
Total operating expenses				12,972			19,127			28,171			19,842			30,801
Income (loss) from operations				(7,048	)		(20	)		4,880			2,242			5,809
Interest and other income (expense), net:
	Interest income and other			41			94			282			178			470
	Foreign currency losses			(14	)		(47	)		(64	)		(32	)		(11	)
	Convertible preferred stock warrant revaluation expense			—			—			(157	)		(71	)		(739	)
Total interest and other income (expense), net				27			47			61			75			(280	)
Income (loss) before income taxes and cumulative effect of change in accounting principle				(7,021	)		27			4,941			2,317			5,529
Income tax benefit (provision)				—			—			(243	)		(353	)		799
Income (loss) before cumulative effect of change in accounting principle				(7,021	)		27			4,698			1,964			6,328
Cumulative effect of change in accounting principle				—			—			(557	)		(557	)		—
Net income (loss)				(7,021	)		27			4,141			1,407			6,328
Less: Income allocable to preferred stockholders				—			(27	)		(4,100	)		(1,407	)		(5,950	)
Net income allocable to common stockholders			$	(7,021	)	$	—		$	41		$	—		$	378
Net income (loss) per share allocable to common stockholders:
	Income (loss) per share before cumulative effect of change in accounting principle:
		Basic	$	(22.94	)	$	—		$	0.12		$	—		$	0.17
		Diluted		(22.94	)		—			0.02			—			0.08
	Cumulative effect per share of change in accounting principle:
		Basic	$	—		$	—		$	(0.05	)	$	—		$	—
		Diluted		—			—			(0.01	)		—			—
	Net income (loss) per share allocable to common stockholders:
		Basic	$	(22.94	)	$	—		$	0.07		$	—		$	0.17
		Diluted		(22.94	)		—			0.01			—			0.08
Shares used to compute basic net income (loss) per share				306			314			560			526			2,184
Shares used to compute diluted net income (loss) per share				306			2,740			3,826			3,653			4,678
Pro forma net income (loss) per share:
	Basic								$	0.27					$	0.36
	Diluted								$	0.23					$	0.32
Shares used to compute pro forma basic net income (loss) per share										18,086						19,711
Shares used to compute pro forma diluted net income (loss) per share										20,908						21,747

(1)

Includes stock-based compensation as follows (in thousands):

Total cost of revenues	$	—	$	—	$	—	$	—	$	119
Research and development		—		—		—		—		274
Sales and marketing		—		—		—		—		240
General and administrative		—		—		—		—		103
Total stock-based compensation	$	—	$	—	$	—	$	—	$	736

The accompanying notes are an integral part of these consolidated financial statements.

F-4

Omneon Video Networks, Inc.
Consolidated statements of convertible preferred
stock and stockholders' equity (deficit)

							Stockholders' Equity (Deficit)
		Convertible Preferred Stock					Common Stock
											Additional Paid-in Capital			Deferred Stock-Based Compensation						Total Stockholders' Equity (Deficit)
																	Accumulated Deficit
(in thousands)		Shares		Amount			Shares		Amount
Balance at December 21, 2002		14,255		$	29,334		310		$	1	$	43,195		$	—		$	(59,466	)	$	(16,270	)
	Reversal of issuance costs relating to Series A-1 Convertible Preferred Stock	—			78		—			—		—			—			—			—
	Issuance of common stock upon exercise of options	—			—		321			—		8			—			—			8
	Shares of unvested common stock subject to repurchase	—			—		(242	)		—		—			—			—			—
	Net loss	—			—		—			—		—			—			(7,021	)		(7,021	)
Balance at December 31, 2003		14,255			29,412		389			1		43,203			—			(66,487	)		(23,283	)
	Issuance of Series B-1 Convertible Preferred Stock, net of issuance costs of $114	5,122			10,386		—			—		—			—			—			—
	Exchange of Series A-2.1 Convertible Preferred Stock with new shares of Series A-2.1	(1,642	)		—		—			—		—			—			—			—
	Exchange of Series A-2.2 Convertible Preferred Stock with new shares of Series A-2.2	(688	)		—		—			—		—			—			—			—
	Issuance of common stock upon exercise of options	—			—		146			—		23			—			—			23
	Shares of unvested common stock subject to repurchase	—			—		(161	)		—		—			—			—			—
	Vesting of early-exercised stock options	—			—		242			—		—			—			—			—
	Stock-based compensation expense for stock options issued to non-employees	—			—		—			—		1			—			—			1
	Net income	—			—		—			—		—			—			27			27
Balance at December 31, 2004		17,047			39,798		616			1		43,227			—			(66,460	)		(23,232	)
	Issuance of common stock upon exercise of options	—			—		207			—		53			—			—			53
	Shares of unvested common stock subject to repurchase	—			—		(112	)		—		—			—			—			—
	Vesting of early-exercised stock options	—			—		161			—		—			—			—			—
	Reversal of issuance costs relating to Series B-1 Convertible Preferred Stock	—			2		—			—		—			—			—			—
	Reclassification of warrants to liabilities	—			(15	)	—			—		—			—			—			—
	Net income	—			—		—			—		—			—			4,141			4,141
Balance at December 31, 2005		17,047			39,785		872			1		43,280			—			(62,319	)		(19,038	)
	Issuance of common stock upon exercise of options	—			—		1,766			1		241			—			—			242
	Shares of unvested common stock subject to repurchase	—			—		(337	)		—		(71	)		—			—			(71	)
	Vesting of early-exercised stock options	—			—		111			—		18			—			—			18
	Employee stock-based compensation expense recognized under SFAS 123(R)	—			—		—			—		53			—			—			53
	Deferred stock-based compensation	—			—		—			—		1,867			(1,867	)		—			—
	Amortization of deferred stock-based compensation, net of forfeitures	—			—		—			—		—			683			—			683
	Net income	—			—		—			—		—			—			6,328			6,328
Balance at September 30, 2006 (unaudited)		17,047		$	39,785		2,412		$	2	$	45,388		$	(1,184	)	$	(55,991	)	$	(11,785	)

The accompanying notes are an integral part of these consolidated financial statements.

F-5

Omneon Video Networks, Inc.
Consolidated statements of cash flows

			Year ended December 31,									Nine months ended September 30,
			2003			2004			2005			2005			2006
(in thousands)												(unaudited)
Cash flows from operating activites
Net income (loss)			$	(7,021	)	$	27		$	4,141		$	1,407		$	6,328
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
	Depreciation and amortization			1,404			1,283			2,162			1,479			2,520
	Stock-based compensation expense			—			1			—			—			736
	Interest income from loan receivable from related party			6			3			(1	)		3			1
	Loss on disposal of fixed assets			108			—			1			1			—
	Forgiveness of loan receivable from related party			81			60			35			35			—
	Revaluation of convertible preferred stock warrants to fair value			—			—			714			628			739
	Changes in operating assets and liabilities:
		Accounts receivable		(429	)		(3,672	)		(3,452	)		(2,578	)		(5,113	)
		Inventory		(396	)		(2,105	)		(2,796	)		(1,644	)		(1,236	)
		Prepaid expenses and other current assets		85			(199	)		(178	)		30			8
		Deferred income taxes		—			—			—			—			(3,120	)
		Other assets		—			—			(217	)		(50	)		(73	)
		Accounts payable		(28	)		1,285			1,469			1,251			1,743
		Accrued liabilities		362			1,000			2,329			922			789
		Deferred revenues		(313	)		1,022			2,828			3,046			(358	)
Net cash provided by (used in) operating activities				(6,141	)		(1,295	)		7,035			4,530			2,964
Cash flows from investing activites
Purchase of property and equipment				(560	)		(1,147	)		(1,991	)		(1,262	)		(2,924	)
Decrease (increase) in restricted cash				(8	)		(1	)		151			143			(27	)
Net cash used in investing activites				(568	)		(1,148	)		(1,840	)		(1,119	)		(2,951	)
Cash flows from financing activites
Proceeds from exercises of common stock options				8			23			53			13			242
Proceeds from issuance of Series B-1 Convertible Preferred Stock, net of issuance costs				—			10,386			—			—			—
Net cash provided by financing activities				8			10,409			53			13			242
		Increase (decrease) in cash and cash equivalents		(6,701	)		7,966			5,248			3,424			255
Cash and cash equivalents, beginning of period				10,103			3,402			11,368			11,368			16,616
Cash and cash equivalents, end of period			$	3,402		$	11,368		$	16,616		$	14,792		$	16,871
Supplemental cash flow information
Income taxes paid			$	—		$	1		$	77		$	51		$	1,694
Noncash financing activities
Reduction of issuance costs related to Series B-1			$	—		$	—		$	2		$	—		$	—

The accompanying notes are an integral part of these consolidated financial statements.

F-6

Omneon Video Networks, Inc.

Notes to consolidated financial statements

1. The company and summary of its significant accounting policies

The Company

Omneon Video Networks, Inc. (the "Company") is a leading provider of digital content storage and processing systems used by media companies to enable efficient production and distribution of high-quality digital video and audio. The Company develops, markets and sells a range of video servers, active storage systems and related software applications that media companies use to simultaneously ingest, process, store, manage and deliver digital media content in a wide range of formats.

The Company was founded in May 1998. The Company sells its products indirectly through system integrators and directly to end user customers domestically, in Europe, in the Middle East and in Asia Pacific.

Basis of presentation and principles of consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries Omneon U.K. Ltd. that services the Company's products in Europe, Omneon Asia Pacific, Ltd., Omneon Video Networks K.K., and Omneon Singapore Pte. Limited, that service the Company's products in Asia Pacific. Intercompany accounts and transactions have been eliminated.

Unaudited interim financial statements

The accompanying consolidated balance sheet as of September 30, 2006, the consolidated statements of operations and of cash flows for the nine months ended September 30, 2005 and 2006, and the consolidated statements of convertible preferred stock and stockholders' equity (deficit) for the nine months ended September 30, 2006 are unaudited. The unaudited interim financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to state fairly the Company's financial position and results of operations and cash flows for the nine months ended September 30, 2005 and 2006. Effective January 1, 2006, the Company adopted Statement of Financial Accounting Standards ("SFAS") No. 123(R), Share-Based Payment ("SFAS No. 123(R)"), which supersedes its previous accounting under Accounting Principles Board ("APB") Opinion No. 25, Accounting for Stock Issued to Employees ("APB No. 25").

The results of operations for the nine months ended September 30, 2006 are not necessarily indicative of the results which may be reported for the year ending December 31, 2006.

Unaudited pro forma stockholders' equity information

The unaudited pro forma stockholders' equity information as of September 30, 2006 gives effect to the assumed conversion of all outstanding shares of the Company's convertible preferred stock into an aggregate of 17,047,446 shares (unaudited) of common stock based on

F-7

the shares of convertible preferred stock outstanding and the assumed conversion of the related convertible preferred stock underlying the warrants into an aggregate of 479,436 shares of common stock at September 30, 2006 upon the assumed completion of the Company's initial public offering. Unaudited pro forma stockholders' equity, as adjusted for the assumed conversion of the convertible preferred stock and the related convertible preferred stock underlying the warrants, is set forth on the face of the Company's consolidated balance sheet.

Foreign currency translation

The foreign subsidiaries' functional currency is the U.S. dollar. Gains and losses resulting from transactions denominated in foreign currencies are included within "Interest and other income (expense), net." Such amounts are not significant to any of the periods presented.

Use of estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and cash equivalents

The Company considers all highly liquid investments purchased with a maturity at the date of purchase of three months or less to be cash equivalents. Cash equivalents consist principally of treasury bills, certificates of deposit and money market funds that are stated at cost, which approximates fair value.

The Company is exposed to credit risk in the event of default by the financial institutions or the issuers of these instruments to the extent that amounts on deposit represent cash balances in excess of amounts that are insured by the Federal Deposit Insurance Corporation.

Restricted cash

The Company maintains a cash balance which totaled $40,000, $13,000 and $15,000 at September 30, 2006, December 31, 2005 and December 31, 2004, respectively, which is restricted from withdrawal as it relates to employee contributions for a flexible spending medical plan.

In addition, the Company maintained a cash balance totaling $149,000 at December 31, 2004 in the form of a certificate of deposit which was restricted from withdrawal. The certificate of deposit served as collateral for a letter of credit issued by the bank to the Company's lessor as

F-8

a security deposit on the Company's operating lease and was included in restricted cash, at December 31, 2004. On April 21, 2005, the lessor released the Company from the deposit obligation and the letter of credit was cancelled.

Fair value of financial instruments

The reported amounts of certain of the Company's financial instruments, which comprise cash and cash equivalents, accounts receivable and accounts payable approximate fair value due to their short maturities.

Certain risks and concentrations

Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents and accounts receivable. Cash and cash equivalents are deposited with financial institutions that management believes are creditworthy. Deposits with financial institutions may exceed the amount of insurance provided on such deposits. The Company has not experienced any losses on its deposits of its cash and cash equivalents.

The Company's accounts receivable are derived from customers primarily located in the United States of America, Europe and Asia Pacific and are denominated in U.S. dollars. The Company performs ongoing credit evaluations of its customers' financial condition, generally does not require collateral and establishes an allowance for doubtful accounts based upon the expected collectibility of accounts receivable.

Certain customers accounted for a significant percentage of the Company's total revenues as follows:

	Year ended December 31,					Nine months ended September 30,
	2003	2004		2005		2005		2006
						(unaudited)
Ascent Media Group	*	12	%	10	%	15	%	11	%
Netorium	*	15	%	*		*		*

*

Represents less than 10% of total revenues

Certain customers accounted for a significant percentage of the Company's total accounts receivable as follows:

	December 31,
					September 30, 2006
	2004		2005
					(unaudited)
Ascent Media Group	26	%	*		20	%
British Sky Broadcasting	*		17	%	*

*

Represents less than 10% of total accounts receivable

F-9

The Company receives certain of its critical components from sole suppliers. Additionally, the Company relies on two primary vendors to provide contract manufacturing and assembly services for its products. The inability of these contract manufacturers to fulfill supply requirements of the Company could materially impact future operating results.

Inventory

Inventory includes finished goods, purchased components and spares inventories and is carried at the lower of cost or market, with cost being determined on a first-in, first-out method. The Company records allowances to reduce the carrying value of inventories to their net realizable value when the Company believes that the net realizable value is less than cost. The Company also records allowances for excess and obsolete inventories based on forecasted demand.

Property and equipment

Property and equipment are stated at historical cost, less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets, generally two to five years. Leasehold improvements are amortized using the straight-line method over the shorter of the estimated useful life of the asset or the term of the lease. Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation is removed from the accounts and any resulting gain or loss is credited or charged to operations. Major additions and improvements are capitalized, while replacements, repairs and maintenance that do not extend the life of the asset are charged to operations.

Warranty accrual

The Company offers warranties on certain products and records a liability for the estimated future costs associated with warranty claims, which is based upon historical experience and the Company's estimate of the level of future costs. Warranty costs are reflected in the statement of operations as a cost of revenues and are recorded at the time that revenue is recognized. A reconciliation of the changes in the Company's warranty accrual follows:

	December 31,									September 30,
	2003			2004			2005			2005			2006
(in thousands)										(unaudited)
Warranty accrual, beginning of period	$	254		$	177		$	242		$	242		$	602
Accruals for warranties issued during the period		227			122			473			134			568
Expenses incurred during the period		(304	)		(57	)		(113	)		(83	)		(126	)
Warranty accrual, end of period	$	177		$	242		$	602		$	293		$	1,044

F-10

Revenue recognition

The Company derives the majority of its revenues from sales of servers and storage systems, with the remaining revenues generated primarily from service fees relating to the maintenance contracts on its products. The Company generally recognizes product revenues at the time of shipment, provided that persuasive evidence of an arrangement exists, title and risk of loss pass to the customer, the price is fixed or determinable and collection of the receivable is reasonably assured. In instances where the Company is required to obtain customer acceptance, revenues are deferred until the terms of acceptance are satisfied. Revenues from service obligations under maintenance contracts are deferred and recognized ratably over the contractual service period. Service maintenance contracts typically range from one to two years.

In connection with sales arrangements that involve multiple elements, such as hardware and maintenance contracts, the entire revenue is allocated to each respective element based on its relative fair value and recognized when the revenue recognition criteria for each element have been met. The Company uses the fair value method to recognize revenues when an arrangement includes one or more elements to be delivered at a future date and objective and reliable evidence of the fair value of all the undelivered elements exists. If objective and reliable evidence of fair value of one or more undelivered elements does not exist, revenue is deferred for all elements and recognized when delivery of those elements occurs or when fair value can be established.

For the sale of products that contain software that is more than incidental to the sale of the hardware, the Company recognizes revenues when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable and collection is reasonably assured. In instances where there are undelivered elements that did not have an established fair-value, revenue is deferred until fair-value is established or those elements have been delivered.

Shipping and handling

The Company classifies amounts billed to customers for shipping and handling as revenue. Costs incurred by the Company for shipping and handling have been classified as cost of revenue.

Advertising costs

The Company expenses advertising costs as incurred. The Company incurred $334,000, $194,000, $231,000, $174,000 and $106,000 of advertising expense during the nine months ended September 30, 2006 (unaudited) and 2005 (unaudited) and the years ended December 31, 2005, 2004 and 2003, respectively.

F-11

Income taxes

The Company accounts for income taxes using the asset and liability approach. The asset and liability approach requires the recognition of taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in the Company's financial statements or tax returns. The measurement of current and deferred tax liabilities and assets are based on provisions of the enacted tax law; the effects of future change in tax laws or rates are not anticipated. The measurement of deferred tax assets is reduced, if necessary, by the amount of any tax benefits that, based on available evidence, are not expected to be realized.

Research and development costs

Research and development costs are expensed as incurred. With respect to software that is embedded in the Company's servers and storage systems and the Company's related applications, software development costs incurred prior to the establishment of technological feasibility are included in research and development and are expensed as incurred. After technological feasibility is established, material software development costs are capitalized. The capitalized cost is then amortized on a straight-line basis over the estimated product life, or in the ratio of current revenues to total projected product revenues, whichever is greater. To date, the period between achieving technological feasibility, which the Company has defined as the establishment of a working model, which typically occurs when the beta testing commences, and the general availability of such software has been short and software development costs qualifying for capitalization have been insignificant. Accordingly, the Company has not capitalized any software development costs.

Net income (loss) per share data

Basic net income (loss) per share allocable to common stockholders is computed by dividing the net income (loss) allocable to common stockholders for the period by the weighted average number of common shares outstanding during the period as reduced by the weighted average unvested common shares subject to repurchase by the Company. Net income (loss) available to common stockholders is calculated using the two class method under EITF No. 03-6, Participating Securities and the Two-Class Method under FASB Statement 128 ("EITF Issue No. 03-6"), which established standards regarding the computation of earnings per share ("EPS") by companies that have issued securities other than common stock that contractually entitle the holder to participate in dividends and earnings of the company. EITF Issue No. 03-6 requires earnings for the period, after deduction of preferred stock dividends, to be allocated between the common and preferred stockholders based on their respective rights to receive dividends. Basic net income (loss) per share is then calculated by dividing income allocable to common stockholders (after the reduction for any undeclared, preferred stock dividends assuming current income for the period had been distributed) by the weighted-average number of common shares outstanding, net of shares subject to repurchase by the Company,

F-12

during the period. EITF Issue No. 03-6 does not require the presentation of basic and diluted net income (loss) per share for securities other than common stock; therefore, the following net income (loss) per share amounts only pertain to the Company's common stock. The Company calculates diluted net income (loss) per share under the if-converted method unless the conversion of the preferred stock is anti-dilutive to basic net income (loss) per share. To the extent preferred stock is anti-dilutive, the Company calculates diluted net income (loss) per share under the two-class method.

Diluted net income (loss) per share allocable to common stockholders is computed by dividing the net income (loss) allocable to common stockholders for the period by the weighted average number of common and potential common shares outstanding during the period, if the effect of each class of potential common shares is dilutive. Potential common shares include common stock subject to repurchase rights and incremental shares of common stock issuable upon the exercise of stock options and upon conversion of preferred stock.

The following table sets forth the computation of basic and diluted net income (loss) per share allocable to common stockholders:

			Year ended December 31,									Nine months ended September 30,
			2003			2004			2005			2005			2006
(in thousands, except per share data)												(unaudited)
Numerator:
	Net income (loss)		$	(7,021	)	$	27		$	4,141		$	1,407		$	6,328
	Accretion of preferred stock warrant liability, net of tax			—			—			714			628			739
	Income allocable to preferred stockholders			—			(27	)		(4,814	)		(2,035	)		(6,689	)
	Net income (loss) allocable to common stockholders		$	(7,021	)	$	—		$	41		$	—		$	378
Denominator:
	Weighted average common shares outstanding (basic)			306			314			560			526			2,184
	Effect of dilutive securities:
		Common equivalent shares from preferred stock warrants		—			407			444			440			458
		Common equivalent shares from options to purchase common stock		—			2,019			2,822			2,687			2,036
	Weighted average common shares outstanding (diluted)			306			2,740			3,826			3,653			4,678
	Basic net income (loss) per share allocable to common stockholders		$	(22.94	)	$	—		$	0.07		$	—		$	0.17
	Diluted net income (loss) per share allocable to common stockholders		$	(22.94	)	$	—		$	0.01		$	—		$	0.08

F-13

Potentially dilutive securities not included in the calculation of diluted net income (loss) per share, because to do so would be anti-dilutive, are as follows (in common equivalent shares):

	Year ended December 31,			Nine months ended September 30,
	2003	2004	2005	2005	2006
(in thousands)				(unaudited)
Convertible preferred stock	11,925	—	—	—	—
Common and preferred stock warrants	480	—	—	—	—
Options to purchase common stock	652	344	228	214	85
Total	13,057	344	228	214	85

Pro forma net income per share allocable to common stockholders (unaudited)

Pro forma basic net income per share allocable to common stockholders has been computed to give effect to the assumed conversion of convertible preferred stock and the related convertible preferred stock underlying the warrants at September 30, 2006 into common stock upon the closing of the Company's initial public offering on an if-converted basis for the year ended December 31, 2005 and the nine months ended September 30, 2006.

The following table sets forth the computation of pro forma basic net income per share allocable to common stockholders (unaudited):

(in thousands, except per share amounts)			Year ended December 31, 2005		Nine months ended September 30, 2006
Numerator:
	Net income		$	4,141	$	6,328
	Convertible preferred stock warrant accretion, net of tax			714		739
	Net income allocable to common stockholders			4,855		7,067
Denominator:
	Weighted average common shares outstanding (basic)			559		2,184
	Add: Adjustments to reflect the weighted average effect of the assumed conversion of convertible preferred stock from the date of issuance			17,527		17,527
		Denominator for basic pro forma calculation		18,086		19,711
	Pro forma net income per share allocable to common stockholders, basic (unaudited)		$	0.27	$	0.36

F-14

Stock-based compensation

For employee stock options granted prior to December 31, 2005, the Company recorded compensation expense based upon their intrinsic value on the date of grant pursuant to APB No. 25 and related interpretations, and has adopted the disclosure-only alternative of SFAS No. 123, Accounting for Stock-Based Compensation ("SFAS No. 123") and SFAS No. 148, Accounting for Stock Based Compensation-Transition and Disclosures.

The Company grants options to purchase common stock to employees with exercise prices equal to the value of the underlying stock, as determined by the board of directors on the date the equity award was granted. The board of directors determined the value of the underlying stock by considering a number of factors, including historical and projected financial results, the risks the Company faced at the time, the preferences of the Company's preferred stockholders and the lack of liquidity of the Company's common stock.

In connection with the preparation of the financial statements for the Company's initial public offering and solely for the purposes of accounting for stock-based compensation for financial statement purposes, the Company's management, with the assistance of an independent valuation firm, reassessed the fair value of the Company's common stock for the equity awards granted on or after April 14, 2004 (which coincided with the Company's Series B-1 convertible preferred stock financing) through February 2006, the last grant date prior to a contemporaneous valuation by an independent valuation firm. Based upon this reassessment of the fair value of the Company's common stock, the Company recorded deferred stock-based compensation to the extent that the reassessed value of the Company's common stock at the date of the grant exceeded the exercise price of the equity awards. Reassessed values are inherently uncertain and highly subjective. The Company recorded deferred stock-based compensation of $1.9 million during 2006. For stock options granted prior to April 14, 2004, no expense was recorded as management determined that the estimated fair value of the Company's stock at the date of grant did not exceed the exercise price. Amortization of deferred stock-based compensation is based on a vesting period of generally four years. For stock options granted from April 2004 through February 2006, the Company recognized stock-based compensation expense related to options granted to employees based on the reassessed values of the common stock underlying the stock option awards.

Of the deferred compensation of $1.9 million, the Company determined that $48,000 and $288,000 related to the years ended December 31, 2004 and 2005, respectively, and concluded that such amounts were immaterial to its results of operations in each of 2004 and 2005. The Company evaluated the effect of recording the cumulative adjustment of $336,000 for the 2004 and 2005 expense on the estimated net income for the year ending December 31, 2006 as an out of period adjustment and concluded the amount was also immaterial. Accordingly, the Company recorded $683,000 in the nine months ended September 30, 2006, which also included stock-based compensation of $116,000, $115,000 and $452,000 for the three months ended September 30, 2006, June 30, 2006 and March 31, 2006, respectively.

F-15

The expense associated with the amortization of deferred stock-based compensation related to options granted from April 14, 2004 to February 14, 2006 is classified in the Company's statements of operations as follows:

	Year ended December 31,						Nine months ended September 30,
	2003		2004		2005		2005		2006
(in thousands)							(unaudited)
Total cost of revenues	$	—	$	—	$	—	$	—	$	110
Research and development		—		—		—		—		249
Sales and marketing		—		—		—		—		221
General and administrative		—		—		—		—		103
Total	$	—	$	—	$	—	$	—	$	683

The table below shows the expected amortization of deferred stock-based compensation expense for the remainder of 2006 and for the following three years for all options granted from April 14, 2004 to February 14, 2006 assuming all employees remain employed by the Company for their remaining vesting periods:

(in thousands)	2006		2007		2008		2009		2010
Amortization of deferred stock-based compensation related to options granted to purchase shares of common stock	$	116	$	462	$	422	$	184	$	1

F-16

The table below summarizes options granted during the period from April 14, 2004 through February 14, 2006, which resulted in the Company recording deferred stock-based compensation of $1.9 million in 2006.

Date of issuance	Number of shares subject to options granted	Exercise price per share		Deemed fair market value per share		Intrinsic value per share
April 14, 2004	53,000	$	0.30	$	0.60	$	0.30
May 14, 2004	39,250		0.30		0.82		0.52
August 10, 2004	178,500		0.30		1.10		0.80
October 12, 2004	1,016,667		0.30		0.79		0.49
December 2, 2004	106,000		0.30		0.90		0.60
January 20, 2005	137,000		0.50		1.01		0.51
February 15, 2005	14,800		0.50		1.07		0.57
April 26, 2005	80,000		0.50		1.26		0.76
May 24, 2005	315,000		0.50		1.28		0.78
July 19, 2005	59,000		0.50		1.42		0.92
August 23, 2005	250,750		0.50		1.50		1.00
September 29, 2005	50,000		0.50		1.61		1.11
October 18, 2005	464,225		0.85		1.65		0.80
November 17, 2005	69,000		1.00		1.88		0.88
January 18, 2006	137,500		1.50		1.89		0.39
February 14, 2006	33,700		1.50		1.96		0.46

Adoption of SFAS 123(R)

In December 2004, the FASB issued SFAS 123(R), Share-Based Payment, which is a revision of SFAS 123. SFAS 123(R) requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their grant date fair values and does not allow the previously permitted pro forma disclosure-only method as an alternative to financial statement recognition. SFAS 123(R) supersedes APB No. 25, and related interpretations and amends SFAS No. 95, Statement of Cash Flows. Effective January 1, 2006, the Company adopted SFAS 123(R). For equity awards granted to employees or modified subsequent to January 1, 2006, the Company recognizes compensation expense based on the grant date fair value of these awards as determined in accordance with FAS 123(R). The unrecognized compensation cost related to those awards will be recognized in the statement of operations over the requisite service period. As the Company is preparing to transition from a non-public entity to a public entity through an initial public offering and has historically used the minimum value method to measure its share-based payments for pro-forma footnote disclosure purposes only, the Company will apply the prospective method to awards granted through December 31, 2005. Except for the deferred stock-based compensation discussed

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above, the Company had no unrecognized compensation cost related to awards granted prior to December 31, 2005. Pursuant to SFAS 123(R), as the Company utilized the minimum value method, the Company will continue to recognize compensation expense related to unvested awards with respect to stock option awards prior to January 1, 2006, using APB No. 25 which is the same accounting principle originally applied to those awards.

The Company's adoption of SFAS 123(R) in 2006 resulted in the recognition of additional stock-based compensation expense for grants after January 1, 2006 of $53,000 during the nine months ended September 30, 2006. Recording this stock-based compensation expense had no material impact on the Company's basic and diluted net income per share for the nine months ended September 30, 2006.

In connection with the adoption of SFAS 123(R), the Company reviewed and updated, among other things, its forfeiture rate, expected term and volatility assumptions. In determining the expected term of options, the Company gave consideration to historical exercises, the vesting term of the Company's options, the cancellation history of the Company's options and the options' contractual term of ten years. Estimated volatility for the nine months ended September 30, 2006 also reflects the application of SEC Staff Accounting Bulletin No. 107 ("SAB 107") interpretive guidance and, accordingly, incorporates historical volatility of similar entities whose share prices are publicly available. The fair value of each option is estimated on the date of grant using the Black-Scholes method using the following assumptions:

	Nine months ended September 30, 2006
	(unaudited)
Expected life (in years)	6.0
Interest rate range	4.29% - 5.10	%
Volatility	60	%
Dividend yield	—	%
Forfeiture rate	3.35	%

As of September 30, 2006, there was $372,000 of unrecognized compensation related to stock options granted after January 1, 2006, which is expected to be recognized over the remaining weighted-average service period of four years.

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The pro forma information regarding net income (loss) and net income (loss) per share detailed below has been accounted for as if the Company had accounted for stock-based awards granted prior to January 1, 2006 under the fair value method prescribed in SFAS No. 123. The fair value of the Company's options to purchase common stock was estimated at the date of grant using the minimum value pricing model for 2003, 2004 and 2005.

The fair value of stock-based awards was estimated using the following assumptions for 2003, 2004, and 2005:

Year ended December 31,	2003		2004		2005
Expected life (in years)	5.0		5.0		6.0
Interest rate range	2.20% - 6.75	%	3.13% - 3.92	%	3.90% - 4.54	%
Volatility	N/A		N/A		N/A
Dividend yield	—		—		—

The following table illustrates the effect on net income (loss) and net income (loss) per share allocable to common stockholders as if the Company had applied the fair value recognition provisions of SFAS No. 123 to stock-based awards for fiscal 2003, 2004, and 2005:

Year ended December 31, (in thousands, except per share data)		2003			2004			2005
Net income (loss)		$	(7,021	)	$	27		$	4,141
Deduct: Stock-based compensation expense under the fair value method, net of tax			(62	)		(50	)		(61	)
Pro forma net income (loss)		$	(7,083	)	$	(23	)	$	4,080
Net income (loss) allocable to common stockholders		$	(7,021	)	$	—		$	41
Pro forma net income (loss) allocable to common stockholders		$	(7,083	)	$	(23	)	$	—
Basic net income (loss) per share allocable to common stockholders
	As reported	$	(22.94	)	$	—		$	0.07
	Pro forma	$	(23.15	)	$	(0.07	)	$	—
Diluted net income (loss) per share allocable to common stockholders
	As reported	$	(22.94	)	$	—		$	0.01
	Pro forma	$	(23.15	)	$	(0.01	)	$	—

Comprehensive income (loss)

Comprehensive income (loss) generally represents all changes in stockholders' deficit except those resulting from investments or contributions by stockholders.

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Segment information

The Company engages in business activities in one operating segment, which provides servers, storage systems and related software applications for media companies. The Company's products and services are delivered primarily to customers in the U.S., Europe and Asia Pacific, with revenues denominated in U.S. dollars and primarily all long-lived assets are located in the U.S.

Impairment of long-lived assets

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparison of the carrying amount to the future net cash flows that the assets are expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the projected discounted future net cash flows arising from the asset. There have been no such impairments as of September 30, 2006.

Cumulative effect of change in accounting principle

On June 29, 2005, the FASB issued Staff Position No. 150-5, Issuer's Accounting under FASB Statement No. 150 for Freestanding Warrants and Other Similar Instruments on Shares That Are Redeemable ("FSP 150-5"). FSP 150-5 requires the Company to classify warrants to purchase shares of the Company's convertible preferred stock as liabilities since the convertible preferred stock is classified outside of stockholders' equity, and revalue them to fair value at the end of each reporting period. The Company adopted FSP 150-5 and accounted for the cumulative effect of the change in accounting principle as of July 1, 2005, the beginning of the third quarter of 2005. For the year ended December 31, 2005, the impact of the change in accounting principle was to decrease net income by $729,000. The impact consisted of a $572,000 cumulative effect adjustment for the change in accounting principle as of July 1, 2005, when the Company adopted FSP 150-5, reflecting the fair value of the warrants as of that date, and $157,000 of expense that was recorded in other income (expense), net to reflect the increase in fair value between July 1, 2005 and December 31, 2005.

These warrants will be subject to revaluation at each balance sheet date and any change in fair value will be recognized as a component of other income (expense), net, until the earlier of the exercise of the warrants or the completion of a liquidation event, including the automatic conversion of the convertible preferred stock and related warrants upon consummation of an initial public offering, at which time the warrants will be exercised on a net exercise basis and the warrant liability will be reclassified to common stock and additional paid-in capital in stockholders' equity.

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Convertible preferred stock warrant liability

The Company accounts for warrants issued in connection with financing arrangements in accordance with FSP 150-5. Pursuant to FSP 150-5, an evaluation of specifically identified conditions is made to determine whether the fair value of warrants issued is required be classified as a liability. The fair value of warrants classified as liabilities is adjusted for changes in fair value at each reporting period, and the corresponding non-cash gain or loss is recorded in current period earnings.

Recent accounting pronouncements

In June 2006, the FASB issued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes—an Interpretation of FASB Statement No. 109 ("FIN 48"). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements in accordance with FASB Statement No. 109, Accounting for Income Taxes, and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company is required to adopt the provisions of FIN 48 beginning in 2007. The Company is currently in the process of assessing what impact FIN 48 may have on its consolidated financial position, results of operations or cash flows.

In September 2006, the Securities and Exchange Commission ("SEC") issued Staff Accounting Bulletin ("SAB") No. 108 regarding the process of quantifying financial statement misstatements. SAB No. 108 states that registrants should use both a balance sheet approach and an income statement approach when quantifying and evaluating materiality of a misstatement. The interpretations in SAB No. 108 contain guidance on correcting errors under the dual approach as well as provide transition guidance for correcting errors. This interpretation does not change the requirements within SFAS No. 154 for the correction of an error in financial statements. SAB No. 108 is effective for annual financial statements covering the first fiscal year ending after November 15, 2006. The Company will be required to adopt this interpretation in 2006.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements ("SFAS No. 157"). This Statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. This Statement applies under other accounting pronouncements that require or permit fair value measurements, the Board having previously concluded in those accounting pronouncements that fair value is the relevant measurement attribute. Accordingly, this Statement does not require any new fair value measurements. This Statement is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The Company does not expect the adoption of SFAS No. 157 in 2008 to have a material impact on its results of operations or financial position.

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2. Balance sheet components

	December 31,
							September 30, 2006
	2004			2005
(in thousands)							(unaudited)
Accounts receivable
Accounts receivable, gross	$	7,028		$	10,621		$	15,749
Allowance for doubtful accounts		(115	)		(256	)		(271	)
Accounts, receivable, net	$	6,913		$	10,365		$	15,478

(in thousands)	Balance at beginning of period		Charged to expenses		Write-offs			Balance at end of period
Allowance for doubtful accounts
Year ended December 31, 2004	$	327	$	60	$	(272	)	$	115
Year ended December 31, 2005		115		141		—			256
Nine months ended September 30, 2006 (unaudited)		256		15		—			271

	December 31,
					September 30, 2006
	2004		2005
(in thousands)					(unaudited)
Inventory
Finished goods	$	1,445	$	2,336	$	1,814
Purchased components		—		—		185
Spares inventory		504		723		769
Inventory, net	$	1,949	$	3,059	$	2,768

F-22

		December 31,
	Estimated useful life							September 30, 2006
		2004			2005
(in thousands)	(years)							(unaudited)
Property and equipment
Computer equipment	2	$	2,376		$	3,847		$	5,629
Software	2		639			977			1,136
Engineering and development equipment	3		3,483			4,260			5,757
Demonstration units	2		1,122			1,589			1,590
Furniture and office equipment	5		457			536			884
Leasehold improvements	6		165			195			362
Construction in progress	—		—			83			339
Property and equipment, gross			8,242			11,487			15,697
Less: Accumulated depreciation and amortization			(5,793	)		(7,525	)		(9,803	)
Property and equipment, net		$	2,449		$	3,962		$	5,894

Depreciation and amortization expense was $2.3 million, $1.2 million, $1.8 million, $1.0 million and $599,000 for the nine months ended September 30, 2006 and 2005 and the years ended December 31, 2005, 2004 and 2003, respectively.

	December 31,
					September 30, 2006
	2004		2005
(in thousands)					(unaudited)
Accrued liabilities
Accrued compensation and employee benefits	$	968	$	1,657	$	1,714
Accrued commissions		708		1,171		996
Warranty accrual		242		602		1,044
Accrued taxes payable		42		197		818
Other		170		831		692
Accrued liabilities	$	2,130	$	4,458	$	5,264

3. Commitments

Operating lease obligations

The Company leases office space under noncancelable operating leases that expire at various dates through November 2010. Some of these arrangements require the Company to pay taxes, insurance and maintenance costs. Rent expense was $493,000, $416,000, $456,000, $392,000 and $341,000 for the nine months ended September 30, 2006 and 2005 and the years ended

F-23

December 31, 2005, 2004 and 2003, respectively. As of December 31, 2005, the future minimum rental payments under all noncancelable operating leases were as follows:

Year ending December 31, (in thousands)	Operating lease
2006	$	588
2007		573
2008		354
2009		269
2010		106
Commitments	$	1,890

Indemnification agreements

Generally, the Company's contracts contain standard indemnification provisions. Pursuant to these agreements, the Company agrees to indemnify, hold harmless, and reimburse the indemnified party for losses suffered or incurred by the indemnified party, in connection with any patent, or any copyright or other intellectual property infringement or certain other claims by any third party with respect to its products. The term of these indemnification agreements is specified by the respective agreements. The maximum potential amount of future payments it could be required to make under these indemnification agreements is generally capped and the Company has never incurred claims or costs to defend lawsuits or settle claims related to these indemnification agreements and accordingly has made no provision for liability under these agreements.

Legal matters

From time to time, we may be subject to claims and proceedings that arise in the ordinary course of our business. While management currently believes that resolving all of these matters, individually or in the aggregate, will not have a material adverse effect on our consolidated financial position, results of operations, or cash flows, management's view of these matters may change in the future due to inherent uncertainties.

Inventory commitments

The Company has outstanding purchase commitments with contract manufacturers and suppliers of $3.5 million as of December 31, 2005.

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4. Income taxes

 The provision for income taxes comprised the following:

	Year ended December 31,
(in thousands)	2003		2004		2005
Foreign
Current	$	—	$	—	$	100
Federal
Current		—		—		123
State
Current		—		—		20
Provision for income taxes	$	—	$	—	$	243

The Company's effective tax rate on pretax income differs from the U.S. Federal statutory regular tax rate as follows:

	Year ended December 31,
	2003		2004		2005
U.S. Federal income tax benefit as statutory rate	0.00	%	34.00	%	34.00	%
State benefit	0.00	%	5.83	%	3.25	%
Foreign earnings taxed at rates different than U.S. rate	0.00	%	610.27	%	(0.62	)%
Permanent differences	0.00	%	161.00	%	0.85	%
Change in valuation allowance	0.00	%	(811.10	)%	(32.71	)%
Effective tax rate	0.00	%	0.00	%	4.77	%

Deferred tax assets (liabilities) comprised the following:

	December 31,
(in thousands)	2003			2004			2005
Deferred tax assets (liabilities)
Net operating loss carryforwards	$	23,377		$	24,289		$	754
Research and development credit carryforwards		2,088			2,631			1,399
Capitalized research and development		—			764			364
Deferred revenues		143			—			—
Depreciation and amortization		53			(200	)		(182	)
Reserves, accrued liabilities and other		601			414			858
Gross deferred tax assets		26,262			27,898			3,193
Less: Valuation allowance		(26,262	)		(27,898	)		(3,193	)
Net deferred tax assets	$	—		$	—		$	—

F-25

Management believes that, based on a number of factors, the deferred tax assets would not be utilized, such that a full valuation allowance was recorded at December 31, 2004 and 2005.

As of December 31, 2005, the Company had federal and state net operating loss carryforwards of approximately $1.9 million and $1.8 million, respectively, to offset future taxable income. These carryforwards will expire in varying amounts between 2007 and 2024. The Company also had federal and state research credit carryforwards of approximately $844,000 and $623,000, respectively, to offset future taxable income. These federal credit carryforwards will expire commencing 2023. Under the Internal Revenue Code, the amounts of and benefits from net operating loss and credit carryforwards are limited in where there is a cumulative ownership change of more than 50%, as defined, over a three year period. The amounts of net operating loss and credit carryforwards presented above reflect such limitations.

5. Convertible Preferred Stock

 In March and April 2004, the Company sold 5,121,952 shares of Series B-1 Preferred Stock at a price of $2.05 per share receiving net proceeds of $10.4 million.

In March and April 2004, the Company modified its 2,154,566 shares of Series A-2.1 and 687,742 shares of Series A-2.2 Preferred Stock to newly issued 512,901 shares of Series A-2.1 and one share of Series A-2.2 to create a one to one conversion rate to Common Stock. The modification did not have any impact on the order of liquidation preference or the absolute dollar value of liquidation preference.

The Company's Certificate of Incorporation, as amended, designates and authorizes the Company to issue 17,526,882 shares of Convertible Preferred Stock ("Preferred Stock").

The holders of Preferred Stock have various rights and preferences as follows:

Voting

Each share of Series A-1, Series A-2.1, Series A-2.2, Series A-3, Series A-4, Series A-5, Series A-6 and Series B-1 Preferred Stock (Series A-1, Series A-2.1, Series A-2.2, Series A-3, Series A-4, Series A-5, Series A-6, and Series B-1, respectively) has voting rights equal to an equivalent number of shares of Common Stock into which it is convertible and votes together as one class with the Common Stock, except as indicated below.

The holders of outstanding Preferred Stock have the right to elect members of the Company's Board of Directors on the following basis:

•

the outstanding Series B-1 Preferred Stock elect one director so long as at least 1,300,000 shares of Series B-1 Preferred Stock remain outstanding;

•

the outstanding Series A-1 Preferred Stock elect three directors so long as at least 2,850,000 shares of Series A-1 Preferred Stock remain outstanding;

F-26

•

the outstanding Common Stock elect one director; and

•

the outstanding Common Stock and Preferred Stock together elect the remaining directors.

Voting for members of the Company's Board of Directors is cumulative. In an election of directors, each stockholder is entitled to vote a number of shares equal to the product of (i) the total number of shares of Common Stock held by such stockholder, including Common Stock issuable upon conversion of Preferred Stock held by such stockholder, and (ii) the number of directors that such stockholder is entitled to elect, and may vote all of those shares for a single director or distribute them among the candidates.

As long as any shares of Preferred Stock remain outstanding, the Company must obtain approval from a majority of all shares of Preferred Stock then outstanding in order to authorize, create or issue any other class of capital stock or securities convertible into capital stock having any preferences or privileges which are superior to or on parity with the Series B-1 Preferred Stock; reclassify any Common Stock into shares having any preference or priority superior to or on a parity with the Series B-1 Preferred Stock; pay or declare any dividend on or redeem any shares of Common Stock or Series A-2.1, Series A-2.2, Series A-3, Series A-4, Series A-5 or Series A-6 Preferred Stock (other than in connection with the repurchase of shares of Common Stock issued to or held by employees, consultants, officers and directors at a price not greater than the amount paid by such persons for such shares upon termination of their employment or services pursuant to agreements providing for the right of said repurchase, provided such repurchase is approved by the Board of Directors) or repay any loans made by any holder of the outstanding shares of Preferred Stock or Common Stock except in connection with the termination of employment of such holder in amounts to be agreed upon by the Company and such terminated holder; amend the Certificate of Incorporation or the Bylaws of the Company; enter into any Liquidation Event, defined as certain mergers, consolidations and sales of all or substantially all of the assets; or enter into any licensing of the Company's technology that would constitute a sale of all or substantially all of the assets of the Company. The Company must obtain approval from a majority of holders of Series A-1 and Series B-1 Preferred Stock voting together as a single class and not as a separate series, on as an converted to Common Stock basis in order to amend the Certificate of Incorporation or Bylaws of the Company, or increase the size of the Company's Board of Directors above eight, or below five.

Dividends

The holders of Series B-1, Series A-1, Series A-2.2 and Series A-6 Preferred Stock, out of any funds legally available, are entitled to receive non-cumulative dividends at the rate of $0.205, $0.11, $75,652 and $0.11, respectively, per share per annum, as adjusted for stock splits, combinations and reorganizations, payable in preference and priority to any payment of any dividend on the other series of Preferred Stock or Common Stock, when and as declared by the Board of Directors. The Series A-2.1 Preferred Stockholders are entitled to receive dividends at

F-27

the rate of $0.462082 per share per annum, prior and in preference to the payment of any dividends on Series A-3, Series A-4 and Series A-5 Preferred Stock and Common Stock when and as declared by the Board of Directors, subject to the prior and preferential dividend rights of the holders of Series B-1, Series A-1, Series A-2.2 and Series A-6 Preferred Stock. Series A-3, Series A-4 and Series A-5 Preferred Stockholders are entitled to receive dividends at the rate of $34.00, $22.00 and $10.00, respectively, per share prior and in preference to the payment of dividends on the Common Stock when and as declared by the Board of Directors, subject to the prior and preferential dividend rights of the holders of Series B-1, Series A-1, Series A-2.1, Series A-2.2, and Series A-6 Preferred Stock. After payment of any dividends on Preferred Stock, any additional dividends shall be distributed among all holders of outstanding shares of Common Stock and all holders of outstanding shares of Preferred Stock in proportion to the number of shares of Common Stock which would be held by each such holder if all shares of each series of Preferred Stock had been converted into Common Stock, when and as declared by the Board of Directors. No dividends on Preferred Stock or Common Stock have been declared to date.

Liquidation

Upon liquidation, dissolution or winding up of the Company, including (1) a merger or acquisition of the Company in which the stockholders of the Company immediately prior to such event own less than 50% of the Company's voting power immediately after such event, (2) the closing of a transfer by stockholders of the Company to a person or group of affiliated persons, which results in the transfer of 50% or more of the outstanding voting power of the Company, or (3) the sale of all or substantially all of the assets of the Company, the holders of Series B-1, Series A-1, Series A-2.2 and Series A-6 Preferred Stock are entitled to receive an amount per share equal to $4.10, $2.20, $1,513,032 and $1.10, respectively, as adjusted for stock splits, combinations and reorganizations, plus any declared but unpaid dividends prior and in preference to all other holders of Preferred Stock or Common Stock. If the assets and funds distributed among the holders of Series B-1, Series A-1, Series A-2.2 and Series A-6 Preferred Stock are insufficient to permit the payment to such holders of the full preferential amounts, then, the entire assets and funds of the Company shall be distributed ratably among the holders of the Series B-1, Series A-1, Series A-2.2 and Series A-6 Preferred Stock in proportion to the full preferential amount each such holder is otherwise entitled to receive.

After payment of the Series B-1, Series A-1, Series A-2.2 and Series A-6 preferential amounts, the holders of Series A-2.1 Preferred Stock are entitled to receive an amount per share equal to $4.62, as adjusted for stock splits, combinations and reorganizations, plus any declared but unpaid dividends prior to and in preference to holders of Series A-3, Series A-4, Series A-5 Preferred Stock or Common Stock. If the assets and funds distributed among the holders of Series A-2.1 Preferred Stock are insufficient to permit the payment to such holders of the full preferential amounts, then the entire remaining assets and funds of the Company shall be

F-28

distributed ratably among the holders of the Series A-2.1 Preferred Stock in proportion to the full preferential amount each such holder is otherwise entitled to receive.

After payment of the Series B-1, Series A-1, Series A-2.1, Series A-2.2 and Series A-6 preferential amounts, the holders of Series A-3, Series A-4, and Series A-5 Preferred Stock are entitled to receive an amount per share equal to $340.00, $220.00 and $100.00, respectively, as adjusted for stock splits, combinations and reorganizations, plus any declared but unpaid dividends prior and in preference to any distribution to the holders of Common Stock. Should the Company's legally available assets be insufficient to satisfy the liquidation preferences, then the entire remaining assets and funds will be distributed ratably among the holders of Series A-3, Series A-4 and Series A-5 Preferred Stock in proportion to the full preferential amount each such holder is otherwise entitled to receive. The remaining assets and funds of the Company, if any, shall be distributed among the holders of Common Stock.

The following table shows the respective liquidation preferences per share of the Company's Preferred Stock:

		Shares
				Liquidation Preference
Series	Date of issuance	Authorized	Outstanding
A-1	December 2002	11,363,661	11,363,661	$	25,000,054
A-2.1	December 2002	512,901	512,901		2,370,023
A-2.2	December 2002	1	1		1,513,032
A-3	December 2002	27,557	27,557		9,369,380
A-4	December 2002	21,275	21,275		4,680,500
A-5	December 2002	99	99		9,900
A-6	December 2002	479,436	—		—
B-1	March 2004	5,121,952	5,121,952		21,000,003
Total		17,526,882	17,047,446	$	63,942,892

Redemption

The Series A-1, Series A-2.1, Series A-2.2, Series A-3, Series A-4, Series A-5, Series A-6 and Series B-1 Preferred Stock are not redeemable, but do require the payment of liquidation preferences upon a Change in Control as noted above.

Conversion

Each share of Preferred Stock is convertible at the option of the holder into shares of Common Stock as is determined by dividing the original purchase price by the conversion price in effect at the time of conversion for such series.

Each share of Preferred Stock will automatically be converted into shares of Common Stock at the then effective conversion rate of such shares (i) in the event of the closing of a firm

F-29

commitment underwritten public offering to offer and sell the Common Stock of the Company to the public at a price per share of at least $4.10 and an aggregate offering price to the public of not less than $25.0 million or (ii) upon the election of the holders of a majority of the outstanding shares of Preferred Stock voting together as a single class on an as-converted to Common Stock basis; provided, however, if the election is conditioned upon or follows consummation of a Liquidation Event where the holders of Series A-2.2 Preferred Stock would receive distributions or consideration valued at $1.5 million absent conversion of Series A-2.2 Preferred Stock into Common Stock, the holders of a majority of Series A-2.2 must agree to the conversion of the Series A-2.2 and holders of all other series of Preferred Stock would vote together excluding the Series A-2.2 Preferred Stock.

Anti-dilution protection

Series B-1 Preferred Stock has anti-dilution protection. If the anti-dilution protection for the Series B-1 Preferred Stock is triggered, then each share of Series B-1 Preferred Stock will be convertible into more than one share of Common Stock. The formula is based on the number of shares of the Company outstanding (on a fully-diluted basis) before the issuance, the number of new shares being issued, and the price being paid for the new shares.

Warrants

In December 2003, the Company granted a warrant to purchase 22,728 shares of its Series A-6 Preferred Stock to the Company's former law firm in payment for services rendered. These warrants have a five-year life and an exercise price of $0.10 per share. The fair value of the warrants was determined to be $1,288 and was estimated using the Black-Scholes pricing model with the following assumptions: risk free interest rate of 3%; contractual life of 5 years; dividend yield of 0%; and expected volatility of 65%. The Company expensed the value of the warrants to operating expenses during the year ending December 31, 2002.

In October 2002, the Company restructured its lease with its landlord and issued warrants to purchase 129,412 shares of its Series A-6 preferred stock to the Company's landlord in connection with that restructuring. These warrants have a five-year life and an exercise price of $0.10 per share. The fair value of the warrants was determined to be $7,351 using the Black-Scholes pricing model with the following assumptions: risk free interest rate of 3%, contractual life of 5 years, dividend yield of 0% and expected volatility of 65%. The amount was recorded in operating expenses during the year ending December 31, 2002.

In anticipation of the Series A-1 Preferred Stock financing, the Company entered into a bridge financing arrangement in September 2002, and pursuant to this arrangement, issued warrants to purchase 327,296 shares of Series A-6 Preferred Stock at an exercise price of $1.10 per share. The fair value of the warrants was determined to be immaterial and was estimated using the Black-Scholes pricing model with the following assumptions: risk free interest rate of 3%; contractual life of 7 years; dividend yield of 0%; and expected volatility of 65%. The Company

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expensed the value of the warrants to interest expense during the year ended December 31, 2002.

All Preferred Stock warrants remain unexercised at September 30, 2006.

The values ascribed to the warrants follow the guidance of FSP 150-5. The Company evaluated the impact of the Series A-6 Preferred Stock Agreement on the preferred stock and the warrants to purchase Preferred Stock and determined their effect based on FSP 150-5. In accordance with FSP 150-5, a transaction which includes a potential for net-cash settlement requires that derivative financial instruments, including warrants, initially be recorded at fair value as an asset or liability and subsequent changes in fair value be reflected in the statement of operations. As such, the fair values of the warrants were accounted for as liabilities, and subsequent changes in their fair value are reflected in the Company's Consolidated Statement of Operations.

6. Common stock

 The Company's Restated Certificate of Incorporation designates and authorizes the Company to issue 36,103,049 shares of common stock with a par value of $0.001 per share.

Common stock option holders have the right to exercise unvested options, subject to a repurchase right held by the Company at the original exercise price, in the event of voluntary or involuntary termination of employment of the stockholder. As of September 30, 2006 and December 31, 2005, 337,217 and 111,801 shares of common stock were subject to repurchase, respectively. The cash paid to the Company in respect of these early exercises of unvested options is included as employee deposits within accrued liabilities, in accordance with EITF 00-23 Issues Relating to the Accounting for Stock Compensation under APB Opinion No. 25 and FASB Interpretation No. 44.

At September 30, 2006, the Company had reserved shares of common stock for future issuance as follows:

Convertible preferred stock	17,047,446
Warrants	479,505
Stock option plans—outstanding(1)	3,626,259
Options available for grant	158,313
Total	21,311,523

(1)

Includes 337,217 shares subject to repurchase at September 30, 2006 related to early exercise of stock options.

Common stock warrants

In 2000, the Company granted warrants to purchase 69 shares of its common stock at an exercise price of $35.00 per share to a financial institution in conjunction with the increase in the maximum borrowing on its line of credit facility. The fair value of the warrants was

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determined to be immaterial and was estimated using the Black-Scholes pricing model with the following assumptions: risk free interest rate of 3%; contractual life of 5 years; dividend yield of 0%; and expected volatility of 65%. The warrants are fully exercisable, and expire if unexercised on January 19, 2007. These warrants remain unexercised at September 30, 2006.

7. Stock plans

 The Company adopted the 1998 Stock Option Plan (the "Plan") under which employees, directors and consultants may be granted Incentive Stock Options ("ISOs") or Nonstatutory Stock Options ("NSO") to purchase shares of the Company's common stock. Stock purchase rights may also be granted under the Plan. The options generally vest 25% upon completion of one year of employment, with a minimum vesting period of four years. The term for new grants is ten years.

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A summary of all option activity under the Plan was as follows:

			Options outstanding
	Shares available for grant		Shares		Weighted average price per share		Weighted average remaining contractual term	Aggregate intrinsic value (in thousands)
Balances at December 31, 2002	505,803		1,685,057		$	0.80
Additional shares authorized	800,000		—			—
Granted	(1,280,965	)	1,280,965		$	0.10
Exercised	—		(78,949	)	$	0.10
Cancelled	183,858		(183,858	)	$	1.61
Balances at December 31, 2003	208,696		2,703,215		$	0.53
Additional shares authorized	1,445,750		—			—
Granted	(1,604,250	)	1,604,250		$	0.28
Exercised	—		(226,892	)	$	0.10
Cancelled	154,727		(154,727	)	$	2.34
Balances at December 31, 2004	204,923		3,925,846		$	0.36
Additional shares authorized	1,450,000		—			—
Granted	(1,439,775	)	1,439,775		$	0.64
Exercised	—		(255,644	)	$	0.21
Cancelled	188,171		(188,171	)	$	1.23
Balances at December 31, 2005	403,319		4,921,806		$	0.42
Granted	(343,250	)	343,250		$	1.93
Exercised	—		(1,877,770	)	$	0.12
Cancelled	98,244		(98,244	)	$	1.19
Balances at September 30, 2006 (unaudited)	158,313		3,289,042		$	0.71	8.1	$	6,379

The options outstanding as of September 30, 2006 and December 31, 2005 exclude 337,217 and 111,801 options shares, respectively, related to exercised unvested options, whose common stock is subject to repurchase upon exercise.

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As of September 30, 2006 and December 31, 2005, options to purchase 3.2 million and 4.7 million shares, respectively, were vested. The following table summarizes information about stock options outstanding and exercisable at September 30, 2006:

	Options outstanding				Options exercisable
Exercise price	Number outstanding	Weighted average remaining contractual life (in years)	Weighted average exercise price (per share)		Number exercisable	Weighted average exercise price (per share)
$  0.10 - $  0.15	694,172	6.36	$	0.11	656,465	$	0.11
$  0.30	945,147	7.99	$	0.30	470,864	$	0.30
$  0.50	828,300	8.71	$	0.50	271,600	$	0.50
$  0.85	437,225	9.05	$	0.85	19,375	$	0.85
$  1.00 - $  1.50	213,200	9.27	$	1.39	—	$	—
$  2.27 - $  2.50	162,550	9.67	$	2.36	—	$	—
$35.00 - $60.00	8,448	4.83	$	58.89	8,448	$	58.89
Total	3,289,042	8.13	$	0.71	1,426,752	$	0.60

The aggregate intrinsic value in the table above represents the total pretax intrinsic value (the aggregate difference between the fair value of the Company's common stock on September 30, 2006 of $2.50 and the exercise price of in-the-money options) that would have been received by the option holders had all option holders exercised their options as of that date. The total number of shares of common stock underlying in-the-money options exercisable as of September 30, 2006 was 1.4 million with an aggregate intrinsic value of $3.2 million.

The total intrinsic value of options exercised during the nine months ended September 30, 2006 was $4.2 million. Total cash received from employees as a result of employee stock option exercises during the nine months ended September 30, 2006 was $242,000.

As of September 30, 2006, there was $372,000, net of forfeitures, of unrecognized compensation cost related to unvested stock options which is expected to be recognized over a weighted average period of 1.6 years. The Company's current practice is to issue new shares to settle share option exercises.

At September 30, 2006 and December 31, 2005, 3.5 million and 2.7 million of the outstanding options have vested, respectively. The weighted-average estimated per share fair value of options granted during the nine months ended September 30, 2006 and the year ended December 31, 2005 were $1.93 and $0.64, respectively.

8. Employee benefit plans

 The Company sponsors a 401(k) defined contribution plan covering all eligible employees. Contributions made by the Company are discretionary and determined annually by the Board of Directors. There have been no employer contributions under this plan.

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9. Segment information

 The Company's operations are located primarily in the United States, and substantially all of its assets are located in Sunnyvale, California. The Company operates in one segment. The Company's chief operating decision-maker reviews its operating results on an aggregate basis and manages its operations as a single operating segment. Revenues are derived from different geographies in the following manner:

	Year ended December 31,						Nine months ended September 30,
	2003		2004		2005		2005		2006
(in thousands)							(unaudited)
Domestic	$	6,219	$	12,114	$	20,943	$	14,502	$	22,279
International		6,215		19,314		33,169		21,826		37,992
Total	$	12,434	$	31,428	$	54,112	$	36,328	$	60,271

The Company has offices in six countries, and its products have been distributed to customers in over 45 countries. The Company has historically generated a substantial amount of its revenues from international sales, which have grown to represent an increasingly larger percentage of the Company's total revenues. For the nine months ended September 30, 2006 and for 2005, 2004 and 2003, the Company's revenues outside the United States of America comprised 74%, 61%, 50% and 61%, respectively, of its total revenues.

10. Related party transaction

 On September 24, 1998, the Company entered into a loan agreement with an officer and member of the Board of Directors of the Company (the "Officer") that allowed for the borrowings by the Officer. The loan agreement was amended on April 1, 2003 and lowered the maximum available principal amount from $480,000 to the amount already paid out, $180,000. The full recourse loan was secured by the Officer's Common Stock held in the Company and was forgiven over time charging expense for $35,000, $60,000 and $85,000 in 2005, 2004 and 2003, respectively. As of October 31, 2005, the loan was fully forgiven. Interest was set annually and compounded quarterly at a rate equal to the Prime Rate as published in the Wall Street Journal on the 2^nd of January, which was 4% during 2005. Interest receivable of $1,000 is included in other receivable at December 31, 2005, and was repaid to the Company by the Officer in March 2006.

From September 2005 through September 2006, the Company recorded approximately $7.7 million in revenues from sales of its products to Ascent Media Group. Since September 2005, the spouse of the Company's chief technology officer, has served as the chief operating officer of Ascent Media Network Services, a subsidiary of Ascent Media Group. Sales to Ascent Media Group totaled $6.9 million in the nine months ended September 30, 2006 and $749,000 during the four months ended December 31, 2005. Accounts receivable from Ascent Media Group included $214,000 and $3.7 million at December 31, 2005 and September 30, 2006, respectively.

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PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other expenses of issuance and distribution.

The following table sets forth the costs and expenses to be paid by the Registrant in connection with the sale of the shares of common stock being registered hereby. All amounts are estimates except for the SEC registration fee, the NASD filing fee and The NASDAQ Global Market filing fee.

	Amount paid or to be paid
SEC registration fee	$12,305
NASD filing fee	12,000
NASDAQ Global Market initial filing fee	5,000
Printing and engraving	*
Legal fees and expenses	*
Accounting fees and expenses	*
Directors and officers liability insurance	*
Blue sky fees and expenses	*
Transfer agent and registrar fees and expenses	*
Miscellaneous	*
Total	$          *

*

To be filed by amendment.

Item 14. Indemnification of directors and officers.

We are incorporated under the laws of the State of Delaware. Section 145 of the Delaware General Corporation Law authorizes a court to award, or a corporation's board of directors to grant, indemnity to directors and officers under certain circumstances and subject to certain limitations. The terms of Section 145 of the Delaware General Corporation Law are sufficiently broad to permit indemnification under certain circumstances for liabilities, including reimbursement of expenses incurred, arising under the Securities Act of 1933.

As permitted by the Delaware General Corporation Law, the Registrant's certificate of incorporation includes a provision that eliminates, to the fullest extent permitted by law, the personal liability of a director for monetary damages resulting from breach of his fiduciary duty as a director.

As permitted by the Delaware General Corporation Law, the Registrant's bylaws provide that:

•

the Registrant is required to indemnify its directors and officers to the fullest extent permitted by the Delaware General Corporation Law, subject to certain very limited exceptions;

•

the Registrant may indemnify its other employees and agents as provided in indemnification contracts entered into between the Registrant and its our employees and agents;

II-1

•

the Registrant is required to advance expenses, as incurred, to its directors and officers in connection with a legal proceeding to the fullest extent permitted by the Delaware General Corporation Law, subject to certain very limited exceptions; and

•

the rights conferred in the bylaws are not exclusive.

In addition, the Registrant will enter into indemnity agreements with each of its current directors and officers prior to the completion of this offering. These agreements will provide for the indemnification of directors and officers for all reasonable expenses and liabilities incurred in connection with any action or proceeding brought against them by reason of the fact that they are or were agents of the Registrant.

The Registrant currently carries liability insurance for its directors and officers.

The Underwriting Agreement filed as Exhibit 1.01 to this Registration Statement provides for indemnification by the underwriters of the Registrant and its directors and officers for certain liabilities under the Securities Act of 1933, or otherwise.

Item 15. Recent sales of unregistered securities.

Since January 2003, the Registrant has issued and sold the following securities:

1.

Since January 1, 2003 to December 15, 2006, the Registrant has issued options to employees, consultants and directors to purchase an aggregate of 4,965,060 shares of the Registrant's common stock under its 1998 stock option plan at a weighted average exercise price of $0.97 per share.

2.

Since January 1, 2003 to December 15, 2006, the Registrant has issued 2,468,994 shares of its common stock to its employees, directors, consultants and other service providers upon exercise of options granted by the Registrant under its 1998 stock option plan, with exercise prices ranging from $0.10 to $10.00 per share.

3.

In March 2004, the Registrant modified its 2,154,566 shares of Series A-2.1 preferred stock and 687,742 shares of Series A-2.2 preferred stock to newly issued 512,901 shares of Series A-2.1 preferred stock and one share of A-2.2 preferred stock to create a 1-to-1 conversion rate to common stock.

4.

In March and April 2004, the Registrant sold an aggregate of 5,121,952 shares of its Series B-1 preferred stock to private investors at a purchase price of $2.05 per share for an aggregate purchase price of approximately $10.5 million.

Unless otherwise stated, the sales of the above securities were deemed to be exempt from registration under the Securities Act in reliance upon Section 4(2) of the Securities Act or Regulation D promulgated thereunder, or Rule 701 promulgated under Section 3(b) of the Securities Act as transactions by an issuer not involving any public offering or pursuant to benefit plans and contracts relating to compensation as provided under Rule 701. The recipients of the securities in each of these transactions represented their intentions to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends were placed upon the share certificates issued in these transactions. All recipients had adequate access, through their relationships with us, to information about Registrant.

II-2

Item 16. Exhibits and financial statement schedules.

(a)

The following exhibits are filed herewith:

Exhibit number		Exhibit title
1.01	*	Form of Underwriting Agreement.
3.01		Registrant's Restated Certificate of Incorporation.
3.02	*	Form of Restated Certificate of Incorporation of Registrant, to be filed with the Delaware Secretary of State after completion of this offering.
3.03		By-Laws of the Registrant.
3.04	*	Form of Restated Bylaws of the Registrant, to be effective upon the completion of this offering.
4.01	*	Form of Registrant's Common Stock certificate.
4.02		Fourth Amended and Restated Investor Rights Agreement dated March 26, 2004 by and among Registrant and certain of its stockholders.
5.01	*	Opinion of Fenwick & West LLP.
10.01		1998 Stock Option Plan and forms of stock option agreement and stock option exercise agreement.
10.02	*	2007 Equity Incentive Plan and forms of stock option agreement and stock option exercise agreement.
10.03	*	2007 Employee Stock Purchase Plan.
10.04	*	Form of Indemnity Agreement to be entered into between Registrant and each of its officers and directors.
10.05		Employment offer letter dated June 8, 2003 by and between Registrant and Joseph Kennedy.
10.06		Amended and restated retention agreement dated November 1, 2002 by and between Registrant and Lawrence Kaplan.
10.07		Employment offer letter dated August 29, 2003 by and between Registrant and with Laura Perrone, as amended by the letter dated September 18, 2006.
10.08		Employment offer letter dated August 2, 2001 by and between Registrant and Daniel Marshall, as amended by the letter dated September 18, 2006.
10.09		Letter agreement dated September 18, 2006 by and between Registrant and Donald Craig.
10.10		Employment offer letter dated March 27, 2003 by and between Registrant and Geoffrey Stedman, as amended by the letter dated September 18, 2006.
10.11		Employment offer letter dated August 25, 2004 by and between Registrant and Johnathan Turk.

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10.12		Employment offer letter dated May 5, 2005 by and between Registrant and Vincent O'Malley.
10.13		Employment offer letter dated July 13, 2005 by and between Registrant and Charles Morris.
10.14		Employment offer letter dated May 5, 2005 by and between Registrant and Ronald Howe.
10.15		Lease dated December 2, 2004 by and between Registrant and Square 24 Associates, L.P.
10.16		Systems Integrator Purchasing Agreement dated April 25, 2002 by and between Registrant and A.F. Associates, Inc.
21.01		Subsidiaries of Registrant
23.01	*	Consent of Fenwick & West LLP (included in Exhibit 5.01).
23.02		Consent of independent registered public accounting firm.
24.01		Power of Attorney (see signature page hereto).

*

To be filed by amendment.

(a)

Financial Statement Schedules.

All schedules have been omitted because they are either inapplicable or the required information has been given in the consolidated financial statements or the notes thereto.

Item 17. Undertakings.

That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser, if the Registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the Registration Statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the Registration Statement or made in a document incorporated or deemed incorporated by referenced into the Registration Statement or prospectus that is part of the Registration Statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the Registration Statement or prospectus that was part of the Registration Statement or made in any such document immediately prior to such date of first use.

That, for the purpose of determining liability of the Registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned Registrant undertakes that in a primary offering of securities of the undersigned Registrant pursuant to this Registration Statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the

II-4

following communications, the undersigned Registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

(i)    Any preliminary prospectus or prospectus of the undersigned Registrant relating to the offering required to be filed pursuant to Rule 424;

(ii)   Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned Registrant or used or referred to by the undersigned Registrant;

(iii)  The portion of any other free writing prospectus relating to the offering containing material information about the undersigned Registrant or its securities provided by or on behalf of the undersigned Registrant; and

(iv)  Any other communication that is an offer in the offering made by the undersigned Registrant to the purchaser.

The undersigned Registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreement certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the provisions described under Item 14 above, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

The undersigned Registrant hereby undertakes that:

(1)   For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or Rule 497(h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective.

(2)   For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

II-5

Signatures

Pursuant to the requirements of the Securities Act, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Sunnyvale, State of California, on the 29th day of December, 2006.

OMNEON VIDEO NETWORKS, INC.
By:	/s/  JOSEPH S. KENNEDY Joseph S. Kennedy President and Chief Executive Officer

Power of attorney

KNOW ALL PERSONS BY THESE PRESENTS that each individual whose signature appears below constitutes and appoints Joseph S. Kennedy and Laura A. Perrone, and each of them, his or her true and lawful attorneys-in-fact and agents with full power of substitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement, and to sign any registration statement for the same offering covered by the Registration Statement that is to be effective upon filing pursuant to Rule 462(b) promulgated under the Securities Act, and all post-effective amendments thereto, and to file the same, with all exhibits thereto and all documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or his, her or their substitute or substitutes, may lawfully do or cause to be done or by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated:

Name	Title	Date
Principal Executive Officer:
/s/  JOSEPH S. KENNEDY Joseph S. Kennedy	President, Chief Executive Officer and Director (Principal Executive Officer)	December 29, 2006
Principal Financial Officer and Principal Accounting Officer:
/s/  LAURA A. PERRONE Laura A. Perrone	Vice President of Finance and Chief Financial Officer (Principal Accounting Officer)	December 29, 2006

II-6

Additional Directors:
/s/  LAWRENCE R. KAPLAN Lawrence R. Kaplan	Chairman and Director	December 29, 2006
/s/  BASIL ALWAN Basil Alwan	Director	December 29, 2006
Jon S. Castor	Director
/s/  MATTHEW D. HOWARD Matthew D. Howard	Director	December 29, 2006
/s/  ESFANDIAR LOHRASBPOUR Esfandiar Lohrasbpour	Director	December 29, 2006
Wes Raffel	Director
/s/  WILLIAM J. SCHROEDER William J. Schroeder	Director	December 29, 2006
/s/  J. PETER WAGNER J. Peter Wagner	Director	December 29, 2006

II-7

Exhibit index

Exhibit number	Exhibit title
1.01*	Form of Underwriting Agreement.
3.01	Registrant's Restated Certificate of Incorporation.
3.02*	Form of Restated Certificate of Incorporation of Registrant, to be filed with the Delaware Secretary of State after completion of this offering.
3.03	By-Laws of the Registrant.
3.04*	Form of Restated Bylaws of the Registrant, to be effective upon the completion of this offering.
4.01*	Form of Registrant's Common Stock certificate.
4.02	Fourth Amended and Restated Investor Rights Agreement dated March 26, 2004 by and among Registrant and certain of its stockholders.
5.01*	Opinion of Fenwick & West LLP.
10.01	1998 Stock Option Plan and forms of stock option agreement and stock option exercise agreement.
10.02*	2007 Equity Incentive Plan and forms of stock option agreement and stock option exercise agreement.
10.03*	2007 Employee Stock Purchase Plan.
10.04*	Form of Indemnity Agreement entered into between Registrant and each of its officers and directors.
10.05	Employment offer letter dated June 8, 2003 by and between Registrant and Joseph Kennedy.
10.06	Amended and restated retention agreement dated November 1, 2002 by and between Registrant and Lawrence Kaplan.
10.07	Employment offer letter dated August 29, 2003 by and between Registrant and with Laura Perrone, as amended by the letter dated September 18, 2006.
10.08	Employment offer letter dated August 2, 2001 by and between Registrant and Daniel Marshall, as amended by the letter dated September 18, 2006.
10.09	Letter agreement dated September 18, 2006 by and between Registrant and Donald Craig.
10.10	Employment offer letter dated March 27, 2003 by and between Registrant and Geoffrey Stedman, as amended by the letter dated September 18, 2006.
10.11	Employment offer letter dated August 25, 2004 by and between Registrant and Johnathan Turk.
10.12	Employment offer letter dated May 5, 2005 by and between Registrant and Vincent O'Malley.

10.13	Employment offer letter dated July 13, 2005 by and between Registrant and Charles Morris.
10.14	Employment offer letter dated May 5, 2005 by and between Registrant and Ronald Howe.
10.15	Lease dated December 2, 2004 by and between Registrant and Square 24 Associates, L.P.
10.16	Systems Integrator Purchasing Agreement dated April 25, 2002 by and between Registrant and A.F. Associates, Inc.
21.01	Subsidiaries of Registrant
23.01*	Consent of Fenwick & West LLP (included in Exhibit 5.01).
23.02	Consent of independent registered public accounting firm.
24.01	Power of Attorney (see signature page hereto).

*

To be filed by amendment.

QuickLinks

Table of contents
Prospectus summary
The offering
Summary consolidated financial data
Risk factors
Forward-looking statements and industry data
Use of proceeds
Dividend policy
Capitalization
Dilution
Selected consolidated financial data
Management's discussion and analysis of financial condition and results of operations
Business
Management
Grants of plan-based awards in last fiscal year
Outstanding option awards at December 31, 2005
Option exercises in last fiscal year
Principal and selling stockholders
Related party transactions
Description of capital stock
Material U.S. federal income tax consequences to non-U.S. holders
Shares eligible for future sale
Underwriting
Legal matters
Experts
Where you can find more information
Omneon Video Networks, Inc. Index to consolidated financial statements
Report of independent registered public accounting firm
Omneon Video Networks, Inc. Consolidated balance sheets
Omneon Video Networks, Inc. Consolidated statements of operations
Omneon Video Networks, Inc. Consolidated statements of convertible preferred stock and stockholders' equity (deficit)
Omneon Video Networks, Inc. Consolidated statements of cash flows
Omneon Video Networks, Inc. Notes to consolidated financial statements
PART II INFORMATION NOT REQUIRED IN PROSPECTUS
Signatures
Power of attorney
Exhibit index

EX-3.01

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Exhibit 3.01

OMNEON VIDEO NETWORKS, INC.
RESTATED CERTIFICATE OF INCORPORATION

        Omneon Video Networks, Inc., a corporation organized and existing under and by virtue of the Delaware General Corporation Law, hereby certifies as follows:

        The name of the corporation is Omneon Video Networks, Inc. The date of filing its original Certificate of Incorporation with the Secretary of State was May 4, 1998.

        This Restated Certificate of Incorporation of the corporation attached hereto as Exhibit A, which is incorporated herein by this reference, and which restates, integrates and further amends the provisions of the Certificate of Incorporation of this corporation as previously amended or supplemented, has been duly adopted by the corporation's Board of Directors, by a majority of the outstanding stock of the corporation and by a majority of the outstanding stock of each class or series of stock of the corporation entitled to vote thereon as a class in accordance with Sections 242 and 245 of the Delaware General Corporation Law, with the approval of the corporation's stockholders having been given by written consent without a meeting in accordance with Section 228 of the Delaware General Corporation Law.

        IN WITNESS WHEREOF, said corporation has caused this Restated Certificate of Incorporation to be signed by its duly authorized officer under the seal of the corporation this 25^th day of March 2004.

OMNEON VIDEO NETWORKS, INC.
By:	/s/  JOSEPH S. KENNEDY Joseph S. Kennedy President and Chief Executive Officer

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EXHIBIT A

RESTATED CERTIFICATE
OF INCORPORATION OF
OMNEON VIDEO NETWORKS, INC.

FIRST

        The name of this corporation is Omneon Video Networks, Inc. (the "Company")

SECOND

        The address of the Company's registered office in the State of Delaware is Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company.

THIRD

        The purpose of the Company is to engage in any lawful act or activity for which a corporation may be organized under the Delaware General Corporation Law.

FOURTH

        A.    The aggregate number of shares that the Company shall have authority to issue is 53,629,931, which shall consist of 36,103,049 shares of Common Stock each with the par value of $0.001 per share and 17,526,882 shares of Preferred Stock each with the par value of $0.001 per share. Of the Preferred Stock, 11,363,661 shares are designated "Series A-1 Preferred Stock," 512,901 shares are designated "Series A-2.1 Preferred Stock," 1 share is designated "Series A-2.2 Preferred Stock," 27,557 shares are designated "Series A-3 Preferred Stock," 21,275 shares are designated "Series A-4 Preferred Stock," 99 shares are designated "Series A-5 Preferred Stock," 479,436 shares are designated "Series A-6 Preferred Stock" and 5,121,952 shares are designated as "Series B-1 Preferred Stock." Immediately upon the filing of this Restated Certificate of Incorporation (the "Filing"), each one (1) outstanding share of the Series A-2.1 Preferred Stock will be exchanged and combined, automatically and without further action, into 0.23805285697 outstanding share of Series A-2.1 Preferred Stock. Such combination shall be effected on a certificate-by-certificate basis, and any fractional shares resulting from such combination shall be rounded up to the nearest whole share. Further, immediately upon the Filing, each 687,742 outstanding shares of the Series A-2.2 Preferred Stock will be exchanged and combined, automatically, without further action, into one (1) outstanding share of the Series A-2.2 Preferred Stock. Such combination shall be effected on a certificate-by-certificate basis, and any fractional shares resulting from such combination shall be issued but shall be rounded up at the eleventh (11^th) decimal place. The two preceding stock combinations shall be collectively referred to herein as the "Stock Combination". The number of authorized shares of Common Stock may be increased or decreased (but not below the number of shares of Common Stock then outstanding) by the affirmative vote of holders of a majority of the capital stock of the Company entitled to vote (voting together on an as-if converted basis), irrespective of the provisions of Section 242(b)(2) of the Delaware General Corporation Law.

        B.    The terms and provisions of the Preferred Stock and the Common Stock are as follows:

        1.    Dividends.    

        (a)   Series B-1, Series A-1, Series A-2.2 and Series A-6 Preferred Stock. The holders of shares of the outstanding Series B-1, Series A-1, Series A-2.2 and Series A-6 Preferred Stock shall be entitled to receive, on a pari passu basis and out of funds legally available therefore, when, as and

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if declared by the Board of Directors of the Company, dividends in the amount of $0.205, $0.11, $75,651.62 and $0.11 per share, respectively (each as adjusted for stock splits, combinations, reorganizations and the like occurring after the Filing Date (collectively, "Recapitalizations")) per annum, prior and in preference to the payment of any dividends on the Series A-2.1, Series A-3, Series A-4 and Series A-5 Preferred Stock and the Common Stock. No dividends (other than those payable solely in Common Stock or other securities or rights convertible into or entitling the holder to receive, directly or indirectly, additional shares of Common Stock) shall be paid with respect to the Series A-2.1, Series A-3, Series A-4 and Series A-5 Preferred Stock and Common Stock during any calendar year unless the prior dividend rights of the Series B-1, Series A-1, Series A-2.2 and Series A-6 Preferred Stock shall have first been paid or declared and set apart for payment to the holders of the Series B-1, Series A-1, Series A-2.2 and Series A-6 Preferred Stock during that calendar year. Dividends on the Series B-1, Series A-1, Series A-2.2 and Series A-6 Preferred Stock shall not be mandatory or cumulative, and no rights or interest shall accrue to the holders of the Series B-1, Series A-1, Series A-2.2 and Series A-6 Preferred Stock by reason of the fact that the Company shall fail to declare or pay dividends on the Series B-1, Series A-1, Series A-2.2 and Series A-6 Preferred Stock in any calendar year or any fiscal year of the Company, whether or not the earnings of the Company in any calendar year or fiscal year were sufficient to pay such dividends in whole or in part.

        (b)   Series A-2.1 Preferred Stock. Subject to the prior and preferential dividend rights of the holders of the outstanding Series B-1, Series A-1, Series A-2.2 and Series A-6 Preferred Stock set forth in Section 4(B)(1)(a) above, the holders of the then outstanding Series A-2.1 Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors of the Company, out of funds legally available therefor, dividends in the amount of $0.462082 per share (as adjusted for Recapitalizations) per annum, prior and in preference to the payment of any dividends on the Series A-3, Series A-4 and Series A-5 Preferred Stock and Common Stock. No dividends (other than those payable solely in Common Stock or other securities or rights convertible into or entitling the holder to receive, directly or indirectly, additional shares of Common Stock) shall be paid with respect to the Series A-3, Series A-4 and Series A-5 Preferred Stock and Common Stock during any calendar year unless the prior dividend rights of the Series A-2.1 Preferred Stock shall have first been paid or declared and set apart for payment to the holders of Series A-2.1 Preferred Stock during that calendar year. Dividends on the Series A-2.1 Preferred Stock shall not be mandatory or cumulative, and no rights or interest shall accrue to the holders of the Series A-2.1 Preferred Stock by reason of the fact that the Company shall fail to declare or pay dividends on the Series A-2.1 Preferred Stock in any calendar year or any fiscal year of the Company, whether or not the earnings of the Company in any calendar year or fiscal year were sufficient to pay such dividends in whole or in part.

        (c)   Series A-3, Series A-4 and Series A-5 Preferred Stock and Common Stock. Subject to the prior and preferential dividend rights of the holders of outstanding Series B-1, Series A-1, Series A-2.1, Series A-2.2 and Series A-6 Preferred Stock set forth in Sections 4(B)(1)(a) and (b) above, the holders of the then outstanding Series A-3, Series A-4 and Series A-5 Preferred shall be entitled to receive, when as and if declared by the Board of Directors of the Company, on a pari passu basis and out of funds legally available therefor, dividends in the amount of $34.00, $22.00 and $10.00 per share, respectively (each as adjusted for Recapitalizations) per annum, prior and in preference to the payment of any dividends on the Common Stock. No dividends (other than those payable solely in Common Stock or other securities or rights convertible into or entitling the holder to receive, directly or indirectly, additional shares of Common Stock) shall be paid with respect to the Common Stock during any calendar year unless the prior dividend rights of the Series A-3, Series A-4 and Series A-5 Preferred Stock shall have first been paid or declared and set apart for payment to the holders of Series A-3, Series A-4 and Series A-5 Preferred Stock during that calendar year and until an additional dividend is paid on each outstanding share of

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Preferred Stock in an amount equal to or greater than the aggregate amount of dividends which would be payable on each share of Preferred Stock if, immediately prior to such payment, it had been converted into Common Stock. Dividends on the Series A-3, Series A-4 and Series A-5 Preferred Stock shall not be mandatory or cumulative, and no rights or interest shall accrue to the holders of the Series A-3, Series A-4 and Series A-5 Preferred Stock by reason of the fact that the Company shall fail to declare or pay dividends on the Series A-3, Series A-4 and Series A-5 Preferred Stock in any calendar year or any fiscal year of the Company, whether or not the earnings of the Company in any calendar year or fiscal year were sufficient to pay such dividends in whole or in part.

        (d)   Common Equivalent Dividend. Notwithstanding the provisions of Section 4(B)(1)(a) above, in the event the Board of Directors declares a dividend to be paid solely in Common Stock or other securities or rights convertible into or entitling the holder to receive, directly or indirectly, additional shares of Common Stock to the holders of Common Stock, the holders of Series B-1, Series A-1, Series A-2.1, Series A-2.2, Series A-3, Series A-4, Series A-5 and Series A-6 Preferred Stock shall also be entitled to receive a dividend, out of any assets legally available therefor, equal to the dividend rights as described in Section 4(B)(1)(a) above plus an amount in proportion to the number of shares of Common Stock which would be held by each such holder if all shares of Series B-1, Series A-1, Series A-2.1, Series A-2.2, Series A-3, Series A-4, Series A-5 and Series A-6 Preferred Stock were converted into shares of Common Stock at the then effective conversion rate (a "Common Equivalent Dividend").

        (e)   Priority of Dividends. The Company shall make no Distribution (as defined below) to the holders of shares of Preferred Stock or Common Stock except in accordance with Section 4(B)(1)(a) and (b) above.

        (f)    Distribution. As used in this section, "Distribution" means the transfer of cash or property without consideration, whether by way of dividend or otherwise (except a dividend in shares of the Company) or the purchase, conversion or other acquisition of shares of the Company (other than in connection with the repurchase of shares of Common Stock issued to or held by employees, consultants, officers and directors at a price not greater than the amount paid by such persons for such shares upon termination of their employment or services pursuant to agreements providing for the right of said repurchase, provided such repurchase is approved by the Board of Directors) for cash, property or other value.

        (g)   Non-Cash Dividends. Whenever a dividend provided for in this Section 4(B)(1) shall be payable in property other than cash, the value of such dividend shall be deemed to be the fair market value of such property as determined in good faith by the Board of Directors.

        2.    Liquidation Rights.    

        (a)   Liquidation Preference. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company (a "Liquidation"), distributions to the stockholders of the Company shall be made in the following manner:

          (i)  The holders of each share of Series B-1, Series A-1, Series A-2.2 and Series A-6 Preferred Stock shall be entitled to receive prior and in preference to distributions of assets or surplus funds of the Company to holders of Series A-2.1, Series A-3, Series A-4, and Series A-5 Preferred Stock and Common Stock, an amount per share equal to $4.10, $2.20, $1,513,032.40 and $1.10, respectively, subject to adjustment for Recapitalizations, for each then outstanding share of Series B-1, Series A-1, Series A-2.2 and Series A-6 Preferred Stock held by them plus an amount equal to all declared and accrued but unpaid dividends on such share to the date fixed for distribution (the "Series B-1 Liquidation Preference," "Series A-1 Liquidation Preference," "Series A-2.2 Liquidation Preference," and "Series A-6 Liquidation

4

Preference," respectively). For the sake of clarity, if there shall then be outstanding a fraction of a share of Series A-2.2 Preferred Stock, then the holder thereof shall be entitled to receive pursuant to this Section 4(B)(2)(a)(i) respecting that fractional share that fraction multiplied by the Series A-2.2 Liquidation Preference. The Series B-1, Series A-1, Series A-2.2 and Series A-6 Preferred Stock shall rank on parity as to the receipt of the respective preference amounts for each such series upon the occurrence of such events. If the assets and funds distributed to the holders of the Series B-1, Series A-1, Series A-2.2 and Series A-6 Preferred Stock shall be insufficient to permit payment to such holders of the full Series B-1, Series A-1, Series A-2.2 and Series A-6 Liquidation Preferences, then the entire assets or property of the Company legally available for distribution shall be distributed ratably to the holders of the Series B-1, Series A-1, Series A-2.2 and Series A-6 Preferred Stock in proportion to the full preferential amount such holder is otherwise entitled to receive under this subsection (i).

         (ii)  After payment of the Series B-1, Series A-1, Series A-2.2 and Series A-6 Liquidation Preferences to the holders of the Series B-1, Series A-1, Series A-2.2 and Series A-6 Preferred Stock, respectively, the holders of each share of Series A-2.1 Preferred Stock shall be entitled to receive prior and in preference to distributions of assets or surplus funds of the Company to holders of Series A-3 Preferred Stock, Series A-4 Preferred Stock, Series A-5 Preferred Stock or Common Stock, an amount per share equal to $4.62082, subject to adjustment for Recapitalizations, for each then outstanding share of Series A-2.1 Preferred Stock held by them plus an amount equal to all declared and accrued but unpaid dividends on such share to the date fixed for distribution (the "Series A-2.1 Liquidation Preference"). If, after payment in full of the full preferential amounts specified for the Series B-1, Series A-1, Series A-2.2 and Series A-6 Preferred Stock in Section 4(B)(2)(a)(i) above, the assets and funds distributed to the holders of the Series A-2.1 Preferred Stock shall be insufficient to permit payment to such holders of the full Series A-2.1 Liquidation Preference, then all of the remaining assets or property of the Company legally available for distribution shall be distributed ratably to the holders of the Series A-2.1 Preferred Stock in proportion to the full preferential amount such holder is otherwise entitled to receive under this subsection (ii).

        (iii)  After payment of the Series B-1, Series A-1, Series A-2.1, Series A-2.2, and Series A-6 Liquidation Preferences to the holders of the Series B-1, Series A-1, Series A-2.1, Series A-2.2 and Series A-6 Preferred Stock, respectively, the holders of each share of Series A-3, Series A-4 and Series A-5 Preferred Stock shall be entitled to receive prior and in preference to distributions of assets or surplus funds of the Company to holders of Common Stock, an amount per share equal to $340.00, $220.00 and $100.00, respectively, subject to adjustment for Recapitalizations, for each then outstanding share of Series A-3, Series A-4 and Series A-5 Preferred Stock held by them plus an amount equal to all declared and accrued but unpaid dividends on such shares to the date fixed for distribution (the "Series A-3 Liquidation Preference," "Series A-4 Liquidation Preference," and "Series A-5 Liquidation Preference," respectively). The Series A-3, Series A-4 and Series A-5 Preferred Stock shall rank on a parity as to the receipt of the respective preferential amounts for each such series upon the occurrence of such event. If, after payment in full of the full preferential amounts specified for the Series B-1, Series A-1, Series A-2.1, Series A-2.2 and Series A-6 Preferred Stock in Sections 4(B)(2)(a)(i) and (ii), the assets and funds distributed to the holders of the Series A-3, Series A-4 and Series A-5 Preferred Stock shall be insufficient to permit payment to such holders of the full Series A-3, Series A-4 and Series A-5 Liquidation Preferences, then all of the remaining assets or property of the Company legally available for distribution shall be distributed ratably to the holders of the Series A-3, Series A-4 and Series A-5 Preferred Stock in proportion to the full preferential amount such holder is otherwise entitled to receive under this subsection (iii).

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        (iv)  After payment has been made to the holders of the Preferred Stock of the preferential amounts as set forth above, the remaining assets and funds of the Company legally available for distribution, if any, shall be distributed ratably among the holders of the then outstanding shares of Common Stock pro rata according to the number of such shares of Common Stock held by each holder thereof.

        (b)   Liquidation Event. For purposes of this Section 4(B)(2), a liquidation shall be deemed to be occasioned by, or to include, (i) the acquisition of the Company by any person or entity by means of any transaction or series of related transactions by the Company or its stockholders in which the stockholders of the Company immediately prior to such transaction or series of related transactions own less than 50% of the Company's voting power immediately after such transaction or series of related transactions (including, without limitation, any reorganization, merger or consolidation but excluding any merger effected exclusively for the purpose of changing the domicile of the Company); (ii) the closing of the transfer (whether by merger, consolidation or otherwise), in one transaction or a series of related transactions, by stockholders of the Company to a person or group of affiliated persons (other than an underwriter of the Company's securities), of the Company's then outstanding securities if, after such closing, such person or group of affiliated persons would hold 50% or more of the outstanding voting stock of the Company; or (iii) the sale, lease, assignment, transfer, conveyance, or disposal of all or substantially all of the assets of the Company or the license of the Company's technology that would constitute a sale of all or substantially all of the assets of the Company (each of the foregoing, a "Liquidation Event").

        (c)   Non-Cash Consideration. In any Liquidation, if the consideration received by the Company or its stockholders is other than cash, then the value of such consideration shall be its fair market value as determined by the Board of Directors in good faith, except that any securities to be distributed to stockholders in a Liquidation shall be valued as follows:

          (i)  With respect to securities not subject to investment letter or other similar restrictions on free marketability covered by (ii) below:

        (1)   If traded on a securities exchange or through the Nasdaq National Market, the value shall be deemed to be the average of the closing prices of the securities on such exchange or system over the twenty (20) trading-day period ending immediately preceding three (3) trading days prior to the closing of a Liquidation;

        (2)   If actively traded over-the-counter, the value shall be deemed to be the average of the closing bid or sale prices (whichever is applicable) over the twenty (20) trading-day period ending immediately preceding three (3) trading days prior to the closing of a Liquidation; and

        (3)   If there is no active public market, the value shall be the fair market value thereof, as mutually determined by the Company and the holders of at least a majority of the voting power of all then outstanding shares of Preferred Stock (voting as a single class and not as separate series and on an as converted to Common Stock basis).

         (ii)  The method of valuation of securities subject to investment letter or other restrictions on free marketability (other than restrictions arising solely by virtue of a stockholder's status as an affiliate or former affiliate) shall be to make an appropriate discount from the market value determined as above in subpart (c)(i)(1), (2) or (3) to reflect the approximate fair market value thereof, as mutually determined by the Company and the holders of at least a majority of the voting power of all then outstanding shares of such Preferred Stock (voting as a single class and not as separate series and on an as converted to Common Stock basis).

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        (iii)  The foregoing methods for valuing non-cash consideration to be distributed in connection with a Liquidation may be superceded by any determination of such value set forth in the definitive agreements governing such Liquidation; provided that such determination is approved by the holders of a majority of the Preferred Stock (voting as a single class and not as separate series and on an as converted to Common Stock basis).

        (d)   In the event the requirements of Section 4(B)(2) are not complied with, the Company shall forthwith either:

          (i)  cause the closing of such Liquidation to be postponed until such time as the requirements of this Section 2 have been complied with; or

         (ii)  cancel such transaction, in which event the rights, preferences and privileges of the holders of the Preferred Stock shall revert to and be the same as such rights, preferences and privileges existing immediately prior to the date of the first notice referred to in Section 4(B)(3)(i) hereof.

        3.    Conversion.    The Preferred Stock shall have conversion rights as follows:

        (a)   Optional Conversion. At the option of the holder thereof, each share of Preferred Stock shall be convertible, at any time or from time to time prior to the close of business on the business day before any date fixed for redemption of such share, into fully paid and nonassessable shares of Common Stock as provided herein at the then effective Conversation Rate (as defined below) for such share.

        (b)   Automatic Conversion. Each share of Preferred Stock shall automatically be converted into fully paid and nonassessable shares of Common Stock, as provided herein at the then effective Conversion Rate for such share immediately upon the earlier of: (1) immediately prior to the closing of a firm commitment underwritten public offering pursuant to an effective registration statement filed under the Securities Act of 1933, as amended (the "Securities Act") covering the offer and sale of Common Stock for the account of the Company in which (i) the per share price to the public is at least $4.10 (before deduction of underwriters' discounts and commissions and which price shall be adjusted for any Recapitalizations), and (ii) the aggregate public offering price (before deduction of underwriters' discounts and commissions) is at least $25,000,000, or (2) with respect to all series of Preferred Stock, the election of the holders of a majority of the outstanding shares of such Preferred Stock voting together as a single class on an as-converted to common stock basis and not as separate series; provided, however, in the event that such conversion is conditioned upon or follows consummation of a Liquidation Event whereby the holders of Series A-2.2 Preferred Stock would receive distributions or consideration in an aggregate amount valued at $1,513,032.40 in respect of their ownership of the Series A-2.2 Preferred Stock pursuant to Section 4(B)(2)(a)(i) hereof absent conversion of Series A-2.2 Preferred Stock into Common Stock, then, solely with respect to the Series A-2.2 Preferred Stock, the election of the holders of a majority of the outstanding shares of the Series A-2.2 Preferred Stock (and the holders of all other series of Preferred Stock would then vote together excluding the Series A-2.2 Preferred Stock).

        (c)   Conversion Price. Each share of Preferred Stock shall be convertible in accordance with Sections 4(B)(3)(a) and 4(B)(3)(b) above into that number of shares of Common Stock as set forth below:

          (i)  Each share of Series B-1 Preferred Stock shall be convertible into that number of fully-paid and nonassessable shares of Common Stock that is equal to $2.05, as adjusted for Recapitalizations of such series, divided by the Series B-1 Conversion Price in effect at the time of conversion. The "Series B-1 Conversion Price" shall initially be $2.05, subject to adjustment as provided herein.

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         (ii)  Each share of Series A-1 Preferred Stock shall be convertible into that number of fully-paid and nonassessable shares of Common Stock that is equal to $1.10, as adjusted for Recapitalizations of such series, divided by the Series A-1 Conversion Price in effect at the time of conversion. The "Series A-1 Conversion Price" shall initially be $1.10, subject to adjustment as provided herein.

        (iii)  Each share of Series A-2.1 Preferred Stock shall be convertible into that number of fully-paid and nonassessable shares of Common Stock that is equal to $4.62082, as adjusted for Recapitalizations of such series, divided by the Series A-2.1 Conversion Price in effect at the time of conversion. Following the Stock Combination, the "Series A-2.1 Conversion Price" shall initially be $4.62082, subject to adjustment as provided herein.

        (iv)  Each share of Series A-2.2 Preferred Stock shall be convertible into that number of fully-paid and nonassessable shares of Common Stock that is equal to $756,515.89, as adjusted for Recapitalizations of such series, divided by the Series A-2.2 Conversion Price in effect at the time of conversion. Following the Stock Combination, the "Series A-2.2 Conversion Price" shall initially be $756,515.89, subject to adjustment as provided herein.

         (v)  Each share of Series A-3 Preferred Stock shall be convertible into that number of fully-paid and nonassessable shares of Common Stock that is equal to $340.00, as adjusted for Recapitalizations of such series, divided by the Series A-3 Conversion Price in effect at the time of conversion. The "Series A-3 Conversion Price" shall initially be $340.00, and shall be subject to adjustment as provided herein.

        (vi)  Each share of Series A-4 Preferred Stock shall be convertible into that number of fully-paid and nonassessable shares of Common Stock that is equal to $220.00, as adjusted for Recapitalizations of such series, divided by the Series A-4 Conversion Price in effect at the time of conversion. The "Series A-4 Conversion Price" shall initially be $220.00, and shall be subject to adjustment as provided herein.

       (vii)  Each share of Series A-5 Preferred Stock shall be convertible into that number of fully-paid and nonassessable shares of Common Stock that is equal to $100.00, as adjusted for Recapitalizations of such series, divided by the Series A-5 Conversion Price in effect at the time of conversion. The "Series A-5 Conversion Price" shall initially be $100.00, and shall be subject to adjustment as provided herein.

      (viii)  Each share of Series A-6 Preferred Stock shall be convertible into that number of fully-paid and nonassessable shares of Common Stock that is equal to $1.10, as adjusted for Recapitalizations of such series, divided by the Series A-6 Conversion Price in effect at the time of conversion. The "Series A-6 Conversion Price" shall initially be $1.10, and shall be subject to adjustment as provided herein.

        (ix)  The number of shares of Common Stock into which each share of Preferred Stock may be converted is hereinafter referred to as the "Conversion Rate." The term "Conversion Price" shall refer to the Series B-1 Conversion Price, Series A-1 Conversion Price, Series A-3 Conversion Price, Series A-4 Conversion Price, Series A-5 Conversion Price and Series A-6 Conversion Price, as applicable.

        (d)   Mechanics of Conversion.

          (i)  No fractional shares of Common Stock shall be issued upon conversion of Preferred Stock. In lieu of any fractional shares to which the holder would otherwise be entitled, the Company shall pay cash equal to such fraction multiplied by the then fair market value of such fractional shares as determined by the Board of Directors. For such purpose, all shares

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of Preferred Stock held by each holder shall be aggregated, and any resulting fractional share of Common Stock shall be paid in cash.

         (ii)  Before any holder of Preferred Stock shall be entitled to voluntarily convert Preferred Stock into full shares of Common Stock, and to receive certificates therefor, he shall surrender the certificate or certificates therefor, duly endorsed, at the office of the Company or of any transfer agent for the Preferred Stock, and shall give written notice to the Company at such office that he elects to convert the same.

        (iii)  In the event of conversions pursuant to Section 4(B)(3)(b) above, the outstanding shares of Preferred Stock shall be converted automatically without any further action by the holders of such shares and whether or not the certificates representing such shares are surrendered to the Company or its transfer agent.

        (iv)  The Company shall not be obligated to issue certificates evidencing the shares of Common Stock issuable upon such conversions unless either the certificates evidencing such shares of Preferred Stock are delivered to the Company or its transfer agent as provided above, or the holder notifies the Company or its transfer agent that such certificates have been lost, stolen or destroyed and executes an agreement satisfactory to the Company to indemnify the Company from any loss incurred by it in connection with such certificates. The Company shall, as soon as practicable after such delivery, or after such agreement and indemnification, issue and deliver at such office to such holder of Preferred Stock, a certificate or certificates for the number of shares of Common Stock to which he shall be entitled as aforesaid and a check payable to the holder in the amount of any cash amounts payable as the result of a conversion into fractional shares of Preferred Stock, plus any declared and unpaid dividends on the converted Preferred Stock. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of the shares of Preferred Stock to be converted, and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock on such date; provided, however, that if the conversion is in connection with an underwritten offer of securities registered pursuant to the Securities Act, the conversion may, at the option of any holder tendering Preferred Stock for conversion, be conditioned upon the closing of the sale of securities pursuant to such offering, in which event the person(s) entitled to receive the Common Stock issuable upon such conversion of the Preferred Stock shall not be deemed to have converted such Preferred Stock until immediately prior to the closing of the sale of such securities. If the conversion is in connection with Automatic Conversion provisions of subsection 3(b) above, such conversion shall be deemed to have been made on the conversion date described in the stockholder consent approving such conversion, and the persons entitled to receive shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holders of such shares of Common Stock as of such date.

        (e)   Adjustments to Conversion Price.

          (i)  Adjustments for Subdivisions or Combinations of Common Stock. Upon the happening of a Common Stock Event (as hereinafter defined), the Conversion Price of each series of Preferred Stock shall, simultaneously with the happening of such Common Stock Event, be adjusted by multiplying the Conversion Price of such series of Preferred Stock in effect immediately prior to such Common Stock Event by a fraction, (i) the numerator of which shall be the number of shares of Common Stock issued and outstanding immediately prior to such Common Stock Event, and (ii) the denominator of which shall be the number of shares of Common Stock issued and outstanding immediately after such Common Stock Event, and the product so obtained shall thereafter be the Conversion Price for such series of Preferred

9

Stock. The Conversion Price for a series of Preferred Stock shall be readjusted in the same manner upon the happening of each subsequent Common Stock Event. As used herein, the term the "Common Stock Event" shall mean at any time or from time to time after the Filing Date, (i) the issue by the Company of additional shares of Common Stock as a dividend or other distribution on outstanding Common Stock, (ii) a subdivision of the outstanding shares of Common Stock into a greater number of shares of Common Stock, or (iii) a combination of the outstanding shares of Common Stock into a smaller number of shares of Common Stock. Notwithstanding the foregoing, no adjustment to the Conversion Prices shall be made if and to the extent the holders of such shares have received a Common Stock Dividend.

         (ii)  Adjustments for Distributions. In the event the Company at any time or from time to time makes or fixes a record date for the determination of holders of Common Stock entitled to receive any distribution payable in securities of the Company other than shares of Common Stock and other than as otherwise adjusted in this Section 4(B)(3), then and in each such event provision shall be made so that the holders of Preferred Stock shall receive upon conversion thereof, in addition to the number of shares of Common Stock receivable thereupon, the amount of securities of the Company which they would have received had their Preferred Stock converted into Common Stock on the date of such event and had they thereafter, during the period from the date of such event to and including the date of conversion, retained such securities receivable by them as aforesaid during such period, subject to all other adjustments called for during such period under this Section 4(B)(3) with respect to the rights of the holders of the Preferred Stock.

        (iii)  Adjustments for Reclassification, Exchange and Substitution. If the Common Stock issuable upon conversion of the Preferred Stock shall be changed into the same or a different number of shares of any other class or classes of stock, whether by recapitalization, reclassification or otherwise (other than a subdivision or combination of shares provided for above), the Conversion Prices then in effect shall, concurrently with the effectiveness of such reorganization or reclassification, be proportionately adjusted such that the Preferred Stock shall be convertible into, in lieu of the number of shares of Common Stock which the holders would otherwise have been entitled to receive, a number of shares of such other class or classes of stock equivalent to the number of shares of Common Stock that would have been subject to receipt by the holders upon conversion of the Preferred Stock immediately before that change.

        (f)    Adjustments to Series B-1 Conversion Price for Sale of Shares Below Conversion Price.

          (i)  Adjustment Formula. If at any time or from time to time after the Filing Date the Company issues or sells, or is deemed by the provisions of this Section 4(B)(3)(f) to have issued or sold, Additional Shares of Common Stock (as hereinafter defined), otherwise than in connection with a Common Stock Event as provided in Section 4(B)(3)(e)(i), a distribution as provided in Section 4(B)(3)(e)(ii) or a recapitalization, reclassification or other change as provided in Section 4(B)(3)(e)(iii), for an Effective Price (as hereinafter defined) that is less than the Series B-1 Conversion Price in effect immediately prior to such issue or sale (or deemed issue or sale), then, and in each such case, the Series B-1 Conversion Price shall be reduced, as of the close of business on the date of such issue or sale, to the price obtained by multiplying the Series B-1 Conversion Price by a fraction:

        (1)   the numerator of which shall be the sum of (A) the number of Common Stock Equivalents Outstanding (as hereinafter defined) immediately prior to such issue or sale of Additional Shares of Common Stock plus (B) the quotient obtained by dividing the Aggregate Consideration Received (as hereinafter defined) by the Company for the total number of Additional Shares of Common Stock so issued or sold (or deemed so issued

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and sold) by the Series B-1 Conversion Price in effect immediately prior to such issue or sale; and

        (2)   the denominator of which shall be the sum of (A) the number of Common Stock Equivalents Outstanding immediately prior to such issue or sale plus (B) the number of Additional Shares of Common Stock so issued or sold (or deemed so issued and sold).

         (ii)  Certain Definitions. For the purpose of making any adjustment required under this Section 4(B)(3)(f):

        (1)   The "Additional Shares of Common Stock" shall mean all shares of Common Stock issued by the Company, or deemed issued as provided in Section 4(B)(3)(f)(iii) below, whether or not subsequently reacquired or retired by the Company, other than:

        (A)  shares of Common Stock issued or issuable upon conversion of any outstanding shares of Preferred Stock;

        (B)  any shares of Common Stock or Preferred Stock (or options, warrants or rights therefor) granted or issued hereafter to employees, officers, directors, contractors, consultants or advisers to, the Company or any Subsidiary pursuant to incentive agreements, stock purchase or stock option plans, stock bonuses or awards, warrants, contracts or other arrangements that are approved by the Board of Directors;

        (C)  any shares of Common Stock or Preferred Stock (and/or options or warrants therefore) issued to parties that are (i) strategic partners investing in connection with a commercial relationship with the Company or (ii) providing the Company with equipment leases, real property leases, loans, credit lines, guaranties of indebtedness, cash price reductions or similar transactions, under arrangements, in each case, approved by the Board of Directors;

        (D)  shares of Common Stock or Preferred Stock issued pursuant to the acquisition of another corporation or entity by the Company by consolidation, merger, purchase of all or substantially all of the assets, or other reorganization in which the Company acquires, in a single transaction or series of related transactions, all or substantially all of the assets of such other corporation or entity or fifty percent (50%) or more of the voting power of such other corporation or entity or fifty percent (50%) or more of the equity ownership of such other entity; provided that such transaction or series of transactions has been approved by the Board of Directors;

        (E)  shares of Common Stock or Preferred Stock issuable upon exercise of any options, warrants or rights to purchase any securities of the Company outstanding as of the Filing Date and any securities issuable upon the conversion thereof;

        (F)  shares of Common Stock issued pursuant to any Common Stock Event; and

        (G)  shares of Common Stock issued or issuable in a public offering prior to or in connection with which all outstanding shares of Preferred Stock will be converted to Common Stock under this Restated Certificate of Incorporation.

        (2)   The "Aggregate Consideration Received" by the Company for any issue or sale (or deemed issue or sale) of securities shall (A) to the extent it consists of cash, be computed at the gross amount of cash received by the Company before deduction of any

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underwriting or similar commissions, compensation or concessions paid or allowed by the Company in connection with such issue or sale and without deduction of any expenses payable by the Company; (B) to the extent it consists of property other than cash, be computed at the fair value of that property as determined in good faith by the Board; and (C) if Additional Shares of Common Stock, Convertible Securities or Rights or Options to purchase either Additional Shares of Common Stock or Convertible Securities are issued or sold together with other stock or securities or other assets of the Company for a consideration which covers both, be computed as the portion of the consideration so received that may be reasonably determined in good faith by the Board to be allocable to such Additional Shares of Common Stock, Convertible Securities or Rights or Options.

        (3)   The "Common Stock Equivalents Outstanding" shall mean the number of shares of Common Stock that is equal to the sum of (A) all shares of Common Stock of the Company that are outstanding at the time in question, plus (B) all shares of Common Stock of the Company issuable upon conversion of all shares of Preferred Stock or other Convertible Securities that are outstanding at the time in question, plus (C) all shares of Common Stock of the Company that are issuable upon the exercise of Rights or Options that are outstanding at the time in question assuming the full conversion or exchange into Common Stock of all such Rights or Options that are Rights or Options to purchase or acquire Convertible Securities into or for Common Stock.

        (4)   The "Convertible Securities" shall mean stock or other securities convertible into or exchangeable for shares of Common Stock.

        (5)   The "Effective Price" of Additional Shares of Common Stock shall mean the quotient determined by dividing the total number of Additional Shares of Common Stock issued or sold, or deemed to have been issued or sold, by the Company under this Section 4(B)(3)(f), into the Aggregate Consideration Received, or deemed to have been received, by the Company under this Section 4(B)(3)(f), for the issue of such Additional Shares of Common Stock.

        (6)   The "Rights or Options" shall mean warrants, options or other rights to purchase or acquire shares of Common Stock or Convertible Securities.

        (iii)  Deemed Issuances. For the purpose of making any adjustment to the Series B 1 Conversion Price required under this Section 4(B)(3)(f), if the Company issues or sells any Rights or Options or Convertible Securities and if the Effective Price of the shares of Common Stock issuable upon exercise of such Rights or Options and/or the conversion or exchange of Convertible Securities (computed without reference to any additional or similar protective or antidilution clauses) is less than the Series B-1 Conversion Price then in effect, then the Company shall be deemed to have issued, at the time of the issuance of such Rights, Options or Convertible Securities, that number of Additional Shares of Common Stock that is equal to the maximum number of shares of Common Stock issuable upon exercise or conversion of such Rights, Options or Convertible Securities upon their issuance and to have received, as the Aggregate Consideration Received for the issuance of such shares, an amount equal to the total amount of the consideration, if any, received by the Company for the issuance of such Rights or Options or Convertible Securities, plus, in the case of such Rights or Options, the minimum amounts of consideration, if any, payable to the Company upon the exercise in full of such Rights or Options, plus, in the case of Convertible Securities, the minimum amounts of consideration, if any, payable to the Company (other than by

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cancellation of liabilities or obligations evidenced by such Convertible Securities) upon the conversion or exchange thereof; provided that:

        (1)   if the minimum amounts of such consideration cannot be ascertained, but are a function of antidilution or similar protective clauses, then the Company shall be deemed to have received the minimum amounts of consideration without reference to such clauses;

        (2)   if the minimum amount of consideration payable to the Company upon the exercise of Rights or Options or the conversion or exchange of Convertible Securities is reduced over time or upon the occurrence or non-occurrence of specified events other than by reason of antidilution or similar protective adjustments, then the Effective Price shall be recalculated using the figure to which such minimum amount of consideration is reduced; and

        (3)   if the minimum amount of consideration payable to the Company upon the exercise of such Rights or Options or the conversion or exchange of Convertible Securities is subsequently increased, then the Effective Price shall again be recalculated using the increased minimum amount of consideration payable to the Company upon the exercise of such Rights or Options or the conversion or exchange of such Convertible Securities.

        No further adjustment of the Conversion Price, adjusted upon the issuance of such Rights or Options or Convertible Securities, shall be made as a result of the actual issuance of shares of Common Stock on the exercise of any such Rights or Options or the conversion or exchange of any such Convertible Securities. If any such Rights or Options or the conversion rights represented by any such Convertible Securities shall expire without having been fully exercised, then the Conversion Price as adjusted upon the issuance of such Rights or Options or Convertible Securities shall be readjusted to the Conversion Price which would have been in effect had an adjustment been made on the basis that the only shares of Common Stock so issued were the shares of Common Stock, if any, that were actually issued or sold on the exercise of such Rights or Options or rights of conversion or exchange of such Convertible Securities, and such shares of Common Stock, if any, were issued or sold for the consideration actually received by the Company upon such exercise, plus the consideration, if any, actually received by the Company for the granting of all such Rights or Options, whether or not exercised, plus the consideration received for issuing or selling all such Convertible Securities actually converted or exchanged, plus the consideration, if any, actually received by the Company (other than by cancellation of liabilities or obligations evidenced by such Convertible Securities) on the conversion or exchange of such Convertible Securities, provided that such readjustment shall not apply to prior conversions of Preferred Stock.

        (g)   No Impairment. The Company will not, except in accordance with the Delaware General Corporation Law, by amendment of its Certificate of Incorporation or through any reorganization, recapitalization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions of this Section 4(B)(3) and in the taking of all such action as may be necessary or appropriate to protect the rights of the holders of Preferred Stock hereunder against impairment.

        (h)   Certificate of Adjustments. Upon the occurrence of each adjustment or readjustment of any Conversion Price pursuant to this Section 4(B)(3), the Company at its expense shall promptly compute such adjustment or readjustment in accordance with the terms hereof and furnish to each holder of Preferred Stock a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Company shall, upon

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the written request at any time of any holder of Preferred Stock, furnish or cause to be furnished to such holder a like certificate setting forth (i) such adjustments and readjustments, (ii) the Conversion Prices at the time in effect, and (iii) the number of shares of Common Stock and the amount, if any, of other property which at the time would be received upon the conversion of Preferred Stock.

        (i)    Notices of Record Date. In the event that the Company shall propose at any time (i) to declare any dividend or distribution upon its Common Stock, whether in cash, property, stock or other securities, whether or not a regular cash dividend and whether or not out of earnings or earned surplus; (ii) to offer for subscription pro rata to the holders of any class or series of its stock any additional shares of stock of any class or series or other rights; (iii) to effect any reclassification or recapitalization of its Common Stock outstanding involving a change in the Common Stock; or (iv) to merge with or into any other corporation, or sell, lease or convey all or substantially all its property or business, or to liquidate, dissolve or wind up; then, in connection with each such event, the Company shall send to the holders of the Preferred Stock at least 20 days' prior written notice of the date on which a record shall be taken for such dividend, distribution or subscription rights (and specifying the date on which the holders of Common Stock shall be entitled thereto) or for determining rights to vote in respect of the matters referred to in clauses (iii) and (iv) above. Each such written notice shall be given by first class mail, postage prepaid, or nationally recognized overnight courier, or personally delivered, addressed to the holders of Preferred Stock at the address for each such holder as shown on the books of the Company.

        (j)    Reservation of Stock Issuable Upon Conversion.    The Company shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of the Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all then outstanding shares of the Preferred Stock; and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of the Preferred Stock, the Company will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purpose including, without limitation, engaging in best efforts to obtain the requisite stockholder approval of any necessary amendment to the Restated Certificate of Incorporation.

        4.     Voting. Except as otherwise expressly provided herein or as required by law, the holders of Preferred Stock and the holders of Common Stock shall vote together and not as separate classes.

        (a)   Preferred Stock. Each holder of shares of Preferred Stock shall be entitled to the number of votes equal to the number of shares of Common Stock into which such shares of Preferred Stock held by such holder of Preferred Stock could then be converted. The holders of shares of the Preferred Stock shall except as otherwise set forth in this Restated Certificate of Incorporation be entitled to vote on all matters on which the Common Stock shall be entitled to vote. The holders of the Preferred Stock shall be entitled to notice of any stockholders' meeting in accordance with the By-laws of the Company. Fractional votes shall not, however, be permitted and any fractional voting rights resulting from the above formula (after aggregating all shares into which shares of Preferred Stock held by each holder could be converted), shall be disregarded.

        (b)   Common Stock. Each holder of shares of Common Stock shall be entitled to one vote for each share thereof held.

        (c)   No Series Voting. Other than as provided by law, or otherwise in this Restated Certificate of Incorporation, there shall be no series voting.

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        (d)   Voting for the Election of Directors.

          (i)  Voting Arrangement. As long as at least 2,850,000 shares of Series A-1 Preferred Stock remain outstanding (such number of shares being subject to proportional adjustments to reflect combinations or subdivision of such Preferred Stock or dividends declared in shares of such stock), the holders of shares of Series A-1 Preferred Stock, voting as a separate series (with cumulative voting rights as among themselves in accordance with Section 214 of the Delaware General Corporation Law), shall be entitled to elect three (3) directors of the Company at any election of directors. As long as at least 1,300,000 shares of Series B-1 Preferred Stock remain outstanding (such number of shares being subject to proportional adjustments to reflect combinations or subdivision of such Preferred Stock or dividends declared in shares of such stock), the holders of shares of Series B-1 Preferred Stock, voting as a separate series (with cumulative voting rights as among themselves in accordance with Section 214 of the Delaware General Corporation Law), shall be entitled to elect one (1) director of the Company at any election of directors. The holders of outstanding Common Stock, voting as a separate class (with cumulative voting rights as among themselves in accordance with Section 214 of the Delaware General Corporation Law), shall be entitled to elect one (1) director of the Company at any election of directors. The holders of Preferred Stock and Common Stock, voting together as a single class (with cumulative voting rights as among themselves in accordance with Section 214 of the Delaware General Corporation Law) shall be entitled to elect any remaining directors of the Company.

         (ii)  Vacancy, Removal and Procedures. Notwithstanding the provisions of Section 223(a)(1) and 223(a)(2) of the Delaware General Corporation Law, any vacancy, including newly created directorships resulting from any increase in the authorized number of directors or amendment of this Restated Certificate of Incorporation, and vacancies created by removal or resignation of a director, may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and the directors so chosen shall hold office until the next annual election and until their successors are duly elected and shall qualify, unless sooner displaced; provided, however, that where such vacancy occurs among the directors elected by the holders of a class or series of stock, the holders of shares of such class or series may override the Board's action to fill such vacancy by (i) voting for their own designee to fill such vacancy at a meeting of the Company's stockholders or (ii) written consent, if the consenting stockholders hold a sufficient number of shares to elect their designee at a meeting of the stockholders. Any director elected as provided in the immediately preceding sentence hereof may be removed during the aforesaid term of office, either with or without cause, by, and only by, the affirmative vote of the holders of the shares of the class or series of stock entitled to elect such director or directors, given either at a special meeting of such stockholders duly called for that purpose or pursuant to a written consent of stockholders, and any vacancy thereby created may be filled by the holders of that class or series of stock represented at the meeting or pursuant to written consent.

        (iii)  Termination. Notwithstanding anything in this Section 4(B)(4)(d) to the contrary, the provisions of this Section 4(B)(4)(d) shall cease to be of any further force or effect upon the earlier to occur of (i) a Liquidation Event or (ii) an event constituting a Liquidation.

        (e)   Approval by Majority of Preferred Stock. The Company shall not, without first obtaining the approval (by vote or consent as provided by law) of a majority of the votes represented by all of the shares of Preferred Stock then outstanding, voting together as a single class and not as separate series, and on an as-converted to common stock basis:

          (i)  amend this Restated Certificate of Incorporation or the By-laws of the Company;

         (ii)  reclassify any Common Stock into shares having any preference or priority superior to or on a parity with the Series B-1 Preferred Stock;

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        (iii)  pay or declare any dividend on or redeem any shares of Common Stock or Series A-2.1, Series A-2.2, Series A-3, Series A-4, Series A-5 or Series A-6 Preferred Stock (other than in connection with the repurchase of shares of Common Stock issued to or held by employees, consultants, officers and directors at a price not greater than the amount paid by such persons for such shares upon termination of their employment or services pursuant to agreements providing for the right of said repurchase, provided such repurchase is approved by the Board of Directors) or repay any loans made by any holder of the outstanding shares of Preferred Stock or Common Stock except in connection with the termination of employment of such holder in amounts to be agreed upon by the Company and such terminated holder;

        (iv)  authorize, create or issue any other class of capital stock or any securities convertible into capital stock having any preference or priority superior to or on a parity with the Series B-1 Preferred Stock;

         (v)  enter into any Liquidation Event; or

        (vi)  enter into any licensing of the Company's technology that would constitute a sale of substantially all of the assets of the Company.

        (f)    Approval by Series A-1 and Series B-1 Preferred Stock. The Company shall not, without first obtaining the approval (by vote or consent as provided by law) of a majority of the votes represented by all of the shares of Series A-1 and Series B-1 Preferred Stock then outstanding, voting together as a single class and not as separate series, and on an as-converted to common stock basis:

          (i)  amend this Restated Certificate of Incorporation or the By-laws of the Company; or

         (ii)  increase or decrease the size of the Company's Board of Directors above seven, or below five.

        5.     Notices. Any notice required by the provisions of this Article FOURTH to be given to the holders of Preferred Stock shall be deemed given if deposited in the United States mail, postage prepaid, with a nationally recognized overnight courier, or personally delivered, and addressed to each holder of record at such holder's address appearing on the books of the Company.

FIFTH

        Except as otherwise provided in this Restated Certificate of Incorporation, the Board of Directors shall have the power to make, alter, amend and repeal the By-laws of the Company (except insofar as the By-laws of the Company as adopted by action of the stockholders of the Company shall otherwise provide). Any By-laws made by the directors under the powers conferred hereby may be altered, amended or repealed by the directors or by the stockholders.

SIXTH

        Election of directors need not be by written ballot unless the By-laws of the Company shall so provide.

SEVENTH

        The Company reserves the right to amend the provisions in this Restated Certificate of Incorporation and in any certificate amendatory hereof in the manner now or hereafter prescribed by law and the provisions of this Restated Certificate of Incorporation, and all rights conferred on stockholders or others hereunder or thereunder are granted subject to such reservation.

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EIGHTH

        A.    To the fullest extent permitted by the Delaware General Corporation Law as the same exists or as may hereafter be amended, no director of the Company shall be personally liable to the Company or its stockholders for monetary damages for breach of fiduciary duty as a director.

        B.    The Company shall indemnify to the fullest extent permitted by law any person made or threatened to be made a party to an action or proceeding whether criminal, civil, administrative or investigative, by reason of the fact that he, his testator or intestate is or was a director, officer or employee of the Company or any predecessor of the Company or serves or served at any other enterprise as a director, officer or employee at the request of the Company or any predecessor to the Company to the same extent as permitted under subpart (a) above.

        C.    Neither any amendment nor repeal of this Article EIGHTH, nor the adoption of any provision of this Restated Certificate of Incorporation inconsistent with this Article EIGHTH, shall eliminate or reduce the effect of this Article EIGHTH in respect of any matter occurring or any action or proceeding accruing or arising or that, but for this Article EIGHTH, would accrue or arise, prior to such amendment, repeal or adoption of an inconsistent provision.

        D.    The Company may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Company or another corporation, partnership, joint venture, trust or other enterprise against any such expense, liability or loss, whether or not the Company would have the power to indemnify such person against such expense, liability or loss under the Delaware General Corporation Law.

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Exhibit 3.01

EXHIBIT A RESTATED CERTIFICATE OF INCORPORATION OF OMNEON VIDEO NETWORKS, INC.

EX-3.03

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Exhibit 3.03

BY-LAWS

OF

OMNEON VIDEO NETWORKS, INC.

A DELAWARE CORPORATION

TABLE OF CONTENTS

		Page
ARTICLE 1—STOCKHOLDERS		1
1.1	ANNUAL MEETINGS	1
1.2	SPECIAL MEETINGS	1
1.3	NOTICE OF MEETINGS	1
1.4	ADJOURNMENTS	1
1.5	QUORUM	1
1.6	ORGANIZATION	2
1.7	VOTING; PROXIES	2
1.8	FIXING DATE FOR DETERMINATION OF STOCKHOLDERS OF RECORD	2
1.9	LIST OF STOCKHOLDERS ENTITLED TO VOTE	3
1.10	ACTION BY CONSENT OF STOCKHOLDERS	3
ARTICLE 2—BOARD OF DIRECTORS		3
2.1	NUMBER; QUALIFICATIONS	3
2.2	ELECTION; RESIGNATION; REMOVAL; VACANCIES	3
2.3	REGULAR MEETINGS	4
2.4	SPECIAL MEETINGS	4
2.5	TELEPHONIC MEETINGS PERMITTED	4
2.6	QUORUM; VOTE REQUIRED FOR ACTION	4
2.7	ORGANIZATION	4
2.8	INFORMAL ACTION BY DIRECTORS	4
ARTICLE 3—COMMITTEES		4
3.1	COMMITTEES	4
3.2	COMMITTEE RULES	5
ARTICLE 4—OFFICERS		5
4.1	EXECUTIVE OFFICERS; ELECTION; QUALIFICATIONS; TERM OF OFFICE; RESIGNATION; REMOVAL; VACANCIES	5
4.2	POWERS AND DUTIES OF EXECUTIVE OFFICERS	5
ARTICLE 5—STOCK		5
5.1	CERTIFICATES	5
5.2	LOST, STOLEN OR DESTROYED STOCK CERTIFICATES; ISSUANCE OF NEW CERTIFICATES	6
ARTICLE 6—INDEMNIFICATION		6
6.1	RIGHT TO INDEMNIFICATION	6
6.2	PREPAYMENT OF EXPENSES	6
6.3	CLAIMS	6
6.4	NON-EXCLUSIVITY OF RIGHTS	6
6.5	OTHER INDEMNIFICATION	6
6.6	AMENDMENT OR REPEAL	7

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ARTICLE 7—MISCELLANEOUS		7
7.1	FISCAL YEAR	7
7.2	SEAL	7
7.3	WAIVER OF NOTICE OF MEETINGS OF STOCKHOLDERS, DIRECTORS AND COMMITTEES	7
7.4	INTERESTED DIRECTORS; QUORUM	7
7.5	FORM OF RECORDS	7
7.6	AMENDMENT OF BY-LAWS	8

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BY-LAWS
OF
OMNEON VIDEO NETWORKS, INC.

ARTICLE 1
STOCKHOLDERS

        1.1    ANNUAL MEETINGS

        An annual meeting of stockholders shall be held for the election of directors at such date, time and place, either within or without the State of Delaware, as may be designated by resolution of the Board of Directors from time to time. Any other proper business may be transacted at the annual meeting.

        1.2    SPECIAL MEETINGS

        Special meetings of stockholders for any purpose or purposes may be called at any time by the Board of Directors, or by a committee of the Board of Directors which has been duly designated by the Board of Directors and whose powers and authority, as expressly provided in a resolution of the Board of Directors, include the power to call such meetings, but such special meetings may not be called by any other person or persons.

        1.3    NOTICE OF MEETINGS

        Whenever stockholders are required or permitted to take any action at a meeting, a written notice of the meeting shall be given which shall state the place, date and hour of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called. Unless otherwise provided by law, the certificate of incorporation or these by-laws, the written notice of any meeting shall be given not less than ten nor more than sixty days before the date of the meeting to each stockholder entitled to vote at such meeting. If mailed, such notice shall be deemed to be given when deposited in the mail, postage prepaid, directed to the stockholder at his address as it appears on the records of the corporation.

        1.4    ADJOURNMENTS

        Any meeting of stockholders, annual or special, may adjourn from time to time to reconvene at the same or some other place, and notice need not be given of any such adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting the corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

        1.5    QUORUM

        Except as otherwise provided by law, the certificate of incorporation or these by-laws, at each meeting of stockholders the presence in person or by proxy of the holders of shares of stock having a majority of the votes which could be cast by the holders of all outstanding shares of stock entitled to vote at the meeting shall be necessary and sufficient to constitute a quorum. In the absence of a quorum, the stockholders so present may, by majority vote, adjourn the meeting from time to time in the manner provided in Section 1.4 of these by-laws until a quorum shall attend. Shares of its own stock belonging to the corporation or to another corporation, if a majority of the shares entitled to vote in the election of directors of such other corporation is held, directly or indirectly, by the corporation, shall neither be entitled to vote nor be counted for quorum purposes; provided, however, that the

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foregoing shall not limit the right of the corporation to vote stock, including but not limited to its own stock, held by it in a fiduciary capacity.

        1.6    ORGANIZATION

        Meetings of stockholders shall be presided over by the Chairman of the Board, if any, or in his absence by the Vice Chairman of the Board, if any, or in his absence by the President, or in his absence by a Vice President, or in the absence of the foregoing persons by a chairman designated by the Board of Directors, or in the absence of such designation by a chairman chosen at the meeting. The Secretary shall act as secretary of the meeting, but in his absence the chairman of the meeting may appoint any person to act as secretary of the meeting.

        1.7    VOTING; PROXIES

        Except as otherwise provided by the certificate of incorporation, each stockholder entitled to vote at any meeting of stockholders shall be entitled to one vote for each share of stock held by him which has voting power upon the matter in question. Each stockholder entitled to vote at a meeting of stockholders may authorize another person or persons to act for him by proxy, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. A duly executed proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A stockholder may revoke any proxy which is not irrevocable by attending the meeting and voting in person or by filing an instrument in writing revoking the proxy or another duly executed proxy bearing a later date with the Secretary of the corporation. Voting at meetings of stockholders need not be by written ballot and need not be conducted by inspectors of election unless so determined by the holders of shares of stock having a majority of the votes which could be cast by the holders of all outstanding shares of stock entitled to vote thereon which are present in person or by proxy at such meeting. At all meetings of stockholders for the election of directors a plurality of the votes cast shall be sufficient to elect. All other elections and questions shall, unless otherwise provided by law, the certificate of incorporation or these by-laws, be decided by the vote of the holders of shares of stock having a majority of the votes which could be cast by the holders of all shares of stock entitled to vote thereon which are present in person or represented by proxy at the meeting.

        1.8    FIXING DATE FOR DETERMINATION OF STOCKHOLDERS OF RECORD

        In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors and which record date: (1) in the case of determination of stockholders entitled to vote at any meeting of stockholders or adjournment thereof, shall, unless otherwise required by law, not be more than sixty nor less than ten days before the date of such meeting; (2) in the case of determination of stockholders entitled to express consent to corporate action in writing without a meeting, shall not be more than ten days from the date upon which the resolution fixing the record date is adopted by the Board of Directors; and (3) in the case of any other action, shall not be more than sixty days prior to such other action. If no record date is fixed: (1) the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held; (2) the record date for determining stockholders entitled to express consent to corporate action in writing without a meeting when no prior action of the Board of Directors is required by law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken

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is delivered to the corporation in accordance with applicable law, or, if prior action by the Board of Directors is required by law, shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action; and (3) the record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

        1.9    LIST OF STOCKHOLDERS ENTITLED TO VOTE

        The Secretary shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof and may be inspected by any stockholder who is present. Upon the willful neglect or refusal of the directors to produce such a list at any meeting for the election of directors, they shall be ineligible for election to any office at such meeting. The stock ledger shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, the list of stockholders or the books of the corporation, or to vote in person or by proxy at any meeting of stockholders.

        1.10    ACTION BY CONSENT OF STOCKHOLDERS

        Unless otherwise restricted by the certificate of incorporation; any action required or permitted to be taken at any annual or special meeting of the stockholders may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

ARTICLE 2
BOARD OF DIRECTORS

        2.1    NUMBER; QUALIFICATIONS

        The Board of Directors shall consist of one or more members, the number thereof to be determined from time to time by resolution of the Board of Directors. Directors need not be stockholders.

        2.2    ELECTION; RESIGNATION; REMOVAL; VACANCIES

        Each director so elected shall hold office until the first annual meeting of stockholders or until his successor is elected and qualified. At the first annual meeting of stockholders and at each annual meeting thereafter, the stockholders shall elect directors each of whom shall hold office for a term of one year or until his successor is elected and qualified. Any director may resign at any time upon written notice to the corporation. Any newly created directorship or any vacancy occurring in the Board of Directors for any cause may be filled by a majority of the remaining members of the Board of Directors, although such majority is less than a quorum, or by a plurality of the votes cast at a meeting of stockholders, and each director so elected shall hold office until the expiration of the term of office of the director whom he has replaced or until his successor is elected and qualified.

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        2.3    REGULAR MEETINGS

        Regular meetings of the Board of Directors may be held at such places within or without the State of Delaware and at such times as the Board of Directors may from time to time determine, and if so determined notices thereof need not be given.

        2.4    SPECIAL MEETINGS

        Special meetings of the Board of Directors may be held at any time or place within or without the State of Delaware whenever called by the President, any Vice President, the Secretary, or by any member of the Board of Directors. Notice of a special meeting of the Board of Directors shall be given by the person or persons calling the meeting at least twenty-four hours before the special meeting.

        2.5    TELEPHONIC MEETINGS PERMITTED

        Members of the Board of Directors, or any committee designated by the Board of Directors, may participate in a meeting thereof by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this by-law shall constitute presence in person at such meeting.

        2.6    QUORUM; VOTE REQUIRED FOR ACTION

        At all meetings of the Board of Directors a majority of the whole Board of Directors shall constitute a quorum for the transaction of business. Except in cases in which the certificate of incorporation or these by-laws otherwise provide, the vote of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors.

        2.7    ORGANIZATION

        Meetings of the Board of Directors shall be presided over by the Chairman of the Board, if any, or in his absence by the Vice Chairman of the Board, if any, or in his absence by the President, or in their absence by a chairman chosen at the meeting. The Secretary shall act as secretary of the meeting, but in his absence the chairman of the meeting may appoint any person to act as secretary of the meeting.

        2.8    INFORMAL ACTION BY DIRECTORS

        Unless otherwise restricted by the certificate of incorporation or these by-laws, any action required or permitted to be taken at any meeting of the Board of Directors, or of any committee thereof, may be taken without a meeting if all members of the Board of Directors or such committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board of Directors or such committee.

ARTICLE 3
COMMITTEES

        3.1    COMMITTEES

        The Board of Directors may, by resolution passed by a majority of the whole Board of Directors, designate one or more committees, each committee to consist of one or more of the directors of the corporation. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of the committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in place of any such absent or disqualified member. Any such committee, to the extent permitted by law and to the extent provided in the resolution of the Board of Directors, shall have and may exercise all the powers

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and authority of the Board of Directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it.

        3.2    COMMITTEE RULES

        Unless the Board of Directors otherwise provides, each committee designated by the Board of Directors may make, alter and repeal rules for the conduct of its business. In the absence of such rules each committee shall conduct its business in the same manner as the Board of Directors conducts its business pursuant to Article III of these by-laws.

ARTICLE 4
OFFICERS

        4.1    EXECUTIVE OFFICERS; ELECTION; QUALIFICATIONS; TERM OF OFFICE; RESIGNATION; REMOVAL; VACANCIES

        The Board of Directors shall elect a President and Secretary, and it may, if it so determines, choose a Chairman of the Board and a Vice Chairman of the Board from among its members. The Board of Directors may also choose one or more Vice Presidents, one or more Assistant Secretaries, a Treasurer and one or more Assistant Treasurers. Each such officer shall hold office until the first meeting of the Board of Directors after the annual meeting of stockholders next succeeding his election, and until his successor is elected and qualified or until his earlier resignation or removal. Any officer may resign at any time upon written notice to the corporation. The Board of Directors may remove any officer with or without cause at any time, but such removal shall be without prejudice to the contractual rights of such officer, if any, with the corporation. Any number of offices may be held by the same person. Any vacancy occurring in any office of the corporation by death, resignation, removal or otherwise may be filled for the unexpired portion of the term by the Board of Directors at any regular or special meeting.

        4.2    POWERS AND DUTIES OF EXECUTIVE OFFICERS

        The officers of the corporation shall have such powers and duties in the management of the corporation as may be prescribed by the Board of Directors and, to the extent not so provided, as generally pertain to their respective offices, subject to the control of the Board of Directors. The Board of Directors may require any officer, agent or employee to give security for the faithful performance of his duties.

ARTICLE 5
STOCK

        5.1    CERTIFICATES

        Every holder of stock shall be entitled to have a certificate signed by or in the name of the corporation by the Chairman or Vice Chairman of the Board of Directors, if any, or the President or Vice President, and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary, of the corporation, certifying the number of shares owned by him in the corporation. Any of or all the signatures on the certificate may be a facsimile. In case any officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent, or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer, transfer agent, or registrar at the date of issue.

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        5.2    LOST, STOLEN OR DESTROYED STOCK CERTIFICATES; ISSUANCE OF NEW CERTIFICATES

        The corporation may issued a new certificate of stock in the place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the corporation may require the owner of the lost, stolen or destroyed certificate, or his legal representative, to give the corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate.

ARTICLE 6
INDEMNIFICATION

        6.1    RIGHT TO INDEMNIFICATION

        The corporation shall indemnify and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any person who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a "proceeding") by reason of the fact that he, or a person for whom he is the legal representative, is or was a director, officer, employee or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, enterprise or non-profit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses reasonably incurred by such person. The corporation shall be required to indemnify a person in connection with a proceeding initiated by such person only if the proceeding was authorized by the Board of Directors of the corporation.

        6.2    PREPAYMENT OF EXPENSES

        The corporation shall pay the expenses incurred in defending any proceeding in advance of its final disposition, provided, however, that the payment of expenses incurred by a director or officer in advance of the final disposition of the proceeding shall be made only upon receipt of an undertaking by the director or officer to repay all amounts advanced if it should be ultimately determined that the director or officer is not entitled to be indemnified under this Article or otherwise.

        6.3    CLAIMS

        If a claim for indemnification or payment of expenses under this Article is not paid in full within sixty days after a written claim therefor has been received by the corporation the claimant may file suit to recover the unpaid amount of such claim and, if successful in whole or in part, shall be entitled to be paid the expense of prosecuting such claim. In any such action the corporation shall have the burden of proving that the claimant was not entitled to the requested indemnification or payment of expenses under applicable law.

        6.4    NON-EXCLUSIVITY OF RIGHTS

        The rights conferred on any person by the Article VI shall not be exclusive of any other rights which such person may have or hereafter acquire under any statute, provision of the certificate of incorporation, these by-laws, agreement, vote of stockholders or disinterested directors or otherwise.

        6.5    OTHER INDEMNIFICATION

        The corporation's obligation, if any, to indemnify any person who was or is serving at its request as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, enterprise or non-profit entity shall be reduced by any amount such person may collect as indemnification from such other corporation, partnership, joint venture, trust, enterprise or non-profit enterprise.

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        6.6    AMENDMENT OR REPEAL

        Any repeal or modification of the foregoing provisions of this Article VI shall not adversely affect any right or protection hereunder of any person in respect of any act or omission occurring prior to the time of such repeal or modification.

ARTICLE 7
MISCELLANEOUS

        7.1    FISCAL YEAR

        The fiscal year of the corporation shall be determined by resolution of the Board of Directors.

        7.2    SEAL

        The corporate seal shall have the name of the corporation inscribed thereon and shall be in such form as may be approved from time to time by the Board of Directors.

        7.3    WAIVER OF NOTICE OF MEETINGS OF STOCKHOLDERS, DIRECTORS AND COMMITTEES

        Any written waiver of notice, signed by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of any regular or special meeting of the stockholders, directors, or members of a committee of directors need be specified in any written waiver of notice.

        7.4    INTERESTED DIRECTORS; QUORUM

        No contract or transaction between the corporation and one or more of its directors or officers, or between the corporation and any other corporation, partnership, association, or other organization in which one or more of its directors or officers are directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the Board of Directors or committee thereof which authorizes the contract or transaction, or solely because his or their votes are counted for such purpose, if: (1) the material facts as to his relationship or interest and as to the contract or transaction are disclosed or are known to the Board of Directors or the committee, and the Board of Directors or committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, even though the disinterested directors be less than a quorum; or (2) the material facts as to his relationship or interest and as to the contract or transaction are disclosed or are known to the stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders; or (3) the contract or transaction is fair as to the corporation as of the time it is authorized, approved or ratified, by the Board of Directors, a committee thereof, or the stockholders. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee which authorizes the contract or transaction.

        7.5    FORM OF RECORDS

        Any records maintained by the corporation in the regular course of its business, including its stock ledger, books of account, and minute books, may be kept on, or be in the form of, punch cards, magnetic tape, photographs, microphotographs, or any other information storage device, provided that the records so kept can be converted into clearly legible form within a reasonable time. The

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corporation shall so convert any records so kept upon the request of any person entitled to inspect the same.

        7.6    AMENDMENT OF BY-LAWS

        These by-laws may be altered or repealed, and new by-laws made, by the Board of Directors, but the stockholders may make additional by-laws and may alter and repeal any by-laws whether adopted by them or otherwise.

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Exhibit 3.03

BY-LAWS OF OMNEON VIDEO NETWORKS, INC.

EX-4.02

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Exhibit 4.02

OMNEON VIDEO NETWORKS, INC.

FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

March 26, 2004

TABLE OF CONTENTS

		Page
SECTION 1. Restrictions on Transferability; Registration Rights		2
1.1.	Certain Definitions	2
1.2.	Restrictions	3
1.3.	Restrictive Legend	3
1.4.	Notice of Proposed Transfers	4
1.5.	Requested Registration	4
1.6.	Company Registration	6
1.7.	Registration on Form S-3	7
1.8.	Limitations on Subsequent Registration Rights	9
1.9.	Expenses of Registration	9
1.10.	Registration Procedures	9
1.11.	Indemnification	10
1.12.	Information by Holder	12
1.13.	Rule 144 Reporting	12
1.14.	Transfer of Registration Rights	13
1.15.	Standoff Agreement	13
1.16.	Termination of Rights	13
SECTION 2. Right of First Offer		14
2.1.	Right of First Offer	14
2.2.	Termination of Right of First Offer	16
SECTION 3. Affirmative Covenants of the Company		16
3.1.	Financial Information	16
3.2.	Operating Plan and Budget	17
3.3.	Inspection	17
3.4.	Assignment of Rights to Financial Information	18
3.5.	Termination of Covenants	18
3.6.	Delivery of Qualified Small Business Stock Representations	18
3.7.	Definition of Investor	18
3.8.	Certain Covenants Relating to SBA Matters	18
SECTION 4. Miscellaneous		19
4.1.	Assignment	19
4.2.	Third Parties	19
4.3.	Governing Law	19
4.4.	Aggregation of Shares	19
4.5.	Counterparts	19
4.6.	Notices	19
4.7.	Severability	19
4.8.	Amendment and Waiver	20
4.9.	Rights of Parties	20
4.10.	Delays or Omissions	20
4.11.	Entire Agreement; Effect on Prior Rights Agreement; Attorneys' Fees; Waiver of Rights	20
4.12.	Specific Performance	21

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EXHIBITS

Exhibit A    Certificate of Representations Regarding Qualified Small Business Stock

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FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

        THIS FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT (this "Agreement") is entered into as of the 26th day of March 2004 ("Effective Date"), by and among (i) OMNEON VIDEO NETWORKS, INC., a Delaware corporation (the "Company"), (ii) Donald M. Craig, Michael M. Gilbert, Edward P. Hobson, II and Lawrence R. Kaplan (each a "Founder" and collectively the "Founders"), (iii) Comerica Bank (f/k/a Imperial Bank) ("Comerica"), as the holder of a warrant to purchase Common Stock, (iv) holders of outstanding shares of the Company's Series A-1 Preferred Stock (the "Series A-1 Holders") acquired pursuant to the Company's Series A-1, Series A-2.1 and Series A-2.2 Preferred Stock Purchase Agreement dated October 29, 2002 (the "Series A Stock Purchase Agreement"), (v) the Former Preferred Holders (as defined below), (vi) holders of outstanding shares of the Company's Series A-2.1 Preferred Stock (the "Series A-2.1 Holders") acquired pursuant to the Series A Stock Purchase Agreement and the Company's Loan Restructuring Agreement dated October 29, 2002 with Lighthouse Capital Partners II, L.P. and Lighthouse Capital Partners III, L.P., (vii) purchasers of the Company's Series B-1 Preferred Stock ("Series B-1 Investors") pursuant to the Company's Series B-1 Preferred Stock Purchase Agreement dated March 26, 2004 (the "Stock Purchase Agreement"), and (viii) BMC Software, Inc. ("BMC" and together with the Series B-1 Investors, the Series A-1 Holders and the Series A-2.1 Holders, the "Investors"), as the holder of a warrant to purchase Series A-6 Preferred Stock.

RECITALS

        A.    Certain stockholders of the Company (collectively, the "Former Preferred Holders") held shares of the Company's Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock, which they acquired pursuant to the Company's Series A Preferred Stock Purchase Agreement dated May 22, 1998, Series B Preferred Stock Purchase Agreement dated June 30, 1999, and Series C Preferred Stock Purchase Agreement dated October 10, 2000, respectively.

        B.    Such Former Preferred Holders had such shares of Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock (the "Former Preferred Stock") converted into shares of Common Stock, Series A-3 Preferred Stock, Series A-4 Preferred Stock and/or Series A-5 Preferred Stock of the Company pursuant to the Company's certificate of incorporation, as amended and restated on October 28, 2002 in connection with the Company's sale of shares of its Series A-1 Preferred Stock pursuant to the Series A Stock Purchase Agreement.

        C.    The Company shall as of the Effective Date sell to certain entities and individuals shares of the Company's Series B-1 Preferred Stock, and execution of this Agreement is a condition precedent to the purchase and sale of such Series B-1 Preferred Stock.

        D.    The Founders, Comerica, the Series A-1 Holders, the Series A-2.1 Holders, the Former Preferred Holders, and BMC are parties to the Company's Third Amended and Restated Investor Rights Agreement dated as of October 29, 2002 (the "Prior Rights Agreement"), pursuant to which such parties were granted certain rights.

        E.    Those Former Preferred Holders who acquired Series A-1 Preferred Stock pursuant to the Series A-1 Stock Purchase Agreement, continued as parties to the Prior Rights Agreement, and, as such, have the right to enter into this Agreement.

        F.     The Company and Series B-1 Investors have requested and the holders of a majority of the aggregate outstanding Registrable Securities (as defined in the Prior Rights Agreement) held by the Investors (as defined in the Prior Rights Agreement) and of a majority of the aggregate outstanding Shares (as defined in the Prior Rights Agreement) held by the Founders (such holders, the "Amending Parties") have agreed, pursuant to Section 4.8 of the Prior Rights Agreement, to amend and restate in its entirety the Prior Rights Agreement in the manner set forth herein.

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        G.    The Company and Comerica are parties to that certain Amended and Restated Loan Agreement dated January 28, 2000 pursuant to which Comerica was granted a warrant to purchase 6,875 shares of Common Stock (the "Comerica Shares"), which shares have registration rights contained in Section 1.6 herein. Comerica is a party to this Agreement for purposes of Sections 1 (with the exception of Sections 1.5 and 1.7) and 4 only. The Founders are parties to this Agreement for purposes of Sections 1 and 4 only.

        NOW, THEREFORE, the parties agree as follows:

SECTION 1.

Restrictions on Transferability; Registration Rights

        1.1.    Certain Definitions.    As used in this Agreement, the following terms shall have the following respective meanings:

        "Commission" shall mean the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act.

        "Common Stock" shall mean the Company's common stock, par value $0.001 per share.

        "Conversion Shares" shall mean the Common Stock issued or issuable upon conversion of the Former Preferred Stock, the Series B-1 Preferred Stock and the Company's Series A-1 Preferred Stock, Series A-2.1 Preferred Stock, Series A-3 Preferred Stock, Series A-4 Preferred Stock, Series A-5 Preferred Stock and Series A-6 Preferred Stock.

        "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, or any similar successor federal statute, and the rules and regulations thereunder, all as the same shall be in effect from time to time.

        "Holder" shall mean (i) any Founder, Former Preferred Holder or Investor holding Registrable Securities and (ii) any person holding Registrable Securities to whom the rights under this Agreement have been transferred in accordance with Section 1.14 hereof, provided, however, that for purposes of this Agreement, a record holder of shares of Preferred Stock (or warrants to purchase Preferred Stock) of the Company that is convertible into such Registrable Securities shall be deemed to be the Holder of such Registrable Securities; and provided, further, that the Company shall in no event be obligated to register shares of Preferred Stock or warrants of the Company, and that Holders of Registrable Securities will not be required to exercise their warrants or convert their shares of Preferred Stock into Common Stock in order to exercise the registration rights granted hereunder, until immediately before the closing of the offering to which the registration relates. "Holder" shall also mean Comerica except with respect to Sections 1.5 and 1.7 hereof.

        "Initiating Holders" shall mean (i) any Investors (or transferees of Investors under Section 1.14 hereof) who in the aggregate are Holders of not less than twenty percent (20%) of the Registrable Securities then held (or deemed held) by all Investors (or transferees of Investors under Section 1.14 hereof) and (ii) who propose to register securities the aggregate offering price of which, net of underwriting discounts and commissions, exceeds $10,000,000.

        The terms "register", "registered" and "registration" refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act, and the declaration or ordering of the effectiveness of such registration statement.

        "Registrable Securities" shall mean (i) Common Stock held by the Founders free of any right of repurchase in favor of the Company, (ii) the Conversion Shares, (iii) any Common Stock of the Company issued or issuable in respect of the Conversion Shares upon any stock split, stock dividend, recapitalization, or similar event, or any Common Stock otherwise issued or issuable with respect to the

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Conversion Shares and (iv) the Comerica Shares for the purposes of Section 1, with the exception of Sections 1.5 and 1.7, only; provided, however, that shares of Common Stock or other securities shall only be treated as Registrable Securities if and so long as they have not been (A) sold to or through a broker or dealer or underwriter in a public distribution or a public securities transaction, (B) sold in a transaction exempt from the registration and prospectus delivery requirements of the Securities Act under Section 4(1) thereof so that all transfer restrictions and restrictive legends with respect thereto are removed upon the consummation of such sale, or (C) transferred in a transaction pursuant to which the registration rights are not also assigned in accordance with Section 1.14 hereof.

        "Registration Expenses" shall mean all expenses incurred by the Company in complying with Sections 1.5, 1.6 and 1.7 hereof, including, without limitation, all registration, qualification, listing and filing fees, printing expenses, escrow fees, fees and disbursements of counsel for the Company, blue sky fees and expenses, and the expense of any special audits incident to or required by any such registration (but excluding the compensation of regular employees of the Company which shall be paid in any event by the Company) and excluding the Selling Expenses.

        "Restricted Securities" shall mean the securities of the Company required to bear the legend set forth in Section 1.3(a) hereof.

        "Securities Act" shall mean the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder or any similar federal statute and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time.

        "Selling Expenses" shall mean all underwriting discounts, selling commissions and stock transfer taxes applicable to the securities registered by the Holders and all fees and disbursements of counsel for the Holders (other than as specified in Section 1.9).

        "Shares" shall mean any shares of capital stock of the Company or any securities of the Company convertible into or exchangeable for such capital stock held by any Founder, Investor or Comerica as of the date of this Agreement.

        1.2.    Restrictions.    None of the Founders, Investors, Former Preferred Holders and Comerica shall sell, assign, transfer or pledge any Shares except upon the conditions specified in this Agreement, which conditions are intended to ensure compliance with the provisions of the Securities Act. Each Founder, Investor and Former Preferred Holder and Comerica will cause any proposed purchaser, assignee, transferee or pledgee of any Shares held by such Founder, Investor, Former Preferred Holder or Comerica to agree to take and hold such Shares subject to the provisions and upon the conditions specified in this Agreement.

        1.3.    Restrictive Legend.    Each certificate representing the Shares held by the Founders, Investors, Former Preferred Holders and Comerica and any other securities issued in respect of such Shares upon any stock split, stock dividend, recapitalization, merger, consolidation or similar event, shall (unless otherwise permitted by the provisions of Section 1.4 below) be stamped or otherwise imprinted with legends in substantially the following form (in addition to any legend required under applicable state securities laws):

(a)

"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH SHARES MAY NOT BE SOLD, TRANSFERRED OR PLEDGED IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL (WHICH MAY BE COUNSEL FOR THE COMPANY) STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT."

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(b)

"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF ONE OR MORE AGREEMENTS BETWEEN THE COMPANY AND THE STOCKHOLDER, COPIES OF WHICH ARE ON FILE WITH THE SECRETARY OF THE COMPANY."

        Each Founder, Investor and Former Preferred Holder and Comerica consents to the Company making a notation on its records and giving instructions to any transfer agent of the Restricted Securities in order to implement the restrictions on transfer established in this Section 1.

        1.4.    Notice of Proposed Transfers.    The holder of each certificate representing Restricted Securities, by acceptance thereof, agrees to comply in all respects with the provisions of this Section 1. Prior to any proposed sale, assignment, transfer or pledge of any Restricted Securities, unless there is in effect a registration statement under the Securities Act covering the proposed transfer, the holder thereof shall give written notice to the Company of such holder's intention to effect such transfer, sale, assignment or pledge. Each such notice shall describe the manner and circumstances of the proposed transfer, sale, assignment or pledge in sufficient detail, and if reasonably requested by the Company shall be accompanied at such holder's expense by either (i) an unqualified written opinion of legal counsel who shall, and whose legal opinion shall, be satisfactory to the Company, addressed to the Company to the effect that the proposed transfer of the Restricted Securities may be effected without registration under the Securities Act, or (ii) a "no action" letter from the Commission to the effect that the transfer of such securities without registration will not result in a recommendation by the staff of the Commission that action be taken with respect thereto, or (iii) any other evidence satisfactory to counsel to the Company, whereupon the holder of such Restricted Securities shall be entitled to transfer such Restricted Securities in accordance with the terms of the notice delivered by the holder to the Company. The Company will not require such a legal opinion, "no action" letter or other evidence satisfactory to counsel to the Company (a) in any transaction in compliance with Rule 144 under the Securities Act ("Rule 144"), (b) in any transaction in which an Investor which is a corporation distributes Restricted Securities solely to its majority owned subsidiaries or affiliates for no consideration, or (c) in any transaction in which an Investor which is a partnership or limited liability company distributes Restricted Securities solely to partners, affiliates (as defined in the Securities Act) or members thereof for no consideration; provided that each transferee agrees in writing to be subject to the terms of this Section 1.4. Each certificate evidencing the Restricted Securities transferred as above provided shall bear, except if such transfer is made pursuant to Rule 144, the restrictive legends set forth in Section 1.3 above, except that such certificate shall not bear the restrictive legend set forth in Section 1.3(a) above if, in the opinion of counsel for such holder and the Company, such legend is not required in order to establish compliance with any provisions of the Securities Act. In either such case, the Company shall be obligated to reissue promptly legended or unlegended certificates at the request of any holder thereof.

        1.5.    Requested Registration.    

        (a)    Request for Registration.    If the Company shall receive from the Initiating Holders a written request with respect to the Registrable Securities held by such Initiating Holders that the Company effect any registration, qualification or compliance, the Company will:

          (i)  promptly give written notice of the proposed registration, qualification or compliance to all other Holders; and

         (ii)  as soon as practicable thereafter, use its best efforts to effect such registration, qualification or compliance (including, without limitation, the execution of an undertaking to file post-effective amendments, appropriate qualification under applicable blue sky or other state securities laws and appropriate compliance with applicable regulations issued under the Securities Act and any other governmental requirements or regulations) as may be so requested and as would permit or facilitate the sale and distribution of all or such portion of such Registrable

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Securities as are specified in such request, together with all or such portion of the Registrable Securities of any Holder or Holders joining in such request as are specified in a written request received by the Company within thirty (30) days after the deemed receipt of such written notice from the Company; provided, however, that the Company shall not be obligated to take any action to effect any such registration, qualification or compliance pursuant to this Section 1.5:

(1)

In any particular jurisdiction in which the Company would be required to execute a general consent to service of process in effecting such registration, qualification or compliance unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act;



(2)

Prior to the earlier of (A) six (6) months following the effective date of the first public offering of the Common Stock of the Company to the general public which is effected pursuant to a registration statement filed with, and declared effective by, the Commission under the Securities Act (the "IPO") or (B) three (3) years following the closing of the sale and issuance of the Series B-1 Preferred Stock pursuant to the Series B-1 Purchase Agreement;



(3)

During the period starting with the date sixty (60) days prior to the Company's estimated date of filing of, and ending on the later of (A) six months from the date sixty (60) days prior to the Company's estimated date of filing of any registration statement pertaining to securities of the Company (other than a registration of securities in a Rule 145 transaction or with respect to an employee benefit plan), provided that the registration statement has not become effective during such time period or (B) the date six (6) months immediately following the effective date of, any registration statement pertaining to securities of the Company (other than a registration of securities in a Rule 145 transaction or with respect to an employee benefit plan), provided in the case of clauses (A) or (B) that the Company is actively employing in good faith all reasonable efforts to cause such registration statement to become effective and that the Company's estimate of the date of filing such registration statement is made in good faith;



(4)

After the Company has effected two (2) such registrations pursuant to this subparagraph 1.5(a), such registrations having been declared or ordered effective and the securities offered pursuant to such registrations having been sold; or



(5)

If the Company shall furnish to such Holders a certificate, signed by the President or Chief Executive Officer of the Company, stating that in the good faith judgment of the board of directors of the Company (the "Board of Directors") it would be seriously detrimental to the Company or its stockholders for a registration statement to be filed in the near future, then the Company's obligation to use its best efforts to register, qualify or comply under this Section 1.5 shall be deferred for a period not to exceed one-hundred and twenty (120) days from the date of receipt of written request from the Initiating Holders; provided, however, that the Company may not utilize this right more than once in any twelve (12) month period; provided further that the Company shall not register any securities for the account of itself or any other stockholder during such one hundred twenty (120) day period (other than a registration relating solely to the sale of securities of participants in a Company stock plan, a registration relating to a corporate reorganization or transaction under Rule 145 of the Act, a registration on any form that does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities, or a registration in which the only Common Stock being registered is Common Stock issuable upon conversion of debt securities that are also being registered).

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        Subject to the foregoing clauses (1) through (5), the Company shall file a registration statement covering the Registrable Securities so requested to be registered as soon as practicable after receipt of the request or requests of the Initiating Holders.

        (b)    Underwriting.    In the event that a registration pursuant to Section 1.5 is for a registered public offering involving an underwriting, the Company shall so advise the Holders as part of the notice given pursuant to Section 1.5(a)(i). The right of any Holder to registration pursuant to Section 1.5 shall be conditioned upon such Holder's participation in the underwriting arrangements required by this Section 1.5 and the inclusion of such Holder's Registrable Securities in the underwriting, to the extent requested, to the extent provided herein.

        The Company shall (together with all Holders proposing to distribute their securities through such underwriting) enter into and perform its obligations under an underwriting agreement in customary form with the managing underwriter selected for such underwriting by the Company (which managing underwriter shall be reasonably acceptable to the Holders of a majority of the Registrable Securities to be registered). Notwithstanding any other provision of this Section 1.5, if the managing underwriter advises the Initiating Holders that marketing factors require a limitation of the number of shares to be underwritten, then the Company shall so advise all Holders of Registrable Securities and the number of shares of Registrable Securities that may be included in the registration and underwriting shall be allocated among all Holders desiring to participate in such registration and underwriting in proportion, as nearly as practicable, to the respective amounts of Registrable Securities held by all such Holders at the time of filing the registration statement; provided, however, that the number of shares of Registrable Securities to be included in such underwriting and registration shall not be reduced unless all other securities to be registered by the Company for its own account or by any other holders of the Company's securities are first entirely excluded from the underwriting and registration. No Registrable Securities excluded from the underwriting by reason of the underwriter's marketing limitation shall be included in such registration. To facilitate the allocation of shares in accordance with the above provisions, the Company or the underwriters may round the number of shares allocated to any Holder to the nearest 100 shares. The Company may include in such registration (and any related qualification under blue sky laws or other compliance), and in any underwriting involved therein, (i) authorized but unissued shares of Common Stock or shares of Common Stock held by the Company or (ii) shares of Common Stock held by holders other than the Holders of Registrable Securities but only to the extent that such inclusion of securities in Sections 1.5(b)(i) and (ii) will not diminish the number of securities included by the Holders of Registrable Securities who have requested their securities to be included in such registration.

        If any Holder of Registrable Securities disapproves of the terms of the underwriting, such person may elect to withdraw therefrom by written notice to the Company, the managing underwriter and the Initiating Holders. The Registrable Securities and/or other securities so withdrawn shall also be withdrawn from registration, and such Registrable Securities shall not be transferred in a public distribution prior to ninety (90) days after the effective date of such registration.

        1.6.    Company Registration.    

        (a)   Notice of Registration. If at any time or from time to time, the Company shall determine to register any of its securities, either for its own account or the account of a security holder or holders other than (i) a registration relating solely to employee benefit plans, (ii) a registration relating solely to a Commission Rule 145 transaction, or (iii) a registration on any registration form that does not permit secondary sales, the Company will:

          (i)  promptly give to each Holder written notice thereof; and

         (ii)  include in such registration (and any related qualification under blue sky laws or other compliance), and in any underwriting involved therein, all the Registrable Securities

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specified in a written request or requests made within fifteen (15) days after the deemed receipt of such written notice from the Company by any Holder, but only to the extent set forth in Section 1.6(b) herein.

        (b)   Underwriting. If the registration of which the Company gives notice is for a registered public offering involving an underwriting, the Company shall so advise the Holders as a part of the written notice given pursuant to Section 1.6(a)(i). In such event, the right of any Holder to registration pursuant to Section 1.6 shall be conditioned upon such Holder's participation in such underwriting and the inclusion of Registrable Securities in the underwriting to the extent provided herein. All Holders proposing to distribute their securities through such underwriting shall (together with the Company and the other holders distributing their securities through such underwriting) enter into and perform their obligations under an underwriting agreement in customary form with the managing underwriter selected for such underwriting by the Company. Notwithstanding any other provision of this Section 1.6, if the managing underwriter determines that marketing factors require a limitation of the number of shares to be underwritten, the managing underwriter may limit the number of Registrable Securities to be included in the registration and underwriting on a pro rata basis based on the total number of securities (including, without limitation, Registrable Securities) entitled to registration pursuant to registration rights granted to the participating Holders by the Company; provided, that, (i) with respect to the IPO, the managing underwriter may exclude all of such Registrable Securities and (ii) with respect to any registration following the IPO, the managing underwriter may exclude only such number of Registrable Securities as would provide the Holders requesting registration with at least thirty percent (30%) of the total number of shares to be registered and sold pursuant to such registration; provided further that (X) in no event shall any Registrable Securities be excluded from such offering unless all other shareholders' securities are first excluded and (Y) any Registrable Securities held by a Founder shall be excluded before any other Registrable Securities are excluded. To facilitate the allocation of shares in accordance with the above provisions, the Company or the underwriters may round the number of shares allocated to any Holder or other holder to the nearest 100 shares. For purposes of the preceding sentence concerning apportionment, for any selling stockholder that is a Holder of Registrable Securities and that is a venture capital fund, partnership or corporation, the affiliated venture capital funds, partners, retired partners and stockholders of such Holder, or the estates and family members of any such partners and retired partners and any trusts for the benefit of any of the foregoing persons shall be deemed to be a single "selling Holder," and any pro rata reduction with respect to such "selling Holder" shall be based upon the aggregate amount of Registrable Securities owned by all such related entities and individuals.

If any Holder or other holder disapproves of the terms of any such underwriting, he or she may elect to withdraw therefrom by written notice to the Company and the managing underwriter. Any securities excluded or withdrawn from such underwriting shall be withdrawn from such registration, and shall not be transferred in a public distribution prior to ninety (90) days after the effective date of the registration statement relating thereto.

        (c)   Right to Terminate Registration. The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 1.6 prior to the effectiveness of such registration, whether or not any Holder has elected to include Registrable Securities in such registration. The expenses of such withdrawn registration shall be born by the Company in accordance with Section 1.9 hereof.

        1.7.    Registration on Form S-3.    

        (a)   The Company shall use its best efforts to qualify for registration on Form S-3 or any comparable or successor form. To that end the Company shall register (whether or not required by law to do so) its Common Stock under the Exchange Act in accordance with the provisions of the

7

Exchange Act following the effective date of the first registration of any securities of the Company on Form S-1 or any comparable or successor form or forms.

        (b)   If, at any time after the Company is entitled to use Form S-3 (or any successor form to Form S-3) for a public offering of Registrable Securities, any Holder or Holders request that the Company file a registration statement on Form S-3, the reasonably anticipated aggregate price to the public of which, net of underwriting discounts and commissions, would exceed $500,000, the Company shall use its best efforts to cause such Registrable Securities to be registered for the offering on such form. The Company will (i) promptly give written notice of the proposed registration to all other Holders, and (ii) as soon as practicable, use its best efforts to effect such registration (including, without limitation, the execution of an undertaking to file post-effective amendments, appropriate qualification under applicable blue sky or other state securities laws and appropriate compliance with applicable regulations issued under the Securities Act and any other governmental requirements or regulations) as may be so requested and as would permit or facilitate the sale and distribution of all or such portion of such Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any Holder or Holders joining in such request as are specified in a written request received by the Company within thirty (30) days after the deemed receipt of the written notice from the Company referred in the preceding clause (i). The applicable substantive provisions of Section 1.5(b) shall be applicable to each registration initiated under this Section 1.7.

        (c)   Notwithstanding the foregoing, the Company shall not be obligated to take any action pursuant to this Section 1.7: (i) in any particular jurisdiction in which the Company would be required to execute a general consent to service of process in effecting such registration, qualification or compliance unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act; (ii) during the period starting with the date sixty (60) days prior to the filing of, and ending on the later of (x) six months from the date sixty (60) days prior to the Company's estimated date of filing of any registration statement pertaining to securities of the Company (other than a registration of securities in a Rule 145 transaction or with respect to an employee benefit plan), provided that the registration statement has not become effective during such time period, or (y) a date six (6) months following the effective date of any registration statement (other than with respect to a registration statement relating to a Rule 145 transaction, an offering solely to employees or any other registration which is not appropriate for the registration of Registrable Securities), provided in the case of clauses (A) or (B) that the Company is actively employing in good faith all reasonable efforts to cause such registration statement to become effective; or (iii) if the Company shall furnish to such Holder a certificate signed by the President or Chief Executive Officer of the Company stating that, in the good faith judgment of the Board of Directors, it would be seriously detrimental to the Company or its stockholders for registration statements to be filed in the near future, then the Company's obligation to use its best efforts to file a registration statement shall be deferred for a period not to exceed one-hundred twenty (120) days from the receipt of the request to file such registration by such Holder or Holders; provided, however, that the Company may not utilize this right more than once in any twelve (12) month period; and provided further that the Company shall not register any securities for the account of itself or any other stockholder during such one hundred twenty (120) day period (other than a registration relating solely to the sale of securities of participants in a Company stock plan, a registration relating to a corporate reorganization or transaction under Rule 145 of the Act, a registration on any form that does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities, or a registration in which the only Common Stock being registered is Common Stock issuable upon conversion of debt securities that are also being registered).

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        (d)   Registrations effected pursuant to this Section 1.7 shall not be counted as a request for registration pursuant to Section 1.5.

        1.8.    Limitations on Subsequent Registration Rights.    From and after the date hereof, the Company shall not, without the prior written consent of the Holders of a majority of the Registrable Securities then outstanding, enter into any agreement granting any holder or prospective holder of any securities of the Company registration rights with respect to such securities unless such new registration rights, including standoff obligations, are on a pari passu basis or are subordinate to the registration rights granted to the Holders hereunder.

        1.9.    Expenses of Registration.    All Registration Expenses incurred in connection with any registration pursuant to Sections 1.5, 1.6 and 1.7 and the reasonable cost of one special legal counsel to represent all of the Holders together in any such registration shall be borne by the Company, provided that the Company shall not be required to pay the Registration Expenses of any registration proceeding begun pursuant to Section 1.5, the request of which has been subsequently withdrawn by the Initiating Holders, unless the withdrawal is based upon material adverse information concerning the Company of which the Initiating Holders were not aware at the time of such request, in which case the Company shall pay all Registration Expenses. In such case, (i) the Holders of Registrable Securities to have been registered shall bear all such Registration Expenses pro rata on the basis of the number of shares to have been registered, and (ii) the Company shall be deemed not to have effected a registration pursuant to subparagraph 1.5(a) of this Agreement. Unless otherwise agreed, all Selling Expenses relating to securities registered on behalf of the Holders shall be borne by the Holders of the registered securities included in such registration pro rata on the basis of the number of shares so registered.

        1.10.    Registration Procedures.    In the case of each registration, qualification or compliance effected by the Company pursuant to this Section 1, the Company will keep each Holder advised in writing as to the initiation of each registration, qualification and compliance and as to the completion thereof and, at its expense, the Company will:

        (a)   Prepare and file with the Commission a registration statement with respect to such securities and use its best efforts to cause such registration statement to become and remain effective for at least ninety (90) days or until the distribution described in the registration statement has been completed; provided, however, that in the case of any registration of Registrable Securities on Form S-3 which are intended to be offered on a continuous or delayed basis, such period shall be extended, if necessary, to keep the registration statement effective until all such Registrable Securities are sold, provided that if Rule 415, or any successor rule under the Securities Act, permits an offering on a continuous or delayed basis, and provided further that if applicable rules under the Securities Act governing the obligation to file a post-effective amendment permit, in lieu of filing a post-effective amendment which (y) includes any prospectus required by Section 10(a)(3) of the Securities Act or (z) reflects facts or events representing a material or fundamental change in the information set forth in the registration statement, the incorporation by reference of information required to be included in (y) and (z) above shall be contained in periodic reports filed pursuant to Section 13 or 15(d) of the Exchange Act in the registration statement;

        (b)   In the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter of such offering;

        (c)   Furnish to the Holders participating in such registration and to the underwriters of the securities being registered such reasonable number of copies of the registration statement, preliminary prospectus, final prospectus and such other documents as such underwriters may reasonably request in order to facilitate the public offering of such securities;

9

        (d)   Prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection with such registration statements as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement;

        (e)   Notify each seller of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading or incomplete in the light of the circumstances then existing, and at the request of any such seller, prepare and furnish to such seller a reasonable number of copies of supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchaser of such shares, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading or incomplete in light of the circumstances then existing;

        (f)    Use its best efforts to register and qualify the securities covered by such registration statement under such other securities or blue sky laws of such jurisdictions as shall be reasonably requested by the Holders, provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions;

        (g)   Cause all such Registrable Securities to be listed on each securities exchange or trading system on which similar securities issued by the Company are then listed;

        (h)   Provide a transfer agent and registrar for all Registrable Securities and a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration;

        (i)    Make available for inspection by any Holder participating in such registration, any underwriter participating in any disposition pursuant to such registration, and any attorney or accountant retained by any such Holder or underwriter, all financial and other records, pertinent corporate documents and properties of the Company, and cause the Company's officers and directors to supply all information reasonably requested by any such Holder, underwriter, attorney or accountant in connection with such registration statement; provided, however, that such Holder, underwriter, attorney or accountant shall agree in writing to hold in confidence and trust all non-public information so provided.

        1.11.    Indemnification.    

        (a)   The Company will indemnify each Holder, each of its officers and directors and partners, and each person controlling such Holder within the meaning of Section 15 of the Securities Act, with respect to which registration, qualification or compliance has been effected pursuant to this Section 1, and each underwriter, if any, and each person who controls any underwriter within the meaning of Section 15 of the Securities Act, against all expenses, claims, losses, damages or liabilities (or actions in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any registration statement, prospectus, offering circular or other document, or any amendment or supplement thereto, incident to any such registration, qualification or compliance, or based on any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading, or any violation by the Company of any rule or regulation promulgated under the Securities Act or any state securities laws, rules or regulations applicable to the Company in connection with any such registration, qualification or compliance, and the Company will reimburse each such Holder, each of its

10

officers, directors and partners, and each person controlling such Holder, each such underwriter and each person who controls any such underwriter, for any legal and any other expenses reasonably incurred in connection with investigating, preparing or defending any such claim, loss, damage, liability or action, as such expenses are incurred, provided that the Company will not be liable in any such case to the extent that any such claim, loss, damage, liability or expense arises out of or is based on any untrue statement or omission or alleged untrue statement or omission, made in reliance upon and in conformity with written information furnished to the Company by an instrument duly executed by such Holder, controlling person or underwriter and stated to be specifically for use therein.

        (b)   Each Holder will, if Registrable Securities held by such Holder are included in the securities as to which such registration, qualification or compliance is being effected, indemnify the Company, each of its directors and officers, each underwriter, if any, of the Company's securities covered by such a registration statement, each person who controls the Company or such underwriter within the meaning of Section 15 of the Securities Act, and each other such Holder, each of its officers, directors and partners and each person controlling such Holder within the meaning of Section 15 of the Securities Act, against all claims, losses, damages and liabilities (or actions in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any such registration statement, prospectus, offering circular or other document, or any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse the Company, such Holders, such directors, partners, officers, persons, underwriters or control persons for any legal or any other expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability or action, as such expenses are incurred, in each case to the extent, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such registration statement, prospectus, offering circular or other document in reliance upon and in conformity with written information furnished to the Company by an instrument duly executed by such Holder and stated to be specifically for use therein; provided that in no event shall any indemnity under this subparagraph 1.11(b) exceed the net proceeds received by such Holder in such registration.

        (c)   Each party entitled to indemnification under this Section 1.11 (the "Indemnified Party") shall give notice to the party required to provide indemnification (the "Indemnifying Party") promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting therefrom, provided that counsel for the Indemnifying Party, who shall conduct the defense of such claim or litigation, shall be approved by the Indemnified Party (whose approval shall not unreasonably be withheld), and the Indemnified Party may participate in such defense at such party's expense; provided, however, that an Indemnified Party (together with all other Indemnified Parties which may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by the Indemnifying Party, if representation of such Indemnified Party by the counsel retained by the Indemnifying Party would be inappropriate due to actual or potential differing interests between such Indemnified Party and any other party represented by such counsel in such proceeding. The failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Section 1.11 unless the failure to give such notice is materially prejudicial to an Indemnifying Party's ability to defend such action (and then only to the extent of such prejudice). No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or litigation.

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        (d)   If the indemnification provided for in this Section 1.11 is held by a court of competent jurisdiction to be unavailable to an Indemnified Party with respect to any claim, loss, damage, liability or action referred to herein, then the Indemnifying Party, in lieu of indemnifying such Indemnified Party hereunder, shall contribute to the amount paid or payable to such Indemnified Party as a result of such claim, loss, damage, liability or action in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party on the one hand and the Indemnified Party on the other in connection with the actions that resulted in such claims, loss, damage, liability or action, as well as any other relevant equitable considerations. The relative fault of the Indemnifying Party and of the Indemnified Party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact related to information supplied by the Indemnifying Party or by the Indemnified Party and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission, provided that in no event shall any contribution by a Holder under this Section 1.11(d) exceed the net proceeds received by such Holder in such registration. The Company and the Holders agree that it would not be just and equitable if contribution pursuant to this Section 1.11(d) were based solely upon the number of entities from whom contribution was requested or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section 1.11(d).

        (e)   The amount paid or payable to an Indemnified Party as a result of the losses, claims, damages and liabilities referred to above in this Section 1.11 shall be deemed to include any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending any such action or claim, subject to the provisions of Section 1.11 hereof. Notwithstanding the provisions of this Section 1.11, no Holder shall be required to contribute any amount or make any other payments under this Agreement which in the aggregate exceed the net proceeds (after selling expenses) received by such Holder. No person guilty of fraudulent misrepresentation (within the meaning of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

        (f)    The obligations of the Company and any Holders under this Section 1.11 shall survive the completion of any offering of Registrable Securities in a registration statement under this Section 1.

        1.12.    Information by Holder.    The Holder or Holders of Registrable Securities included in any registration shall furnish to the Company such information regarding such Holder or Holders, the Registrable Securities held by them and the distribution proposed by such Holder or Holders as the Company may reasonably request in writing and as shall be required in connection with any registration, qualification or compliance referred to in this Section 1.

        1.13.    Rule 144 Reporting.    With a view to making available the benefits of certain rules and regulations of the Commission which may at any time permit the sale of the Restricted Securities to the public without registration or pursuant to Form S-3, after such time as a public market exists for the Common Stock of the Company, the Company agrees to:

        (a)   Make and keep public information available, as those terms are understood and defined in Rule 144 under the Securities Act, at all times after the effective date that the Company becomes subject to the reporting requirements of the Securities Act or the Exchange Act;

        (b)   File with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements); and

        (c)   So long as a Holder owns any Restricted Securities, to furnish to such Holder forthwith upon request a written statement by the Company as to its compliance with the reporting

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requirements of said Rule 144 (at any time after ninety (90) days after the effective date of the first registration statement filed by the Company for an offering of its securities to the general public), and of the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements) or that it qualifies as a registrant whose securities may be resold pursuant to Form S-3 (at any time it so qualifies), a copy of the most recent annual or quarterly report of the Company, and such other reports and documents of the Company and other information in the possession of or reasonably obtainable by the Company as a Holder may reasonably request in availing itself of any rule or regulation of the Commission allowing a Holder to sell any such securities without registration or pursuant to such Form S-3.

        1.14.    Transfer of Registration Rights.    The rights to cause the Company to register securities granted to any party hereto under Sections 1.5, 1.6 and 1.7 may be assigned to a transferee or assignee in connection with any transfer or assignment of Registrable Securities by such party (together with any affiliate); provided that (a) such transfer may otherwise be effected in accordance with applicable securities laws, (b) prior written notice of such assignment is given to the Company and (c) such transferee or assignee (i) is a wholly-owned subsidiary or constituent partner or limited liability company member (including limited partners, retired partners, spouses and ancestors, lineal descendants and siblings of such partners or spouses who acquire Registrable Securities by gift, will or intestate succession) or affiliate of such party, or (ii) acquires from such party at least 500,000 of the Registrable Securities (as appropriately adjusted for any stock splits, consolidations, reorganizations and the like). Notice must be given to the Company and the Company must give its consent in writing for any other assignment to occur and such consent shall not be unreasonably withheld.

        1.15.    Standoff Agreement.    Each party hereto agrees in connection with the Company's IPO that, upon request of the underwriters managing any underwritten offering of the Company's securities, not to sell, make any short sale of, loan, pledge or otherwise hypothecate or encumber, grant any option for the purchase of, or otherwise dispose of any Shares (other than those included in the registration) without the prior written consent of such underwriters, as the case may be, for such period of time (not to exceed one hundred eighty (180) days from the effective date of such registration) as may be requested by such managing underwriters, provided, however, that this Section 1.15 shall apply only as long as all officers, directors and 1% stockholders of the Company enter into similar agreements. For purposes of this Section 1.15, the term "Company" shall include any wholly-owned subsidiary of the Company into which the Company merges or consolidates. In order to enforce the foregoing covenant, the Company shall have the right to place restrictive legends on the certificates representing the shares subject to this section and to impose stop transfer instructions with respect to the Registrable Securities and such other shares of stock of each Holder (and the shares or securities of every other person subject to the foregoing restriction) until the end of such period. Each Holder further agrees to enter into any agreement reasonably required by the underwriters to implement the foregoing within any reasonable timeframe so requested.

        1.16.    Termination of Rights.    The rights of any particular Holder to cause the Company to register securities under Sections 1.5, 1.6 and 1.7 shall terminate with respect to such Holder on the earlier of (i) the five (5) year anniversary of the effective date of the Company's IPO and (ii) such time at which all Registrable Securities held by such Holder (and any affiliate of the Holder with whom such Holder must aggregate its sales under Rule 144) can be sold in any three (3)-month period without registration in compliance with Rule 144 of the Act and such Holder owns less than one percent (1%) of the Company's outstanding stock, and the Company's Common Stock is listed on Nasdaq or other similar stock market.

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SECTION 2.

Right of First Offer

        2.1.    Right of First Offer.    

        (a)   Right of First Offer. Subject to the terms and conditions contained in this Section 2.1, the Company hereby grants to each Investor the right of first offer to purchase such Investor's Pro Rata Portion of any New Securities (as defined in subsection 2.1(b)) which the Company may, from time to time, propose to sell and issue. An Investor's "Pro Rata Portion" for purposes of this Section 2.1 is the ratio that (x) the sum of the number of shares of the Company's Common Stock held by the Investor or issuable upon conversion of the Series B-1 Preferred Stock, Series A-1 Preferred Stock, Series A-2.1 Preferred Stock, Series A-2.2 Preferred Stock, Series A-3 Preferred Stock, Series A-4 Preferred Stock, Series A-5 Preferred Stock and Series A-6 Preferred Stock then held by such Investor bears to (y) the sum of the total number of shares of Common Stock then outstanding and the number of shares of the Company's Common Stock issuable upon conversion of any then outstanding Preferred Stock of the Company. An Investor purchasing in full its Pro Rata Portion is hereinafter referred to as a "Fully Exercising Investor". The sum of the Pro Rata Portions for all Investors equals the "Aggregate Pro Rata Portion".

        (b)   Definition of New Securities. Except as set forth below, "New Securities" shall mean any shares of capital stock of the Company, including Common Stock and Preferred Stock, whether authorized or not, and rights, options or warrants to purchase said shares of Common Stock or Preferred Stock, and securities of any type whatsoever that are, or may become, convertible into said shares of Common Stock or Preferred Stock. Notwithstanding the foregoing, New Securities does not include: (i) shares of Common Stock issued or issuable upon conversion of outstanding shares of Preferred Stock; (ii) any shares of Common Stock or Preferred Stock (or options, warrants or rights therefor) granted or issued hereafter to employees, officers, directors, contractors, consultants or advisers to, the Company or any subsidiary of the Company pursuant to incentive agreements, stock purchase or stock option plans, stock bonuses or awards, warrants, contracts or other arrangements that are approved by the Board of Directors of the Company; (iii) any shares of Common Stock or Preferred Stock (and/or options or warrants therefore) issued to parties that are (A) strategic partners investing in connection with a commercial relationship with the Company or (B) providing the Company with equipment leases, real property leases, loans, credit lines, guaranties of indebtedness, cash price reductions or similar transactions, under arrangements, in each case, approved by the Board of Directors of the Company; (iv) shares of Common Stock or Preferred Stock issued pursuant to the acquisition of another corporation or entity by the Company by consolidation, merger, purchase of all or substantially all of the assets, or other reorganization in which the Company acquires, in a single transaction or series of related transactions, all or substantially all of the assets of such other corporation or entity or fifty percent (50%) or more of the voting power of such other corporation or entity or fifty percent (50%) or more of the equity ownership of such other entity; provided that such transaction or series of transactions has been approved by the Company's Board of Directors; (v) shares of Common Stock or Preferred Stock issuable upon exercise of any options, warrants or rights to purchase any securities of the Company outstanding as of the date hereof and any securities issuable upon the conversion thereof; (vi) shares of Common Stock issued pursuant to (A) the issue by the Company of additional shares of Common Stock as a dividend or other distribution on outstanding Common Stock, (B) a subdivision of the outstanding shares of Common Stock into a greater number of shares of Common Stock, or (C) a combination of the outstanding shares of Common Stock into a smaller number of shares of Common Stock, provided that for the purpose of clauses (A), (B) and (C), such issue, dividend or combination shall have been approved by the Board of Directors of the Company; and (vii) shares of Common Stock issued or issuable in a public offering prior to or

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in connection with which all outstanding shares of Preferred Stock are converted to Common Stock pursuant to the Company's certificate of incorporation.

        (c)   Notice of Right. In the event the Company proposes to undertake an issuance of New Securities, it shall give each Investor written notice of its intention, describing the type of New Securities and the price and terms upon which the Company proposes to issue the same. Each Investor shall have fifteen (15) days from the date of the deemed receipt of any such notice to agree to purchase shares of such New Securities (up to the amount referred to in subsection 2.1(a) and, subject to the limits described in this subsection (c), additional shares (if and to the extent available) of Unsubscribed Shares (as defined below)), for the price and upon the terms specified in the notice, by giving written notice to the Company and stating therein the quantity of New Securities to be purchased. In the event that a Fully Exercising Investor's notice includes notice of such Fully Exercising Investor's intent to purchase additional New Securities, should not all Investors choose to purchase their Pro Rata Portion set forth in subsection 2.1(a) (such number of New Securities, which Investors have the right, but elect not, to purchase hereunder is referenced as the "Unsubscribed Shares"), each such Fully Exercising Investor shall be entitled to purchase that number of Unsubscribed Shares equal to its pro rata portion of such Unsubscribed Shares. For purposes of this Section 2.1(c), a Fully Exercising Investor's pro rata portion of Unsubscribed Shares is the ratio that (x) the sum of the number of shares of the Company's Common Stock held by the Fully Exercising Investor or issuable upon conversion of the Series B-1 Preferred Stock, Series A-1 Preferred Stock, Series A-2.1 Preferred Stock, Series A-2.2 Preferred Stock, Series A-3 Preferred Stock, Series A-4 Preferred Stock, Series A-5 Preferred Stock and Series A-6 Preferred Stock then held by such Fully Exercising Investor bears to (y) the sum of the number of shares of the Company's Common Stock held by all Fully Exercising Investors or issuable upon conversion of the Series B-1 Preferred Stock, Series A-1 Preferred Stock, Series A-2.1 Preferred Stock, Series A-2.2 Preferred Stock, Series A-3 Preferred Stock, Series A-4 Preferred Stock, Series A-5 Preferred Stock and Series A-6 Preferred Stock then held by all Fully Exercising Investors. For the sake of clarity, the maximum amount of the New Securities that the Investors have the right hereunder to purchase shall not exceed the Aggregate Pro Rata Portion of the New Securities.

        (d)   Exercise of Right. If any Investor exercises its right of first offer hereunder, the closing of the purchase of the New Securities by such Investor with respect to which such right has been exercised shall take place within ninety (90) calendar days after the Investor gives notice of such exercise, which period of time shall be extended in order to comply with applicable laws and regulations. Upon exercise of such right of first offer, the Company and such Investor shall be legally obligated to consummate the purchase contemplated thereby and shall use their best efforts to secure any approvals required in connection therewith.

        (e)   Lapse and Reinstatement of Right. In the event the Investors fail to exercise the right of first offer provided in this Section 2.1 for all the New Securities proposed to be sold by the Company within said fifteen (15) day period, the Company shall have ninety (90) days thereafter to sell or enter into an agreement (pursuant to which the sale of New Securities covered thereby shall be closed, if at all, within sixty (60) days from the date of said agreement) to sell the New Securities not elected to be purchased by such Investors at the price and upon the terms no more favorable to the purchasers of such securities than specified in the Company's notice. In the event the Company has not sold the New Securities or entered into an agreement to sell the New Securities within said ninety (90) day period (or sold and issued New Securities in accordance with the foregoing within sixty (60) days from the date of said agreement), the Company shall not thereafter issue or sell any New Securities without first offering such securities to the Investors in the manner provided under this Section 2.1.

        (f)    Assignment. The rights granted pursuant to Sections 2.1 may be assigned to a transferee or assignee in connection with any transfer or assignment of Registrable Securities by such party

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(together with any affiliate); provided that (a) such transfer may otherwise be effected in accordance with applicable securities laws, (b) prior written notice of such assignment is given to the Company and (c) such transferee or assignee (i) is a wholly-owned subsidiary or constituent partner or limited liability company member (including limited partners, retired partners, spouses and ancestors, lineal descendants and siblings of such partners or spouses who acquire Registrable Securities by gift, will or intestate succession) or affiliate of such party, or (ii) acquires from such party at least 500,000 of the Registrable Securities (as appropriately adjusted for any stock splits, consolidations, reorganizations and the like). Notice must be given to the Company and the Company must give its consent in writing for any other assignment to occur and such consent shall not be unreasonably withheld.

        2.2.    Termination of Right of First Offer.    The right of first offer granted under Section 2.1 of this Agreement shall terminate and be of no further force or effect immediately prior to the earliest of the following:

        (a)   immediately prior to the closing of a firm commitment underwritten public offering pursuant to an effective registration statement filed under the Securities Act of 1933, as amended, covering the offer and sale of Common Stock for the account of the Company in which (i) the per share price to the public is at least $4.10 (before deduction of underwriters' discounts and commissions and which price shall be adjusted for any stock splits, combinations, reorganizations and the like), and (ii) the aggregate public offering price (before deduction of underwriters' discounts and commissions) is at least $25,000,000; or

        (b)   the acquisition of the Company by any person or entity by means of any transaction or series of related transactions by the Company or its stockholders in which the stockholders of the Company immediately prior to such transaction or series of related transactions own less than 50% of the Company's voting power immediately after such transaction or series of related transactions (including, without limitation, any reorganization, merger or consolidation but excluding any merger effected exclusively for the purpose of changing the domicile of the Company); (ii) the closing of the transfer (whether by merger, consolidation or otherwise), in one transaction or a series of related transactions, by stockholders of the Company to a person or group of affiliated persons (other than an underwriter of the Company's securities), of the Company's then outstanding securities if, after such closing, such person or group of affiliated persons would hold 50% or more of the outstanding voting stock of the Company; or (iii) the sale, lease, assignment, transfer, conveyance, or disposal of all or substantially all of the assets of the Company or the license of the Company's technology that would constitute a sale of all or substantially all of the assets of the Company (each of the foregoing, a "Liquidation Event").

SECTION 3.

Affirmative Covenants of the Company

        The Company hereby covenants and agrees as follows:

        3.1.    Financial Information.    The Company will maintain true books and records of account in which full and correct entries will be made of all its business transactions pursuant to a system of accounting established and administered in accordance with generally accepted accounting principles consistently applied, and will set aside on its books all such proper accruals and reserves as shall be required under generally accepted accounting principles consistently applied. So long as an Investor is a holder of at least 400,000 shares of the Series B-1 Preferred Stock (as adjusted for any stock splits, consolidations, reorganizations and the like) or a number of Shares equal to at least 1,000,000 of the

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Registrable Securities (as appropriately adjusted for any stock splits, consolidations, reorganizations and the like), the Company will furnish to such Investor the following reports:

        (a)   As soon as practicable after the end of each fiscal year, and in any event within ninety (90) days thereafter, consolidated balance sheets of the Company and its subsidiaries, if any, as of the end of such fiscal year, and consolidated statements of income and cash flows of the Company and its subsidiaries, if any, for such year, prepared in accordance with generally accepted accounting principles and setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail and certified by independent public accountants of national standing selected by the Company; and

        (b)   As soon as practicable, but in any event within forty-five (45) days after the end of each of the first three (3) quarters of each fiscal year of the Company, an unaudited profit or loss statement, schedule as to the sources and application of funds for such fiscal quarter and an unaudited balance sheet of the Company and its subsidiaries, if any, prepared in accordance with generally accepted accounting principles, with the exception that no notes need be attached and year-end audit adjustments may not have been made, and a statement of stockholder's equity, all for such quarter and for the current year to date and a statement showing the number of shares of each class and series of capital stock and securities convertible into or exercisable for shares of capital stock outstanding at the end of the period, the number of common shares issuable upon conversion or exercise of any outstanding securities convertible or exercisable for common shares and the exchange ratio or exercise price applicable thereto, all in sufficient detail as to permit the Investor to calculate its percentage equity ownership in the Company.

        (c)   No later than sixty (60) days prior to the end of each fiscal year, an annual budget for the upcoming fiscal year.

        (d)   As soon as practicable after the end of each calendar month, and in any event within 30 days thereafter, unaudited consolidated balance sheets of the Company and its subsidiaries, if any, as of the end of each calendar month, and unaudited consolidated statements of profit or loss and of cash flow for such period and for the current fiscal year to date and setting forth in each case in comparative form the figures for the corresponding periods of the previous fiscal year.

        (e)   Such other information relating to the financial condition, business or corporate affairs of the Company as the Investor may from time to time request, provided, however, that the Company shall not be obligated under this subsection (e) or any other subsection of Section 3.1 to provide information that it deems in good faith to be a trade secret or similar confidential information.

        3.2.    Operating Plan and Budget.    So long as an Investor holds at least 400,000 shares of the Series B-1 Preferred Stock (as adjusted for any stock splits, consolidations, reorganizations and the like) or a number of Shares equal to at least 1,000,000 of the Registrable Securities (as appropriately adjusted for any stock splits, consolidations, reorganizations and the like), as soon as practicable upon approval or adoption by the Board of Directors, the Company will furnish such Investor with the Company's budget and operating plan (including projected balance sheets and profit and loss and cash flow statements) for such fiscal year.

        3.3.    Inspection.    The Company shall permit each Investor, for so long as such Investor holds at least 400,000 shares of the Series B-1 Preferred Stock (as adjusted for any stock splits, consolidations, reorganizations and the like) or a number of Shares equal to at least 1,000,000 of the Registrable Securities (as appropriately adjusted for any stock splits, consolidations, reorganizations and the like), at such Investor's expense, to visit and inspect the Company's properties, to examine its books of account and records and to discuss the Company's affairs, finances and accounts with its officers, all at such reasonable times as may be requested by the Investor; provided, however, that the Company shall

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not be obligated pursuant to this Section 3.3 to provide access to any information which it reasonably considers to be a trade secret or similar confidential information.

        3.4.    Assignment of Rights to Financial Information.    The rights granted pursuant to Sections 3.1, 3.2 and 3.3 may be assigned to a transferee or assignee in connection with any transfer or assignment of Registrable Securities by such party (together with any affiliate); provided that (a) such transfer may otherwise be effected in accordance with applicable securities laws, (b) prior written notice of such assignment is given to the Company, (c) such transferee or assignee (i) is a wholly-owned subsidiary or constituent partner or limited liability company member (including limited partners, retired partners, spouses and ancestors, lineal descendants and siblings of such partners or spouses who acquire Registrable Securities by gift, will or intestate succession) or affiliate of such party, or (ii) acquires from such party at least 500,000 of the Registrable Securities (as appropriately adjusted for any stock splits, consolidations, reorganizations and the like) and (d) such transferee or assignee is not a competitor, or affiliated within the meaning of Rule 144 under the Securities Act with a competitor, of the Company in the good faith judgment of the Company. Notice must be given to the Company and the Company must give its consent in writing for any other assignment to occur and such consent shall not be unreasonably withheld.

        3.5.    Termination of Covenants.    The covenants set forth in Sections 3.1 through 3.4 shall terminate on, and be of no further force or effect after the earliest of the following:

        (a)   the date on which the Company is required to file reports with the Commission pursuant to Section 13 or 15(d) of the Exchange Act; or

        (b)   the date of the closing of any Liquidation Event.

        3.6.    Delivery of Qualified Small Business Stock Representations.    The Company covenants and agrees, on the reasonable request of any Investor, to conduct a reasonable investigation into the question of whether the Shares or Conversion Shares are "qualified small business stock" within the meaning of the Internal Revenue Code of 1986, as amended, and to thereafter deliver to such Investor a duly executed Certificate of Representations in the form attached hereto as Exhibit A (the "QSBS Certificate"). If the Company is unable to deliver an executed QSBS Certificate because representation statement 2 in the QSBS Certificate is inaccurate, the Company covenants and agrees to deliver a statement explaining the reasons for such inaccuracy.

        3.7.    Definition of Investor.    For purposes of determining the amount of Shares held by an Investor, all Investors affiliated with, or controlling, controlled by or under common control with, any Investor shall be treated as a single Investor.

        3.8.    Certain Covenants Relating to SBA Matters.

        (a)   Use of Proceeds. The proceeds from the issuance and sale of the Series B-1 Preferred Stock pursuant to the Stock Purchase Agreement (the "Proceeds") shall be used by the Company for its growth, modernization or expansion. The Company shall provide each Investor which is a licensed Small Business Investment Company (an "SBIC Investor") and the Small Business Administration reasonable access to the Company's books and records for the purpose of confirming the use of Proceeds.

        (b)   Business Activity. For a period of one year following the Initial Closing, as defined in the Stock Purchase Agreement, the Company shall not change the nature of its business activity if such change would render the Company ineligible as provided in Section 107.720 of Title 13 of the Code of Federal Regulations (the "Federal Regulations").

        (c)   Compliance. So long as any SBIC Investor holds any securities of the Company, the Company will at all times comply with the non-discrimination requirements of Parts 112, 113 and 117 of Title 13 of the Federal Regulations.

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        (d)   Information for SBIC Investor. Upon reasonable request, the Company agrees to promptly provide each SBIC Investor with sufficient information to permit such SBIC Investor to comply with their obligations under the Small Business Investment Act of 1958, as amended, and the regulations promulgated thereunder and related thereto; provided, however, each SBIC Investor agrees that it will protect any information which the Company labels as confidential to the extent permitted by law. Any submission of any financial information to an SBIC Investor under this Section shall include a certificate of the Company's president, chief executive officer, treasurer or chief financial officer as to the accuracy of such information.

SECTION 4.

Miscellaneous

        4.1.    Assignment.    Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties hereto.

        4.2.    Third Parties.    Nothing in this Agreement, express or implied, is intended to confer upon any party, other than the parties hereto, and their respective successors and assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided herein.

        4.3.    Governing Law.    This Agreement shall be governed by and construed under the laws of the State of California without regard to choice of laws or conflict of laws' provisions thereof.

        4.4.    Aggregation of Shares.    For the purposes of determining the availability of any rights under this Agreement, the holdings of (i) any transferee and assignee of an individual who is a spouse, ancestor, lineal descendant, adopted child, parent, grandparent or sibling of such individual, (ii) any partnership and partners or retired partners of such partnership, any corporation or other business organization to which such partnership shall sell all or substantially all of its assets or with which it shall be merged or affiliates of such partnership (including spouses and ancestors, lineal descendants and siblings of such partners or spouses who acquire Common Stock or Preferred Stock by gift, will or intestate succession), (iii) any limited liability company and any of its members, any corporation or other business organization to which such limited liability company shall sell all or substantially all of its assets or with which it shall be merged or any affiliate of such limited liability company, or (iv) any corporation and any corporation or other business organization to which such corporation shall sell or transfer all or substantially all of its assets or with which it shall be merged and any affiliate of such corporation shall be aggregated together with the individual, partnership, limited liability company or corporation as the case may be, for the purpose of exercising any rights or taking any action under this Agreement.

        4.5.    Counterparts.    This Agreement may be executed in two or more counterparts and signature pages may be delivered by facsimile, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

        4.6.    Notices.    Any notice required or permitted by this Agreement shall be in writing and shall be sent by prepaid registered or certified mail, return receipt requested, or otherwise delivered by hand or by messenger, or sent by facsimile or e-mail, addressed to the other party, in the case of the Company or the Founders, to the Company, and in the case of the Investors, to the address set forth on the records of the Company, or at such other address or facsimile number for which such party gives notice hereunder. Such notice shall be deemed to have been given three (3) days after deposit in the mail.

        4.7.    Severability.    If one or more provisions of this Agreement are held to be unenforceable under applicable law, portions of such provisions, or such provisions in their entirety, to the extent

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necessary, shall be several from this Agreement, and the balance of this Agreement shall be enforceable in accordance with its terms.

        4.8.    Amendment and Waiver.    Any provision of this Agreement may be amended or waived with the written consent of (i) the Company, (ii) the holders of a majority of the aggregate outstanding Registrable Securities held by the Investors and (iii) the holders of a majority of the aggregate outstanding Shares held by the Founders; provided that (i) no such amendment shall impose or increase any liability or obligation on a party hereto without the consent of such party and (ii) no such amendment having a disproportionately adverse effect on any party in relation to the other parties may be made without consent of such party. Any amendment or waiver effected in accordance with this paragraph shall be binding upon each party to this Agreement. Notwithstanding anything herein to the contrary, if pursuant to Section 1.2 of the Stock Purchase Agreement, additional parties may purchase shares of the Series B-1 Preferred Stock in any "Additional Closing" thereunder, then each such new "Investor" thereunder shall become a party to this Agreement as a "Series B-1 Investor" hereunder, without the need for any consent, approval or signature of any Investor or any Founder when such new "Investor" thereunder has both: (a) purchased shares of Series B-1 Preferred Stock under the Stock Purchase Agreement and paid the Company all consideration payable for such shares and (b) executed one or more counterpart signature pages to this Agreement.

        4.9.    Rights of Parties.    Each party to this Agreement shall have the absolute right to exercise or refrain from exercising any right or rights that such party may have by reason of this Agreement, including, without limitation, the right to consent to the waiver or modification of any obligation under this Agreement, and such party shall not incur any liability to any other party or other holder of any securities of the Company as a result of exercising or refraining from exercising any such right or rights.

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

        4.11.    Entire Agreement; Effect on Prior Rights Agreement; Attorneys' Fees; Waiver of Rights.    

        (a)   Entire Agreement. This Agreement constitutes the full and entire understanding and agreement between the parties regarding the subject matter hereof and supersedes and cancels all prior agreements, negotiations, correspondence, undertakings and communications of the parties, oral or written, respecting such subject matter.

        (b)   Effect on Prior Rights Agreement. The provisions of this Agreement amend and supersede any rights or obligations under the Prior Rights Agreement.

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

        (d)   Waiver of Right of First Refusal. The undersigned Amending Parties hereby waive the right of first refusal set forth in Section 2.1 of the Prior Rights Agreement on behalf of all Investors

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otherwise entitled to exercise such right of first refusal under the Prior Rights Agreement, including without limitation the 15-day response period thereunder, with respect to the issuance of the Series B-1 Preferred Stock issued pursuant to the Stock Purchase Agreement, as it may be amended from time to time.

        4.12.    Specific Performance.    Without limiting the rights of each party hereto to pursue all other legal and equitable rights available to such party for any other party's failure to perform its obligations under this Agreement, each such party acknowledges and agrees that the remedy at law for any failure to perform obligations hereunder would be inadequate and all such parties shall be entitled to specific performance, injunctive relief or other equitable remedies in the event of any such failure.

*****

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

THE COMPANY:
OMNEON VIDEO NETWORKS, INC.
By:	/s/  JOSEPH KENNEDY Joseph Kennedy President and Chief Executive Officer
THE INVESTORS:
CHANCELLOR V, L.P.
By:	IPC Direct Associates V, LLC, its general partner
By:	INVESCO Private Capital, Inc., its managing member
By:	/s/  ESFANDIAR LOHRASBPOUR Name: Esfandiar Lohrasbpour Title:
CHANCELLOR V-A, L.P.
By:	IPC Direct Associates V, LLC, its general partner
By:	INVESCO Private Capital, Inc., its managing member
By:	/s/  ESFANDIAR LOHRASBPOUR Name: Esfandiar Lohrasbpour Title:
CITIVENTURE 2000, L.P.
By:	IPC Direct Associates V, LLC, its general partner
By:	INVESCO Private Capital, Inc., its managing member
By:	/s/  ESFANDIAR LOHRASBPOUR Name: Esfandiar Lohrasbpour Title:

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EUROMEDIA VENTURE FUND (cotenancy of IPC Direct Associates V, LLC and EuroMedia Venture Belgique, S.A.)
By:	IPC Direct Associates V, LLC, its general partner
By:	INVESCO Private Capital, Inc., its managing member
By:	/s/  ESFANDIAR LOHRASBPOUR Name: Esfandiar Lohrasbpour Title:
CENTRE PALISADES NON-QUALIFIED INVESTORS, L.P.
By:	/s/  PAUL D'ADDARIO Name: Paul D'Addario Title: Senior Managing Director
CENTRE PALISADES QUALIFIED INVESTORS, L.P.
By:	/s/  PAUL D'ADDARIO Name: Paul D'Addario Title: Senior Managing Director
CENTRE PALISADES VENTURES, L.P.
By:	/s/  PAUL D'ADDARIO Name: Paul D'Addario Title: Senior Managing Director
ACCEL VI-S L.P.
By:	Accel VI Associates L.L.C., its General Partner
By:	/s/ [Illegible] Title: Attorney-in-Fact
ACCEL KEIRETSU VI L.P.
By:	Accel Keiretsu VI L.L.C., its General Partner
By:	/s/ [Illegible] Title: Attorney-in-Fact

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ACCEL INVESTORS '98 L.P.
By:	/s/ [Illegible] Title: Attorney-in-Fact
ACCEL INVESTORS '98-S L.P.
By:	Accel VI Associates L.L.C., its General Partner
By:	/s/ [Illegible] Title: Attorney-in-Fact
NORWEST VENTURE PARTNERS VII-A, LP
By:	Itasca VC Partners VII-A, LLP, its Managing Partner
By:	/s/  PROMOD HAQUE Name: Promod Haque Title: Managing Director
ATV ENTREPRENEURS VII, L.P.
By:	ATV Associates VII, L.L.C., its General Partner
By:	/s/  WES RAFFEL Print Name: Wes Raffel Title: Managing Director
ATV ALLIANCE 2001, L.P.
By:	ATV Alliance Associates, L.L.C., its General Partner
By:	/s/  WES RAFFEL Print Name: Wes Raffel Title: Director
ATV ALLIANCE 2002, L.P.
By:	ATV Alliance Associates, L.L.C., its General Partner
By:	/s/  WES RAFFEL Print Name: Wes Raffel Title: Director

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ADVANCED TECHNOLOGY VENTURES VII, L.P.
By:	ATV Associates VII, L.L.C., its General Partner
By:	/s/  WES RAFFEL Print Name: Wes Raffel Title: Managing Director
ADVANCED TECHNOLOGY VENTURES VII (B), L.P.
By:	ATV Associates VII, L.L.C., its General Partner
By:	/s/  WES RAFFEL Print Name: Wes Raffel Title: Managing Director
ADVANCED TECHNOLOGY VENTURES VII (C), L.P.
By:	ATV Associates VII, L.L.C., its General Partner
By:	/s/  WES RAFFEL Print Name: Wes Raffel Title: Managing Director
IGNITE VENTURES I, L.P.
By:	Ignite Venture Partners LLC—General Partner
By:	/s/  NOBUO MII Print Name: Nobuo Mii Title: Managing Member
LUCENT VENTURE PARTNERS I LLC
By:	/s/  PETER ROKKOS Print Name: Peter Rokkos Title: V.P.

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MERITECH CAPITAL PARTNERS II L.P.
By:	/s/  MICHAEL B. GORDON Print Name: Michael B. Gordon Title: Managing Member
MERITECH CAPITAL AFFILIATES II L.P.
By:	/s/  MICHAEL B. GORDON Print Name: Michael B. Gordon Title: Managing Member
MCP ENTREPRENEUR PARTNERS II
By:	/s/  MICHAEL B. GORDON Print Name: Michael B. Gordon Title: Managing Member
ALFRED & GLADY'S PRATT TISCH TRUST FBO THOMAS TISCH
By:	/s/  THOMAS A. TISCH Print Name: Thomas A. Tisch Title: Trustee
THOMAS A. & ROSEMARY S. TISCH TRUST
By:	/s/  THOMAS A. TISCH Print Name: Thomas A. Tisch Title: Trustee
GC&H INVESTMENTS LLC
By:	/s/  JOHN L. CARDOZA Print Name: John L. Cardoza Title: Managing Member
LIGHTHOUSE CAPITAL PARTNERS II, L.P.
By:	Lighthouse Management Partners II, L.P., its General Partner
By:	Lighthouse Capital Partners Inc., its General Partner
By:	/s/  THOMAS CONNEELY Name: Thomas Conneely Title: Vice President

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LIGHTHOUSE CAPITAL PARTNERS III, L.P.
By:	Lighthouse Management Partners III, L.L.C., its General Partner
By:	/s/  THOMAS CONNEELY Name: Thomas Conneely Title: Vice President
INTEL CAPITAL CORPORATION
By:	/s/  RAVI JACOB Print Name: Ravi Jacob Title: Vice President, Finance & Enterprise Services Group Asst Treasurer, M & A
JP MORGAN PARTNERS (BHCA), L.P.
By:	JPMP Master Fund Manager, L.P. Its General Partner
By:	JPMP Capital Corp., Its General Partner
By:	/s/  THOMAS SZYMONIAK Print Name: Thomas Szymoniak Title: Assistant Secretary
MICHAEL GRANT WATTERS AND TERRI LYNN WATTERS TRUSTEES OF THE WATTERS FAMILY TRUST U/D/T DATED DECEMBER 17, 1999
By:	/s/  MICHAEL WATTERS Print Name: Michael Watters Title: Trustee

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COMERICA INCORPORATED
By:	/s/  ANTHONY G. MORROW Print Name: Anthony G. Morrow Title: Vice President, Corporate Counsel & Assistant Secretary
FOUNDERS:
	/s/  DONALD M. CRAIG Donald M. Craig
	Michael M. Gilbert
	Edward P. Hobson, II
	/s/  LAWRENCE R. KAPLAN Lawrence R. Kaplan

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EXHIBIT A

OMNEON VIDEO NETWORKS, INC.,
a Delaware corporation
CERTIFICATE OF REPRESENTATIONS
REGARDING QUALIFIED SMALL BUSINESS STOCK

        THIS CERTIFICATE OF REPRESENTATIONS REGARDING QUALIFIED SMALL BUSINESS STOCK (this "Certificate") is executed as of                        ,            by Omneon Video Networks, Inc., a Delaware corporation (the "Company"), for the benefit of                        (the "Stockholder"). As used herein, the term "Stock" means those shares of Company stock issued by the Company to the Stockholder and described more fully on Schedule A hereto.

Representations

        Subject to the limitations and qualifications set forth below, the Company hereby represents as follows:

        1.     The Company has conducted a reasonable investigation into the question of whether the Stock is "qualified small business stock" ("QSBS") within the meaning of Section 1202(c) of the Internal Revenue Code of 1986, as amended (the "Code"); and

        2.     As of the date first above written, and assuming that the Stockholder has not sold, distributed, or otherwise transferred the Stock, all of the Stock is QSBS.

Qualifications and Limitations

        1.     Qualification of the Stock as QSBS is based, in part, on the value of Company stock or other assets at certain relevant times. For purposes of the representations made in this Certificate, the Company has made a good faith determination of such values, taking into account all material facts and circumstances, but cannot guarantee that the Internal Revenue Service will not successfully assert that such determination is incorrect.

        2.     Qualification of the Stock as QSBS is based, in part, on whether the Company has been engaged in the active conduct of one or more qualified trades or businesses. The term "qualified trade or business" set forth in Section 1202(e)(3) of the Code is not clearly defined in all respects. For purposes of the representations made in this Certificate, the Company has made a good faith effort to apply the definition of qualified trade or business set forth in Section 1202(e)(3) of the Code, but cannot guarantee that the Internal Revenue Service will not successfully assert a contrary definition.

        3.     Qualification of the Stock as QSBS is based, in part, on whether at least eighty percent (by value) of the Company's assets have been used in the active conduct of one or more qualified trades or businesses. For this purpose, assets held as "working capital" of a qualified trade or business within the meaning of Section 1202(e)(6) of the Code are treated as used in the active conduct of such trade or business. The term "working capital" set forth in Section 1202(e)(6) of the Code is not clearly defined in all respects. For purposes of the representations made in this Certificate, the Company has made a good faith effort to apply the definition of working capital set forth in Section 1202(e)(6) of the Code, but cannot guarantee that the Internal Revenue Service will not successfully assert a contrary definition.

        4.     Qualification of the Stock as QSBS is based, in part, on whether the Company purchased any of its stock from a person related to the Stockholder during a relevant testing period. For purposes of the representations made in this Certificate, the Company has made a good faith determination that such purchases did not occur, but cannot guarantee that the Internal Revenue Service will not successfully assert that such determination is incorrect.

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        5.     While the representations contained herein are made in good faith, the Company assumes no liability for the failure of the Stock to qualify as QSBS.

        IN WITNESS WHEREOF, the Company has executed this Certificate as of the date first above written.

BY:

TITLE:

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SCHEDULE A

Class/Type of Stock Certificate Number Number of Shares Issue Date

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Exhibit 4.02

FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
RECITALS
SECTION 1.
Restrictions on Transferability; Registration Rights
SECTION 2.
Right of First Offer
SECTION 3.
Affirmative Covenants of the Company
SECTION 4.
Miscellaneous
SCHEDULE A

EX-10.01

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Exhibit 10.01

OMNEON VIDEO NETWORKS, INC.

1998 STOCK OPTION PLAN

        1.    Purposes of the Plan.    The purposes of this 1998 Stock Option Plan are to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to Employees and Consultants of the Company and its Subsidiaries and to promote the success of the Company's business. Options granted under the Plan may be Incentive Stock Options or Nonstatutory Stock Options, as determined by the Administrator at the time of grant of an Option and subject to the applicable provisions of Section 422 of the Code and the regulations promulgated thereunder.

        2.    Definitions.    As used herein, the following definitions shall apply:

        (a)   "Administrator" means the Board or any of its Committees appointed pursuant to Section 4 of the Plan.

        (b)   "Applicable Laws" means the legal requirements relating to the administration of stock option plans under U.S. state corporate laws, U.S. federal and state securities laws, the Code and the applicable laws of any foreign country or jurisdiction where Options are, or will be, granted under the Plan.

        (c)   "Board" means the Board of Directors of the Company.

        (d)   "Code" means the Internal Revenue Code of 1986, as amended.

        (e)   "Committee" means a Committee appointed by the Board of Directors in accordance with Section 4 of the Plan.

        (f)    "Common Stock" means the Common Stock of the Company.

        (g)   "Company" means Omneon Video Networks, Inc., a Delaware corporation.

        (h)   "Consultant" means any person who is engaged by the Company or any Parent or Subsidiary to render consulting or advisory services and is compensated for such services, and any Director of the Company whether compensated for such services or not. If the Company registers any class of any equity security pursuant to the Exchange Act, the term Consultant shall thereafter not include Directors who are not compensated for their services or are paid only a Director's fee by the Company.

        (i)    "Continuous Status as an Employee or Consultant" means that the employment or consulting relationship with the Company, any Parent or Subsidiary is not interrupted or terminated. Continuous Status as an Employee or Consultant shall not be considered interrupted in the case of (i) any leave of absence approved by the Company or (ii) transfers between locations of the Company or between the Company, its Parent, any Subsidiary, or any successor. A leave of absence approved by the Company shall include sick leave, military leave, or any other personal leave approved by an authorized representative of the Company. For purposes of Incentive Stock Options, no such leave may exceed 90 days, unless reemployment upon expiration of such leave is guaranteed by statute or contract, including Company policies. If reemployment upon expiration of a leave of absence approved by the Company is not so guaranteed, on the 91st day of such leave any Incentive Stock Option held by the Optionee shall cease to be treated as an Incentive Stock Option and shall be treated for tax purposes as a Nonstatutory Stock Option.

        (j)    "Director" means a member of the Board of Directors of the Company.

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        (k)   "Employee" means any person, including Officers and Directors, employed by the Company or any Parent or Subsidiary of the Company. The payment of a Director's fee by the Company shall not be sufficient to constitute "employment" by the Company.

        (l)    "Exchange Act" means the Securities Exchange Act of 1934, as amended.

        (m)  "Fair Market Value" means, as of any date, the value of Common Stock determined as follows:

        (i)    If the Common Stock is listed on any established stock exchange or a national market system, including without limitation The Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system for the last market trading day prior to the time of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable;

        (ii)   If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, its Fair Market Value shall be the mean between the high bid and low asked prices for the Common Stock on the last market trading day prior to the day of determination; or

        (iii)  In the absence of an established market for the Common Stock, the Fair Market Value thereof shall be determined in good faith by the Administrator.

        (n)   "Incentive Stock Option" means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code.

        (o)   "Nonstatutory Stock Option" means an Option not intended to qualify as an Incentive Stock Option.

        (p)   "Officer" means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.

        (q)   "Option" means a stock option granted pursuant to the Plan.

        (r)   "Optioned Stock" means the Common Stock subject to an Option.

        (s)   "Optionee" means an Employee or Consultant who receives an Option.

        (t)    "Parent" means a "parent corporation," whether now or hereafter existing, as defined in Section 424(e) of the Code.

        (u)   "Plan" means this 1998 Stock Option Plan.

        (v)   "Section 16(b)" means Section 16(b) of the Securities Exchange Act of 1934, as amended.

        (w)  "Share" means a share of the Common Stock, as adjusted in accordance with Section 12 below.

        (x)   "Subsidiary" means a "subsidiary corporation," whether now or hereafter existing, as defined in Section 424(f) of the Code.

        3.    Stock Subject to the Plan.    Subject to the provisions of Section 12 of the Plan, the maximum aggregate number of Shares that may be subject to option and sold under the Plan is Six Million Three Hundred Three Thousand Eight Hundred Twenty-One (6,303,821) Shares. The Shares may be authorized but unissued, or reacquired Common Stock.

        If an Option expires or becomes unexercisable without having been exercised in full, or is surrendered pursuant to an option exchange program, the unpurchased Shares that were subject thereto shall become available for future grant or sale under the Plan (unless the Plan has terminated).

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However, Shares that have actually been issued under the Plan, upon exercise of an Option, shall not be returned to the Plan and shall not become available for future distribution under the Plan, except that if Shares are repurchased by the Company at their original purchase price, and the original purchaser of such Shares did not receive any benefits of ownership of such Shares, such Shares shall become available for future grant under the Plan. For purposes of the preceding sentence, voting rights shall not be considered a benefit of Share ownership.

        4.    Administration of the Plan.    

        (a)   Initial Plan Procedure. Prior to the date, if any, upon which the Company becomes subject to the Exchange Act, the Plan shall be administered by the Board or a Committee appointed by the Board.

        (b)   Plan Procedure after the Date, if any, upon which the Company Becomes Subject to the Exchange Act.

        (i)    Multiple Administrative Bodies. If permitted by Rule 16b-3, the Plan may be administered by different bodies with respect to Directors, Officers and Employees who are neither Directors nor Officers.

        (ii)   Administration with Respect to Directors and Officers. With respect to grants of Options to Employees who are also Officers or Directors of the Company, the Plan shall be administered by (A) the Board if the Board may administer the Plan in compliance with the rules under Rule 16b-3 promulgated under the Exchange Act or any successor thereto ("Rule 16b-3") relating to the disinterested administration of employee benefit plans under which Section 16(b) exempt discretionary grants and awards of equity securities are to be made, or (B) a Committee designated by the Board to administer the Plan, which Committee shall be constituted to comply with the rules under Rule 16b-3 relating to the disinterested administration of employee benefit plans under which Section 16(b) exempt discretionary grants and awards of equity securities are to be made. Once appointed, such Committee shall continue to serve in its designated capacity until otherwise directed by the Board. From time to time the Board may increase the size of the Committee and appoint additional members thereof, remove members (with or without cause) and appoint new members in substitution therefor, fill vacancies, however caused, and remove all members of the Committee and thereafter directly administer the Plan, all to the extent permitted by the rules under Rule 16b-3 relating to the disinterested administration of employee benefit plans under which Section 16(b) exempt discretionary grants and awards of equity securities are to be made.

        (iii)  Administration with Respect to Other Employees and Consultants. With respect to grants of Options and to Employees or Consultants who are neither Directors nor Officers of the Company, the Plan shall be administered by (A) the Board or (B) a Committee designated by the Board, which committee shall be constituted in such a manner as to satisfy Applicable Laws. Once appointed, such Committee shall continue to serve in its designated capacity until otherwise directed by the Board. From time to time the Board may increase the size of the Committee and appoint additional members thereof, remove members (with or without cause) and appoint new members in substitution therefor, fill vacancies, however caused, and remove all members of the Committee and thereafter directly administer the Plan, all to the extent permitted by the Applicable Laws.

        (c)   Powers of the Administrator. Subject to the provisions of the Plan and, in the case of a Committee, the specific duties delegated by the Board to such Committee, and subject to the approval of any relevant authorities, including the approval, if required, of any stock exchange

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upon which the Common Stock is listed, the Administrator shall have the authority in its discretion:

        (i)    to determine the Fair Market Value of the Common Stock, in accordance with Section 2(m) of the Plan;

        (ii)   to select the Consultants and Employees to whom Options may from time to time be granted hereunder;

        (iii)  to determine whether and to what extent Options are granted hereunder;

        (iv)  to determine the number of Shares to be covered by each such award granted hereunder;

        (v)   to approve forms of agreement for use under the Plan;

        (vi)  to determine the terms and conditions of any award granted hereunder;

        (vii) to determine whether and under what circumstances an Option may be settled in cash under subsection 9(f) instead of Common Stock;

        (viii) to reduce the exercise price of any Option to the then current Fair Market Value if the Fair Market Value of the Common Stock covered by such Option has declined since the date the Option was granted;

        (ix)  to provide for the early exercise of Options for the purchase of unvested shares subject to such terms and conditions as the Administrator may determine; and

        (x)   to construe and interpret the terms of the Plan and awards granted pursuant to the Plan.

        (d)   Effect of Administrator's Decision. All decisions, determinations and interpretations of the Administrator shall be final and binding on all Optionees and any other holders of any Options.

        5.    Eligibility.    

        (a)   Nonstatutory Stock Options may be granted to Employees and Consultants. Incentive Stock Options may be granted only to Employees. An Employee or Consultant who has been granted an Option may, if otherwise eligible, be granted additional Options.

        (b)   Each Option shall be designated in the written option agreement as either an Incentive Stock Option or a Nonstatutory Stock Option. However, notwithstanding such designation, to the extent that the aggregate Fair Market Value of the Shares with respect to which Incentive Stock Options are exercisable for the first time by the Optionee during any calendar year (under all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such Options shall be treated as Nonstatutory Stock Options. For purposes of this Section 5(b), Incentive Stock Options shall be taken into account in the order in which they were granted. The Fair Market Value of the Shares shall be determined as of the time the Option with respect to such Shares is granted.

        (c)   Neither the Plan nor any Option shall confer upon any Optionee any right with respect to continuation of his or her employment or consulting relationship with the Company, nor shall it interfere in any way with his or her right or the Company's right to terminate his or her employment or consulting relationship at any time, with or without cause.

        (d)   Upon the Company or a successor corporation issuing any class of common equity securities required to be registered under Section 12 of the Exchange Act or upon the Plan being assumed by a corporation having a class of common equity securities required to be registered

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under Section 12 of the Exchange Act, the following limitations shall apply to grants of Options to Employees:

        (i)    The foregoing limitations shall be adjusted proportionately in connection with any change in the Company's capitalization as described in Section 11.

        (ii)   If an Option is cancelled in the same fiscal year of the Company in which it was granted (other than in connection with a transaction described in Section 11), the cancelled Option shall be counted against the limit set forth in subsection (i) above. For this purpose, if the exercise price of an Option is reduced, such reduction will be treated as a cancellation of the Option and the grant of a new Option.

        6.    Term of Plan.    The Plan shall become effective upon the earlier to occur of its adoption by the Board of Directors or its approval by the stockholders of the Company, as described in Section 17 of the Plan. It shall continue in effect for a term of ten (10) years unless sooner terminated under Section 13 of the Plan.

        7.    Term of Option.    The term of each Option shall be the term stated in the Option Agreement; provided, however, that the term shall be no more than ten (10) years from the date of grant thereof. In the case of an Incentive Stock Option granted to an Optionee who, at the time the Option is granted, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the term of the Option shall be five (5) years from the date of grant thereof or such shorter term as may be provided in the Option Agreement.

        8.    Option Exercise Price and Consideration.    

        (a)   The per share exercise price for the Shares to be issued upon exercise of an Option shall be such price as is determined by the Administrator, but shall be subject to the following:

        (i)    In the case of an Incentive Stock Option

        (A)  granted to an Employee who, at the time of grant of such Option, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the per Share exercise price shall be no less than 110% of the Fair Market Value per Share on the date of grant.

        (B)  granted to any other Employee, the per Share exercise price shall be no less than 100% of the Fair Market Value per Share on the date of grant.

        (ii)   In the case of a Nonstatutory Stock Option

        (A)  granted to a person who, at the time of grant of such Option, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the per Share exercise price shall be no less than 110% of the Fair Market Value per Share on the date of the grant.

        (B)  granted to any other person, the per Share exercise price shall be no less than 85% of the Fair Market Value per Share on the date of grant.

        (b)   The consideration to be paid for the Shares to be issued upon exercise of an Option, including the method of payment, shall be determined by the Administrator (and, in the case of an Incentive Stock Option, shall be determined at the time of grant). Such consideration may consist of (1) cash, (2) check, (3) promissory note, (4) other Shares that (x) in the case of Shares acquired upon exercise of an Option, have been owned by the Optionee for more than six months on the date of surrender, and (y) have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which such Option shall be exercised, (5) delivery of a properly executed exercise notice together with such other documentation as the Administrator and a broker, if applicable, shall require to effect an

5

exercise of the Option and delivery to the Company of the sale or loan proceeds required to pay the exercise price, or (6) any combination of the foregoing methods of payment. In making its determination as to the type of consideration to accept, the Administrator shall consider if acceptance of such consideration may be reasonably expected to benefit the Company.

        9.    Exercise of Option.    

        (a)   Procedure for Exercise; Rights as a Stockholder. Any Option granted hereunder shall be exercisable at such times and under such conditions as determined by the Administrator, including performance criteria with respect to the Company and/or the Optionee, and as shall be permissible under the terms of the Plan. Except in the case of Options granted to Officers, Directors and Consultants, Options shall become exercisable at a rate of no less than 20% per year over five (5) years from the date the Options are granted.

An Option may not be exercised for a fraction of a Share.

        An Option shall be deemed to be exercised when written notice of such exercise has been given to the Company in accordance with the terms of the Option by the person entitled to exercise the Option and full payment for the Shares with respect to which the Option is exercised has been received by the Company. Full payment may, as authorized by the Administrator, consist of any consideration and method of payment allowable under Section 8(b) hereof. Until the issuance (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company) of the stock certificate evidencing such Shares, no right to vote, receive dividends or any other rights as a stockholder shall exist with respect to the Optioned Stock, notwithstanding the exercise of the Option. The Company shall issue (or cause to be issued) such stock certificate promptly upon exercise of the Option. No adjustment shall be made for a dividend or other right for which the record date is prior to the date the stock certificate is issued, except as provided in Section 11 hereof.

        Exercise of an Option in any manner shall result in a decrease in the number of Shares that thereafter may be available, both for purposes of the Plan and for sale under the Option, by the number of Shares as to which the Option is exercised.

        (b)   Termination of Employment or Consulting Relationship. In the event of termination of an Optionee's Continuous Status as an Employee or Consultant (but not in the event of an Optionee's change of status from Employee to Consultant (in which case an Employee's Incentive Stock Option shall automatically convert to a Nonstatutory Stock Option on the date three (3) months and one day following such change of status) or from Consultant to Employee), such Optionee may, but only within such period of time as is determined by the Administrator, of at least thirty (30) days, with such determination in the case of an Incentive Stock Option not exceeding three (3) months after the date of such termination (but in no event later than the expiration date of the term of such Option as set forth in the Option Agreement), exercise his or her Option to the extent that the Optionee was entitled to exercise it at the date of such termination. To the extent that the Optionee was not entitled to exercise the Option at the date of such termination, or if the Optionee does not exercise such Option to the extent so entitled within the time specified herein, the Option shall terminate.

        (c)   Disability of Optionee. In the event of termination of an Optionee's Continuous Status as an Employee or Consultant as a result of his or her disability, the Optionee may within six (6) months of termination, or such longer period of time as specified in the Option Agreement not to exceed twelve (12) months from the date of such termination (and in no event later than the expiration date of the term of such Option as set forth in the Option Agreement), exercise the Option to the extent otherwise entitled to exercise it at the date of such termination. If such disability is not a "disability" as such term is defined in Section 22(e)(3) of the Code, in the case

6

of an Incentive Stock Option such Incentive Stock Option shall automatically cease to be treated as an Incentive Stock Option and shall be treated for tax purposes as a Nonstatutory Stock Option on the day three months and one day following such termination. To the extent that the Optionee was not entitled to exercise the Option at the date of termination, or if the Optionee does not exercise such Option to the extent so entitled within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan.

        (d)   Death of Optionee. In the event of the death of an Optionee, the Option may be exercised within six (6) months of termination, or such longer period of time as specified in the Option Agreement not to exceed twelve (12) months following the date of death (but in no event later than the expiration of the term of such Option as set forth in the Notice of Grant) by the Optionee's estate or by a person who acquired the right to exercise the Option by bequest or inheritance, but only to the extent that the Optionee was entitled to exercise the Option on the date of death. If, at the time of death, the Optionee was not entitled to exercise his or her entire Option, the Shares covered by the unexercisable portion of the Option shall immediately revert to the Plan. If, after the Optionee's death, the Optionee's estate or a person who acquires the right to exercise the Option by bequest or inheritance does not exercise the Option within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan.

        (e)   Rule 16b-3. Options granted to persons subject to Section 16(b) of the Exchange Act must comply with Rule 16b-3 and shall contain such additional conditions or restrictions as may be required thereunder to qualify for the maximum exemption from Section 16 of the Exchange Act with respect to Plan transactions.

        (f)    Buyout Provisions. The Administrator may at any time offer to buy out for a payment in cash or Shares, an Option previously granted, based on such terms and conditions as the Administrator shall establish and communicate to the Optionee at the time that such offer is made.

        10.    Non-Transferability of Options.    Options may. not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Optionee, only by the Optionee.

        11.    Adjustments Upon Changes in Capitalization or Merger.    

        (a)   Changes in Capitalization. Subject to any required action by the stockholders of the Company, the number of shares of Common Stock covered by each outstanding Option, and the number of shares of Common Stock that have been authorized for issuance under the Plan but as to which no Option has yet been granted or that has been returned to the Plan upon cancellation or expiration of an Option, as well as the price per share of Common Stock covered by each such outstanding Option, shall be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock, or any other increase or decrease in the number of issued shares of Common Stock effected without receipt of consideration by the Company. The conversion of any convertible securities of the Company shall not be deemed to have been "effected without receipt of consideration." Such adjustment shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to an Option.

        (b)   Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company, the Administrator shall notify the Optionee at least fifteen (15) days prior to such

7

proposed action. To the extent it has not been previously exercised, the Option shall terminate immediately prior to the consummation of such proposed action.

        (c)   Merger. In the event of a merger of the Company with or into another corporation, each outstanding Option may be assumed or an equivalent option or right may be substituted by such successor corporation or a parent or subsidiary of such successor corporation. If, in such event, an Option is not assumed or substituted, the Option shall terminate as of the date of the closing of the merger. For the purposes of this paragraph, the Option shall be considered assumed if, following the merger, the Option confers the right to purchase or receive, for each Share of Optioned Stock subject to the Option immediately prior to the merger, the consideration (whether stock, cash, or other securities or property) received in the merger by holders of Common Stock for each Share held on the effective date of the transaction (and if the holders are offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares). If such consideration received in the merger is not solely common stock of the successor corporation or its Parent, the Administrator may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of the Option, for each Share of Optioned Stock subject to the Option, to be solely common stock of the successor corporation or its Parent equal in fair market value to the per share consideration received by holders of Common Stock in the merger.

        12.    Time of Granting Options.    The date of grant of an Option shall, for all purposes, be the date on which the Administrator makes the determination granting such Option, or such other date as is determined by the Administrator. Notice of the determination shall be given to each Employee or Consultant to whom an Option is so granted within a reasonable time after the date of such grant.

        13.    Amendment and Termination of the Plan.    

        (a)   Amendment and Termination. The Board may at any time amend, alter, suspend or discontinue the Plan, but no amendment, alteration, suspension or discontinuation shall be made that would impair the rights of any Optionee under any grant theretofore made, without his or her consent. In addition, to the extent necessary and desirable to comply with Rule 16b-3 under the Exchange Act or with Section 422 of the Code (or any other applicable law or regulation, including the requirements of the NASD or an established stock exchange), the Company shall obtain stockholder approval of any Plan amendment in such a manner and to such a degree as required.

        (b)   Effect of Amendment or Termination. Any such amendment or termination of the Plan shall not affect Options already granted, and such Options shall remain in full force and effect as if this Plan had not been amended or terminated, unless mutually agreed otherwise between the Optionee and the Administrator, which agreement must be in writing and signed by the Optionee and the Company.

        14.    Conditions upon Issuance of Shares.    Shares shall not be issued pursuant to the exercise of an Option unless the exercise of such Option and the issuance and delivery of such Shares pursuant thereto shall comply with all relevant provisions of law, including, without limitation, the Securities Act of 1933, as amended, the Exchange Act, the rules and regulations promulgated thereunder, and the requirements of any stock exchange upon which the Shares may then be listed, and shall be further subject to the approval of counsel for the Company with respect to such compliance.

        As a condition to the exercise of an Option, the Company may require the person exercising such Option to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required by any of the aforementioned relevant provisions of law.

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        15.    Reservation of Shares.    The Company, during the term of this Plan, shall at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan.

        The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company's counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained.

        16.    Agreements.    Options shall be evidenced by written agreements in such form as the Administrator shall approve from time to time.

        17.    Stockholder Approval.    Continuance of the Plan shall be subject to approval by the stockholders of the Company within twelve (12) months before or after the date the Plan is adopted. Such stockholder approval shall be obtained in the degree and manner required under Applicable Laws and the rules of any stock exchange upon which the Common Stock is listed.

        18.    Information to Optionees and Purchasers.    The Company shall provide to each Optionee and to each individual who acquires Shares pursuant to the Plan, not less frequently than annually during the period such Optionee or purchaser has one or more Options outstanding, and, in the case of an individual who acquires Shares pursuant to the Plan, during the period such individual owns such Shares, copies of annual financial statements. The Company shall not be required to provide such statements to key employees whose duties in connection with the Company assure their access to equivalent information.

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Notice of Stock Option Grant	Omneon Video Networks, Inc.
	965 Stewart Drive Sunnyvale, CA 94086 Federal Tax ID: 77-0483655
[Name of Optionee]
[Address of Optionee]	Option Number:
[Address of Optionee]	Plan:        1998 Stock Option Plan
	ID:

The undersigned Optionee has been granted an Option to purchase Common Stock of the Company, subject to the terms and conditions of the Plan, and the attached Stock Option Agreement. (Please see the attached Stock Option Agreement for definitions of capitalized terms used in this Notice of Stock Option Grant.) Information about the Option grant follows:

Date of Grant:
Vesting Commencement Date:
Exercise Price Per Share:
Total Number of Shares Granted:
Total Exercise Price:
Expiration Date:
	(unless earlier terminated pursuant to the Stock Option Agreement)
Type of Option
(Check one):	o Incentive Stock Option
	o Nonstatutory Stock Option
Classification of Optionee	o Exempt Employee
	o Nonexempt Employee

Vesting Schedule:

The Option is exercisable immediately, in whole or in part, conditioned upon Optionee entering into a Restricted Stock Purchase Agreement with respect to any unvested Option Shares. The Shares subject to this Option shall vest and/or be released from the Company's repurchase option, as set forth in the Restricted Stock Purchase Agreement, according to the following schedule:

[25]% of the Shares subject to the Option shall vest on the one (1) year anniversary of the Vesting Commencement Date, and 1/[36]^th of the remaining Shares subject to the Option shall vest each month thereafter, subject to Optionee continuing to be an Employee or Consultant on such dates.

Termination Period:

This Option may be exercised, to the extent vested, for thirty (30) days after termination of your employment or consulting relationship. A longer period may be applicable, however, upon your

10

disability or death as provided in this Stock Option Agreement, but in no event later than the expiration date as provided above.

By your signature and the Company's signature below, you and the Company agree that this Option is granted under and governed by the terms and conditions of the Stock Option Agreement and the Plan, which are attached to and made a part of this document.

Signed:
	,	[Type officer name/title]	Date
Signed:
[TYPE OPTIONEE NAME]		DATE

11

OMNEON VIDEO NETWORKS, INC.
1998 STOCK OPTION PLAN
STOCK OPTION AGREEMENT

        Unless otherwise defined herein, the terms defined in the 1998 Stock Option Plan shall have the same defined meanings in this Stock Option Agreement.

        1.    Grant of Option.    The Company hereby grants to the Optionee an Option to purchase the number of shares of Common Stock (the "Shares") set forth in the Notice of Stock Option Grant, at the exercise price per share set forth in the Notice of Stock Option Grant (the "Exercise Price"). This Option is exercisable immediately in whole or in part, conditioned upon Optionee executing and delivering the Exercise Notice and Investment Representation in the form available from the Company's finance department (the "Notice") and entering into a Restricted Stock Purchase Agreement with respect to any unvested Option Shares. The Shares subject to this Option shall vest and/or be released from the Company's repurchase option, as set forth in the Notice of Stock Option Grant and the Restricted Stock Purchase Agreement. This grant of an Option is subject to the terms, definitions and provisions of the 1998 Stock Option Plan (the "Plan") adopted by the Company, which is incorporated herein by reference.

        OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE OPTION HEREOF IS EARNED ONLY BY CONTINUING CONSULTANCY OR EMPLOYMENT AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS AGREEMENT, SHALL CONFER UPON OPTIONEE ANY RIGHT WITH RESPECT TO CONTINUATION OF EMPLOYMENT OR CONSULTANCY BY THE COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE OPTIONEE'S EMPLOYMENT OR CONSULTANCY AT ANY TIME, WITH OR WITHOUT CAUSE.

        If designated in the Notice of Stock Option Grant as an Incentive Stock Option ("ISO"), this Option is intended to qualify as an ISO as defined in Section 422 of the Code.

        2.    Exercise of Option.    This Option is exercisable as follows:

        (i)    Right to Exercise.

(a)

Subject to subsections 2(i)(b) through 2(i)(e) below, this Option shall be exercisable cumulatively according to the vesting schedule set out in the Notice of Stock Option Grant. At the election of the Optionee, this Option may also be exercised in whole or in part at any time as to any Shares which have not yet vested. For purposes of this Stock Option Agreement, Shares subject to this Option shall vest based on continued employment of or consulting services by Optionee with the Company. Vested Shares shall not be subject to the Company's repurchase right as set forth in the Restricted Stock Purchase Agreement, available from the Company's finance department.



(b)

As a condition to exercising this Option for unvested Shares, the Optionee shall execute the Restricted Stock Purchase Agreement.



(c)

This Option may not be exercised for a fraction of a Share.



(d)

In the event of Optionee's death, disability or other termination of the employment or consulting relationship, the exercisability of the Option is governed by Sections 6, 7 and 8 below, subject to the limitation contained in subsection 2(i)(g).

12

(e)

Vesting under this Stock Option Agreement shall be suspended during any approved leave of absence or following sixty (60) days of disability leave except to the extent such suspension of vesting may be restricted under applicable Federal law. Upon an Optionee's return following any such period of leave, the dates (other than the date on which the Stock Option will expire) set forth in the Notice of Stock Option Grant shall be adjusted to reflect the period during which vesting was suspended pursuant to the terms hereof.



(f)

Vesting under this Stock Option Agreement shall be suspended during any period (other than due to vacations or holidays or due an absence described in Section 2(i)(d) hereof) in which Optionee's regular hours worked falls below twenty (20) hours per week. Upon Optionee's return to regular full time work following any such period of reduced work, the dates (other than the date on which the Stock Option will expire) set forth in the Notice of Stock Option Grant shall be adjusted to reflect the period during which vesting was suspended pursuant to the terms hereof. If Optionee's regular hours worked fall below the level of regular full-time work, but remain greater that twenty (20) hours per week, vesting under this Stock Option may be adjusted by the Administrator.



(g)

In no event may this Option be exercised after the date of expiration of the term of this Option as set forth in the Notice of Stock Option Grant.

        (ii)   Method of Exercise. This Option shall be exercisable by delivery of the Notice to the Company as specified herein. The Notice must state the number of Shares for which the Option is being exercised, and such other representations and agreements with respect to such shares of Common Stock as may be required by the Company pursuant to the provisions of the Plan. The Notice must be signed by the Optionee and, together with an executed copy of the Restricted Stock Purchase Agreement, if applicable, shall be delivered in person or by certified mail to the Secretary of the Company. The Notice and Restricted Stock Purchase Agreement must be accompanied by payment of the Exercise Price. This Option shall be deemed to be exercised upon receipt by the Company of such written Notice and Restricted Stock Purchase Agreement accompanied by the Exercise Price in a form permitted under Section 4 of this Agreement.

        No Shares shall be issued pursuant to the exercise of an Option unless such issuance and such exercise comply with all relevant provisions of law and the requirements of any stock exchange upon which the Shares may then be listed. Assuming such compliance, for income tax purposes the Shares shall be considered transferred to the Optionee on the date on which the Option is exercised with respect to such Shares.

        3.    Lock-Up Period.    Optionee hereby agrees that if so requested by the Company or any representative of the underwriters (the "Managing Underwriter") in connection with any registration of the offering of any securities of the Company under the Securities Act, Optionee shall not sell or otherwise transfer any Shares or other securities of the Company during the 180-day period (or such longer period as may be requested in writing by the Managing Underwriter and agreed to in writing by the Company) (the "Market Standoff Period") following the effective date of a registration statement of the Company filed under the Securities Act; provided, however, that such restriction shall apply only to the first registration statement of the Company to become effective under the Securities Act that includes securities to be sold on behalf of the Company to the public in an underwritten public offering under the Securities Act. The Company may impose stop-transfer instructions with respect to securities subject to the foregoing restrictions until the end of such Market Standoff Period.

        4.    Method of Payment.    Payment of the Exercise Price shall be by any of the following, or a combination thereof, at the election of the Optionee;

        (i)    cash; or

        (ii)   check, or

13

        (iii)  surrender of other shares of Common Stock of the Company which (A) in the case of Shares acquired pursuant to the exercise of a Company option, have been owned by the Optionee for more than six (6) months on the date of surrender, and (B) have a Fair Market Value on the date of surrender equal to the Exercise Price of the Shares as to which the Option is being exercised; or

        (iv)  to the extent permitted by the Administrator, delivery of a properly executed exercise notice together with such other documentation as the Administrator and the broker, if applicable, shall require to effect an exercise of the Option and delivery to the Company of the sale or loan proceeds required to pay the Exercise Price.

        5.    Restrictions on Exercise.    If the issuance of Shares upon such exercise or if the method of payment for such shares would constitute a violation of any applicable federal or state securities or other law or regulation, then the Option may not be exercised. The Company may require Optionee to make any representation and warranty to the Company as may be required by any applicable law or regulation before allowing the Option to be exercised.

        6.    Termination of Relationship.    If an Optionee's Continuous Status as an Employee or Consultant terminates, Optionee may exercise this Option during the period set out in the Notice of Stock Option Grant, to the extent the Option was vested at the date of such termination (the "Termination Date"). To the extent that Optionee was not vested in this Option at the date of such termination, or if Optionee does not exercise this Option within the time specified herein, the Option shall terminate.

        7.    Disability of Optionee.    Despite Section 6 above, if an Optionee's Continuous Status as an Employee or Consultant terminates as a result of his or her disability, Optionee may exercise the Option to the extent the Option was vested at the date of such termination, but only within six (6) months from the date of such termination (and in no event later than the expiration date of the term of such Option as set forth in the Stock Option Agreement). To the extent that Optionee is not vested in the Option at the date of termination, or if Optionee does not exercise such Option within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan.

        8.    Death of Optionee.    If Optionee's Continuous Status as an Employee or Consultant terminates as a result of the death of Optionee, the vested portion of the Option may be exercised at any time within six (6) months following the date of death (but in no event later than the date of expiration of the term of this Option as set forth in Section 10 below) by Optionee's estate or by a person who acquires the right to exercise the Option by bequest or inheritance. To the extent that Optionee is not vested in the Option at the date of death, or if the Option is not exercised within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan.

        9.    Non-Transferability of Option.    This Option may not be transferred in any manner except by will or by the laws of descent or distribution. It may be exercised during the lifetime of Optionee only by Optionee. The terms of this Option shall be binding upon the executors, administrators, heirs, successors and assigns of the Optionee.

        10.    Term of Option.    This Option may be exercised only within the term set out in the Notice of Stock Option Grant.

        11.    Tax Consequences.    Set forth below is a brief summary as of the Effective Date of the Plan of some of the federal and California tax consequences of exercise of the Option and disposition of the Shares. This summary is necessarily incomplete, and the tax laws and regulations are subject to change. The Optionee should consult a tax adviser before exercising the option or disposing of the shares.

14

        (i)    Exercise of ISO. If the Option qualifies as an ISO, there will be no regular federal or California income tax liability upon the exercise of the Option, although the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price will be treated as a tax preference item for federal alternative minimum tax purposes and may subject the Participant to the alternative minimum tax in the year of exercise.

        (ii)   Exercise of Nonstatutory Stock Option. If the Option does not qualify as an ISO, there may be a regular federal and California income tax liability upon the exercise of the Option. Participant will be treated as having received compensation income (taxable at ordinary income tax rates) equal to the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price. If Participant is a current or former employee of the Company, the Company may be required to withhold from Participant's compensation or collect from Participant and pay to the applicable taxing authorities an amount equal to a percentage of this compensation income at the time of exercise.

        (iii)  Disposition of Shares. The following tax consequences may apply upon disposition of the Shares.

(a)

Incentive Stock Options. If the Shares are held for more than twelve (12) months after the date of purchase of the Shares pursuant to the exercise of an ISO and are disposed of more than two (2) years after the Date of Grant, any gain realized on disposition of the Shares will be treated as long term capital gain for federal and California income tax purposes. If Vested Shares purchased under an ISO are disposed of within the applicable one (1) year or two (2) year period, any gain realized on such disposition will be treated as compensation income (taxable at ordinary income rates in the year of the disposition) to the extent of the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price. To the extent the Option was exercised prior to vesting coincident with the filing of an 83(b) Election (as defined below), the amount taxed because of a disqualifying disposition will be based upon the excess, if any, of the fair market value over the exercise price on the vesting date(s) for the Shares that were disposed of in the disqualifying disposition.



(b)

Nonstatutory Stock Options. If the Shares are held for more than twelve (12) months after the date of purchase of the Shares pursuant to the exercise of a nonstatutory stock option, any gain realized on disposition of the Shares will be treated as long-term capital gain.



(c)

Withholding. The Company may be required to withhold from the Participant's compensation or collect from the Participant and pay to the applicable taxing authorities an amount equal to a percentage of this compensation income.

        12.    Section 83(b) Election for Unvested Shares.    With respect to unvested Shares which are subject to the Company's repurchase option, unless an election (an "83(b) Election") is filed by the Participant with the Internal Revenue Service (and, if necessary, the proper state taxing authorities), within 30 days of the purchase of the unvested Shares, electing pursuant to Section 83(b) of the Code (and similar state tax provisions, if applicable) to be taxed currently on any difference between the Exercise Price of the unvested Shares and their Fair Market Value on the date of purchase, there may be a recognition of taxable income (including, where applicable, alternative minimum taxable income) to the Optionee,

15

measured by the excess, if any, of the Fair Market Value of the unvested Shares at the time they cease to be unvested Shares, over the Exercise Price of the unvested Shares.

OMNEON VIDEO NETWORKS, INC.

By:

Title:

OPTIONEE

16

1998 STOCK OPTION PLAN
RESTRICTED STOCK PURCHASE AGREEMENT (UNVESTED SHARES)

        THIS AGREEMENT (this "Agreement") is made between                        (the "Purchaser") and Omneon Video Networks, Inc., a Delaware corporation (the "Company"), as of                        , 20            .

RECITALS

        (1)    Pursuant to the exercise of the stock option granted to Purchaser (the "Option") under the Company's 1998 Stock Option Plan and pursuant to the Stock Option Agreement (the "Stock Option Agreement") dated                        by and between the Company and Purchaser with respect to such grant, which Stock Option Agreement is hereby incorporated by reference, Purchaser has elected to purchase                        of those shares of the Company's Common Stock subject to the Stock Option Agreement which have not become vested under the vesting schedule set forth in the Stock Option Agreement ("Unvested Shares"). The Unvested Shares and the shares subject to the Stock Option Agreement which have become vested are sometimes collectively referred to herein as the "Shares".

        (2)    As a condition to Purchaser's election to exercise the option. Purchaser must execute this Restricted Stock Purchase Agreement, which sets forth the rights and obligations of the parties with respect to Shares acquired upon exercise of the Option.

        1.    Repurchase Option.    

(a)

If Purchaser's employment or consulting relationship with the Company is terminated for any reason, including for cause, death, and disability, the Company shall have the right and option to purchase from Purchaser, or Purchaser's personal representative, as the case may be, all of the Purchaser's Unvested Shares as of the date of such termination at the price paid by the Purchaser for such Shares (the "Repurchase Option").



(b)

Upon the occurrence of a termination, the Company may exercise its Repurchase Option by delivering personally or by registered mail, to Purchaser (or his transferee or legal representative, as the case may be), within ninety (90) days of the termination, a notice in writing indicating the Company's intention to exercise the Repurchase Option and setting forth a date for closing not later than thirty (30) days from the mailing of such notice. The closing shall take place at the Company's headquarters. At the closing, the holder of the certificates for the Unvested Shares being transferred shall deliver the stock certificate or certificates evidencing the Unvested Shares, and the Company shall deliver the purchase price therefor.



(c)

At its option, the Company may elect to make payment for the Unvested Shares to a bank selected by the Company. The Company shall avail itself of this option by a notice in writing to Purchaser stating the name and address of the bank, date of closing, and waiving the closing at the Company's office.



(d)

If the Company does not elect to exercise the Repurchase Option conferred above by giving the requisite notice within ninety (90) days following the termination, the Repurchase Option shall terminate.

        2.    Transferability of the Shares; Escrow.    

(a)

Purchaser hereby authorizes and directs the secretary of the Company, or such other person designated by the Company, to transfer the Unvested Shares as to which the Repurchase Option has been exercised from Purchaser to the Company.

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(b)

To insure the availability for delivery of Purchaser's Unvested Shares upon repurchase by the Company purest to the Repurchase Option under Section 1, Purchaser hereby appoints the secretary, or any other person designated by the Company as escrow agent, as its attorney-in-fact to sell, assign and transfer unto the Company, such Unvested Shares, if any, repurchased by the Company pursuant to the Repurchase Option and shall, upon execution of this Agreement, deliver and deposit with the secretary of the Company, or such other person designated by the Company, the share certificates representing the Unvested Shares, together with the stock assignment duly endorsed in blank, attached hereto as Schedule 1. The Unvested Shares and stock assignment shall be held by the secretary in escrow, pursuant to the Joint Escrow Instructions of the Company and Purchaser attached as Schedule 2 hereto, until the Company exercises its Repurchase Option as provided in Section 1, until such Unvested Shares are vested, or until such time as this Agreement no longer is in effect As a further condition to the Company's obligations under this Agreement, the spouse of the Purchaser, if any, shall execute and deliver to the Company the Consent of Spouse attached hereto as Schedule 3. Upon vesting of the Unvested Shares, the escrow agent shall promptly deliver to the Purchaser the certificate or certificates representing such Shares in the escrow agent's possession belonging to the Purchaser, and the escrow agent shall be discharged of all further obligations hereunder; provided, however, that the escrow agent shall nevertheless retain such certificate or certificates as escrow agent if so required pursuant to other restrictions imposed pursuant to this Agreement.



(c)

The Company, or its designee, shall not be liable for any act it may do or omit to do with respect to holding the Shares in escrow and while acting in good faith and in the exercise of its judgment.



(d)

Transfer or sale of the Shares is subject to restrictions on transfer imposed by any applicable state and federal securities laws. Any transferee shall hold such Shares subject to all the provisions hereof and the Exercise Notice executed by the Purchaser with respect to any Unvested Shares purchased by Purchaser and shall acknowledge the same by signing a copy of this Agreement.

        3.    Ownership, Voting Rights, Duties.    This Agreement shall not affect in any way the ownership, voting rights or other rights or duties of Purchaser, except as specifically provided herein.

        4.    Legends.    The share certificate evidencing the Shares issued hereunder shall be endorsed with the following legend (in addition to any legend required under applicable state securities laws);

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS UPON TRANSFER AND RIGHTS OF REPURCHASE AS SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.

        5.    Adjustment for Stock Split.    All references to the number of Shares and the purchase price of the Shares in this Agreement shall be appropriately adjusted to reflect any stock split, stock dividend or other change in the Shares which may be made by the Company after the date of this Agreement.

        6.    Notices.    Notices required hereunder shall be given in person or by registered mail to the address of Purchaser shown on the records of the Company, and to the Company at its principal executive office.

        7.    Survival of Terms.    This Agreement shall apply to and bind Purchaser and the Company and their respective permitted assignees and transferees, hairs, legatees, executors, administrators and legal successors.

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        8.    Section 83(b) Elections.    

(a)

Election for Unvested Shares Purchased Pursuant to Nonstatutory Stock Options. Purchaser hereby acknowledges that he or she has been informed that, with respect to the exercise of a Nonstatutory Stock Option for Unvested Shares, that unless an election is' filed by the Purchaser with the Internal Revenue Service and, if necessary, the proper state taxing authorities, within 30 days of the purchase of the Shares, electing pursuant to Section 83(b) of the Code (and similar state tax provisions if applicable) to be taxed currently on any difference between the purchase price of the Shares and their Fair Market Value on the date of purchase, there will be a recognition of taxable income to the Optionee, measured by the excess, if any, of the fair market value of the Shares, at the time the Company's Repurchase Option lapses over the purchase price for the Shares. Optionee represents that Optionee has consulted any tax consultants) Optionee deems advisable in connection with the purchase of the Shares or the filing of the Election under Section-83(b) and similar tax provisions. A form of Election under Section 83(b) is attached hereto as Schedule 4 for reference.



(b)

Election for Unvested Shares Purchased Pursuant to Incentive Stock Options. Purchaser hereby acknowledges that he or she has been informed that, with respect to the exercise of an Incentive Stock Option for Unvested Shares, that unless an election is filed by the Purchaser with the Internal Revenue Service and, if necessary, the proper state taxing authorities, within 30 days of the purchase of the Shares, electing pursuant to Section 83(b) of the Code (and similar state tax provisions if applicable) to be taxed currently on any difference between the purchase price of the Shares and their Fair Market Value on the date of purchase, there will be a recognition of income to the Optionee, for alternative minimum tax purposes, measured by the excess, if any, of the fair market value of the Shares, at the time the Company's Repurchase Option lapses over the purchase price for the Shares. Optionee represents that Optionee bar consulted any tax consultants) Optionee deems advisable in connection with the purchase of the Shares or the filing of the Election under Section 83(b) and similar tax provisions. A form of Election under Section 83(b) for alternative minimum tax purposes is attached hereto as Schedule 1 for reference. Purchaser hereby further acknowledges that he or she has been informed that, to the extent the Option has been exercised prior to vesting coincident with the filing of the Election under 83(b), the amount taxed because of a disqualifying disposition will be based upon the excess, if any, of the fair market value over the exercise price on the vesting date(s) for the Shares that were disposed of in the disqualifying disposition.

PURCHASER ACKNOWLEDGES THAT IT IS PURCHASER'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVE TO MAKE THUS FILING ON PURCHASER'S BEHALF.

        9.    Representations.    Purchaser has reviewed with his own tax advisers the federal, state, local and foreign tax consequences of this investment and the transactions contemplated by this Agreement. Purchaser is relying solely on such advisors and not on any statements or representations of the Company or any of its agents. Purchaser understands that he (and not the Company) shall be responsible for his own tax liability that may arise as a result of this investment or the transactions contemplated by this Agreement.

        10.    Governing Law.    This Agreement shall be governed by the internal substantive laws but not the choice of law rules of California.

[remainder of this page intentionally left blank]

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        Purchaser represents that he or she has read this Agreement and is familiar with its terms and provisions. Purchaser hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Board of Directors of the Company upon any questions arising under this Agreement.

        IN WITNESS WHEREOF, this Agreement is deemed made as of the date first set forth above.

"Company"
OMNEON VIDEO NETWORKS, INC.

By:

Title:

"PURCHASER"

Address:

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SCHEDULE 1

ASSIGNMENT SEPARATE FROM CERTIFICATE

        FOR VALUE RECEIVED I,                                                                               , hereby sell assign and transfer unto                                                                                               (                   ) shares of the Common Stock of Omneon Video Networks, Inc., standing in my name of the books of said corporation represented by Certificate No.                     herewith and do hereby irrevocably constitute and appoint                               to transfer the said stock on the books of the within named corporation with full power of substitution in the premises.

        This Stock Assignment may be used only in accordance with the Restricted Stock Purchase Agreement between Omneon Video Networks, Inc. and the undersigned dated                                                  , 20          .

        Dated:                                                  , 20          

        Signature:                                                                     

INSTRUCTIONS: Please do not fill in any blanks other than the signature line. The purpose of this assignment is to enable the Company to exercise its "repurchase option," as set forth in the Agreement, without requiring additional signatures on to part of the Purchaser.

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SCHEDULE 2

JOINT ESCROW INSTRUCTIONS

                                                 , 20          

Fenwick & West LLP
Attn: Thomas A. Trudell
Silicon Valley Center
801 California St.
Mountain View, CA 94041

        To the Escrow Agent for Omneon Video Networks, Inc. Common Stock:

        As Escrow Agent for both Omneon Video Networks, Inc., a Delaware corporation (the "Company"), and the undersigned purchaser of stock of the Company (the "Purchaser"), you are hereby authorized and directed to hold the documents delivered to you pursuant to the terms of that certain Restricted Stock Purchase Agreement ("Agreement") between the Company and the undersigned, in accordance with the following instructions:

        1.     In the event the Company and/or any assignee of the Company (referred to collectively for convenience herein as the "Company") exercises the Company's repurchase option set forth in the Agreement, the Company shall give to Purchaser and you a written notice specifying the number of shares of stock to be purchased, the purchase price, and the time for a closing hereunder at the principal office of the Company. Purchaser and the Company hereby irrevocably authorize and direct you to close the transaction contemplated by such notice in accordance with the terms of said notice.

        2.     At the closing, you are directed (a) to date the stock assignments necessary for the transfer in question, (b) to fill in the number of shares being transferred, and (c) to deliver the same, together with the certificate evidencing the shares of stock to be transferred, to the Company or its assignee, against the simultaneous delivery to you of the purchase price (by cash, a check, or some combination thereof) for the number of shares of stock being purchased pursuant to the exercise of the Company's repurchase option.

        3.     Purchaser irrevocably authorizes the Company to deposit with you any certificates evidencing shares of stock to be held by you hereunder and any additions and substitutions to said shares as defined in the Agreement. Purchaser does hereby irrevocably constitute and appoint you as Purchaser's attorney-in-fact and agent for the term of this escrow to execute with respect to such securities all documents necessary or appropriate to make such securities negotiable and to complete any transaction herein contemplated, including but not limited to the filing with any applicable state blue sky authority of any required applications for consent to, or notice of transfer of, the securities. Subject to the provisions of this paragraph 3, Purchaser shall exercise all rights and privileges of a stockholder of the Company while the stock is held by you.

        4.     Upon written request of the Purchaser, but no more than once per calendar year, unless the Company's repurchase option has been exercised, you will deliver to Purchaser a certificate or certificates representing so many shares of stock as are not then subject to the Company's repurchase option. Within 120 days after cessation of Purchaser's continuous employment by or services to the Company, or any parent or subsidiary of the Company, you will deliver to Purchaser a certificate or certificates representing the aggregate number of shares held or issued pursuant to the Agreement and not purchased by the Company or its assignees pursuant to exercise of the Company's repurchase option.

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        5.     If at the time of termination of this escrow you should have in your possession any documents, securities, or other property belonging to Purchaser, you shall deliver all of the same to Purchaser and shall be discharged of all further obligations hereunder.

        6.     Your duties hereunder may be altered, amended, modified or revoked only by a writing signed by all of the parties hereto.

        7.     You shall be obligated only for the performance of such duties as are specifically set forth herein and may rely and shall be protected in relying or refraining from acting on any instrument reasonably believed by you to be genuine and to have been signed or presented by the proper party or parties. You shall not be personally liable for any act you may do or omit to do hereunder as Escrow Agent or as attorney-in-fact for Purchaser while acting in good faith, and any act done or omitted by you pursuant to the advice of your own attorneys shall be conclusive evidence of such good faith.

        8.     You are hereby expressly authorized to disregard any and all warnings given by any of the parties hereto or by any other person or corporation, excepting only orders or process of courts of law and are hereby expressly authorized to comply with and obey orders, judgments or decrees of any court. In case you obey or comply with any such order, judgment or decree, you shall not be liable to any of the parties hereto or to any other person, firm or corporation by reason of such compliance, notwithstanding any such order, judgment or decree being subsequently reversed, modified, annulled, set aside, vacated or found to have been entered without jurisdiction.

        9.     You shall not be liable in any respect on account of the identity, authorities or rights of the parties executing or delivering or purporting to execute or deliver the Agreement or any documents or papers deposited or called for hereunder.

        10.   You shall not be liable for the outlawing of any rights under the Statute of Limitations with respect to these Joint Escrow Instructions or any documents deposited with you.

        11.   You shall be entitled to employ such legal counsel and other experts as you may deem necessary properly to advise you in connection with your obligations hereunder, may rely upon the advice of such counsel, and may pay such counsel reasonable compensation therefor.

        12.   Your responsibilities as Escrow Agent hereunder shall terminate if you shall cease to be an officer or agent of the Company or if you shall resign by written notice to each party. In the event of any such termination, the Company shall appoint a successor Escrow Agent.

        13.   If you reasonably require other or further instruments in connection with these Joint Escrow Instructions or obligations in respect hereto, the necessary parties hereto shall join in furnishing such instruments.

        14.   It is understood and agreed that should any dispute arise with respect to the delivery and/or ownership or right of possession of the securities held by you hereunder, you are authorized and directed to retain in your possession without liability to anyone all or any part of said securities until such disputes shall have been settled either by mutual written agreement of the parties concerned or by a final order, decree or judgment of a court of competent jurisdiction after the time for appeal has expired and no appeal has been perfected, but you shall be under no duty whatsoever to institute or defend any such proceedings.

        15.   Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upon personal delivery or upon deposit in the United States Post Office, by registered or certified mail with postage and fees prepaid, addressed to each of the other parties there unto

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entitled at the following addresses or at such other addresses as a party may designate by an days' advance written notice to each of the other parties hereto.

COMPANY:	Omneon Video Networks, Inc. Attn: Chief Financial Officer 965 Stewart Drive Sunnyvale, CA 94086
PURCHASER:
ESCROW AGENT:	Fenwick & West LLP Attn: Thomas A. Trudell Silicon Valley Center 801 California St. Mountain View, CA 94041

        16.   By signing these Joint Escrow Instructions, you become a party hereto only for the purpose of said Joint Escrow instructions; you do not become a party to the Agreement.

        17.   This instrument shall be binding upon and inure to the benefit of the parties hereto, and their respective successors and permitted assigns.

        18.   These Joint Escrow Instructions shall be governed by, and construed and enforced in accordance with, the laws of the State of California.

OMNEON VIDEO NETWORKS, INC.

By:

Title:

PURCHASER:

ESCROW AGENT:

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SCHEDULE 3

CONSENT OF SPOUSE

I,                                                                   , spouse of                                                                                have read and approve the foregoing Restricted Stock Purchase Agreement (the "Agreement"). In consideration of granting of the right to my spouse to purchase shares of Omneon Video Networks, Inc. as set forth in the Agreement, I hereby appoint my spouse as my attorney-in-fact in respect to the exercise of any rights under the Agreement and agree to be bound by the provisions of the Agreement insofar as I may have any rights in said Agreement or any shares issued pursuant thereto under the community property laws or similar laws relating to marital property in effect in the state of our residence as of the date of the signing of the foregoing Agreement.

        Dated:                                                  , 20          

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SCHEDULE 4

ELECTION UNDER SECTION 83(b)

OF THE INTERNAL REVENUE CODE OF 1986

The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended, to include in taxpayer's gross income for the current taxable year the amount of any compensation taxable to taxpayer in connection with taxpayer's receipt of the property described below:

1.

The name, address, taxpayer identification number and taxable year of the undersigned are as follows:

NAME:	TAXPAYER:
	SPOUSE:
ADDRESS:
IDENTIFICATION NO.:	TAXPAYER:
	SPOUSE:
TAXABLE YEAR:

2.

The property with respect to which the election is made is described as follows:                          shares (the "Shares") of the Common Stock of Omneon Video Networks, Inc. (the "Company").

3.

The date on which the property was transferred is:                                                  , 20          .

4.

The property is subject to the following restrictions:

The Shares may not be transferred and are subject to forfeiture under the terms of an agreement between the taxpayer and the Company. These restrictions lapse upon the satisfaction of certain conditions contained in such agreement.

5.

The fair market value at the time of transfer, determined without regard to any restriction other than a restriction which by its terms will never lapse, of such property is: $                             .

6.

The amount (if any) paid for such property is: $                                                 .

The undersigned understands that the foregoing election may not be revoked except with the consent of the Commissioner.

Dated:                                                  , 20	Taxpayer
The undersigned spouse of taxpayer joins in this election.
Dated:                                                  , 20	Spouse of Taxpayer

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1998 STOCK OPTION PLAN

EXERCISE NOTICE AND INVESTMENT REPRESENTATION (VESTED SHARES)

Omneon Video Networks, Inc.
965 Stewart Drive
Sunnyvale, CA 94085-3913

        1.    Exercise of Option.    Effective as of today,                         , the undersigned ("Optionee") hereby elects to exercise Optionee's option to purchase                        shares of the Common Stock (the "Shares") of Omneon Video Networks,  Inc., a Delaware corporation (the "Company"), under and pursuant to the Company's 1998 Stock Option Plan (the "Plan") and the Stock Option Agreement dated                        (the "Stock Option Agreement"). The aggregate Exercise Price for the above Shares is $                        .

        2.    Representations of Optionee.    Optionee acknowledges that Optionee has received, read and understood the Plan and the Stock Option Agreement. Optionee agrees to abide by and be bound by their terms and conditions. Optionee represents to the Company the following:

        (a)   Optionee is aware of the Company's business affairs and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the Shares. Optionee is acquiring these Shares for investment for Optionee's own account only and not with a view to, or for resale in connection with, any "distribution" thereof within the meaning of the Securities Act of 1933, as amended (the "Securities Act").

        (b)   Optionee acknowledges and understands that the Shares constitute "restricted securities" under the Securities Act and have not been registered under the Securities Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of Optionee's investment intent as expressed herein. In this connection, Optionee understands that, in the view of the Securities and Exchange Commission, the statutory basis for such exemption may be unavailable if Optionee's representation was predicated solely upon a present intention to hold the Shares for the minimum capital gains period specified under tax statutes, for a deferred sale, for or until an increase or decrease in the market price of the Shares, or for a period of one year or any other fixed period in the future. Optionee further understands that the Shares must be held indefinitely unless they are subsequently registered by the Company under the Securities Act or an exemption from such registration is available. Optionee further acknowledges and understands that the Company is under no obligation to register the Shares. Optionee understands that the certificate evidencing the Shares will be imprinted with a legend which prohibits the transfer of the Shares unless they are registered or such registration is not required in the opinion of counsel satisfactory to the Company and any other legend required under applicable state securities laws.

        (c)   Optionee is familiar with the provisions of Rule 701 and Rule 144, each promulgated under the Securities Act, which, in substance, permit limited public resale of "restricted securities" acquired, directly or indirectly from the issuer thereof, in a non-public offering subject to the satisfaction of certain conditions. Rule 701 provides that if the issuer qualifies under Rule 701 at the time of the grant of the Option to the Optionee, the exercise will be exempt from registration under the Securities Act. In the event the Company becomes subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, ninety (90) days thereafter (or such longer period as any market stand-off agreement may require) the Shares that were issued under the Rule 701 exemption may be resold, subject to the satisfaction of certain of the conditions specified by Rule 144, including the resale being made through a broker in an unsolicited "broker's transaction" or in transactions directly with a market-maker (as said term is defined under the

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Securities Exchange Act of 1934, as amended) and, in the case of affiliates of the Company, (1) the availability of certain public information about the Company, (2) the amount of Securities being sold during any three month period not exceeding the limitations specified in Rule 144(e), and (3) the timely filing of a Form 144, if applicable.

        In the event that the Company does not qualify under Rule 701 at the time of grant of the Option, then the Shares may be resold in certain limited circumstances subject to the provisions of Rule 144, which requires the resale to occur not less than one year after the later of the date the Shares were sold by the Company or the date the Shares were sold by an affiliate of the Company, within the meaning of Rule 144; and, in the case of acquisition of the Shares by an affiliate, or by a non-affiliate who subsequently holds the Shares less than two years, the satisfaction of the conditions set forth in sections (1), (2), (3) and (4) of the paragraph immediately above.

        (d)   Optionee further understands that in the event all of the applicable requirements of Rule 701 or 144 are not satisfied, registration under the Securities Act, compliance with Regulation A, or compliance with some other exemption from registration will be required; and that, notwithstanding the fact that Rules 144 and 701 are not exclusive, the staff of the Securities and Exchange Commission has expressed its opinion that persons proposing to sell private placement securities other than ins registered offering and otherwise than pursuant to Rules 144 or 701 will have a substantial burden of proof in establishing that an exemption from registration is available for such offers or sales, and that such persons and their respective brokers who participate in such transactions do so at their own risk. Optionee understands that no assurances can be given that any such other registration exemption will be available in such event.

        3.    Rights as Stockholder.    Until the stock certificate evidencing such Shares is issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to the Shares, notwithstanding the exercise of the Option. The Company shall issue (or cause to be issued) such stock certificate promptly after the Option is exercised. No adjustment will be made for a dividend or other right for which the record date is prior to the date the stock certificate is issued, except as provided in Section 11 of the Plan.

        Optionee shall enjoy rights as a stockholder until such time as Optionee disposes of the Shares or the Company and/or its assignee(s) exercises the Right of First Refusal hereunder. Upon such exercise, Optionee shall have no further rights as a holder of the Shares so purchased except the right to receive payment for the Shares so purchased in accordance with the provisions of this Agreement, and Optionee shall forthwith cause the certificate(s) evidencing the Shares so purchased to be surrendered to the Company for transfer or cancellation.

        4.    Company's Right of First Refusal.    Before any Shares held by Optionee or any transferee (either being sometimes referred to herein as the "Holder") may be sold or otherwise transferred (including transfer by gift or operation of law), the Company or its assignee(s) shall have a right of first refusal to purchase the Shares on the terms and conditions set forth in this Section (the "Right of First Refusal").

        (a)   Notice of Proposed Transfer    The Holder of the Shares shall deliver to the Company a written notice (the "Notice") stating: (i) the Holder's bona fide intention to sell or otherwise transfer such Share; (ii) the name of each proposed purchaser or other transferee ("Proposed Transferee"); (iii) the number of Shares to be transferred to each Proposed Transferee; and (iv) the bona fide cash price or other consideration for which the Holder proposes to transfer the Shares (the "Offered Price"), and the Holder shall offer the Shares at the Offered Price to the Company or its assignee(s).

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        (b)   Exercise of Right of First Refusal    Within thirty (30) days after receipt of the Notice, the Company and/or its assignees) may elect in writing to purchase all, but not less than all, of the Shares proposed to be transferred to any one or more of the Proposed Transferees. The purchase price will be determined in accordance with subsection (c) below.

        (c)   Purchase Price    The purchase price ("Purchase Price") for the Shares repurchased under this Section shall be the Offered Price. If the Offered Price includes consideration other than cash, the cash equivalent value of the non-cash consideration shall be determined by the Board of Directors of the Company in good faith.

        (d)   Payment    Payment or the Purchase Price shall be made, at the option of the Company or its assignee(s), in cash (by check), by cancellation of all or a portion of any outstanding indebtedness of the Holder to the Company (or, in the case of repurchase by an assignee, to the assignee), or by any combination thereof within thirty (30) days after receipt of the Notice or in the manner and at the times set forth in the Notice.

        (e)   Holder's Right to Transfer    If all of the Shares proposed in the Notice to be transferred to a given Proposed Transferee are not purchased by the Company and/or its assignee(s) as provided in this Section, then the Holder may sell or otherwise transfer such Shares to that Proposed Transferee at the Offered Price or at a higher price, provided that such sale or other transfer is consummated within one hundred twenty (120) days after the date of the Notice and provided further that any such sale or other transfer is effected in accordance with any applicable securities laws and the Proposed Transferee agrees in writing that the provisions of this Section shall continue to apply to the Shares in the hands of such Proposed Transferee. If the Shares described in the Notice are not transferred to the Proposed Transferee within such period, a new Notice shall be given to the Company, and the Company and/or its assignees shall again be offered the Right of First Refusal as provided herein before any Shares held by the Holder may be sold or otherwise transferred.

        (f)    Exception for Certain Family Transfers    Anything to the contrary contained in this Section notwithstanding, the transfer of any or all of the Shares during the Optionee's lifetime or on the Optionee's death by will or intestacy to the Optionee's immediate family or a trust for the benefit of the Optionee's immediate family shall be exempt from the provisions of this Section. "Immediate Family" as used herein shall mean spouse, lineal descendant or antecedent, father, mother, brother or sister or stepchild (whether or not adopted). In such case, the transferee or other recipient shall receive and hold the Shares so transferred subject to the provisions of this Section, and there shall be no further transfer of such Shares except in accordance with the terms of this Section.

        (g)   Termination of Right of First Refusal    The Right of First Refusal shall terminate as to any Shares ninety (90) days after the first sale of Common Stock of the Company to the general public pursuant to a registration statement filed with and declared effective by the Securities and Exchange Commission under the Securities Act of 1933, as amended.

        5.    Tax Consultation.    Optionee understands that Optionee may suffer adverse tax consequences as a result of Optionee's purchase or disposition of the Shares. Optionee represents that Optionee has consulted with any tax consultants Optionee deems advisable in connection with the purchase or disposition of the Shares and that Optionee is not relying on the Company for any tax advice.

        6.    Restrictive Legend; and Stop-Transfer Orders.

        (a)   Legends    Optionee understands and agrees that the Company shall cause the legends set forth below or legends substantially equivalent thereto, to be placed upon any certificate(s)

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evidencing ownership of the Shares together with any other legends that may be required by state or federal securities laws:

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND RIGHT OF FIRST REFUSAL OPTIONS HELD BY THE ISSUER OR ITS ASSIGNEE(S) AS SET FORTH IN THE EXERCISE NOTICE BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER. SUCH TRANSFER RESTRICTIONS AND RIGHT OF FIRST REFUSAL ARE BINDING ON TRANSFEREES OF THESE SHARES.

        (b)   Stop-Transfer Notices    Optionee agrees that, in order to ensure compliance with the restrictions referred to herein, the Company may issue appropriate "stop transfer" instructions to its transfer agent, if any, and that, if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records.

        (c)   Refusal to Transfer    The Company shall not be required (i) to transfer on its books any Shares that have been sold or otherwise transferred in violation of any of the provisions of this Agreement or (ii) to treat as owner of such Shares or to accord the right to vote or pay dividends to any purchaser or other transferee to whom such Shares shall have been so transferred.

        7.    Successors and Assigns.    The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth, this Agreement shall be binding upon Optionee and his or her heirs, executors, administrators, successors and assigns.

        8.    Interpretation.    Any dispute regarding the interpretation of this Agreement shall be submitted by Optionee or by the Company forthwith to the Company's Board of Directors or the committee thereof that administers the Plan, which shall review such dispute at its next regular meeting. The resolution of such a dispute by the Board or committee shall be final and binding on the Company and on Optionee.

        9.    Governing Law; Severability.    This Agreement shall be governed by and construed in accordance with the laws of the State of California excluding that body of low pertaining to conflicts of law. Should any provision of this Agreement be determined by a court of law to be illegal of unenforceable, the other provisions shall nevertheless ruin effective and shall remain enforceable.

        10.    Notices.    Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upon personal delivery or upon deposit in the United States mail by certified mail, with postage and fees prepaid, addressed to the other party at its address as shown below beneath its signature, or to such other address as such party may designate in writing from time to time to the other party.

        11.    Further Instruments.    The parties agree to execute such further instruments and to take such further action as may be reasonably necessary to carry out the purposes and intent of this Agreement.

        12.    Delivery of Payment.    Optionee herewith delivers to the Company the full Exercise Price for the Shares.

[remainder of this page intentionally left blank]

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        13.    Entire Agreement.    The Plan and the Stock Option Agreement (including the Notice of Stock Option Grant) are incorporated herein by reference. This Agreement, the Plan, the Stock Option Agreement and the Investment Representation Statement constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Optionee with respect to the subject matter hereof.

Submitted by:	Accepted by:
OPTIONEE:	OMNEON VIDEO NETWORKS, INC.
	By:
	Its:
Certificate Registration Name and Address:

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Exhibit 10.01

SCHEDULE 1 ASSIGNMENT SEPARATE FROM CERTIFICATE
SCHEDULE 2 JOINT ESCROW INSTRUCTIONS
SCHEDULE 3 CONSENT OF SPOUSE
SCHEDULE 4 ELECTION UNDER SECTION 83(b) OF THE INTERNAL REVENUE CODE OF 1986

EX-10.05

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Exhibit 10.05

Omneon Video Networks Logo

June 8, 2003

Joseph S. Kennedy

Dear Joe:

This is a revised version of my Offer Letter to you dated May 21, 2003. I am pleased to offer you a position with Omneon Video Networks, Inc. (the "Company") as President and Chief Executive Officer. Your position with the Company pursuant to the terms and conditions of this letter will commence as soon as possible. While employed by the Company, you will report to the Board of Directors (the "Board") and have such duties and responsibilities as the Board may from time to time require. You agree to perform your duties faithfully and to the best of your abilities and to devote your full business efforts and time to the Company. Additionally, while employed by the Company, you agree to not actively engage in any other employment, occupation or consulting activity for any direct or indirect remuneration without prior approval of the Board.

While employed by the Company, you will receive as compensation for your services a base salary at the annualized rate of two hundred and twenty-five thousand dollars ($225,000). You will also be eligible to earn a variable bonus, of up to 30% of your base salary, based upon meeting operational milestones to be determined by the Compensation Committee of the Board. Your salary and bonus will be paid periodically in accordance with normal Company payroll practices and be subject to the usual, required withholding.

Additionally, subject to approval by the Board, you will be granted a stock option to purchase 76,133,916 shares (5.0%) of Company common stock at an exercise price to be determined by the Board. Subject to the accelerated vesting provisions referenced herein, 25% of the shares subject to the option will vest on the one-year anniversary of your employment with the Company, and the remaining shares will vest as to ¹/48 of the total shares each month thereafter, subject to your continued employment with the Company on the relevant vesting dates. The option will be subject to the terms and conditions of the Company's 1998 Stock Option Plan and the applicable option agreement between you and the Company, both of which are incorporated herein by reference.

During your employment with the Company, you will be eligible to participate in the employee benefit plans currently and hereafter maintained by the Company of general applicability to other senior executives of the Company, including, without limitation, the Company's group medical, dental, vision, disability and life insurance plans. The Company reserves the right to cancel or change the benefit plans and programs it offers to its employees at any time.

If (i) you terminate your employment with the Company for Good Reason or (ii) the Company terminates your employment other than for Cause, and you sign and do not revoke a standard release of claims with the Company, then (i) you will be entitled to receive continuing payments of severance pay (less applicable withholding taxes) at a rate equal to your then current base salary for a period of three (3) months from the date of such termination, to be paid periodically in accordance with the Company's normal payroll policies; (ii) during the three (3) month period following your termination of employment, the Company will pay for the same level of health (i.e. medical, vision and dental) coverage and benefits as in effect for you and your covered dependents on the day immediately preceding the date of such termination; and (iii) any options held by you to purchase shares of the Company's common stock will immediately vest and become exercisable as to that number of shares, if any, that would have vested had you remained employed by the Company through the three (3) month period from the date of such termination ("Severance Benefits").

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Notwithstanding the foregoing, if within one year following a Change of Control (i) you terminate your employment with the Company for Good Reason or (ii) the Company (or its successor) terminates your employment other than for Cause, and you sign and do not revoke a standard release of claims with the Company, then (i) you will be entitled to receive continuing payments of severance pay (less applicable withholding taxes) at a rate equal to your then current base salary for a period of six (6) months from the date of such event, to be paid periodically in accordance with the Company's normal payroll policies; (ii) during the six (6) month period following your termination of employment, the Company will pay for the same level of health (i.e. medical, vision and dental) coverage and benefits as in effect for you and your covered dependents on the day immediately preceding the date of such termination; and (iii) any options held by you to purchase shares of the Company's common stock will immediately vest and become exercisable as to that number of shares, if any, that would have vested had you remained employed by the Company through the twelve (12) month period from the date of such termination ("Change of Control Benefits"). If you receive Change of Control Benefits, you will no longer be entitled to receive Severance Benefits.

"Cause" is defined as (i) an act of material dishonesty made by you in connection with your responsibilities as an employee, (ii) your conviction of, or plea of nolo contendere to, a felony, (iii) your gross misconduct, or (iv) your continued substantial violations of your employment duties after you have received a written demand for performance from the Company which specifically sets forth the factual basis for the Company's belief that you have not substantially performed your duties.

"Change of Control" is defined as the occurrence of any of the following events: (i) any "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the "beneficial owner" (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company's then outstanding voting securities, (ii) the consummation of the sale or disposition by the Company of all or substantially all of the Company's assets, or (iii) the consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such merger or consolidation.

"Good Reason" is defined as any of the following, without your express written consent, (i) a significant reduction of your duties, position or responsibilities relative to your duties, position or responsibilities in effect immediately prior to such reduction, or your removal from such position, duties and responsibilities, unless you are provided with comparable duties, position and responsibilities; provided, however, that a reduction in duties, position or responsibilities solely by virtue of the Company being acquired and made part of a larger entity (as, for example, when the President of the Company remains as such following a change of control but is not made the President of the acquiring corporation) will not constitute "Good Reason;" (ii) a material reduction by the Company of your base salary as in effect immediately prior to such reduction (other than in connection with a Company-wide salary reduction program applicable to similarly-situated executives); or (iii) your relocation to a facility or a location more than fifty (50) miles from your current location.

You should understand that your employment with the Company is "at-will," and may be terminated by you or the Company at any time and for any reason. This offer letter and the confidential information and/or inventions assignment agreement between you and the Company that you will be expected to execute upon commencement of your employment represent the entire agreement and understanding between you and the Company concerning your employment relationship with the Company, and supersede in their entirety any and all prior agreements and understandings concerning your employment relationship with the Company, whether written or oral.

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The terms and conditions set forth in this offer letter will be binding and inure to the benefit of (1) your heirs, executors and legal representatives upon your death, and (ii) any successor of the Company. In the event any of the terms and conditions set forth in this offer letter becomes, or is determine to be, illegal, unenforceable or void, all other terms and conditions will continue in full force and effect.

You agree that any and all controversies, claims, or disputes with anyone (including the Company and any employee, officer, director, shareholder or benefit plan of the Company in their capacity as such or otherwise) arising out of, relating to, or resulting from your service to the Company under this Agreement or otherwise or the termination of your service with the Company, including any breach of this Agreement, will be subject to binding arbitration. You further understand that this Agreement to arbitrate also applies to any disputes that the Company may have with you. You agree that any arbitration will be administered in Santa Clara, California by the American Arbitration Association and that a neutral arbitrator will be selected in a manner consistent with its National Rules for the Resolution of Employment Disputes.

This letter will be governed by the laws of the state of California, with the exception of its conflict of laws provisions.

Please sign below to indicate your acceptance and agreement to the terms set forth in this offer letter and fax the signed offer letter to me at 408.585.5098. If you have any questions, don't hesitate to contact me. I am excited to welcome you to the Company, and I look forward to your participation in the Company's future success.

Sincerely,

/s/  LARRY KAPLAN Larry Kaplan President and Chief Executive Officer Omneon Video Networks, Inc.
Accepted and agreed to this 9th day of June, 2003	/s/  JOSEPH S. KENNEDY Signature

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Exhibit 10.05

EX-10.06

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Exhibit 10.06

OMNEON VIDEO NETWORKS, INC.

AMENDED AND RESTATED LAWRENCE R. KAPLAN RETENTION AGREEMENT

        The agreement entered into as of November 1, 2002 (the "Prior Agreement") by and between Omneon Video Networks, Inc. (the "Company") and Lawrence R. Kaplan ("Executive") is hereby amended and restated on this    ^th day of April 2003 (the "Effective Date") as follows:

RECITALS

        WHEREAS, Executive is currently President and Chief Executive Officer of the Company;

        WHEREAS, The Company and Executive are parties to the Prior Agreement dated as of November 1, 2002 (the "Origination Date");

        WHEREAS, The Company and Executive desire to amend and restate the Prior Agreement to read as set forth in this agreement (the "Agreement"). After the execution and delivery of this Agreement the Prior Agreement shall have no further force or effect;

        WHEREAS, on September 24, 1998, the Company and Executive entered into a Loan Agreement (the "Loan Agreement") which allowed for maximum borrowings by Executive from the Company of up to an aggregate principal amount of $480,000 (the "Loan");

        WHEREAS, as of the Origination Date, the aggregate principal and interest amount outstanding under the Loan was $180,000;

        WHEREAS, the Company's Board of Directors (the "Board") believes that it is in the best interests of the Company and its stockholders to provide Executive with an incentive to continue his employment with the Company; and

        WHEREAS, in order to provide Executive with enhanced financial security and sufficient encouragement to remain with the Company, the Board believes that it is imperative to provide Executive with certain performance bonus opportunities and severance benefits upon Executive's termination of employment,

        NOW, THEREFORE, based on the foregoing premises and in consideration of the commitments set forth below, Executive and the Company agree as follows:

        1.    Duties and Scope of Employment.    

        (a)   Positions and Duties. As of the Effective Date, Executive will continue to serve as President and Chief Executive Officer of the Company; provided, however, Executive will serve as Executive Chairman of the Company if the Company hires a new Chief Executive Officer following the Effective Date. Executive will render such business and professional services in the performance of his duties, consistent with Executive's position within the Company, as shall reasonably be assigned to him by the Board. As Executive Chairman, such duties will include, but not be limited to, shared responsibility for the Company's high-level customer, partner and industry relations, business development and strategic direction. The period of Executive's employment under this Agreement is referred to herein as the "Employment Term."

        (b)   Board Membership. During the Employment Term, Executive will continue to serve as a member of the Board, subject to any required Board and/or stockholder approval.

        (c)   Obligations. During the Employment Term, Executive will perform his duties faithfully and to the best of his ability and will devote his full business efforts and time to the Company. For the

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duration of the Employment Term, Executive agrees not to actively engage in any other employment, occupation or consulting activity for any direct or indirect remuneration without the prior approval of the Board.

        (d)   Loan Agreement. During the Employment Term, the Loan shall continue to be governed by the terms and conditions of the Loan Agreement. Executive agrees and acknowledges that he will not make any additional loan draws under the Loan Agreement following the Effective Date.

        2.    At-Will Employment.    The parties agree that Executive's employment with the Company will remain "at-will" employment and may be terminated at any time with or without cause or notice. Executive understands and agrees that neither his job performance nor promotions, commendations, bonuses or the like from the Company give rise to or in any way serve as the basis for modification, amendment, or extension, by implication or otherwise, of his employment with the Company.

        3.    Compensation and Benefits.    

        (a)   Base Salary. During the Employment Term, the Company will pay Executive as compensation for his services a base salary at the annualized rate of $195,000 (the "Base Salary"). The Base Salary will be subject to annual review by the Board, will be paid periodically in accordance with the Company's normal payroll practices and be subject to the usual, required withholding.

        (b)   Quarterly Bonuses. During each of the Company's fiscal years during the Employment Term, Executive will be eligible to receive quarterly bonuses based upon achievement of standard bonus criteria established for other Company executives and dependent on Executive's duties and responsibilities at the Company. Such bonus opportunity shall be targeted at 15% of the Base Salary earned in each applicable fiscal quarter and shall be paid within thirty (30) days of the end of the applicable fiscal quarter. Executive will also be entitled to participate in any other management incentive programs that the Company provides to similarly-situated executives.

        (c)   Performance Bonus. In addition to the Base Salary and contingent upon Executive remaining employed by the Company, Executive shall receive a bonus payment of $5,000 per month in the form of forgiveness of the Loan (the "Per Month Loan Forgiveness") for a period of three (3) years from the Origination Date, subject to acceleration as provided in Section 4 hereof.

        (d)   Stock Option. Following the Effective Date, the Company will recommend to the Board that Executive be granted a stock option to purchase 2.5%, or 36,066,958 shares, of the Company's fully-diluted shares of Common Stock (measured as of the Final Closing (as defined in the Series A-1, A-2.1 and A-2.2 Preferred Stock Purchase Agreement dated October 29, 2002) of the Company's Series A-1 Preferred Stock financing) at an exercise price equal to the fair market value per share of the Company's Common Stock on the date of grant (the "Option"). Subject to the accelerated vesting provisions set forth herein, the Option will vest as to 8,265,464 of the shares subject to the Option on March 31^st, 2003, and as to ¹/48^th of the shares subject to the Option each month thereafter, subject to Executive's continued service to the Company on the relevant vesting dates. The Option will be subject to the terms, definitions and provisions of the Company's Stock Plan (the "Stock Plan") and the stock option agreement by and between Executive and the Company (the "Option Agreement"), both of which documents are incorporated herein by reference.

        (e)   Employee Benefits. During the Employment Term, Executive will be entitled to continue to participate in the employee benefit plans currently and hereafter maintained by the Company of general applicability to other senior executives of the Company. The Company reserves the right to cancel or change the benefit plans and programs it offers to its employees at any time.

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        4.    Severance.    

        (a)   Involuntary Termination During Severance Window. If, during the "Severance Window" (as defined herein), Executive's employment with the Company terminates for (i) "Good Reason" (as defined herein) by Executive or (ii) other than for "Cause" (as defined herein) by the Company, and Executive signs and does not revoke a standard release of claims with the Company, then (i) Executive shall be entitled to receive continuing payments of severance pay (less applicable withholding taxes) at a rate equal to his Base Salary rate, as then in effect, for a period of six (6) months from the date of such termination, to be paid periodically in accordance with the Company's normal payroll policies; (ii) during the six (6) month period following Executive's termination of employment, the Company shall pay for the same level of health (i.e. medical, vision and dental) coverage and benefits as in effect for Executive and his covered dependents on the day immediately preceding the date of such termination; (iii) Executive shall be entitled to receive an accelerated payment equal to six (6) month's of Per Month Loan Forgiveness, for total accelerated forgiveness of $30,000; and (iv) any options held by Executive to purchase shares of the Company's common stock shall immediately vest and become exercisable as to that number of shares, if any, that would have vested had Executive remained employed by the Company through the six (6) month period from the date of such termination.

        (b)   Involuntary Termination Following Severance Window. If, following the "Severance Window", Executive's employment with the Company terminates for (i) "Good Reason" by Executive or (ii) other than for "Cause" by the Company, and Executive signs and does not revoke a standard release of claims with the Company, then (i) Executive shall be entitled to receive continuing payments of severance pay (less applicable withholding taxes) at a rate equal to his Base Salary rate, as then in effect, for a period of three (3) months from the date of such termination, to be paid periodically in accordance with the Company's normal payroll policies; (ii) during the three (3) month period following Executive's termination of employment, the Company shall pay for the same level of health (i.e. medical, vision and dental) coverage and benefits as in effect for Executive and his covered dependents on the day immediately preceding the date of such termination; (iii) Executive shall be entitled to receive an accelerated payment equal to three (3) month's of Per Month Loan Forgiveness, for total accelerated forgiveness of $15,000; and (iv) any options held by Executive to purchase shares of the Company's common stock shall immediately vest and become exercisable as to that number of shares, if any, that would have vested had Executive remained employed by the Company through the three (3) month period from the date of such termination.

        (c)   Termination Following Change of Control. If within twelve (12) months following a "Change of Control" (as defined herein), Executive's employment with the Company terminates for (i) "Good Reason" by Executive or (ii) other than for "Cause" by the Company, and Executive signs and does not revoke a standard release of claims with the Company (or its successor corporation), then (i) Executive shall be entitled to receive continuing payments of severance pay (less applicable withholding taxes) at a rate equal to his Base Salary rate, as then in effect, for a period of six (6) months from the date of such termination, to be paid periodically in accordance with the Company's normal payroll policies; (ii) during the six (6) month period following Executive's termination of employment, the Company (or its successor) shall pay for the same level of health (i.e. medical, vision and dental) coverage and benefits as in effect for Executive and his covered dependents on the day immediately preceding the date of such termination; and (iii) any options held by Executive to purchase shares of the Company's common stock shall immediately vest and become exercisable as to that number of shares, if any, that would have vested had Executive remained employed by the Company (or its successor) through the twelve (12) month period from the date of such termination. In such event, Executive shall not be entitled to any additional severance benefits specified in Section 4(a) or Section 4(b).

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        (d)   Voluntary Termination; Termination for Cause. If Executive's employment with the Company terminates voluntarily by Executive other than for Good Reason or for Cause by the Company, then (i) all vesting of any options held by Executive will terminate immediately and all payments of compensation by the Company to Executive hereunder will terminate immediately (except as to amounts already earned), and (ii) Executive will only be eligible for severance benefits in accordance with the Company's established policies as then in effect.

        5.    Definitions.    

        (a)   Cause. For purposes of this Agreement, "Cause" is defined as (i) an act of material dishonesty made by Executive in connection with Executive's responsibilities as an employee, (ii) Executive's conviction of, or plea of nolo contendere to, a felony, (iii) Executive's gross misconduct, or (iv) Executive's continued substantial violations of his employment duties after Executive has received a written demand for performance from the Company which specifically sets forth the factual basis for the Company's belief that Executive has not substantially performed his duties.

        (b)   Change of Control. For purposes of this Agreement, "Change of Control" of the Company is defined as: (i) any "person" (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing 50% or more of the total voting power represented by the Company's then outstanding voting securities; or (ii) the date of the consummation of a merger or consolidation of the Company with any other corporation that has been approved by the stockholders of the Company, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation, or the stockholders of the Company approve a plan of complete liquidation of the Company; or (iii) the date of the consummation of the sale or disposition by the Company of all or substantially all the Company's assets.

        (c)   Good Reason. For purposes of this Agreement, "Good Reason" is defined as any of the following, without Executive's express written consent, (i) a significant reduction of Executive's duties, position or responsibilities relative to Executive's duties, position or responsibilities in effect immediately prior to such reduction, or the removal of Executive from such position, duties and responsibilities, unless Executive is provided with comparable duties, position and responsibilities; provided, however, that neither (i) the Company's hiring of a new Chief Executive Officer following the Effective Date nor (ii) a reduction in duties, position or responsibilities solely by virtue of the Company being acquired and made part of a larger entity (as, for example, when the Chief Executive Officer of the Company remains as such following a Change of Control but is not made the Chief Executive Officer of the acquiring corporation) shall not constitute Good Reason; (ii) a material reduction by the Company of Executive's Base Salary as in effect immediately prior to such reduction (other than in connection with a Company-wide salary reduction program applicable to similarly-situated executives); or (iii) the relocation of Executive to a facility or a location more than fifty (50) miles from his current location.

        (d)   Severance Window. For purposes of this Agreement, "Severance Window" is defined as the period of time that begins on the Effective Date and ends on the date that is nine (9) months following the date, if ever, that the Company hires a new Chief Executive Officer.

        6.    Assignment.    This Agreement will be binding upon and inure to the benefit of (a) the heirs, executors and legal representatives of Executive upon Executive's death and (b) any successor of the Company. Any such successor of the Company will be deemed substituted for the Company under the

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terms of this Agreement for all purposes. For this purpose, "successor" means any person, firm, corporation or other business entity which at any time, whether by purchase, merger or otherwise, directly or indirectly acquires all or substantially all of the assets or business of the Company. None of the rights of Executive to receive any form of compensation payable pursuant to this Agreement may be assigned or transferred except by will or the laws of descent and distribution. Any other attempted assignment, transfer, conveyance or other disposition of Executive's right to compensation or other benefits will be null and void.

        7.    Notices.    All notices, requests, demands and other communications called for hereunder shall be in writing and shall be deemed given (i) on the date of delivery if delivered personally, (ii) one (1) day after being sent by a well established commercial overnight service, or (iii) four (4) days after being mailed by registered or certified mail, return receipt requested, prepaid and addressed to the parties or their successors at the following addresses, or at such other addresses as the parties may later designate in writing:

If to the Company:

Omneon Video Networks, Inc.
965 Stewart Drive
Sunnyvale, CA 94086
Attn: Company Counsel

If to Executive:

at the last residential address known by the Company.

        8.    Severability.    In the event that any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement will continue in full force and effect without said provision.

        9.    Integration.    This Agreement, together with the Loan Agreement, represents the entire agreement and understanding between the parties as to the subject matter herein and supersedes all prior or contemporaneous agreements whether written or oral. No waiver, alteration, or modification of any of the provisions of this Agreement will be binding unless in writing and signed by duly authorized representatives of the parties hereto.

        10.    Tax Withholding.    All payments made pursuant to this Agreement will be subject to withholding of applicable taxes.

        11.    Attorney Fees.    The Company agrees to pay the reasonable attorneys' fees incurred by Executive in connection with the negotiation and execution of this Agreement upon receipt of invoices for up to $5,000.

        12.    Governing Law.    This Agreement will be governed by the laws of the State of Delaware (with the exception of its conflict of laws provisions).

        13.    Acknowledgment.    Executive acknowledges that he has had the opportunity to discuss this matter with and obtain advice from his private attorney, has had sufficient time to, and has carefully read and fully understands all the provisions of this Agreement, and is knowingly and voluntarily entering into this Agreement.

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        IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by their duly authorized officers, as of the day and year first above written.

COMPANY:

OMNEON VIDEO NETWORKS, INC.

By:	Date:
Title:
EXECUTIVE:
/s/ LAWRENCE R. KAPLAN	Date:
Lawrence R. Kaplan

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Exhibit 10.06

EX-10.07

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Exhibit 10.07

Omneon Video Networks Logo

August 29, 2003

Laura Perrone

Dear Laura:

This offer letter supercedes a version communicated earlier.

I am pleased to offer you a position with Omneon Video Networks, Inc. (the "Company") as Vice President of Finance and Chief Financial Officer. Your position with the Company pursuant to the terms and conditions of this letter will commence as soon as possible. While employed by the Company, you will report to the Chief Executive Officer and have such duties and responsibilities as may from time to time require. During the initial twelve months of your employment, you may be asked to work at a reduced workload, but not less than 60% of a normal workweek. You agree to perform your duties faithfully and to the best of your abilities and to devote your full business efforts and time to the Company. Additionally, while employed by the Company, you agree to not actively engage in any other employment, occupation or consulting activity for any direct or indirect remuneration without prior approval of the Chief Executive Officer.

While employed by the Company, you will receive as compensation for your services a base salary at the annualized rate one hundred and sixty-five thousand dollars ($165,000). You will also be eligible to earn a variable bonus, of up to 20% of your base salary, based upon meeting operational milestones to be determined by the Chief Executive Officer. You salary and bonus will be paid periodically in accordance with normal Company payroll practices and be subject to the usual, required withholding.

Additionally, subject to approval by the Board, you will be granted a stock option to purchase 152,268 shares (approximately 1.0%) of Company common stuck, subject to the approval of the board of directors, at an exercise price to be determined by the Board. Subject to the accelerated vesting provisions referenced herein, 25% of the shares (pro-rated as a function of your workload) subject to the option will vest on the one-year anniversary of your employment with the Company, and the remaining shares will vest evenly over the following 36 months thereafter, subject to your continued employment with the Company on the relevant vesting dates. The option will be subject to the terms and conditions of the Company's 1998 Stock Option Plan and the applicable option agreement between you and the Company, both of which are incorporated herein by reference.

During your employment with the Company, you will be eligible to participate in the employee benefit plans currently and hereafter maintained by the Company of general applicability to other senior executives of the Company, including, without limitation, the Company's group medical, dental, vision, disability and life insurance plans. The Company reserves the right to cancel or change the benefit plans and programs it offers to its employees at any time.

If (i) you terminate your employment with the Company for Good Reason or (ii) the Company terminates your employment other than for Cause, and you sign and do not revoke a standard release of claims with the Company, then (i) you will be entitled to receive continuing payments of severance pay (less applicable withholding taxes) at a rate equal to your then current base salary for a period of two (2) months from the date of such termination, to be paid periodically in accordance with the Company's normal payroll policies; (ii) during the two (2) month period following your termination of employment, the Company will pay for the same level of health (i.e. medical, vision and dental) coverage and benefits as in effect for you and your covered dependents on the day immediately

1

preceding the date of such termination; and (iii) any options held by you to purchase shares of the Company's common stock will immediately vest and become exercisable as to that number of shares, if any, that would have vested had you remained employed by the Company through the two (2) month period from the date of such termination ("Severance Benefits").

Notwithstanding the foregoing, if within one year following a Change of Control (i) you terminate your employment with the Company for Good Reason or (ii) the Company (or its successor) terminates your employment other than for Cause, and you sign and do not revoke a standard release of claims with the Company, than (i) you will be entitled to receive continuing payments of severance pay (less applicable withholding taxes) at a rate equal to your then current base salary for a period of four (4) months from the date of such event, to be paid periodically in accordance with the Company's normal payroll policies; (ii) during the four (4) month period following your termination of employment, the Company will pay for the same level of health (i.e. medical, vision and dental) coverage and benefits as in effect for you and your covered dependents on the day immediately preceding the date of such termination; and (iii) any options held by you to purchase shares of the Company's common stock will immediately vest and become exercisable as to that number of shares, if any, that would have vested had you remained employed by the Company through the twelve (12) month period from the date of such termination ("Change of Control Benefits"). If you receive Change of Control Benefits, you will no longer be entitled to receive Severance Benefits.

"Cause" is defined as (i) an act of material dishonesty made by you in connection with your responsibilities as an employee, (ii) your conviction of, or plea of nolo contendere to, a felony, (iii) your gross misconduct, or (iv) your continued substantial violations of your employment duties after you have received a written demand for performance from the Company which specifically sets forth the factual basis for the Company's belief that you have not substantially performed your duties.

"Change of Control" is defined as the occurrence of any of the following events: (i) any "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the "beneficial owner" (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company's then outstanding voting securities, (ii) the consummation of the sale or disposition by the Company of all or substantially all of the Company's assets, or (iii) the consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such merger or consolidation.

"Good Reason" is defined at any of the following, without your express written consent, (i) a significant reduction of your duties, position or responsibilities relative to your duties, position or responsibilities in effect immediately prior to such reduction, or your removal from such position, duties and responsibilities, unless you are provided with comparable duties, position and responsibilities; provided, however, that a reduction in duties, position or responsibilities solely by virtue of the Company being acquired and made part of a larger entity (as, for example, when the President of the Company remains as such following a change of control but is not made the President of the acquiring corporation) will not constitute "Good Reason;" (ii) a material reduction by the Company of your base salary as in effect immediately prior to such reduction (other than in connection with a Company-wide salary reduction program applicable to similarly-situated executives); or (iii) your relocation to a facility or a location more than fifty (50) miles from your current location.

You should understand that your employment with the Company is "at-will," and may be terminated by you or the Company at any time and for any reason. This offer letter and the confidential information

2

and/or inventions assignment agreement between you and the Company that you will be expected to execute upon commencement of your employment represent the entire agreement and understanding between you and the Company concerning your employment relationship with the Company, and supersede in their entirety any and all prior agreements and understandings concerning your employment relationship with the Company, whether written or oral.

The terms and conditions set forth in this offer letter will be binding and inure to the benefit of (i) your heirs, executors and legal representatives upon your death, and (ii) any successor of the Company. In the event any of the terms and conditions set forth in this offer letter becomes, or is determine to be, illegal, unenforceable or void, all other terms and conditions will continue in full force and effect.

You agree that any and all controversies, claims, or disputes with anyone (including the Company and any employee, officer, director shareholder or benefit plan of the Company in their capacity as such or otherwise) arising out of, relating to, or resulting from your service to the Company under this Agreement or otherwise or the termination of your service with the Company, including any breach of this Agreement, will be subject to binding arbitration. You further understand that this Agreement to arbitrate also applies to any disputes that the Company may have with you. You agree that any arbitration will be administered in Santa Clara, California by the American Arbitration Association and that a neutral arbitrator will be selected in a manner consistent with its National Rules for the Resolution of Employment Disputes.

This letter will be governed by the laws of the state of California, with the exception of its conflict of laws provisions.

Please sign below to indicate your acceptance and agreement to the terms set forth in this offer letter and fax the signed offer letter to me at 408.585.5098. If you have any questions, don't hesitate to contact me. I am excited to welcome you to the Company, and I look forward to your participation in the Company's future success.

Sincerely,

/s/  JOSEPH S. KENNEDY Joseph S. Kennedy

President and Chief Executive Officer

Omneon Video Networks, Inc.

Accepted and agreed to this

29^th day of August, 2003

/s/  LAURA PERRONE Signature

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Letter of Amendment

Omneon Video Networks Logo

September 18, 2006

Laura Perrone

Dear Laura:

This letter amends the offer letter from Omneon to you dated August 20, 2003, to conform the severance benefits described in paragraphs 5 through 9 of your current letter to the standard recently adopted by the Compensation Committee. The offer letter is attached hereto for your reference.

The changes to your current severance benefits are to increase your severance payment and health coverage and benefits to 6 months following a Change of Control.

Paragraphs 7 through 10 of your offer letter are deleted and replaced with the following:

Notwithstanding the foregoing, if within one year following a Change of Control (i) you terminate your employment with the Company for Good Reason or (ii) the Company (or its successor) terminates your employment other than for Cause, and you sign and do not revoke a standard release of claims with the company, then (i) you will be entitled to receive continuing payments of severance pay (less applicable withholding taxes) at a rate equal to your then current base salary for a period of six (6) months from the date of such event, to be paid periodically in accordance with the Company's normal payroll policies; (ii) during the six (6) month period following your termination of employment, the Company will pay for the same level of health (i.e. medical, vision and dental) coverage and benefits as in effect for you and your covered dependents on the day immediately preceding the date of such termination; and (iii) any options held by you to purchase shares of the Company's common stock will immediately vest and become exercisable as to that number of shares, if any, that would have vested had you remained employed by the Company through the twelve (12) month period from the date of such termination ("Change of Control Benefits").

"Cause" is defined as (i) an act of material dishonesty made by you in connection with your responsibilities as an employee, (ii) your conviction of, or plea of nolo contendere to, a felony, (iii) your gross misconduct, or (iv) your continued substantial violations of your employment duties after you have received a written demand for performance from the Company which specifically sets forth the factual basis for the Company's belief that you have not substantially performed your duties.

"Change of Control" is defined as the occurrence of any of the following events: (i) any "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the "beneficial owner" (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company's then outstanding voting securities, (ii) the consummation of the sale or disposition by the Company of all or substantially all of the Company's assets, or (iii) the consummation of a merger or consolidation of the Company with any other corporation other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least fifty (50%) of the total voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such merger or consolidation.

4

"Good Reason" is defined as any of the following, without your express written consent, (i) a significant reducing of your duties, position or responsibilities relative to your duties, position or responsibilities in effect immediately prior to such reduction, or your removal from such position, duties and responsibilities, unless you are provided with comparable duties, position and responsibilities; provided, however, that a reduction in duties, position or responsibilities solely by virtue of the Company being acquired and made part of a larger entity (as, for example, when the President of the Company remains as such following a change of control but is not made the President of the acquiring corporation) will not constitute "Good Reason;" (ii) a material reduction by the Company of your base salary as in effect immediately prior to such reduction (other than in connection with a Company-wide salary reduction program applicable to similarly-situated executives); or (iii) your relocation to a facility or a location more than fifty (50) miles from your current location.

Except as expressly stated in this letter, we agree no other changes are made to your revised Offer Letter.

Please acknowledge your agreement with the amendment by signing below and returning the original to me for filing with the Company's records. Should you have any questions or comments, please do not hesitate to contact me.

Thank you for your assistance and cooperation with this matter.

Very truly yours,

Joseph S. Kennedy, President

ACKNOWLEDGED and AGREED this 18th day of
September, 2006.

/s/  LAURA PERRONE Laura Perrone

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Exhibit 10.07

EX-10.08

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Exhibit 10.08

Omneon Video Networks Logo

August 2, 2001

Dan Marshall

Dear Dan:

It is my pleasure to offer you a position as Vice President Sales & Service with Omneon Video Networks reporting directly to me. Your salary will be $200,000 per year and you will participate in an excellent benefits program providing comprehensive health insurance. In addition to your base salary, you will also receive linearly variable compensation of 0 to $100,000 depending the company's performance against the revenue plan—at 100% of plan you would receive $100,000. For the first 12 months, you will be guaranteed a minimum of $50,000. In addition to your base salary and variable compensation, you will receive a starting bonus of $20,000.

As one of our key contributors, you will also receive an option to purchase 500,000 shares of Omneon stock subject to approval of the Board of Directors. This option will vest ¹/4 (one-fourth) following 12 months of service and ¹/36 monthly over the following 36 mouths. If your position is eliminated or the scope reduced within one year following a change in the control or ownership of Omneon (not including an IPO), your options will be accelerated by one year. In this situation, you will also receive six months salary as a severance payment. This accelerated vesting and severance is also subject to approval by the Omneon Board of Directors. Lastly, this offer is subject to satisfactory reference checks.

If you accept, please sign and return this Offer Letter along with the attached Omneon Employee Agreement. I look forward to working with you to build a great company. I have asked Mike Gilbert to sign this letter in my behalf while I'm traveling. Please call me on my cell phone at 650.867.2023 so I can answer any questions you may have and we can discuss a starting date.

Sincerely,

by	/s/  MIKE GILBERT Larry Kaplan President & Chief Executive Officer
	/s/  DANIEL MARSHALL Accepted: Dan Marshall Date: 8/13/01

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Letter of Amendment

Omneon Video Networks Logo

September 18, 2006

Dan Marshall

Dear Dan:

This letter amends your offer letter from Omneon dated August 2, 2001 as to the severance benefits included in the letter. A copy of your offer letter is attached for your reference.

In your offer letter, it is stated: "If your position is eliminated or the scope reduced within one year following a change of control or ownership of Omneon (not including an IPO), your options will be accelerated by one year. In this situation, you will also receive six months salary as a severance payment." These two sentences are deleted and replaced with the following provision which more clearly define the conditions under which severance benefits are granted but do not otherwise change the benefit or vesting periods:

If within one year following a Change of Control (i) you terminate your employment with the Company for Good Reason or (ii) the Company (or its successor) terminates your employment other than for Cause, and you sign and do not revoke a standard release of claims with the company, then (i) you will be entitled to receive continuing payments of severance pay (less applicable withholding taxes) at a rate equal to your then current base salary for a period of six (6) months from the date of such event, to be paid periodically in accordance with the Company's normal payroll policies; (ii) during the six (6) month period following your termination of employment, the Company will pay for the same level of health (i.e. medical, vision and dental) coverage and benefits as in effect for you and your covered dependents on the day immediately preceding the date of such termination; and (iii) any options held by you to purchase shares of the Company's common stock will immediately vest and become exercisable as to that number of shares, if any, that would have vested had you remained employed by the Company through the twelve (12) month period from the date of such termination ("Change of Control Benefits").

"Cause" is defined as (i) an act of material dishonesty made by you in connection with your responsibilities as an employee, (ii) your conviction of, or plea of nolo contendere to, a felony, (iii) your gross misconduct, or (iv) your continued substantial violations of your employment duties after you have received a written demand for performance from the Company which specifically sets forth the factual basis for the Company's belief that you have not substantially performed your duties.

"Change of Control" is defined as the occurrence of any of the following events: (i) any "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the "beneficial owner" (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company's then outstanding voting securities, (ii) the consummation of the sale or disposition by the Company of all or substantially all of the Company's assets, or (iii) the consummation of a merger or consolidation of the Company with any other corporation other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such merger or consolidation.

2

"Good Reason" is defined as any of the following, without your express written consent, (i) a significant reducing of your duties, position or responsibilities relative to your duties, position or responsibilities in effect immediately prior to such reduction, or your removal from such position, duties and responsibilities, unless you are provided with comparable duties, position and responsibilities; provided, however, that a reduction in duties, position or responsibilities solely by virtue of the Company being acquired and made part of a larger entity (as, for example, when the President of the Company remains as such following a change of control but is not made the President of the acquiring corporation) will not constitute "Good Reason;" (ii) a material reduction by the Company of your base salary as in effect immediately prior to such reduction (other than in connection with a Company-wide salary reduction program applicable to similarly-situated executives); or (iii) your relocation to a facility or a location more than fifty (50) miles from your current location.

Except as expressly stated in this letter, we agree no other changes are made to your revised Offer Letter.

Please acknowledge your agreement with the amendment by signing below and returning the original to me for filing with the Company's records. Should you have any questions or comments, please do not hesitate to contact me.

Thank you for your assistance and cooperation with this matter.

Very truly yours,

/s/  LAURA PERRONE Laura Perrone, CFO

ACKNOWLEDGED and AGREED this            day of September, 2006.

/s/  DAN MARSHALL Dan Marshall

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Exhibit 10.08

Letter of Amendment

EX-10.09

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Exhibit 10.09

Omneon Video Networks Logo

September 18, 2006

Donald Craig

Dear Don:

This letter is intended to extend to you the severance benefits recently adopted by the Omneon's Compensation Committee ("Company").

If within one year following a Change of Control (i) you terminate your employment with the Company for Good Reason or (ii) the Company (or its successor) terminates your employment other than for Cause, and you sign and do not revoke a standard release of claims with the company, then (i) you will be entitled to receive continuing payments of severance pay (less applicable withholding taxes) at a rate equal to your then current base salary for a period of six (6) months from the date of such event, to be paid periodically in accordance with the Company's normal payroll policies; (ii) during the six (6) month period following your termination of employment, the Company will pay for the same level of health (i.e. medical, vision and dental) coverage and benefits as in effect for you and your covered dependents on the day immediately preceding the date of such termination; and (iii) any options held by you to purchase shares of the Company's common stock will immediately vest and become exercisable as to that number of shares, if any, that would have vested had you remained employed by the Company through the twelve (12) month period from the date of such termination ("Change of Control Benefits").

"Cause" is defined as (i) an act of material dishonesty made by you in connection with your responsibilities as an employee, (ii) your conviction of, or plea of nolo contendere to, a felony, (iii) your gross misconduct, or (iv) your continued substantial violations of your employment duties after you have received a written demand for performance from the Company which specifically sets forth the factual basis for the Company's belief that you have not substantially performed your duties.

"Change of Control" is defined as the occurrence of any of the following events: (i) any "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the "beneficial owner" (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company's then outstanding voting securities, (ii) the consummation of the sale or disposition by the Company of all or substantially all of the Company's assets, or (iii) the consummation of a merger or consolidation of the Company with any other corporation other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such merger or consolidation.

"Good Reason" is defined as any of the following, without your express written consent, (i) a significant reducing of your duties, position or responsibilities relative to your duties, position or responsibilities in effect immediately prior to such reduction, or your removal from such position, duties and responsibilities, unless you are provided with comparable duties, position and responsibilities; provided, however, that a reduction in duties, position or responsibilities solely by virtue of the Company being acquired and made part of a larger entity (as, for example, when the President of the Company remains as such following a change of control but is not made the President of the acquiring corporation) will not constitute "Good Reason;" (ii) a material reduction by the

1

Company of your base salary as in effect immediately prior to such reduction (other than in connection with a Company-wide salary reduction program applicable to similarly-situated executives); or (iii) your relocation to a facility or a location more than fifty (50) miles from your current location.

Information and/or inventions assignment between you and the Company. Except as expressly stated in this letter, we agree no other changes are made to your revised Offer Letter.

The terms and conditions set forth herein will be binding and inure to any successor of the Company. In the event any of the terms and conditions included in this letter becomes, or is determined to be, illegal, unenforceable or void, all other terms and conditions will continue in full force and effect.

You agree that any and all controversies, claims, or disputes with anyone (including the Company and any employee, officer, director, shareholder, or benefit plan of the Company in their capacity as such or otherwise) arising out of, relating to, or resulting from the termination of your service with the Company, including any breach of this Agreement, will be subject to binding arbitration. You further understand that this Agreement to arbitrate also applies to any disputes that the Company may have with you. You agree that any arbitration will be administered in Santa Clara, California by the American Arbitration Association and that a neutral arbitrator will be selected in a manner consistent with its National Rules for the Resolution of Employment Disputes.

This Agreement will be governed by the laws of the state of California, with the exception of its conflict of laws provisions.

Please acknowledge your agreement with the amendment by signing below and returning the original to me for filing with the Company's records. Should you have any questions or comments, please do not hesitate to contact me.

Thank you for your assistance and cooperation with this matter.

Very truly yours,

/s/  LAURA PERRONE Laura Perrone,
VP of Finance, CFO

ACKNOWLEDGED and AGREED this 17th day of September, 2006.

/s/  DONALD CRAIG Donald Craig

Omneon Video Networks Logo

2

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Exhibit 10.09

EX-10.10

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Exhibit 10.10

Omneon Video Networks Logo

March 27, 2003

Geoff Stedman

Dear Geoff:

This Offer Letter replaces the letter dated March 19, 2003.

It is my pleasure to offer you a position as Vice President Marketing with Omneon Video Networks reporting directly to me. Your salary will be $155,000 per year and you will participate in an excellent benefits program providing comprehensive health insurance. As one of our key contributors, you will also receive an option to purchase 11,541,427 shares of Omneon stock subject to approval of the Board of Directors. 11,541,427 shares is approximately .80% of the outstanding shares as of March 19, 2003. This option will vest monthly over four years including a one-year initial waiting period. If your position is eliminated or the scope reduced within one year following a change in the control or ownership of Omneon (not including an IPO), your options will be accelerated by one year. In this situation, you will also receive six months salary as a severance payment. This accelerated vesting and severance is also subject to approval by the Omneon Board of Directors. Lastly, this offer is subject satisfactory reference checks.

If you accept, please sign and return this Offer Letter along with the attached Omneon Employee Agreement. I look forward to working with you to build a great company.

Sincerely,

/s/  LARRY KAPLAN Larry Kaplan
President & Chief Executive Officer

/s/  GEOFF STEDMAN Accepted: Geoff Stedman
Date: 3/27/03

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OMNEON VIDEO NETWORKS LOGO

September 18, 2006

Geoff Stedman

Dear Geoff:

This letter amends your offer letter from Omneon dated August 2, 2001 as to the severance benefits included in the letter. A copy of your offer letter is attached for your reference.

In your offer letter, it is stated: "If your position is eliminated or the scope reduced within one year following a change of control or ownership of Omneon (not including an IPO), your options will be accelerated by one year. In this situation, you will also receive six months salary as a severance payment." These two sentences are deleted and replaced with the following provision which more clearly define the conditions under which severance benefits are granted but do not otherwise change the benefit or vesting periods:

If within one year following a Change of Control (i) you terminate your employment with the Company for Good Reason or (ii) the Company (or its successor) terminates your employment other than for Cause, and you sign and do not revoke a standard release of claims with the company, then (i) you will be entitled to receive continuing payments of severance pay (less applicable withholding taxes) at a rate equal to your then current base salary for a period of six (6) months from the date of such event, to be paid periodically in accordance with the Company's normal payroll policies; (ii) during the six (6) month period following your termination of employment, the Company will pay for the same level of health (i.e. medical, vision and dental) coverage and benefits as in effect for you and your covered dependents on the day immediately preceding the date of such termination; and (iii) any options held by you to purchase shares of the Company's common stock will immediately vest and become exercisable as to that number of shares, if any, that would have vested had you remained employed by the Company through the twelve (12) month period from the date of such termination ("Change of Control Benefits").

"Cause" is defined as (i) an act of material dishonesty made by you in connection with your responsibilities as an employee, (ii) your conviction of, or plea of nolo contendere to, a felony, (iii) your gross misconduct, or (iv) your continued substantial violations of your employment duties after you have received a written demand for performance from the Company which specifically sets forth the factual basis for the Company's belief that you have not substantially performed your duties.

"Change of Control" is defined as the occurrence of any of the following events: (i) any "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the "beneficial owner" (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company's then outstanding voting securities, (ii) the consummation of the sale or disposition by the Company of all or substantially all of the Company's assets, or (iii) the consummation of a merger or consolidation of the Company with any other corporation other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such merger or consolidation.

"Good Reason" is defined as any of the following, without your express written consent, (i) a significant reducing of your duties, position or responsibilities relative to your duties, position or responsibilities in effect immediately prior to such reduction, or your removal from such position, duties and responsibilities, unless you are provided with comparable duties, position and responsibilities; provided, however, that a reduction in duties, position or responsibilities solely by virtue of the Company being acquired and made part of a larger entity (as, for example, when the President of the Company remains as such following a change of control but is not made the President

of the acquiring corporation) will not constitute "Good Reason;" (ii) a material reduction by the Company of your base salary as in effect immediately prior to such reduction (other than in connection with a Company-wide salary reduction program applicable to similarly-situated executives); or (iii) your relocation to a facility or a location more than fifty (50) miles from your current location.

Except as expressly stated in this letter, we agree no other changes are made to your revised Offer Letter.

Please acknowledge your agreement with the amendment by signing below and returning the original to me for filing with the Company's records. Should you have any questions or comments, please do not hesitate to contact me.

Thank you for your assistance and cooperation with this matter.

Very truly yours,

/s/  LAURA PERRONE

Laura Perrone,
VP of Finance, CFO

ACKNOWLEDGED and AGREED this                day of
September, 2006.

/s/  GEOFF STEDMAN Geoff Stedman

2

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Exhibit 10.10

EX-10.11

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Exhibit 10.11

Omneon Video Networks Logo

August 25, 2004

Johnathan P. Turk

Dear John:

I am pleased to offer you a position with Omneon Video Networks, Inc. (the "Company") as Vice President of Operations. Your position with the Company pursuant to the terms and conditions of this letter will commence October 4, 2004. While employed by the Company, you will report to the Chief Executive Officer and have such duties and responsibilities as this office may from time to time require. Your functional responsibilities will initially include Materials, Production, Manufacturing Engineering and Test, Quality, Shipping and Distribution Logistics, Receiving, Purchasing, and Facilities. At a later date, to be mutually determined, is our intent for you to also have responsibility for Information Technology. You agree to perform your duties faithfully and to the best of your abilities and to devote your full business efforts and time to the Company. Additionally, while employed by the Company, you agree to not actively engage in any other employment, occupation or consulting activity for any direct or indirect remuneration without prior approval.

While employed by the Company, you will receive as compensation for your services a base salary at the annualized rate of one hundred and sixty thousand dollars ($160,000). You will also be eligible to earn a variable bonus of up to 10% of your base salary, based upon meeting individual operational milestones to be agreed upon. This individual performance based bonus may be replaced in the future by an executive bonus plan encompassing both company and individual performance goals. Your salary and bonus will be paid periodically in accordance with normal Company payroll practices and be subject to the usual, required withholding.

Additionally, subject to approval by the Board, you will be granted a stock option to purchase 167,000 shares of Company common stock (approximately .75% of fully diluted shares) at an exercise price to be determined by the Board. One quarter (¹/4^th) of the shares subject to the option will vest on the one-year anniversary of your employment with the Company, and the remaining shares will vest as to one-forty-eighth (¹/48^th) of the total shares each month thereafter, subject to your continued employment with the Company on the relevant vesting dates. The option will be subject to the terms and conditions of the Company's 1998 Stock Option Plan and the applicable option agreement between you and the Company, both of which are incorporated herein by reference. During your employment with the Company, you will be eligible to participate in the employee benefit plans currently and hereafter maintained by the Company of general applicability to other senior executives of the Company, including, without limitation, the Company's group medical, dental, vision, disability and life insurance plans. The Company reserves the right to cancel or change the benefit plans and programs it offers to its employees at any time.

If within one year following a Change of Control (i) you terminate your employment with the Company for Good Reason or (ii) the Company (or its successor) terminates your employment other than for Cause, and you sign and do not revoke a standard release of claims with the company, then (i) you will be entitled to receive continuing payments of severance pay (less applicable withholding taxes) at a rate equal to your then current base salary for a period of six (6) months from the date of such event, to be paid periodically in accordance with the Company's normal payroll policies; (ii) during the six (6) month period following your termination of employment, the Company will pay for the same level of health (i.e. medical, vision and dental) coverage and benefits as in effect for you and your covered dependents on the day immediately preceding the date of such termination; and (iii) any options held

1

by you to purchase shares of the Company's common stock will immediately vest and become exercisable as to that number of shares, if any, that would have vested had you remained employed by the Company through the twelve (12) month period from the date of such termination ("Change of Control Benefits").

"Cause" is defined as (i) an act of material dishonesty made by you in connection with your responsibilities as an employee, (ii) your conviction of, or plea of nolo contendere to, a felony, (iii) your gross misconduct, or (iv) your continued substantial violations of your employment duties after you have received a written demand for performance from the Company which specifically sets forth the factual basis for the Company's belief that you have not substantially performed your duties.

"Change of Control" is defined as the occurrence of any of the following events: (i) any "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the "beneficial owner" (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company's then outstanding voting securities, (ii) the consummation of the sale or disposition by the Company of all or substantially all of the Company's assets, or (iii) the consummation of a merger or consolidation of the Company with any other corporation other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such merger or consolidation.

"Good Reason" is defined as any of the following, without your express written consent, (i) a significant reducing of your duties, position or responsibilities relative to your duties, position or responsibilities in effect immediately prior to such reduction, or your removal from such position, duties and responsibilities, unless you are provided with comparable duties, position and responsibilities; provided, however, that a reduction in duties, position or responsibilities solely by virtue of the Company being acquired and made part of a larger entity (as, for example, when the President of the Company remains as such following a change of control but is not made the President of the acquiring corporation) will not constitute "Good Reason;" (ii) a material reduction by the Company of your base salary as in effect immediately prior to such reduction (other than in connection with a Company-wide salary reduction program applicable to similarly-situated executives); or (iii) your relocation to a facility or a location more than fifty (50) miles from your current location.

You should understand that your employment with the Company is "at-will", and may be terminated by you or the Company at any time and for any reason. This offer letter and the confidential information and invention assignment agreement between you and the Company that you will be expected to execute upon commencement of your employment, represent the entire agreement and understanding between you and the Company concerning your employment relationship with the Company, and supersede in their entirety any and all prior agreements and understandings concerning your employment relationship with the Company, whether written or oral.

The terms and conditions set forth in this offer letter will be binding and inure to the benefit of (i) your heirs, executors and legal representatives upon your death, and (ii) any successor of the Company. In the event any of the terms and conditions set forth in this offer letter becomes, or is determined to be, illegal, unenforceable or void, all other terms and conditions will continue in full force and effect.

You agree that any and all controversies, claims, or disputes with anyone (including the Company and any employee, officer, director, shareholder, or benefit plan of the Company in their capacity as such or otherwise) arising out of, relating to, or resulting from your service to the Company under this Agreement or otherwise or the termination of your service with the Company, including any breach of

2

this Agreement, will be subject to binding arbitration. You further understand that this Agreement to arbitrate also applies to any disputes that the Company may have with you. You agree that any arbitration will be administered in Santa Clara, California by the American Arbitration Association and that a neutral arbitrator will be selected in a manner consistent with its National Rules for the Resolution of Employment Disputes.

This letter will be governed by the laws of the state of California, with the exception of its conflict of laws provisions. Lastly, this offer is contingent upon satisfactory reference and background checks.

Please sign below to indicate your acceptance and agreement to the terms set forth in this offer letter and fax the signed offer letter to me at (408) 585-5098. If you have any questions, don't hesitate to contact me. I am excited to welcome you to the Company, and I look forward to your participation in the Company's future success.

Sincerely,

/s/  JOSEPH S. KENNEDY Joseph S. Kennedy President and CEO Omneon Video Networks, Inc.
Accepted and agreed to this 27th day of August, 2004.	/s/  JONATHAN P. TURK Signature

3

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Exhibit 10.11

EX-10.12

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Exhibit 10.12

Omneon Video Networks Logo

May 5, 2005

Vincent O'Malley

Dear Vince:

I am pleased to offer you a position with Omneon Video Networks, Inc. (the "Company") as Vice President of Engineering. Your position with the Company pursuant to the terms and conditions of this letter will commence May 31, 2005. While employed by the Company, you will report to the Chief Executive Officer and have such duties and responsibilities as this office may from time to time require. You agree to perform your duties faithfully and to the best of your abilities and to devote your full business efforts and time to the Company. Additionally, while employed by the Company, you agree to not actively engage in any other employment, occupation or consulting activity for any direct or indirect remuneration without prior approval.

While employed by the Company, you will receive as compensation for your services a base salary at the annualized rate of one hundred and eighty-five thousand dollars ($185,000). You will also be eligible to earn a variable bonus of up to 10% of your base salary, based upon meeting individual operational milestones to be agreed upon. This individual performance based bonus may be replaced in the future by an executive bonus plan encompassing both company and individual performance goals. Your salary and bonus will be paid periodically in accordance with normal Company payroll practices and be subject to the usual, required withholding.

Additionally, subject to approval by the Board, you will be granted a stock option to purchase 171,500 shares of Company common stock (approximately .75% of fully diluted shares) at an exercise price to be determined by the Board. One quarter (¹/4^th) of the shares subject to the option will vest on the one-year anniversary of your employment with the Company, and the remaining shares will vest as to one-forty-eighth (¹/48^th) of the total shares each month thereafter, subject to your continued employment with the Company on the relevant vesting dates. The option will be subject to the terms and conditions of the Company's 1998 Stock Option Plan and the applicable option agreement between you and the Company, both of which are incorporated herein by reference. During your employment with the Company, you will be eligible to participate in the employee benefit plans currently and hereafter maintained by the Company of general applicability to other senior executives of the Company, including, without limitation, the Company's group medical, dental, vision, disability and life insurance plans. The Company reserves the right to cancel or change the benefit plans and programs it offers to its employees at any time.

If within one year following a Change of Control (i) you terminate your employment with the Company for Good Reason or (ii) the Company (or its successor) terminates your employment other than for Cause, and you sign and do not revoke a standard release of claims with the company, then (i) you will be entitled to receive continuing payments of severance pay (less applicable withholding taxes) at a rate equal to your then current base salary for a period of six (6) months from the date of such event, to be paid periodically in accordance with the Company's normal payroll policies; (ii) during the six (6) month period following your termination of employment, the Company will pay for the same level of health (i.e. medical, vision and dental) coverage and benefits as in effect for you and your covered dependents on the day immediately preceding the date of such termination; and (iii) any options held by you to purchase shares of the Company's common stock will immediately vest and become

1

exercisable as to that number of shares, if any, that would have vested had you remained employed by the Company through the twelve (12) month period from the date of such termination ("Change of Control Benefits").

"Cause" is defined as (i) an act of material dishonesty made by you in connection with your responsibilities as an employee, (ii) your conviction of, or plea of nolo contendere to, a felony, (iii) your gross misconduct, or (iv) your continued substantial violations of your employment duties after you have received a written demand for performance from the Company which specifically sets forth the factual basis for the Company's belief that you have not substantially performed your duties.

"Change of Control" is defined as the occurrence of any of the following events: (i) any "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the "beneficial owner" (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company's then outstanding voting securities, (ii) the consummation of the sale or disposition by the Company of all or substantially all of the Company's assets, or (iii) the consummation of a merger or consolidation of the Company with any other corporation other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such merger or consolidation.

"Good Reason" is defined as any of the following, without your express written consent, (i) a significant reducing of your duties, position or responsibilities relative to your duties, position or responsibilities in effect immediately prior to such reduction, or your removal from such position, duties and responsibilities, unless you are provided with comparable duties, position and responsibilities; provided, however, that a reduction in duties, position or responsibilities solely by virtue of the Company being acquired and made part of a larger entity (as, for example, when the President of the Company remains as such following a change of control but is not made the President of the acquiring corporation) will not constitute "Good Reason;" (ii) a material reduction by the Company of your base salary as in effect immediately prior to such reduction (other than in connection with a Company-wide salary reduction program applicable to similarly-situated executives); or (iii) your relocation to a facility or a location more than fifty (50) miles from your current location.

You should understand that your employment with the Company is "at-will", and may be terminated by you or the Company at any time and for any reason. This offer letter and the confidential information and invention assignment agreement between you and the Company that you will be expected to execute upon commencement of your employment, represent the entire agreement and understanding between you and the Company concerning your employment relationship with the Company, and supersede in their entirety any and all prior agreements and understandings concerning your employment relationship with the Company, whether written or oral.

The terms and conditions set forth in this offer letter will be binding and inure to the benefit of (i) your heirs, executors and legal representatives upon your death, and (ii) any successor of the Company. In the event any of the terms and conditions set forth in this offer letter becomes, or is determined to be, illegal, unenforceable or void, all other terms and conditions will continue in full force and effect.

You agree that any and all controversies, claims, or disputes with anyone (including the Company and any employee, officer, director, shareholder, or benefit plan of the Company in their capacity as such or otherwise) arising out of, relating to, or resulting from your service to the Company under this Agreement or otherwise or the termination of your service with the Company, including any breach of this Agreement, will be subject to binding arbitration. You further understand that this Agreement to

2

arbitrate also applies to any disputes that the Company may have with you. You agree that any arbitration will be administered in Santa Clara, California by the American Arbitration Association and that a neutral arbitrator will be selected in a manner consistent with its National Rules for the Resolution of Employment Disputes.

This letter will be governed by the laws of the state of California, with the exception of its conflict of laws provisions.

Please sign below to indicate your acceptance and agreement to the terms set forth in this offer letter and fax the signed offer letter to me at (408) 585-5098. If you have any questions, don't hesitate to contact me. I am excited to welcome you to the Company, and I look forward to your participation in the Company's future success.

Sincerely,

/s/  JOSEPH S. KENNEDY Joseph S. Kennedy President and CEO Omneon Video Networks, Inc.
Accepted and agreed to this
9th day of May, 2005.	/s/  VINCENT O'MALLEY Signature

3

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Exhibit 10.12

EX-10.13

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Exhibit 10.13

Omneon Video Networks Logo

July 13, 2005

Charles F. Morris, Jr.

Dear Chuck:

I am pleased to offer you a position with Omneon Video Networks, Inc. (the "Company") as Vice President of Engineering, Storage & Applications. Your position with the Company pursuant to the terms and conditions of this letter will commence August 8, 2005. While employed by the Company, you will report to the Chief Executive Officer and have such duties and responsibilities as this office may from time to time require. You agree to perform your duties faithfully and to the best of your abilities and to devote your full business efforts and time to the Company. Additionally, while employed by the Company, you agree to not actively engage in any other employment, occupation or consulting activity for any direct or indirect remuneration without prior approval.

While employed by the Company, you will receive as compensation for your services a base salary at the annualized rate of one hundred and eighty-five thousand dollars ($185,000). You will also be eligible to earn a variable bonus of up to 10% of your base salary, based upon meeting individual operational milestones to be agreed upon. This individual performance based bonus may be replaced in the future by an executive bonus plan encompassing both company and individual performance goals. Your salary and bonus will be paid periodically in accordance with normal Company payroll practices and be subject to the usual, required withholding.

Additionally, subject to approval by the Board, you will be granted a stock option to purchase 171,500 shares of Company common stock (approximately .75% of fully diluted shares) at an exercise price to be determined by the Board. One quarter (¹/4^th) of the shares subject to the option will vest on the one-year anniversary of your employment with the Company, and the remaining shares will vest as to one-forty-eighth (¹/48^th) of the total shares each month thereafter, subject to your continued employment with the Company on the relevant vesting dates. The option will be subject to the terms and conditions of the Company's 1998 Stock Option Plan and the applicable option agreement between you and the Company, both of which are incorporated herein by reference. During your employment with the Company, you will be eligible to participate in the employee benefit plans currently and hereafter maintained by the Company of general applicability to other senior executives of the Company, including, without limitation, the Company's group medical, dental, vision, disability and life insurance plans. The Company reserves the right to cancel or change the benefit plans and programs it offers to its employees at any time.

This offer is contingent upon receipt of a background clearance through Executive Resources Group.

If within one year following a Change of Control (i) you terminate your employment with the Company for Good Reason or (ii) the Company (or its successor) terminates your employment other than for Cause, and you sign and do not revoke a standard release of claims with the company, then (i) you will be entitled to receive continuing payments of severance pay (less applicable withholding taxes) at a rate equal to your then current base salary for a period of six (6) months from the date of such event, to be paid periodically in accordance with the Company's normal payroll policies; (ii) during the six (6) month period following your termination of employment, the Company will pay for the same level of health (i.e. medical, vision and dental) coverage and benefits as in effect for you and your covered dependents on the day immediately preceding the date of such termination; and (iii) any options held

1

by you to purchase shares of the Company's common stock will immediately vest and become exercisable as to that number of shares, if any, that would have vested had you remained employed by the Company through the twelve (12) month period from the date of such termination ("Change of Control Benefits").

"Cause" is defined as (i) an act of material dishonesty made by you in connection with your responsibilities as an employee, (ii) your conviction of, or plea of nolo contendere to, a felony, (iii) your gross misconduct, or (iv) your continued substantial violations of your employment duties after you have received a written demand for performance from the Company which specifically sets forth the factual basis for the Company's belief that you have not substantially performed your duties.

"Change of Control" is defined as the occurrence of any of the following events: (i) any "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the "beneficial owner" (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company's then outstanding voting securities, (ii) the consummation of the sale or disposition by the Company of all or substantially all of the Company's assets, or (iii) the consummation of a merger or consolidation of the Company with any other corporation other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such merger or consolidation.

"Good Reason" is defined as any of the following, without your express written consent, (i) a significant reducing of your duties, position or responsibilities relative to your duties, position or responsibilities in effect immediately prior to such reduction, or your removal from such position, duties and responsibilities, unless you are provided with comparable duties, position and responsibilities; provided, however, that a reduction in duties, position or responsibilities solely by virtue of the Company being acquired and made part of a larger entity (as, for example, when the President of the Company remains as such following a change of control but is not made the President of the acquiring corporation) will not constitute "Good Reason;" (ii) a material reduction by the Company of your base salary as in effect immediately prior to such reduction (other than in connection with a Company-wide salary reduction program applicable to similarly-situated executives); or (iii) your relocation to a facility or a location more than fifty (50) miles from your current location.

You should understand that your employment with the Company is "at-will", and may be terminated by you or the Company at any time and for any reason. This offer letter and the confidential information and invention assignment agreement between you and the Company that you will be expected to execute upon commencement of your employment, represent the entire agreement and understanding between you and the Company concerning your employment relationship with the Company, and supersede in their entirety any and all prior agreements and understandings concerning your employment relationship with the Company, whether written or oral.

The terms and conditions set forth in this offer letter will be binding and inure to the benefit of (i) your heirs, executors and legal representatives upon your death, and (ii) any successor of the Company. In the event any of the terms and conditions set forth in this offer letter becomes, or is determined to be, illegal, unenforceable or void, all other terms and conditions will continue in full force and effect.

You agree that any and all controversies, claims, or disputes with anyone (including the Company and any employee, officer, director, shareholder, or benefit plan of the Company in their capacity as such or otherwise) arising out of, relating to, or resulting from your service to the Company under this Agreement or otherwise or the termination of your service with the Company, including any breach of

2

this Agreement, will be subject to binding arbitration. You further understand that this Agreement to arbitrate also applies to any disputes that the Company may have with you. You agree that any arbitration will be administered in Santa Clara, California by the American Arbitration Association and that a neutral arbitrator will be selected in a manner consistent with its National Rules for the Resolution of Employment Disputes.

This letter will be governed by the laws of the state of California, with the exception of its conflict of laws provisions.

Please sign below to indicate your acceptance and agreement to the terms set forth in this offer letter and fax the signed offer letter to me at (408) 585-5097. If you have any questions, don't hesitate to contact me. I am excited to welcome you to the Company, and I look forward to your participation in the Company's future success.

Sincerely,

/s/  JOSEPH S. KENNEDY Joseph S. Kennedy President and CEO Omneon Video Networks, Inc.
Accepted and agreed to this
18th day of July, 2005.	/s/  CHARLES F. MORRIS Signature

3

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Exhibit 10.13

EX-10.14

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Exhibit 10.14

Omneon Video Networks Logo

May 5, 2005

Ronald Howe

Dear Ron:

I am pleased to offer you a position with Omneon Video Networks, Inc. (the "Company") as Vice President of Customer Service. Your position with the Company pursuant to the terms and conditions of this letter will commence May 23, 2005. While employed by the Company, you will report to the Chief Executive Officer and have such duties and responsibilities as this office may from time to time require. You agree to perform your duties faithfully and to the best of your abilities and to devote your full business efforts and time to the Company. Additionally, while employed by the Company, you agree to not actively engage in any other employment, occupation or consulting activity for any direct or indirect remuneration without prior approval.

While employed by the Company, you will receive as compensation for your services a base salary at the annualized rate of one hundred and eighty-five thousand dollars ($185,000). You will also be eligible to earn a variable bonus of up to 10% of your base salary, based upon meeting individual operational milestones to be agreed upon. This individual performance based bonus may be replaced in the future by an executive bonus plan encompassing both company and individual performance goals. Your salary and bonus will be paid periodically in accordance with normal Company payroll practices and be subject to the usual, required withholding.

Additionally, subject to approval by the Board, you will be granted a stock option to purchase 115,000 shares of Company common stock (approximately .50% of fully diluted shares) at an exercise price to be determined by the Board. One quarter (¹/4^th) of the shares subject to the option will vest on the one-year anniversary of your employment with the Company, and the remaining shares will vest as to one-forty-eighth (¹/48^th) of the total shares each month thereafter, subject to your continued employment with the Company on the relevant vesting dates. The option will be subject to the terms and conditions of the Company's 1998 Stock Option Plan and the applicable option agreement between you and the Company, both of which are incorporated herein by reference. During your employment with the Company, you will be eligible to participate in the employee benefit plans currently and hereafter maintained by the Company of general applicability to other senior executives of the Company, including, without limitation, the Company's group medical, dental, vision, disability and life insurance plans. The Company reserves the right to cancel or change the benefit plans and programs it offers to its employees at any time.

If within one year following a Change of Control (i) you terminate your employment with the Company for Good Reason or (ii) the Company (or its successor) terminates your employment other than for Cause, and you sign and do not revoke a standard release of claims with the company, then (i) you will be entitled to receive continuing payments of severance pay (less applicable withholding taxes) at a rate equal to your then current base salary for a period of six (6) months from the date of such event, to be paid periodically in accordance with the Company's normal payroll policies; (ii) during the six (6) month period following your termination of employment, the Company will pay for the same level of health (i.e. medical, vision and dental) coverage and benefits as in effect for you and your covered dependents on the day immediately preceding the date of such termination; and (iii) any options held by you to purchase shares of the Company's common stock will immediately vest and become

1

exercisable as to that number of shares, if any, that would have vested had you remained employed by the Company through the twelve (12) month period from the date of such termination ("Change of Control Benefits").

"Cause" is defined as (i) an act of material dishonesty made by you in connection with your responsibilities as an employee, (ii) your conviction of, or plea of nolo contendere to, a felony, (iii) your gross misconduct, or (iv) your continued substantial violations of your employment duties after you have received a written demand for performance from the Company which specifically sets forth the factual basis for the Company's belief that you have not substantially performed your duties.

"Change of Control" is defined as the occurrence of any of the following events: (i) any "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the "beneficial owner" (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company's then outstanding voting securities, (ii) the consummation of the sale or disposition by the Company of all or substantially all of the Company's assets, or (iii) the consummation of a merger or consolidation of the Company with any other corporation other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such merger or consolidation.

"Good Reason" is defined as any of the following, without your express written consent, (i) a significant reducing of your duties, position or responsibilities relative to your duties, position or responsibilities in effect immediately prior to such reduction, or your removal from such position, duties and responsibilities, unless you are provided with comparable duties, position and responsibilities; provided, however, that a reduction in duties, position or responsibilities solely by virtue of the Company being acquired and made part of a larger entity (as, for example, when the President of the Company remains as such following a change of control but is not made the President of the acquiring corporation) will not constitute "Good Reason;" (ii) a material reduction by the Company of your base salary as in effect immediately prior to such reduction (other than in connection with a Company-wide salary reduction program applicable to similarly-situated executives); or (iii) your relocation to a facility or a location more than fifty (50) miles from your current location.

You should understand that your employment with the Company is "at-will", and may be terminated by you or the Company at any time and for any reason. This offer letter and the confidential information and invention assignment agreement between you and the Company that you will be expected to execute upon commencement of your employment, represent the entire agreement and understanding between you and the Company concerning your employment relationship with the Company, and supersede in their entirety any and all prior agreements and understandings concerning your employment relationship with the Company, whether written or oral.

The terms and conditions set forth in this offer letter will be binding and inure to the benefit of (i) your heirs, executors and legal representatives upon your death, and (ii) any successor of the Company. In the event any of the terms and conditions set forth in this offer letter becomes, or is determined to be, illegal, unenforceable or void, all other terms and conditions will continue in full force and effect.

You agree that any and all controversies, claims, or disputes with anyone (including the Company and any employee, officer, director, shareholder, or benefit plan of the Company in their capacity as such or otherwise) arising out of, relating to, or resulting from your service to the Company under this Agreement or otherwise or the termination of your service with the Company, including any breach of this Agreement, will be subject to binding arbitration. You further understand that this Agreement to

2

arbitrate also applies to any disputes that the Company may have with you. You agree that any arbitration will be administered in Santa Clara, California by the American Arbitration Association and that a neutral arbitrator will be selected in a manner consistent with its National Rules for the Resolution of Employment Disputes.

This letter will be governed by the laws of the state of California, with the exception of its conflict of laws provisions.

Please sign below to indicate your acceptance and agreement to the terms set forth in this offer letter and fax the signed offer letter to me at (408) 585-5098. If you have any questions, don't hesitate to contact me. I am excited to welcome you to the Company, and I look forward to your participation in the Company's future success.

Sincerely,

/s/  JOSEPH S. KENNEDY Joseph S. Kennedy President and CEO Omneon Video Networks, Inc.
Accepted and agreed to this
6th day of May, 2005.	/s/  RONALD HOWE Signature

3

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Exhibit 10.14

EX-10.15

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Exhibit 10.15

* * * * * * * * * * * * * * * * * * *

LEASE

Sunnyvale Technology Park

* * * * * * * * * * * * * * * * * * *

Between

OMNEON VIDEO NETWORKS, INC.
(Tenant)

and

SQUARE 24 ASSOCIATES
(DBA Square 24 Associates, L.P.)
(Landlord)

TABLE OF CONTENTS

		Page
1.	LEASE AGREEMENT	4
2.	RENT	4
3.	PREPARATION AND CONDITION OF PREMISES; TENANT'S POSSESSION; REPAIRS AND MAINTENANCE	11
4.	SERVICES AND UTILITIES	12
5.	ALTERATION AND REPAIRS	13
6.	USE OF PREMISES	15
7.	GOVERNMENTAL REQUIREMENTS AND BUILDING RULES	16
8.	WAIVER OF CLAIMS; INDEMNIFICATION; INSURANCE	17
9.	FIRE AND OTHER CASUALTY	20
10.	EMINENT DOMAIN	21
11.	RIGHTS RESERVED TO LANDLORD	21
12.	EVENTS OF DEFAULT	22
13.	LANDLORD REMEDIES	24
14.	SURRENDER	25
15.	HOLDOVER	26
16.	SUBORDINATION TO GROUND LEASES AND MORTGAGES	26
17.	ASSIGNMENT AND SUBLEASE	27
18.	CONVEYANCE BY LANDLORD	30
19.	ESTOPPEL CERTIFICATE	30
20.	SECURITY DEPOSIT	30
21.	TENANT'S PERSONAL PROPERTY AND FIXTURES	31
22.	NOTICES	31
23.	QUIET POSSESSION	32
24.	REAL ESTATE BROKERS	32
25.	MISCELLANEOUS	32
26.	UNRELATED BUSINESS INCOME	34
27.	BUILDING RENOVATIONS	34
28.	BUILDING RENOVATIONS	35
29.	EXCULPATION	37
30.	COMMUNICATIONS AND COMPUTER LINES	37
31.	SECURITY	37

1

LEASE

        THIS LEASE (the "Lease") is dated as of December 2, 2004 (for reference purposes only) between SQUARE 24 ASSOCIATES, a District of Columbia limited partnership (dba Square 24 Associates, L.P.) ("Landlord") and the Tenant as named in the Schedule below. The term "Project" means the five (5) buildings, the land appurtenant thereto ("Land"), and other improvements located thereon commonly known as "Sunnyvale Technology Park", located in Sunnyvale, California. The "Premises" means that portion of the Project leased to Tenant and described in the Schedule and outlined on Exhibit A. The building in which the Premises are located shall be referred to herein as the "Building". The following schedule (the "Schedule") is an integral part of this Lease. Terms defined in this Schedule shall have the same meaning throughout the Lease.

SCHEDULE

1.

Tenant: OMNEON VIDEO NETW0RKS, INC., a Delaware corporation



2.

Premises: 965 Stewart Drive, Sunnyvale, California



3.

Intentionally Omitted



4.

Rentable Square Footage of the Premises: Approximately 40,900 rentable square feet



5.

Tenant's Proportionate Share: 100%



6.

Lease Deposit:

Prepaid Rent: Prepaid Base Rent equal to Twenty-Two Thousand Four Hundred Ninety-Five and No/100 Dollars ($22,495.00), Prepaid Additional Rent equal to Ten Thousand Two Hundred Twenty-Five and No/100 Dollars ($10,225.00), totaling Thirty-Two Thousand Seven Hundred Twenty and No/100 Dollars ($32,720.00)

Security Deposit: Twenty-Two Thousand Four Hundred Ninety-Five and No/100 Dollars ($22,495.00)

7.

Permitted Use: General office, warehouse, laboratory, testing and research and development



8.

Tenant's Real Estate Broker for this Lease: None



9.

Landlord's Real Estate Broker for this Lease: None



10.

Tenant Improvements, if any: See Section 3.A



11.

Commencement Date: (See Section 1.A below)

Target Commencement Date: April 7, 2005

12.

Term/Termination Date: The Term of this Lease shall be for three (3) years commencing on the Commencement Date and expiring on the calendar day preceding the third (3rd) anniversary of the Commencement Date (the "Termination Date"); provided, however, that if the Commencement Date shall occur on a date other than the first day of a calendar month, the Termination Date shall be the last day of the calendar month in which the third (3rd) anniversary of the Commencement Date occurs



13.

Parking Stalls: One Hundred Sixty-Four (164) unassigned stalls



14.

Base Rent:

Period	Monthly Base Rent		Annual Base Rent
Commencement Date to the Termination Date	$	22,495.00	$	269,940.00

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Exhibit A—PLAN OF THE PREMISES
Exhibit B—RULES AND REGULATIONS
Exhibit C—INTENTIONALLY OMITTED
Exhibit D—COMMENCEMENT DATE CONFIRMATION (see Section 1.A)
Exhibit E—ENVIRONMENTAL QUESTIONNAIRE

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        1.    LEASE AGREEMENT.    On the terms stated in this Lease, Landlord leases the Premises to Tenant, and Tenant leases the Premises from Landlord, for the Term beginning on the Commencement Date and ending on the Termination Date unless extended or sooner terminated pursuant to this Lease.

        A.    Commencement Date. The commencement date ("Commencement Date") for this Lease is the later to occur of (1) the Target Commencement Date, or (2) the date on which Landlord tenders possession of the Premises to Tenant; provided, however, that, if Landlord fails to tenders possession of the Premises to Tenant on or before July 7, 2005 (the "Premises Delivery Deadline"), Tenant, as its sole remedy, shall have the right to cancel this Lease by giving written notice of such cancellation to Landlord at any time after the Premises Delivery Deadline and prior to the date Landlord delivers possession of the Premises to Tenant, in which case this Lease shall be cancelled effective thirty (30) days after Landlord's receipt of Tenant's cancellation notice, unless Landlord delivers possession of the Premises to Tenant within said thirty (30) day period. In the event of such cancellation by Tenant, neither party shall have any obligations to the other under this Lease, except for obligations arising before such cancellation. If and only if the Commencement Date is not the Target Commencement Date, then Landlord shall prepare and deliver to Tenant a Commencement Date Confirmation substantially in the form attached hereto as Exhibit D that sets forth both the Commencement Date and Termination Date for this Lease. Tenant shall execute the Commencement Date Confirmation and deliver the executed original of the same to Landlord within three (3) days after Tenant's receipt thereof. Tenant's failure to timely execute and return the Commencement Date Confirmation document to Landlord shall be conclusive evidence of Tenant's agreement with the information as set forth therein. This Lease shall be a binding contractual obligation effective upon execution and delivery hereof by Landlord and Tenant, notwithstanding the later commencement of the Lease Term.

        B.    Termination Date. The termination date ("Termination Date") of this Lease is the date set forth in the Schedule.

        2.    RENT.    

        A.    Types of Rent. Tenant shall pay the following Rent in the form of a check to Landlord at the following address:

	Square 24 Associates t/a Sunnyvale Technology Park P.O. Box 642937 Pittsburgh, PA 15264-2937
or by wire transfer as follows:
	Account Name:	Square 24 Associates t/a Sunnyvale Technology Park
	Park Bank Name:	PNC Bank
	Transit Number:	043000096
	Account Number:	1004339524
	Notification:	Lease Administration (Square 24 Associates re Omneon Video Networks, Inc.)
	Telephone:	(408) 544-9660

or in such other manner as Landlord may notify Tenant.

        1.     Base Rent in monthly installments in advance, on or before the first day of each month of the Term in the amount set forth on the Schedule; provided, however, that upon

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Tenant's execution and delivery of this Lease to Landlord, Tenant shall pay to Landlord the Prepaid Base Rent set forth in Item 6 of the Schedule, which shall be applied to the first monthly installment of Base Rent payable by Tenant following the Commencement Date, but if the Commencement Date is a day other than the first day of a calendar month, then (a) the Prepaid Base Rent shall be applied to the Base Rent payable by Tenant for the partial month in which the Commencement Date occurs and the next succeeding calendar month and (b) the Prorated First Base Rent Payment (as defined below) shall be payable by Tenant on or before the first full calendar month following the Commencement Date. The "Prorated First Base Rent Payment" means the remaining amount of Base Rent payable by Tenant for the first full calendar month following the Commencement Date, after the Prepaid Base Rent is applied as provided above.

        2.     Operating Cost Share Rent equal to Tenant's Proportionate Share (as set forth in the Schedule) of Operating Costs for the applicable Fiscal Year (as defined in Section 2.C(5) below), paid monthly in advance in an estimated amount. The definition of Operating Costs and the method for billing and payment of Operating Cost Share Rent are set forth in Sections 2.B, 2.C and 2.D.

        3.     Tax Share Rent equal to Tenant's Proportionate Share of Taxes for the applicable Fiscal Year, paid monthly in advance in an estimated amount. A definition of Taxes and the method for billing and payment of Tax Share Rent are set forth in Sections 2.B, 2.C and 2.D.

        Notwithstanding the foregoing, upon Tenant's execution and delivery of this Lease to Landlord, Tenant shall pay to Landlord the Prepaid Additional Rent set forth in Item 6 of the Schedule, which shall be applied to the first monthly installment of Operating Cost Share Rent and Tax Share Rent payable by Tenant following the Commencement Date, but if the Commencement Date is a day other than the first day of a calendar month, then (a) the Prepaid Additional Rent shall be applied to the Operating Cost Share Rent and Tax Share Rent payable by Tenant for the partial month in which the Commencement Date occurs and the next succeeding calendar month and (b) the Prorated First Additional Rent Payment (as defined below) shall be payable by Tenant on or before the first full calendar month following the Commencement Date. The "Prorated First Additional Rent Payment" means the remaining amount of Operating Cost Share Rent and Tax Share Rent payable by Tenant for the first full calendar month following the Commencement Date, after the Prepaid Additional Rent is applied as provided above. All prorations under this Section 2.A shall be made on the basis of the actual number of days in the particular month.

        As used in this Lease, the term "Rent" means Base Rent, Operating Cost Share Rent, Tax Share Rent and all other costs, expenses, liabilities, and amounts which Tenant is required to pay under this Lease ("Additional Rent"), including any interest for late payment. Tenant's agreement to pay Rent is an independent covenant, with no right of setoff, deduction or counterclaim of any kind.

        B.    Payment of Operating Cost Share Rent and Tax Share Rent.

        1.     Payment of Estimated Operating Cost Share Rent and Tax Share Rent.

        (a)   Before the Commencement Date and on or before April 1 of each succeeding Fiscal Year, or as soon as reasonably possible thereafter, Landlord shall give Tenant notice of its estimate of the payments to be made pursuant to Sections 2.A(2) and 2.A(3) above for such Fiscal Year. Landlord may revise these estimates by written notice to Tenant whenever it obtains more accurate information, such as the final real estate tax assessment or tax rate for the Project, in which event subsequent monthly payments by Tenant for such Fiscal Year shall be based upon such revised estimate.

        (b)   Within ten (10) days after receiving Landlord's notice regarding the original or revised estimate of the monthly payments to be made pursuant to Sections 2.A(2) and

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2.A(3) above for a particular Fiscal Year, Tenant shall pay Landlord an amount equal to the product of such estimated monthly payments (as set forth in Landlord's notice), multiplied by the number of months that have elapsed in the applicable Fiscal Year to the date of such payment including the current month, minus any payments on account thereof previously made by Tenant for the months elapsed. On the first day of each month thereafter, Tenant shall pay Landlord the estimated monthly payments as set forth in Landlord's most recent notice, until a new estimate becomes applicable.

        2.     Correction of Operating Cost Share Rent and Tax Share Rent. Within one hundred fifty (150) days after the close of each Fiscal Year or as soon after such 150-day period as practicable, Landlord shall deliver to Tenant a statement of (a) Operating Costs and Taxes for such Fiscal Year, and (b) the payments made by Tenant under Section 2.B(1) above for such Fiscal Year (the "Annual Expense Statement"). If, on the basis of any Annual Expense Statement, Tenant owes an amount that is less than the estimated payments previously made by Tenant for the applicable Fiscal Year, Landlord, at its election, shall either promptly refund the amount of the overpayment to Tenant or, if this Lease is still in effect, credit such excess against Tenant's subsequent obligations to pay Operating Costs and Taxes. If, on the basis of any Annual Expense Statement, Tenant owes an amount that is more than the estimated payments previously made by Tenant for the applicable Fiscal Year, Tenant shall pay the deficiency to Landlord within twenty (20) days after Landlords delivery of such Annual Expense Statement to Tenant. The obligations of Landlord and Tenant under this Section to promptly refund any overpayment or pay any deficiency, as appropriate, shall survive the expiration or earlier termination of this Lease.

        C.    Definitions.

        1.     Included Operating Costs.

        (a)   "Operating Costs" means any expenses, costs and disbursements of any kind other than Taxes, paid or incurred by Landlord in connection with the ownership, management, maintenance, operation and repair of the Project or any part thereof, and of the personal property, fixtures, machinery, equipment, systems and apparatus used in connection therewith, including, without limitation, (i) all costs to operate, maintain, repair, replace, supervise, and administer the common areas of the Project, including, without limitation, all costs of resurfacing and restriping the parking areas of the Project; (ii) all costs and expenses paid or incurred by Landlord for insurance on the Project or any part thereof or interest therein, and any deductibles paid under policies of any such insurance; (iii) except for costs which are the sole responsibility of Landlord pursuant to Section 3.C(2) below, all costs paid or incurred by Landlord in connection with the performance of Landlord's obligations under that Section, including without limitation, all costs to maintain, repair and replace the roof coverings of the Building, (iv) the cost of providing those services required to be furnished by Landlord under this Lease, and (v) the cost of all electricity, water, gas, sewers, oil and other utilities (collectively, "Utilities"), including any surcharges imposed, serving the Project or any part thereof (but excluding the cost of Utilities directly billed to Tenant or other tenants in the Project), and any amounts, taxes, charges, surcharges, assessments or impositions levied, assessed or imposed upon the Project or any part thereof, or upon Tenant's use and occupancy thereof, as a result of any rationing of Utilities services or restriction on the use of Utilities affecting the Project or any part thereof. Any Operating Costs that constitute capital expenditures (collectively, "Included Capital Items") shall be amortized by Landlord, with interest, over the estimated useful life of such item and such amortized costs shall be included in Operating Costs only for that portion of the useful life of the Included Capital Item which falls within the Term; provided, however, that if the cost of

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the Included Capital Item is less than Ten Thousand Dollars ($10,000), then such cost shall be expensed in the year in which it was incurred.

        (b)   If the Project contains more than one building, then Operating Costs shall include (i) all Operating Costs fairly allocable to the Building, and (ii) a proportionate share (based on the gross rentable area of the Building as a percentage of the gross rentable area of all of the buildings in the Project) of all Operating Costs which relate to the Project in general and are not fairly allocable to any one building in the Project. Landlord covenants that in no event shall Landlord allocate more than 100% of the Operating Costs, and further covenants that, in accordance with Section 2.D(4) below, Landlord will make available to Tenant the records of Landlord so demonstrating.

        (c)   If the Project is not fully occupied during any portion of any Fiscal Year, Landlord may adjust (an "Equitable Adjustment") Operating Costs to equal what would have been incurred by Landlord had the Project been fully occupied. This Equitable Adjustment shall apply only to Operating Costs which are variable and therefore increase as occupancy of the Project increases. Landlord may incorporate the Equitable Adjustment in its estimates of Operating Costs.

        (d)   If any tenant of the Project contracts directly with Landlord or a third party for any Utilities or services for which Tenant pays Landlord pursuant to Section 2.A(2) above, the total costs of such Utilities or services for the Project shall be "grossed up" to reflect what those costs would have been had such tenant(s) not directly contracted for such Utilities or services.

        2.     Excluded Operating Costs. Operating Costs shall not include:

(a)

costs of installing leasehold improvements for tenants or occupants or prospective tenants or occupants of the Project;



(b)

interest and principal payments on mortgages or any other debt costs (except as provided in Section 2.C(1) above with regard to Included Capital Items), or rental payments on any ground lease of the Project;



(c)

real estate brokers' leasing commissions;



(d)

legal fees, space planner fees and advertising expenses incurred with regard to leasing the Project or portions thereof;



(e)

any cost or expenditure for which Landlord is reimbursed, by insurance proceeds or otherwise, except by Operating Cost Share Rent;



(f)

the cost of any service furnished to any tenant of the Project which Landlord does not make available to Tenant;



(g)

depreciation (except on any Included Capital Items);



(h)

franchise or income taxes imposed upon Landlord, except to the extent imposed in lieu of all or any part of Taxes;



(i)

legal and auditing fees incurred for the benefit of Landlord such as collecting delinquent rents, preparing tax returns and other financial statements, and audits other than those incurred in connection with the preparation of reports required pursuant to Section 2.B above;



(j)

the wages of any employee for services not related directly to the management, maintenance, operation and repair of the Project;

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(k)

management fees in excess of the greater of (i) three percent (3%) of the annual gross revenues payable under this Lease, or (ii) those charged by landlords of comparable buildings in the vicinity of the Project;



(l)

fines, penalties and interest incurred by Landlord for late payment by Landlord or violations of law;



(m)

the cost of abatement or removal of Hazardous Substances in, on, or about the Project; provided, however, that (i) the costs of routine monitoring of and testing for Hazardous Substances in, on, or about the Project, and (ii) costs incurred in the cleanup or remediation of de minimis amounts of Hazardous Substances customarily used in office buildings or used to operate motor vehicles and customarily found in parking facilities may be included as Operating Costs; and



(n)

the cost of expenditures to correct violations of Governmental Requirements existing in the Project as of the date of this Lease (based on the current interpretation of such Governmental Requirements by applicable governmental authority(ies) as of the date of this Lease).

        3.     Taxes.

        (a)   "Taxes" means any and all taxes, assessments and charges of any kind, general or special, ordinary or extraordinary, levied against the Project, which Landlord shall pay or become obligated to pay in connection with the ownership, leasing, renting, management, use, occupancy, control or operation of the Project or of the personal property, trade fixtures, machinery, equipment, systems and apparatus used in connection therewith. Taxes shall include real estate taxes, personal property taxes, sewer rents, water rents, special or general assessments, transit taxes, ad valorem taxes, and any tax levied on the rents hereunder or the interest of Landlord under this Lease (the "Rent Tax"). Taxes shall also include all fees and other costs and expenses paid by Landlord in reviewing any Taxes and in seeking a refund or reduction of any Taxes, whether or not the Landlord is ultimately successful. Taxes shall also include any assessments or fees paid to any business park owners association, or similar entity, which are imposed against the Project pursuant to any Covenants, Conditions and Restrictions ("CC&R's") recorded against the Project and any installments of principal and interest required to pay any existing or future general or special assessments for public improvements, services or benefits, and any increases resulting from reassessments imposed in connection with any change in ownership or new construction.

        (b)   If the Project contains more than one building, then Taxes shall include (i) all Taxes fairly allocable to the Building, and (ii) a proportionate share (based on the gross rentable area of the Building as a percentage of the gross rentable area of all of the buildings in the Project) of all Taxes which relate to the Project in general and are not fairly allocable to any one building in the Project. Landlord covenants that in no event shall Landlord allocate more than 100% of the Taxes, and further covenants that, in accordance with Section 2.D(4) below, Landlord will make available to Tenant the records of Landlord so demonstrating.

        (c)   For any year, the amount to be included in Taxes (i) from taxes or assessments payable in installments, shall be the amount of the installments (with any interest) due and payable during such year, and (ii) from all other Taxes, shall, at Landlord's election (provided that the method elected shall be consistent between the Base Year and subsequent Fiscal Years during the Term), be the amount accrued, assessed, or otherwise imposed for such year or the amount due and payable in such year. If Taxes for any

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period during the Lease Term are increased after payment thereof for any reason, including, without limitation, error or reassessment by applicable governmental or municipal authorities, and such increase results in Tenant having underpaid Tax Share Rent hereunder, then Tenant shall pay to Landlord, within thirty (30) days after demand, the amount of such underpayment. Similarly, if Taxes for any period during the Lease Term are decreased after payment thereof for any reason, and such decrease results in Tenant having overpaid Tax Share Rent hereunder, then Landlord shall return to Tenant the amount of such overpayment within thirty (30) days after receipt of same. The obligations of Landlord and Tenant under this Section to promptly refund any overpayment or pay any deficiency, as appropriate, shall survive the expiration or earlier termination of this Lease. Taxes shall not include (i) any net income, capital, stock, succession, transfer, franchise, gift, estate or inheritance tax, except to the extent that such tax shall be imposed in lieu of any portion of Taxes; (ii) fines, penalties or interest imposed due to Landlord's failure to pay Taxes when due (unless caused by Tenant's failure to timely make the required payments under this Section), or (iii) any tax, levy, assessment, charge or surcharge imposed as a direct result of contamination of the Project by any Hazardous Substances not caused by Tenant or any Tenant Party (as defined in Section 8.B(1) below), as opposed to the imposition of such a charge on a more general basis.

        (d)   Notwithstanding anything to the contrary set forth in this Lease, Tenant shall reimburse Landlord upon demand for any and all taxes payable by Landlord (other than net income taxes) whether or not now customary or within the contemplation of the parties hereto: (i) imposed upon, measured by or reasonably attributable to the cost or value of Tenant's equipment, furniture, trade fixtures and other personal property located in the Premises or by the cost or value of any leasehold improvements made in or to the Premises by or for Tenant, other than Building-standard improvements made by Landlord, if any, regardless of whether title to such improvements shall be in Tenant or Landlord; (ii) imposed upon or measured by the Base Rent payable hereunder, including, without limitation, any gross income tax or excise tax levied by the city or county in which the Project is located, the federal government or any other governmental body with respect to the receipt of such rental; (iii) imposed upon or with respect to the possession, leasing, operation, management, maintenance, alteration, repair, use or occupancy by Tenant of the Premises or any portion thereof; or (iv) imposed upon this transaction or any document to which Tenant is a party creating or transferring an interest or an estate in the Premises.

        4.     Lease Year. "Lease Year" means each consecutive twelve month period beginning with the Commencement Date, except that if the Commencement Date is not the first day of a calendar month, then the first Lease Year shall be the period from the Commencement Date through the final day of the calendar month during which the first anniversary of the Commencement Date occurs, and subsequent Lease Years shall be each succeeding twelve month period during the Term following the first Lease Year.

        5.     Fiscal Year. "Fiscal Year" means each calendar year during which any portion of the Term occurs (e.g., the first Fiscal Year shall be the calendar year during which the Commencement Date occurs).

        D.    Computation of Base Rent and Rent Adjustments.

        1.     Prorations. If (a) the Commencement Date is a date other than January 1, (b) the Termination Date is a date other than December 31, (c) this Lease terminates early, or (d) the size of the Premises increases or decreases, then in each such event, the Base Rent,

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the Operating Cost Share Rent and Tax Share Rent shall be equitably adjusted to reflect such event on a basis determined by Landlord to be consistent with the principles underlying the provisions of this Section 2.

        2.     Interest Rate. Any sum due from Tenant to Landlord not paid when due shall bear interest from the date due until paid at the lesser of twelve percent (12%) per annum or the maximum rate permitted by law (the "Interest Rate").

        3.     Rent Adjustment. The square footage of the Premises set forth in the Schedule is conclusively deemed to be the actual square footage thereof, without regard to any subsequent remeasurement of the Premises. If any Operating Cost paid in one Fiscal Year relates to more than one Fiscal Year, Landlord may proportionately allocate such Operating Cost among the related Fiscal Years.

        4.     Books and Records. Landlord shall maintain books and records reflecting the Operating Costs and Taxes in accordance with sound accounting and management practices. Tenant and a certified public accountant employed by a certified public accounting firm and working on a non-contingency fee basis shall have the right to inspect Landlord's records at Landlord's applicable local office or other location designated by Landlord upon at least seventy-two (72) hours' prior notice during normal business hours during the ninety (90) days following Landlord's delivery of the Annual Expense Statement to Tenant. The results of any such inspection shall be kept strictly confidential by Tenant and its agents, and Tenant and its certified public accountant must agree, in their contract for such services, to such confidentiality restrictions and shall specifically agree that the results shall not be made available to any other tenant of the Project (and in connection with the foregoing, prior to exercising its rights hereunder, Tenant and its agents shall sign a confidentiality agreement acceptable to Landlord). Unless Tenant sends to Landlord any written exception to an Annual Expense Statement within said ninety (90) day period, such Annual Expense Statement shall be deemed final and accepted by Tenant and Tenant waives any other rights pursuant to applicable law to inspect Landlord's books and records and/or to contest the amount Operating Costs and/or Taxes due hereunder. Tenant shall pay the amount shown on any Annual Expense Statement in the manner prescribed in this Lease, whether or not Tenant takes any such written exception, without any prejudice to such exception. If Tenant makes a timely exception, Landlord shall cause an independent certified public accountant to issue a final and conclusive resolution of Tenant's exception. Tenant shall pay the cost of such certification unless Landlord's original determination of annual Operating Costs and Taxes overstated the amounts thereof, in the aggregate, by more than five percent (5%).

        5.     Miscellaneous. So long as an Event of Default (as defined in Section 12.A below) exists, Tenant shall not be entitled to any refund of any amount from Landlord. If this Lease is terminated for any reason prior to the annual determination of Operating Cost Share Rent or Tax Share Rent, either party shall pay the full amount due to the other within fifteen (15) days after Landlord's notice to Tenant of the amount when it is determined. Landlord may commingle any payments made with respect to Operating Cost Share Rent and Tax Share Rent, without payment of interest.

        6.     Operating Cost Share Rent and Tax Share Rent Limit. Notwithstanding any provision in this Lease to the contrary, the sum of Operating Cost Share Rent and Tax Share Rent payable by Tenant shall not exceed Ten Thousand Two Hundred Twenty-Five Dollars ($10,225.00) per month, i.e., Twenty-Five Cents ($0.25) per rentable square foot of the Premises; provided, however, that the foregoing limitation shall not apply to costs incurred by Landlord under Section 3.C(2) in repairing damage arising from the acts of Tenant or any Tenant Parties (as defined in Section 8.B(1) below).

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        3.    PREPARATION AND CONDITION OF PREMISES; TENANT'S POSSESSION: REPAIRS AND MAINTENANCE.    

        A.    Condition of Premises. Landlord is leasing the Premises to Tenant "as is", without any obligation to alter, remodel, improve, repair or decorate any part of the Premises and without any express or implied representations or warranties of any kind, including, without limitation, any representation or warranty regarding the condition of the Premises or the Project or the suitability of any of the foregoing for the conduct of Tenant's business, except that, as of the Commencement Date, the Systems shall be in good working condition.

        B.    Tenant's Possession. Tenants taking possession of any portion of the Premises on or after the Commencement Date shall be conclusive evidence that the Premises were in good order, repair and condition, subject to any latent defects of which Tenant gives Landlord written notice within thirty (30) days after the Commencement Date.

        C.    Repairs and Maintenance.

        1.     Tenant's Obligations. Except to the extent of Landlord's obligations under Section 3.C(2) below, Tenant shall, throughout the Term at its expense, (a) keep and maintain the Premises in good order and condition, and repair and maintain every part thereof, including (i) glass, windows, window frames, window casements (including the repairing, resealing, cleaning and replacing of both interior and exterior windows) and skylights; (ii) interior and exterior doors, door frames and door closers; (iii) interior lighting (including, without limitation, light bulbs and ballasts); (iv) the heating, ventilating, air conditioning ("HVAC"), plumbing, sewer, drainage, electrical, fire protection, elevator, escalator, life safety and security systems and other mechanical, electrical and communications systems and equipment serving the Premises (collectively, the "Systems") and related equipment, including, without limitation, all electrical facilities and equipment, including lighting fixtures, lamps, fans and any exhaust equipment and systems, electrical motors and all other appliances and equipment of every kind and nature located in, upon or otherwise exclusively serving the Premises; (v) all communications systems serving the Premises; (vi) Tenant's signage; (vii) interior demising walls and partitions (including painting and wallcoverings), equipment, floors, and any roll-up doors, ramps and dock equipment, (b) furnish all expendables, including light bulbs, paper goods and soaps, used in the Premises, and (c) keep and maintain in good order and condition, repair and replace all of Tenant's security systems in or about or serving the Premises and, to the extent that Landlord notifies Tenant in writing of its intention to no longer arrange for such monitoring, cause the fire alarm systems serving the Premises to be monitored by a monitoring or protective services firm approved by Landlord in writing. Tenant shall also be responsible for all pest control within the Premises, and for all trash removal and disposal from the Premises. With respect to any HVAC systems and equipment serving the Premises, Tenant shall obtain HVAC systems preventive maintenance contracts with bimonthly or monthly service in accordance with manufacturer recommendations, which shall be subject to the reasonable prior written approval of Landlord and paid for Tenant, and which shall provide for and include replacement of filters, oiling and lubricating of machinery, parts replacement, adjustment of drive belts, oil changes and other preventive maintenance, including annual maintenance of duct work, interior unit drains and caulking of sheet metal, and recaulking of jacks and vents on an annual basis. Tenant shall have the benefit of all warranties available to Landlord regarding the HVAC systems. Tenant's repair and maintenance obligations shall be performed under the supervision and subject to the prior approval of Landlord, and within any reasonable period of time specified by Landlord; provided, however, that Landlord, at Landlord's option and at Tenant's expense, may perform any obligation of Tenant under this Section (including, without limitation, Tenant's obligation to obtain HVAC systems preventive maintenance contracts). Tenant shall pay to Landlord all

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costs and expenses incurred by Landlord and required to be paid by Tenant under this Section 3.C(1) within fifteen (15) days after receipt of an invoice therefor.

        2.     Landlord's Obligations. Subject to the provisions of Sections 3.A(1), 9 and 10 hereof, and further subject to Tenant's obligation under Section 2 above to reimburse Landlord, in the form of Additional Rent, for Tenant's Proportionate Share of the cost and expense of the following items, Landlord shall maintain, repair and replace the following items: (a) the roof coverings (provided that Tenant installs no additional air conditioning or other equipment on the roof that damages the roof coverings, in which event Tenant shall pay all costs resulting from the presence of such additional equipment); and (b) the parking areas of the Project, pavement, landscaping, sprinkler systems, sidewalks, driveways, curbs, and lighting systems in the common areas of the Project. Subject to the provisions of Sections 3.A(1), 9 and 10 hereof, Landlord, at its own cost and expense without possibility of reimbursement as Operating Costs or otherwise, agrees to repair and maintain the structural portions of the roof (specifically excluding the roof coverings), the foundation, the footings, the floor slab, and the load bearing walls and exterior walls of the Building (excluding any glass and any routine maintenance, including, without limitation, any painting, sealing, patching and waterproofing of such walls); provided, however, that subject to the provisions of Section 8.F below, any damage arising from the acts of Tenant or any Tenant Parties shall be repaired by Landlord at Tenant's sole expense, and Tenant shall pay Landlord, on demand, the cost of any such repair. Landlord may, but shall not be required to, enter the Premises at all reasonable times to make such repairs, alterations, improvements or additions to the Premises or to any equipment located in the Premises as Landlord shall desire or deem necessary or as Landlord may be required to do by governmental or quasi-governmental authority or court order or decree. The cost of any repairs made by Landlord on account of Tenant's default, or on account of the misuse or neglect by Tenant or any Tenant Parties anywhere in the Project, shall constitute Additional Rent payable by Tenant on demand. As a condition precedent to all of Landlord's repair and maintenance obligations under this Lease, Tenant must have notified Landlord of the need of such repairs or maintenance. Tenant hereby waives any and all rights under and benefits of subsection 1 of Section 1932 and Sections 1941 and 1942 of the California Civil Code and any similar or successor law, statute or ordinance now or hereafter in effect regarding Tenant's right to make repairs and deduct the cost of such repairs from the Rent due under this Lease.

        4.    SERVICES AND UTILITIES.    Tenant shall promptly pay, as the same become due, all charges for water, gas, electricity, telephone, sewer service, waste pick-up and any other utilities, materials and services furnished directly to or used by Tenant on or about the Premises during the Term, including, without limitation, (i) meter, use and/or connection fees, hook-up fees, or standby fees, and (ii) penalties for discontinued interrupted service. If any utility service is not separately metered to the Premises, then Tenant shall pay its pro rata share of the cost of such utility service with all others served by the service not separately metered. However, (a) if Landlord reasonably determines that Tenant is using a disproportionate amount of any utility service (whether or not separately metered), then Landlord, at its election, may (1) periodically charge Tenant, as Additional Rent, a sum equal to Landlord's reasonable estimate of the cost of Tenant's excess use of such utility service, and/or (2) install, at Tenant's expense, a separate meter to measure the utility service supplied to the Premises, and (b) if Landlord reasonably determines that Tenant is using a disproportionate share of the electrical capacity available for the Building or Project (i.e., electrical usage in excess of that which would typically be used for general office purposes), then, in addition to the foregoing, Landlord may install, at Tenant's expense, additional equipment to increase the electrical capacity for the Building or Project to offset excess electrical usage by Tenant. Any interruption or cessation of utilities resulting from any causes, including any entry for repairs pursuant to this Lease, and any renovation, redecoration or rehabilitation of any area of the Project, shall not render Landlord liable for damages

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to either person or property or for interruption or loss to Tenant's business, nor be construed as an eviction of Tenant, nor work an abatement of any portion of Rent, nor relieve Tenant from fulfillment of any covenant or agreement hereof; provided, however, that if (x) an interruption of the Project services prevents Tenant from occupying all or a material portion of the Premises for the Permitted Use for a period of at least five (5) consecutive days and (y) such interruption was caused solely by the negligence or willful misconduct of Landlord, its agents or employees, then monthly Rent shall thereafter be proportionately abated during the period of such interruption. Nothing in this Section 4.F shall limit the parties' rights and obligations under Section 9 hereof, in the event of a casualty affecting the Building or Premises.

        5.    ALTERATIONS AND REPAIRS.    

        A.    Landlord's Consent and Conditions.

        1.     Except for Minor Alterations (as defined below), Tenant shall not make any improvements or alterations to the Premises (the "Work") without in each instance submitting plans and specifications for the Work to Landlord and obtaining Landlord's prior written consent. Tenant shall pay Landlord's standard charge (or, if Landlord does not have a standard charge, then Landlord's actual costs incurred) for review of all of the plans and all other items submitted by Tenant. Landlord will be deemed to be acting reasonably in withholding its consent for any Work which (a) impacts the base structural components of the Building or the Systems, (b) impacts any other tenant's premises, (c) is visible from outside the Premises, or (d) would utilize building materials or equipment which are inconsistent with Landlord's standard building materials and equipment for the Building.

        2.     Landlord's approval shall not be required for Work on the interior of the Premises costing less than Ten Thousand Dollars ($10,000.00) per project ("Minor Alterations"), provided that (a) Landlord would not have the right to reasonably withhold consent to the Work pursuant to clauses (1)(a) through (1)(d) of Section 5.A(1) above; and (b) Tenant provides Landlord with written notice of such Minor Alteration, which shall include a copy of any governmental permits required to complete such Minor Alteration, prior to commencing construction of such Minor Alteration.

        3.     Tenant shall pay for the cost of all Work, including the cost of any and all approvals, permits, fees and other charges which may be required as a condition of performing such Work.

        4.     The following requirements shall apply to all Work:

        (a)   At least seven (7) days before beginning any Work, Tenant shall furnish to Landlord (i) written notice of the expected commencement date of the Work to permit Landlord to post and record a notice of nonresponsibility, (ii) building permits, (iii) certificates of insurance satisfactory to Landlord, and (iv) at Landlord's request with respect to Work in excess of Twenty-Five Thousand Dollars ($25,000.00), security for payment of all costs.

        (b)   Tenant shall perform all Work so as to maintain peace and harmony among other contractors serving the Project and shall avoid interference with other work to be performed or services to be rendered in the Project.

        (c)   The Work shall be performed in a good and workmanlike manner, meeting the standard for construction and quality of materials in the Project, and shall comply with all insurance requirements and all applicable laws, ordinances, regulations or requirements of the United States of America, the State of California, or the ordinances, regulations or requirements of the local municipal or county governing body or other lawful authorities having jurisdiction over the Project, including, without limitation, any such laws,

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ordinances, regulations or requirements relating to hazardous materials or substances, as those terms are defined by applicable laws now or hereafter in effect (collectively, "Governmental Requirements").

        (d)   Tenant shall perform all Work so as to minimize or prevent disruption to other tenants, and Tenant shall comply with all reasonable requests of Landlord in response to complaints from other tenants.

        (e)   Tenant shall perform all Work in compliance with any "Policies, Rules and Procedures for Construction Projects" which may be in effect at the time the Work is performed.

        (f)    All Work shall be performed only by contractors or mechanics approved by Landlord, which approval shall not be unreasonably withheld, conditioned or delayed; provided, however, that (i) Landlord may, in its sole discretion, specify engineers, general contractors, subcontractors, and architects to perform work affecting the Systems; and (ii) if Landlord consents to any Work that requires work to be performed outside the Premises, Landlord may elect to perform such work at Tenant's expense.

        (g)   Tenant shall permit Landlord to supervise all Work, including, without limitation, the right (but not an obligation) to inspect the construction work during the progress thereof, and to require corrections of faulty construction or any material deviation from the plans for such Work as approved by Landlord; provided, however, that no such inspection shall be deemed to create any liability on the part of Landlord, or constitute a representation by Landlord or any person hired to perform such inspection that the work so inspected conforms with such plans or complies with any Governmental Requirements, and no such inspection shall give rise to a waiver of, or estoppel with respect to, Landlord's continuing right at any time or from time to time to require the correction of any faulty work or any material deviation from such plans.

        (h)   Landlord may charge a supervisory fee not to exceed five percent (5%) of labor, material, and all other costs of the Work to compensate Landlord for its review of plans and its management and supervision of the progress of the work.

        (i)    Upon completion, Tenant shall furnish Landlord with contractor's affidavits and full and final statutory waivers of liens, as-built plans and specifications, and receipted bills covering all labor and materials, and all other close-out documentation related to the Work, including any other information required under any "Policies, Rules and Procedures for Construction Projects" which may be in effect at the time.

        B.    No Liens. Tenant has no authority to cause or permit any lien or encumbrance of any kind to affect Landlord's interest in the Project; any such lien or encumbrance shall attach to Tenant's interest only. If any mechanic's lien shall be filed or claim of lien made for work or materials furnished to Tenant, then Tenant shall at its expense, within ten (10) business days after Tenant's receipt of Landlord's written notice of such lien, either discharge or contest the lien or claim. If Tenant contests the lien or claim, then Tenant shall (i) within such ten (10) business day period, provide Landlord adequate security for the lien or claim, (ii) contest the lien or claim in good faith by appropriate proceedings that operate to stay its enforcement, and (iii) pay promptly any final adverse judgment entered in any such proceeding. If Tenant does not comply with these requirements, Landlord may discharge the lien or claim, and the amount paid, as well as attorney's fees and other expenses incurred by Landlord, shall constitute Additional Rent payable by Tenant on demand.

        C.    Ownership of Improvements. All Work as defined in this Section 5, partitions, hardware, equipment, machinery and all other improvements and all fixtures, except trade fixtures,

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constructed in the Premises by either Landlord or Tenant, (i) shall become Landlord's property upon installation without compensation to Tenant, unless Landlord consents otherwise in writing, and (ii) shall, at Landlord's option, either (a) be surrendered to Landlord with the Premises at the termination of this Lease or of Tenant's right to possession, or (b) be removed in accordance with Section 14 below (unless Landlord at the time it gives its consent to the performance of such construction expressly waives in writing the right to require such removal).

        6.    USE OF PREMISES.    

        A.    Limitation on Use. Tenant shall use the Premises only for the Permitted Use stated in the Schedule and Tenant shall not use or permit the Premises or the Project to be used for any other purpose or purposes whatsoever without the prior written consent of Landlord, which may be withheld in Landlord's sole discretion. Tenant shall not allow any use of the Premises which will negatively affect the cost of coverage of Landlord's insurance on the Project. Tenant shall not allow any inflammable or explosive liquids or materials to be kept on the Premises. Tenant shall not allow any use of the Premises which would cause the value or utility of any part of the Premises to diminish or would interfere with any other tenant or with the operation of the Project by Landlord. Tenant shall not permit any nuisance or waste to occur in, on, or about the Project, or allow any offensive noise or odor in or around the Project. At the end of each business day, or more frequently if necessary, Tenant shall deposit all garbage and other trash (excluding any inflammable, explosive and/or hazardous materials) in trash bins or containers approved by Landlord in locations designated by Landlord from time to time. If any governmental authority shall deem the Premises to be a "place of public accommodation" under the Americans with Disabilities Act ("ADA") or any other comparable law as a result of Tenant's use, Tenant shall either modify its use to cause such authority to rescind its designation or be responsible for any alterations, structural or otherwise, required to be made to the Premises under such laws.

        B.    Signs. Tenant shall not place on any portion of the Premises any sign, placard, lettering, banner, displays, graphic, decor or other advertising or communicative material which is visible from the exterior of the Premises without Landlord's prior written approval. The material, typeface, graphic format (including color) and proportions of Tenant's signs, as well as the precise location of such signs, shall be subject to Landlord's approval, and any approval required under Governmental Requirements. Any approved signs shall strictly conform to all Governmental Requirements, any CC&R's recorded against the Project, and Landlord's signage standards in effect at the time, and shall be installed and removed at Tenant's expense. Tenant, at its sole expense, shall maintain such signs in good condition and repair during the Term. Prior to the expiration or earlier termination of this Lease, Tenant at its sole cost shall remove all of its exterior signage and repair any and all damage caused to the Building and/or Project (including any fading or discoloration) by such signs and/or the removal of such signs from the Building and/or Project. Landlord shall install the Building-standard sign containing Tenant's name at the entrance to the Premises.

        C.    Parking. Tenant shall have the non-exclusive right to park in the Project's parking facilities in common with other tenants of the Project upon terms and conditions, as may from time to time be established by Landlord. Tenant agrees not to overburden the parking facilities (i.e., use more than the number of unassigned parking stalls indicated on the Schedule) and agrees to cooperate with Landlord and other tenants in the Project in the use of the parking facilities. Landlord reserves the right in its discretion to determine whether the parking facilities are becoming crowded and to allocate and assign parking passes among Tenant and the other tenants in the Project. Landlord shall have the right to charge Tenant the portion that Landlord deems allocable to Tenant of any charges (e.g., fees or taxes) imposed by the Regional Air Quality Control Board or other governmental or quasi-governmental agency in connection with the parking facilities (e.g., in connection with operation or use of the parking facilities). Landlord shall not be liable to

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Tenant, nor shall this Lease be affected, if any parking is impaired by (or if any parking charges are imposed as a result of) any moratorium, initiative, referendum, law, ordinance, regulation or order passed, issued or made by any governmental or quasi-governmental body. Tenant's continued right to use the parking spaces is conditioned upon Tenant abiding by all rules and regulations which are prescribed from time to time for the orderly operation and use of the parking facility where the parking passes are located, including any sticker or other identification system established by Landlord, Tenant's cooperation in seeing that Tenant's employees and visitors also comply with such rules and regulations and Tenant not being in default under this Lease. Landlord specifically reserves the right to change the size, configuration, design, layout and all other aspects of the Project parking facility at any time and Tenant acknowledges and agrees that Landlord may, without incurring any liability to Tenant and without any abatement of Rent under this Lease, from time to time, close-off or restrict access to the Project parking facility for purposes of permitting or facilitating any such construction, alteration or improvements. Landlord may delegate its responsibilities hereunder to a parking operator in which case such parking operator shall have all the rights of control attributed hereby to the Landlord. The parking passes rented by Tenant pursuant to this Section 6.C are provided to Tenant solely for use by Tenant's own personnel and such passes may not be transferred, assigned, subleased or otherwise alienated by Tenant without Landlord's prior approval.

        D.    Prohibition Against Use of Roof and Structure of Building.

        1.     Tenant shall be prohibited from using all or any portion of the roof of the Building or any portion of the structure of the Building during the Term of this Lease (or any extensions thereof) for any purposes without Landlord's prior written consent, which Landlord may withhold in its sole and absolute discretion; provided, however, that Tenant shall have the right to (a) use the roof of the Building for the installation, maintenance and repair of telecommunications equipment relating to Tenant's business in the Premises and (b) access the roof of the Building as may be reasonably necessary to allow Tenant to perform its HVAC and other maintenance obligations hereunder. Landlord has made no representations or promise as to the suitability or effectiveness of any part of the roof for Tenant's proposed use, or as to any Governmental Requirements applicable to Tenant's proposed use.

        2.     Tenant shall submit to Landlord, prior to the installation of any rooftop equipment, plans and specifications therefor, which must include, without limitation, the design, size and features of the rooftop equipment and mounting structure, floor and power load requirements, cabling installations, the means of affixing or mounting the rooftop equipment, and the means of connecting the rooftop equipment to the Building's electrical system and to the Premises. Tenant acknowledges and agrees that Tenant's use of any portion of the roof of the Building shall be subject to Landlord's approval of location, plans and installation pursuant to Section 5 of this Lease and such rules and regulations as Landlord may prescribe, including, without limitation, with regard to (a) the location, size, type and methods of installation of the proposed rooftop equipment, (b) requirements to prevent electrical, electromagnetic, radio frequency or other interference with other telecommunication equipment in, on or about the Project, (c) restrictions on penetration of the roof surface, and (d) removal requirements upon the expiration or earlier termination of this Lease.

        3.     Nothing herein shall limit or restrict Landlord's rights under Section 11.M, or require Landlord to obtain Tenant's consent prior to exercising such rights.

        7.    GOVERNMENTAL REQUIREMENTS AND BUILDING RULES.    

        A.    Compliance in Premises. Tenant shall, at its sole cost and expense, (1) comply with all Governmental Requirements; with any occupancy certificate issued for the Premises; and with the provisions of all recorded documents affecting the Premises, insofar as any thereof relates to or

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affects the condition, use or occupancy of the Premises; and (2) take all proper and necessary action to cause the Premises, including any repairs, replacements, alterations and improvements thereto, to be maintained, constructed, used and occupied in compliance with applicable Governmental Requirements, including any applicable code and ADA requirements, whether or not such requirements are based on Tenant's use of the Premises, and further to assume all responsibility to ensure the Premises' continued compliance with all Governmental Requirements, including applicable code and ADA requirements, throughout the Term. Tenant shall be responsible, at its sole cost and expense, to make all alterations to the Premises as are required to comply with the governmental rules, regulations, requirements or standards described in this Section 7.A; provided, however, that, unless necessitated by Tenant's particular use of the Premises or any improvements to or alterations of the Premises made by or on behalf of Tenant, Tenant shall have no obligation to make structural repairs or alterations to the Premises to comply with Governmental Requirements. The judgment of any court of competent jurisdiction or the admission of Tenant in any judicial action, regardless of whether Landlord is a party thereto, that Tenant has violated any of said governmental measures, shall be conclusive of that fact as between Landlord and Tenant.

        B.    Compliance in Common Areas. Subject to reimbursement as an Operating Cost as provided in Section 2 above, Landlord shall perform any work required under any applicable Governmental Requirements, including the ADA, to be performed in the common areas of the Project, except that Tenant shall be solely responsible for all such compliance work which is required as a result of Tenant's use or activities or which relate to the initial Tenant Improvements or Tenant's proposed alterations or repairs. With respect to any code compliance work required outside the Premises for which Tenant is responsible hereunder, Landlord shall have the right to perform such work, or require that Tenant perform such work with contractors, subcontractors, engineers and architects approved by Landlord; and if Landlord elects to perform such work outside the Premises, Tenant shall reimburse Landlord for the cost of such work within ten (10) days following receipt of invoices therefor. Landlord makes no representations or warranties regarding whether the Project or the Premises complies with applicable Governmental Requirements as of the date of this Lease. For the avoidance of doubt, Tenant shall not be liable or responsible (legally, financially or otherwise) with respect to any violation of or non-compliance with any Governmental Requirements in the common areas of the Project if such violation or non-compliance existed on the date of this Lease (based on the current interpretation of such Governmental Requirements by applicable governmental authority(ies) as of the date of this Lease).

        C.    Rules and Regulations. Tenant shall also comply with all reasonable rules for the Project which may be established and amended from time to time by Landlord. The present rules and regulations are contained in Exhibit B. Failure by another tenant to comply with the rules or failure by Landlord to enforce them shall not relieve Tenant of its obligation to comply with the rules or make Landlord responsible to Tenant in any way. Landlord shall use reasonable efforts to apply the rules and regulations uniformly with respect to Tenant and any other tenants in the Project under leases containing rules and regulations similar to this Lease. If Tenant performs alterations or repairs, Tenant shall comply with the provisions of Section 5 of this Lease.

        8.    WAIVER OF CLAIMS; INDEMNIFICATION; INSURANCE.    

        A.    Waiver of Claims. Neither Landlord nor the other Indemnitees (as defined below) shall be liable to Tenant or to any Tenant Parties (as defined below), and Tenant waives all claims against Landlord and such other Indemnitees, for any injury to or death of any person or for loss of use of or damage to or destruction of property in or about the Premises or Project by or from any cause whatsoever, including without limitation, earthquake or earth movement, gas, fire, oil, electricity or leakage from the roof, walls, basement or other portion of the Premises or Project,

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except only, with respect to any Indemnitee, to the extent such injury, death or damage is caused by the gross negligence or willful misconduct of such Indemnitee or except to the extent such limitation on liability is prohibited by law. The provisions of this Section 8.A shall survive the expiration or earlier termination of this Lease until all claims within the scope of this Section 8.A are fully, finally, and absolutely barred by the applicable statutes of limitations.

        B.    Indemnification.

        1.     Tenant shall indemnify, protect, defend (by counsel reasonably satisfactory to Landlord) and hold harmless Landlord and its officers, directors, employees and agents (each, an "Indemnitee" and collectively, the "Indemnitees"), and each of them, against any and all obligations, losses, claims, actions (including remedial or enforcement actions of any kind and administrative or judicial proceedings, suits, orders or judgments), causes of action, liabilities, penalties, damages (including consequential and punitive damages), costs and expenses (including reasonable attorneys' and consultants' fees and expenses, except to the extent Section 25.Z below would apply) (collectively, "Claims") arising from any of the following, including, but not limited to, Claims brought by or on behalf of employees of Tenant, with respect to which Tenant waives, for the benefit of the Indemnitees, any immunity to which Tenant may be entitled under any worker's compensation laws: (a) any cause in, on or about the Premises, (b) any act or omission or negligence of Tenant or any person or entity claiming by or through Tenant (including any assignee or subtenant), or any of their respective members, partners, employees, contractors, agents, customers, visitors, licensees or other persons in or about the Project by reason of Tenant's occupancy of the Premises (each a "Tenant Party" and, collectively, "Tenant Parties"), or (c) Tenant's breach of its obligations under this Lease, either prior to, during, or after the expiration of the Lease Term; provided, however, that, with respect to any Indemnitee, Tenant's obligations under this Section shall be inapplicable to the extent such Claims arise from the gross negligence or willful misconduct of such Indemnitee, or to the extent such obligations are prohibited by applicable law.

        2.     Tenant's duty to defend Landlord and the other Indemnitees under this Section 8.B is separate and independent of Tenant's duty to indemnify the Indemnitees. The duty to defend includes claims for which the Indemnitees may be liable without fault or strictly liable. The duty to defend applies regardless of whether the issues of negligence, liability, fault, default, or other obligation on the part of Tenant Parties have been determined. The duty to defend applies immediately, regardless of whether any Indemnitees have paid any sums or incurred any detriment arising out of or relating (directly or indirectly) to any Claims. The parties expressly intend that Indemnitees shall be entitled to obtain summary adjudication or summary judgment regarding Tenant's duty to defend the Indemnitees at any stage of any claim or suit within the scope of this Section.

        3.     Tenant's obligations under this Section shall survive the expiration or earlier termination of this Lease until all Claims within the scope of this Section 8.B are fully, finally, and absolutely barred by the applicable statutes of limitations.

        C.    Tenant's Insurance. Tenant shall maintain insurance as follows, with such other terms, coverages and insurers, as Landlord shall reasonably require from time to time:

        1.     Commercial General Liability Insurance, with (a) Contractual Liability including the indemnification provisions contained in this Lease, (b) a severability of interest endorsement, and (c) limits of not less than Five Million Dollars ($5,000,000) combined single limit per occurrence, not less than Five Million Dollars ($5,000,000) in the aggregate for bodily injury, sickness or death, and property damage, and umbrella coverage of not less than Five Million Dollars ($5,000,000).

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        2.     Property Insurance against "All Risks" of physical loss covering the replacement cost of all leasehold improvements, trade fixtures and personal property in the Premises and business interruption.

        3.     Workers' compensation or similar insurance in form and amounts required by law, and Employer's Liability with not less than the following limits:

Each Accident:	$500,000
Disease—Policy Limit:	$500,000
Disease—Each Employee:	$500,000

        Tenant's insurance shall be primary and not contributory to that carried by Landlord, its agents, or mortgagee. Landlord, and if any, Landlord's building manager or agent, mortgagee and ground lessor shall be named as additional insureds under the insurance required of the Tenant in Section 8.C(1). The company or companies writing any insurance which Tenant is required to maintain under this Lease, as well as the form of such insurance, shall at all times be subject to Landlord's approval, and any such company shall be licensed to do business in the State of California. Such insurance companies shall have an A.M. Best rating of A VI or better.

        4.     Tenant shall cause any contractor of Tenant performing work on the Premises to maintain insurance as follows, with such other terms, coverages and insurers, as Landlord shall reasonably require from time to time:

        (a)   Commercial General Liability Insurance, including contractor's liability coverage, contractual liability coverage, completed operations coverage, broad form property damage endorsement, and contractor's protective liability coverage, to afford protection with limits, for each occurrence, of not less than One Million Dollars ($1,000,000) with respect to personal injury, death or property damage.

        (b)   Workers' compensation or similar insurance in form and amounts required by law, and Employer's Liability with not less than the following limits:

Each Accident:	$500,000
Disease—Policy Limit:	$500,000
Disease—Each Employee:	$500,000

        Such insurance shall contain a waiver of subrogation provision in favor of Landlord and its agents. Tenant's contractor's insurance shall be primary and not contributory to that carried by Tenant, Landlord, their agents or mortgagees. Tenant and Landlord, and if any, Landlord's building manager or agent, mortgagee or ground lessor shall be named as additional insured on Tenant's contractor's insurance policies.

        D.    Insurance Certificates. Tenant shall deliver to Landlord certificates evidencing all required insurance no later than five (5) days prior to the Commencement Date and each renewal date. Each certificate will provide for thirty (30) days prior written notice of cancellation to Landlord and Tenant.

        E.    Landlord's Insurance. Subject to reimbursement as an Operating Cost in accordance with the provisions of Section 2 hereof, Landlord shall procure and maintain in effect throughout the Term of this Lease commercial general liability insurance, property insurance and/or such other types of insurance as Landlord reasonably deems necessary or advisable to carry. Such coverages shall be in such amounts, from such companies and on such other terms and conditions as Landlord may from time to time reasonably determine, and Landlord shall have the right, but not the obligation, to change, cancel, decrease or increase any insurance coverages in respect of the Building, add additional forms of insurance as Landlord shall deem reasonably necessary, and/or

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obtain umbrella or other policies covering both the Building and other assets owned by or associated with Landlord or its affiliates, in which event the cost thereof shall be equitably allocated.

        F.     Waiver of Subrogation. Landlord and Tenant hereby waive and release any and all rights of recovery against the other party, including officers, employees, agents and authorized representatives (whether in contract or tort) of such other party, that arise or result from any and all loss of or damage to any property of the waiving party located within or constituting part of the Building to the extent of amounts payable under a standard ISO Commercial Property insurance policy, or such additional property coverage as the waiving party may carry (with a commercially reasonable deductible), whether or not the party suffering the loss or damage actually carries any insurance, recovers under any insurance or self-insures the loss or damage. Each party shall have their property insurance policies issued in such form as to waive any right of subrogation as might otherwise exist. This mutual waiver is in addition to any other waiver or release contained in this Lease.

        9.    FIRE AND OTHER CASUALTY.    

        A.    Termination. If a fire or other casualty causes damage to the Building, and sufficient insurance proceeds will be available to Landlord to cover the cost of any restoration to the Building, Landlord shall engage a registered architect to estimate, within one (1) month of the casualty, to both Landlord and Tenant the amount of time needed to restore the Building to tenantability, using standard working methods without the payment of overtime and other premiums. If the time needed exceeds six (6) months from the beginning of the restoration, or two (2) months therefrom if the restoration would begin wring the last twelve (12) months of the Lease, then either Landlord or Tenant may terminate this Lease by notice to the other party within ten (10) days after the notifying party's receipt of the architect's estimate. If sufficient insurance proceeds will not be available to Landlord to cover the cost of any restoration to the Building, Landlord may terminate this Lease by written notice to Tenant. Any termination pursuant to this Section 9.A shall be effective thirty (30) days from the date of such termination notice and Rent shall be paid by Tenant to that date, with an abatement for any portion of the Premises which has been rendered untenantable as a result of the casualty (except to the extent that (1) the casualty was caused by the negligence or intentional misconduct of Tenant, its agents, employees, contractors, subtenants or assignees, or (2) Landlord does not receive insurance proceeds sufficient to cover the rent interruption during such period).

        B.    Restoration. If a casualty causes damage to the Building but this Lease is not terminated for any reason, then subject to the rights of any mortgagees or ground lessors, Landlord shall obtain the applicable insurance proceeds and diligently restore the Premises to substantially its prior condition, except for modifications required by then applicable Governmental Requirements; provided, however, that, within ten (10) days following notice to Tenant from Landlord, Tenant shall irrevocably and unconditionally assign to Landlord (or to any party designated by Landlord) all insurance proceeds payable to Tenant under Tenant's insurance required under Section 8.C(2) above which pertain to the repair and restoration of the leasehold improvements in the Premises, including any leasehold improvements performed by or on behalf of Tenant pursuant to Section 5 above; and provided further, that if the cost of repair and restoration by Landlord of the leasehold improvements in the Premises exceeds the amount of insurance proceeds received by Landlord from Tenant's insurance carrier, as assigned by Tenant, the cost of such repair and restoration shall be promptly paid by Tenant to Landlord, but in any event prior to Landlord's commencement of repair of the damage. Notwithstanding the foregoing, Landlord shall have no obligation with respect to, and if Landlord elects or is required to perform any restoration hereunder, Tenant shall be responsible for and shall, repair and replace at its sole cost all of Tenant's equipment, furniture, trade fixtures and other personal property in the Premises, including, without limitation, any

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telecommunications wires, cables and related devices located in or serving the Premises. Rent shall be abated on a per diem basis from the date of the damage until returned to Tenant in tenantable condition, except to the extent that (1) the casualty was caused by the negligence or intentional misconduct of Tenant, its agents, employees, contractors, subtenants or assignees, (2) Landlord is delayed in completing the repair or restoration as a result of any act, omission, neglect or failure of Tenant or any of Tenant's agents, employees, contractors or subcontractors, or (3) Landlord does not receive insurance proceeds sufficient to cover the rent interruption during such period. Tenant shall not be entitled to any compensation or damages from Landlord for loss of the use of the Premises, damage to Tenant's personal property and trade fixtures or any inconvenience occasioned by such damage, repair or restoration. Tenant hereby waives the provisions of Section 1932, Subdivision 2, and Section 1933, Subdivision 4, of the California Civil Code, and the provisions of any similar law hereinafter enacted.

        10.    EMINENT DOMAIN.    If a part of the Project is taken by eminent domain or deed in lieu thereof which is so substantial that the Premises cannot reasonably be used by Tenant for the operation of its business, then either party may terminate this Lease effective as of the date of the taking. If any substantial portion of the Project is taken without affecting the Premises, then Landlord may terminate this Lease as of the date of such taking. Rent shall abate from the date of the taking in proportion to any part of the Premises taken. The entire award for a taking of any kind shall be paid to Landlord, and Tenant shall have no right to share in the award. All obligations accrued to the date of the taking shall be performed by the party liable to perform said obligations, as set forth herein. Tenant hereby waives any and all rights it might otherwise have pursuant to Section 1265.130 of The California Code of Civil Procedure.

        11.    RIGHTS RESERVED TO LANDLORD.    

        Landlord may exercise at any time any of the following rights respecting the operation of the Project without liability to Tenant of any kind:

        A.    Name. To change the name of the Project, or the street address of the Building.

        B.    Signs. To install, modify and/or maintain any signs on the exterior and in the interior of the Building or on the Project, and to approve at its sole discretion, prior to installation, any of Tenant's signs in the Premises visible from the common areas or the exterior of the Building.

        C.    Window Treatments. To approve, at its discretion, prior to installation, any shades, blinds, ventilators or window treatments of any kind, as well as any lighting within the Premises that may be visible from the exterior of the Building or any interior common area.

        D.    Keys. To retain and use at any time passkeys to enter the Premises or any door within the Premises. Tenant shall not alter or add any lock or bolt.

        E.    Access. To have access to the Premises with twenty-four hours' prior notice (except in the case of an emergency, in which case Landlord shall have the right to immediate access) to inspect the Premises, to post notices of non-responsibility in connection with any Work, to make repairs, alterations, additions or improvements to the Premises or Building, and to perform any other obligations of Landlord hereunder, all without abatement of Rent.

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        F.     Preparation for Reoccupancy. To decorate, remodel, repair, alter or otherwise prepare the Premises for reoccupancy at any time after Tenant abandons the Premises, without relieving Tenant of any obligation to pay Rent.

        G.    Heavy Articles. To approve the weight, size, placement and time and manner of movement within the Building of any safe, central filing system or other heavy article of Tenant's property. Tenant shall move its property entirely at its own risk.

        H.    Show Premises. To show the Premises to prospective purchasers, tenants, brokers, lenders, mortgagees, investors, rating agencies or others at any reasonable time, provided that Landlord gives prior notice to Tenant and does not materially interfere with Tenant's use of the Premises.

        I.     Intentionally omitted.

        J.     Use of Lockbox. To designate a lockbox collection agent for collections of amounts due Landlord. In that case, the date of payment of Rent or other sums shall be the date of the agent's receipt of such payment or the date of actual collection if payment is made in the form of a negotiable instrument thereafter dishonored upon presentment. However, Landlord may reject any payment for all purposes as of the date of receipt or actual collection by mailing to Tenant within a reasonable time after such receipt or collection a check equal to the amount sent by Tenant.

        K.    Repairs and Alterations. To make repairs or alterations to the Project and in doing so transport any required material through the Premises, to close entrances, doors, corridors, elevators and other facilities in the Project, or to open any ceiling in the Premises. Landlord may perform any such repairs or alterations during ordinary business hours, except that Tenant may require any work in the Premises to be done after business hours if Tenant pays Landlord for overtime and any other expenses incurred. Landlord may do or permit any work on any nearby building, land, street, alley or way.

        L.    Building Services. To install, use and maintain through the Premises, pipes, conduits, wires and ducts serving the Building, provided that such installation, use and maintenance does not unreasonably interfere with Tenant's use of the Premises.

        M.   Use of Roof. To install, operate, maintain and repair any satellite dish, antennae, equipment, or other facility on the roof of the Building or to, use the roof of the Building in any other manner, or to allow any entity selected by Landlord to undertake the foregoing, provided that such installation, operation, maintenance, repair or use does not unreasonably interfere with Tenant's use of the Premises.

        N.    Other Actions. To take any other action which Landlord deems reasonable in connection with the operation, maintenance or preservation of the Building and the Project.

        12.    EVENTS OF DEFAULT.    

        A.    Tenant's Default. The occurrence of any one or more of the following events (each, an "Event of Default") shall constitute a breach of this Lease by Tenant:

        1.     Rent Default. Tenant fails to pay any Rent when due, and such failure continues for a period of three (3) business days after Tenant's receipt (or deemed receipt pursuant to Section 22 below) of Landlord's written notice that such Rent is overdue;

        2.     Assignment/Sublease or Hazardous Substances Default. Tenant defaults in its obligations under Section 16 (Subordination), Section 17 (Assignment and Sublease), Section 19 (Estoppel Certificate) or Section 28 (Hazardous Substances);

        3.     Other Performance Default. Tenant fails to perform any other obligation to Landlord under this Lease, and such failure continues for twenty (20) days after written notice from

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Landlord or Landlord's agent, except that if Tenant begins to cure its failure within the twenty (20) day period but cannot reasonably complete its cure within such period, then, so long as Tenant continues to diligently attempt to cure its failure, the twenty (20) day period shall be extended to sixty (60) days, or such lesser period as is reasonably necessary to complete the cure;

        4.     Credit Default. One of the following credit defaults occurs:

        (a)   Tenant (or any guarantor of Tenant's obligations hereunder) commences any proceeding under any law relating to bankruptcy, insolvency, reorganization or relief of debts, or seeks appointment of a receiver, trustee, custodian or other similar official for the Tenant (or the guarantor) or for any substantial part of its property, or any such proceeding is commenced against Tenant (or the guarantor) and either remains undismissed for a period of thirty (30) days or results in the entry of an order for relief against Tenant (or the guarantor) which is not fully stayed within seven (7) days after entry;

        (b)   Tenant (or any guarantor of Tenant's obligations hereunder) becomes insolvent or bankrupt, does not generally pay its debts as they become due, or admits in writing its inability to pay its debts, or makes a general assignment for the benefit of creditors;

        (c)   Any third party obtains a levy or attachment under process of law against Tenant's leasehold interest which is not released within thirty (30) days.

        5.     Vacation or Abandonment Default. Tenant vacates or abandons the Premises.

        Tenant acknowledges and agrees that, notwithstanding the foregoing provisions of this Section 12, Tenant shall be in default for purposes of Section 1161 of the California Code of Civil Procedure immediately following Tenant's failure to perform or comply with any covenants, agreements, terms or conditions of this Lease to be performed or observed by Tenant, including, without limitation, Tenant's failure to pay Rent when due, and that any notices required to be given by Landlord under this Section 12 shall, in each case, be in lieu of, and not in addition to, any notice required under Section 1161 of the California Code of Civil Procedure, and shall be deemed to satisfy the requirement, if any, that notice be given pursuant to such section.

        B.    Landlord Defaults. Landlord shall be in default hereunder if Landlord has not begun and pursued with reasonable diligence the cure of any failure of Landlord to meet its obligations hereunder within thirty (30) days after the receipt by Landlord of written notice from Tenant of the alleged failure to perform. Except as expressly provided in this Lease or except in the case of constructive eviction (as evidenced by a final judgment by a court of competent jurisdiction), in no event shall Tenant have the right to terminate or rescind this Lease as a result of Landlord's default as to any covenant or agreement contained in this Lease. Tenant hereby waives such remedies of termination and rescission and hereby agrees that Tenant's remedies for default hereunder and for breach of any promise or inducement shall be limited to a suit for damages and/or injunction. In addition, Tenant hereby covenants that, prior to the exercise of any such remedies, Tenant will give notice and a reasonable time to cure any default by Landlord to any holder of a mortgage or deed of trust encumbering Landlord's interest in the Project of which Tenant has been given notice. Notwithstanding anything contained herein to the contrary, Landlord shall not be in default under this Lease to the extent Landlord is unable to perform any of its obligations on account of any prevention, delay, stoppage due to strikes, lockouts, inclement weather, labor disputes, inability to obtain labor, materials, fuels, energy or reasonable substitutes therefor, governmental restrictions, regulations, controls, actions or inaction, civil commotion, fire or other acts of god, national emergency, acts of war or terrorism or any other cause of any kind beyond the reasonable control of Landlord (except financial inability).

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        13.    LANDLORD REMEDIES.    UPON ANY EVENT OF DEFAULT BY TENANT, LANDLORD SHALL HAVE THE FOLLOWING REMEDIES, IN ADDITION TO ALL OTHER RIGHTS AND REMEDIES PROVIDED BY LAW OR OTHERWISE PROVIDED IN THIS LEASE, TO WHICH LANDLORD MAY RESORT CUMULATIVELY OR IN THE ALTERNATIVE:

        A.    Termination of Lease. Landlord may elect by notice to Tenant to terminate this Lease, in which event, Tenant shall immediately vacate the Premises and deliver possession to Landlord.

        B.    Civil Code Section 1951.4 Remedy. Even though Tenant has breached this Lease, this Lease shall continue in effect for so long as Landlord does not terminate Tenant's right to possession, and Landlord shall have all of its rights and remedies, including the right, pursuant to California Civil Code Section 1951.4, to recover all rent as it becomes due under this Lease, if Tenant has the right to sublet or assign, subject only to reasonable limitations. Acts of maintenance or preservation or efforts to relet the Premises or the appointment of a receiver upon initiative of Landlord to protect Landlord's interest under this Lease shall not constitute a termination of Tenant's right to possession unless written notice of termination is given by Landlord to Tenant.

        C.    Lease Termination Damages. If Landlord elects to terminate this Lease, then this Lease shall terminate on the date for termination set forth in such notice. Tenant shall immediately vacate the Premises and deliver possession to Landlord, and Landlord may repossess the Premises and may, at Tenant's sole cost, remove any of Tenant's signs and any of its other property, without relinquishing its right to receive Rent or any other right against Tenant. On termination, Landlord has the right to recover from Tenant as damages:

        1.     The worth at the time of award of unpaid Rent and other sums due and payable which had been earned at the time of termination; plus

        2.     The worth at the time of award of the amount by which the unpaid Rent and other sums due and payable which would have been earned after termination until the time of award exceeds the amount of such Rent loss that Tenant proves could have been reasonably avoided; plus

        3.     The worth at the time of award of the amount by which the unpaid Rent and other sums due and payable for the balance of the Term after the time of award exceeds the amount of such Rent loss that Tenant proves could be reasonably avoided; plus

        4.     Any other amount necessary to compensate Landlord for all the detriment proximately caused by Tenant's failure to perform Tenant's obligations under this Lease, or which, in the ordinary course of things, would be likely to result therefrom, including, without limitation, any costs or expenses incurred by Landlord: (i) in retaking possession of the Premises; (ii) in maintaining, repairing, preserving, restoring, replacing, cleaning, altering or rehabilitating the Premises or any portion thereof, including such acts for reletting to a new tenant or tenants; (iii) for leasing commissions; or (iv) for any other costs necessary or appropriate to relet the Premises; plus

        5.     At Landlord's election, such other amounts in addition to or in lieu of the foregoing as may be permitted from time to time by the laws of the State of California.

        The "worth at the time of award" of the amounts referred to in Sections 13.C(1) and 13.C(2) is computed by allowing interest at the Interest Rate on the unpaid rent and other sums due and payable from the termination date through the date of award. The "worth at the time of award" of the amount referred to in Section 13.C(3) is computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus one percent (1%). Tenant waives redemption or relief from forfeiture under California Code of Civil Procedure Sections 1174 and 1179,

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or under any other present or future law, if Tenant is evicted or Landlord takes possession of the Premises by reason of any Event of Default by Tenant hereunder.

        D.    Landlord's Remedies Cumulative. All of Landlord's remedies under this Lease shall be in addition to all other remedies Landlord may have at law or in equity, including, without limitation, the remedy described in California Civil Code Section 1951.4 (pursuant to which Landlord may continue this Lease in effect after Tenant's breach and abandonment and recover rent as it becomes due if Tenant has the right to sublet or assign the Lease, subject to reasonable limitations). Waiver by Landlord of any breach of any obligation by Tenant shall be effective only if it is in writing, and shall not be deemed a waiver of any other breach, or any subsequent breach of the same obligation. The possession of Tenant's funds, negotiation of Tenant's negotiable instruments, or acceptance of Tenant's payment by Landlord or its agents shall not constitute a waiver of any breach by Tenant, and if such possession, negotiation or acceptance occurs after Landlord's notice to Tenant, or termination of this Lease or of Tenant's right to possession, such possession, negotiation or acceptance shall not affect such notice or termination. Acceptance of payment by Landlord after commencement of a legal proceeding or final judgment shall not affect such proceeding or judgment. Landlord may advance such monies and take such other actions for Tenant's account as reasonably may be required to cure or mitigate any default by Tenant. Tenant shall immediately reimburse Landlord for any such advance, and such sums shall bear interest at the Interest Rate until paid.

        E.    WAIVER OF TRIAL BY JURY. EACH PARTY WAIVES TRIAL BY JURY IF ANY LEGAL PROCEEDING IS BROUGHT BY THE OTHER IN CONNECTION WITH THIS LEASE. EACH PARTY SHALL BRING ANY ACTION AGAINST THE OTHER IN CONNECTION WITH THIS LEASE IN A FEDERAL OR STATE COURT LOCATED IN CALIFORNIA, CONSENTS TO THE JURISDICTION OF SUCH COURTS, AND WAIVES ANY RIGHT TO HAVE ANY PROCEEDING TRANSFERRED FROM SUCH COURTS ON THE GROUND OF IMPROPER VENUE OR INCONVENIENT FORUM. THE PROVISIONS OF THIS SECTION 13.E SHALL SURVIVE THE EXPIRATION OR EARLIER TERMINATION OF THIS LEASE.

        14.    SURRENDER.    Upon the expiration or earlier termination of this Lease for any reason, Tenant shall surrender the Premises to Landlord in its condition existing as of the Commencement Date, normal wear and tear and damage by fire or other casualty excepted, with all interior walls repaired and repainted if marked or damaged, all carpets shampooed and cleaned, all broken, marred or nonconforming acoustical ceiling tiles replaced, all windows washed, the plumbing and electrical systems and lighting in good order and repair, including replacement of any burned out or broken light bulbs or ballasts, the HVAC equipment serviced and repaired by a reputable and licensed service firm acceptable to Landlord, and all floors cleaned and waxed, all to the reasonable satisfaction of Landlord. Tenant shall remove from the Premises and the Project all of Tenant's trade fixtures, furniture, moveable equipment and other personal property, and any Work which Landlord elects to be removed pursuant to Section 5.D, and shall restore the Premises to its condition prior to their installation, including, without limitation, repairing all damage caused by the installation or removal of any of the foregoing items. If Tenant does not timely remove such property, then Tenant shall be conclusively presumed to have, at Landlord's election: (a) conveyed such property to Landlord without compensation or (b) abandoned such property, and Landlord may dispose of or store any part thereof in any manner at Tenant's sole cost, without waiving Landlord's right to claim from Tenant all expenses arising out of Tenant's failure to remove the property, and without liability to Tenant or any other person. Landlord shall have no duty to be a bailee of any such personal property. If Landlord elects to consider such property abandoned, Tenant shall be liable to Landlord for the costs of (i) removal of any such Work or personal property, (ii) storage, transportation, and disposition of the same, and (iii) repair and restoration of the Premises, together with interest thereon at the Interest Rate from the date of expenditure by Landlord. In addition, if the Premises are not so surrendered at the termination

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of this Lease, Tenant shall indemnify Landlord against all loss or liability, including reasonable attorneys' fees and costs, resulting from delay by Tenant in so surrendering the Premises.

        15.    HOLDOVER.    Tenant shall have no right to holdover possession of the Premises after the expiration or termination of this Lease without Landlord's prior written consent which Landlord may withhold in its sole and absolute discretion. If, however, Tenant retains possession of any part of the Premises after the Term, Tenant shall become a tenant at sufferance only, for the entire Premises upon all of the terms of this Lease as might be applicable to such tenancy, except that Tenant shall pay all of the Base Rent, Operating Cost Share Rent and Tax Share Rent at double the rate in effect immediately prior to such holdover (without regard to any abatements of Rent on account of casualty or otherwise), computed on a monthly basis for each full or partial month Tenant remains in possession. Tenant shall also protect, defend, indemnify and hold Landlord harmless from and against all Claims resulting from such failure, including, without limiting the generality of the foregoing, any claims made by any succeeding tenant founded upon such failure to surrender and any lost profits to Landlord resulting therefrom. No acceptance of Rent or other payments by Landlord under these holdover provisions shall operate as a waiver of Landlord's right to regain possession or any other of Landlord's remedies.

        16.    SUBORDINATION TO GROUND LEASES AND MORTGAGES.    

        A.    Subordination. This Lease shall be subordinate to any present or future ground lease or mortgage (each a "Superior Interest") respecting the Project, and any amendments to such Superior Interest, at the election of the ground lessor or mortgagee as the case may be (each a "Holder"), effected by notice to Tenant in the manner provided in this Lease. The subordination shall be effective upon such notice, but at the request of Landlord or such Holder, Tenant shall within ten (10) days after the request, execute and deliver to the requesting party any reasonable documents provided to evidence the subordination. Any mortgagee has the right, at its sole option, to subordinate its mortgage to the terms of this Lease, without notice to, nor the consent of, Tenant. With respect to any Superior Interest to which this Lease is now or shall hereafter become subordinate, Landlord shall use commercially reasonable efforts to obtain from the Holder of such Superior Interest, for the benefit of Tenant, a non-disturbance agreement, in the customary form of such Holder, providing generally that as long as Tenant is not in default under this Lease, this Lease will not be terminated if such Holder acquires title to the Building or Project by reason of foreclosure proceedings, acceptance of a deed in lieu of foreclosure, or termination of the leasehold interest of Landlord, provided that Tenant attorns to such Holder in accordance with its requirements. Except for making such commercially reasonable efforts, Landlord will be under no duty or obligation hereunder with respect to any Superior Interest, nor will the failure or refusal of the Holder of any Superior Interest to grant a non-disturbance agreement render Landlord liable to Tenant, or affect this Lease, in any manner.

        B.    Termination of Ground Lease or Foreclosure of Mortgage. If any ground lease is terminated or mortgage foreclosed or deed in lieu of foreclosure given and the ground lessor, mortgagee, or purchaser at a foreclosure sale shall thereby become the owner of the Project, Tenant shall attorn to such ground lessor or mortgagee or purchaser without any deduction or setoff by Tenant, and this Lease shall continue in effect as a direct lease between Tenant and such ground lessor, mortgagee or purchaser. The ground lessor or mortgagee or purchaser shall be liable as Landlord only during the time such ground lessor or mortgagee or purchaser is the owner of the Project. At the request of Landlord, ground lessor or mortgagee, Tenant shall execute and deliver within ten (10) days after the request any document furnished by the requesting party to evidence Tenant's agreement to attorn.

        C.    Security Deposit. Any ground lessor or mortgagee shall be responsible for the return of any security deposit by Tenant only to the extent the security deposit, if any, is received by such ground lessor or mortgagee.

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        D.    Notice and Right to Cure. Tenant agrees to send by registered or certified mail to any ground lessor or mortgagee, identified in any notice from Landlord to Tenant, a copy of any notice of default sent by Tenant to Landlord. If Landlord fails to cure such default within the required time period under this Lease, but ground lessor or mortgagee begins to cure within ten (10) days after such period and proceeds diligently to complete such cure, then ground lessor or mortgagee shall have such additional time as is necessary to complete such cure, including any time necessary to obtain possession if possession is necessary to cure, and Tenant shall not begin to enforce its remedies so long as the cure is being diligently pursued.

        E.    Definitions. As used in this Section 16, "mortgage" shall include "trust deed" and "deed of trust"; "mortgagee" shall include "trustee", "beneficiary" and the mortgagee of any ground lessee; and "ground lessor", "mortgagee", and "purchaser at a foreclosure sale" shall include, in each case, all of its successors and assigns, however remote.

        17.    ASSIGNMENT AND SUBLEASE.    

        A.    In General. Tenant shall not, without Landlord's prior written consent, in each case: (i) make or allow any assignment or transfer, by operation of law or otherwise, of any part of Tenant's interest in this Lease, (ii) sublet any part of the Premises, or (iii) permit anyone other than Tenant and its employees to occupy any part of the Premises (all of the foregoing are hereinafter sometimes referred to individually as a "Transfer", and collectively as "Transfers", any person to whom any Transfer is made or sought to be made is hereinafter sometimes referred to as a "Transferee", and any person by whom any Transfer is made or sought to be made is hereinafter sometimes referred to as a "Transferor"). Tenant shall remain primarily liable for all of its obligations under this Lease, notwithstanding any Transfer. No consent granted by Landlord shall be deemed to be a consent to any subsequent Transfer. Tenant shall pay all of Landlord's attorneys' fees and other expenses incurred in connection with any consent requested by Tenant or in considering any proposed Transfer. Any Transfer without Landlord's prior written consent shall be void. If Tenant shall assign this Lease or sublet or otherwise Transfer the Premises, or any portion thereof, to any party other than a Permitted Transferee (as defined below), any rights of Tenant to renew this Lease, to extend the Term or to lease additional space in the Project shall be extinguished thereby and will not be transferred to the Transferee, all such rights being personal to the Tenant named herein. In addition, Tenant shall not, without Landlord's prior written consent, which Landlord may withhold in its sole discretion, mortgage, pledge or encumber this Lease, the term or estate hereby granted or any interest hereunder.

        B.    Landlord's Consent. Landlord will not unreasonably withhold its consent to any proposed Transfer. It shall be reasonable for Landlord to withhold its consent to any Transfer if (i) an Event of Default exists under this Lease, (ii) the proposed Transferee is a tenant in the Project or an affiliate of such a tenant or a party that Landlord has identified as a prospective tenant in the Project or in another project owned by Landlord in the vicinity of the Project, (iii) the financial responsibility, nature of business, and character of the proposed Transferee are not all reasonably satisfactory to Landlord, (iv) in the reasonable judgment of Landlord the purpose for which the Transferee intends to use the Premises (or a portion thereof) is not in keeping with Landlord's standards for the Project or are in violation of the terms of this Lease or any other leases in the Project, (v) the proposed Transferee is a government entity, (vi) the nature of the proposed Transferee's business is inconsistent with the nature of the Building as a first-class office building, (vii) the proposed effective rent under the sublease or other Transfer is less than eighty-five percent (85%) of the effective rent then being quoted by Landlord for comparable space in the Project for a comparable term, calculated using a present value analysis; provided, however, that if no comparable space in the Project is available for lease for a comparable term at the time of the proposed Transfer, then the foregoing restriction on the proposed effective rent under the sublease

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or other Transfer shall be inapplicable. The foregoing shall not exclude any other reasonable basis for Landlord to withhold its consent.

        C.    Procedure. Tenant shall notify Landlord of any proposed Transfer at least thirty (30) days prior to its proposed effective date. The notice shall include the name and address of the proposed Transferee, its corporate affiliates in the case of a corporation and its partners in the case of a partnership, a description of the portion of the Premises that is subject to the Transfer (the "Transfer Premises"), a calculation of the Transfer Premium (as defined in Section 17.F below) payable in connection with the Transfer, an executed copy of the proposed Transfer agreement, and sufficient information to permit Landlord to determine the financial responsibility and character of the proposed Transferee (including, without limitation, the most recent financial statements for the proposed Transferee). As a condition to the effectiveness of any assignment of this Lease, the assignee shall execute and deliver to Landlord, at least fifteen (15) days prior to the effective date of the assignment, Landlord's standard form of Consent to Assignment, providing for, among other things, an assumption of all of the obligations of Tenant under this Lease. As a condition to the effectiveness of any other Transfer, Transferee shall execute and deliver to Landlord, at least fifteen (15) days prior to the effective date of such Transfer, Landlord's standard consent form, providing, among other things, (1) an assumption of all of the obligations of Tenant under this Lease to the extent applicable to the Transfer Premises (excluding the payment of Rent), and (2) the Transferee's agreement that any such Transfer shall be subordinate and subject to the provisions of this Lease, and if this Lease shall be terminated during the term of any such Transfer, Landlord shall have the right to: (a) treat such Transfer as cancelled and repossess the Transfer Premises by any lawful means, or (b) require that the Transferee attorn to and recognize Landlord as its landlord under any such Transfer. If Tenant shall default and fail to cure within the time permitted for cure under Section 12 above, Landlord is hereby irrevocably authorized, as Tenant's agent and attorney-in-fact, to direct any Transferee to make all payments under or in connection with the Transfer directly to Landlord (which Landlord shall apply towards Tenant's obligations under this Lease) until such default is cured.

        D.    Change of Management or Ownership. Any transfer of the direct or indirect power to affect the management or policies of Tenant or direct or indirect change in 50% or more of the ownership interest in Tenant shall constitute an assignment of this Lease.

        E.    Permitted Transfers. Notwithstanding Section 17.A or Section 17.D above, provided an Event of Default does not then exist hereunder, Tenant may assign this Lease or sublet any portion of the Premises (hereinafter collectively referred to as a "Permitted Transfer") to (i) a parent or subsidiary of Tenant, or an entity under common control with Tenant, (ii) any successor entity to Tenant by way of merger, consolidation or other non-bankruptcy corporate reorganization, or (iii) an entity which acquires all or substantially all of Tenant's assets (collectively, "Permitted Transferees", and, individually, a "Permitted Transferee"); provided that (1) at least ten (10) business days prior to the Transfer, Tenant notifies Landlord of such Transfer, and supplies Landlord with any documents or information reasonably requested by Landlord regarding such Transfer or Permitted Transferee, including, but not limited to, copies of the sublease or instrument of assignment and copies of documents establishing to the reasonable satisfaction of Landlord that the transaction in question is one permitted under this Section 17.E, (2) at least ten (10) business days prior to the Transfer, Tenant furnishes Landlord with a written document executed by the proposed Permitted Transferee in which, in the case of an assignment, such entity assumes all of Tenant's obligations under this Lease with respect to the Transfer Premises, and, in the case of a sublease, such entity agrees to sublease the Transfer Premises subject to this Lease, (3) in the case of a Transfer pursuant to clause (ii) above, the successor entity must have a net worth (computed after the corporate reorganization and in accordance with generally accepted accounting principles, except that intangible assets such as goodwill, patents, copyrights, and trademarks shall be excluded

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in the calculation ("Net Worth") at the time of the Transfer that is at least equal to the Net Worth of Tenant immediately prior to such Transfer, and (4) any such proposed Transfer is made for a good faith operating business purpose and not, whether in a single transaction or in a series of transactions, be entered into as a subterfuge to evade the obligations and restrictions relating to Transfers set forth in this Section 17.

        F.     Transfer Premium.

        1.     If Landlord consents to a Transfer, as a condition thereto which the parties hereby agree is reasonable, Landlord shall be entitled to receive, as Additional Rent hereunder, fifty percent (50%) of any Transfer Premium derived from such Transfer. As used herein, the term "Transfer Premium" means (i)(A) in the case of an assignment, any consideration (including, without limitation, payment for leasehold improvements) paid by the assignee on account of such assignment, and (B) in the case of any other Transfer, all rent, additional rent or other consideration paid by the Transferee to the Transferor pursuant to such Transfer in excess of the base rent and additional rent payable by such Transferor during the term of the Transfer on a per rentable square foot basis, minus (ii) any brokerage commissions (not to exceed commissions typically paid in the market at the time of such subletting or assignment) and reasonable attorneys' fees paid by Transferor in connection with the Transfer ("Recoverable Expenses"), unless the deduction of such Recoverable Expenses is waived by Transferor pursuant to Section 17.F(2) below. For purposes of calculating the Transfer Premium in connection with a sublease, the Recoverable Expenses shall be deducted, on an amortized basis, without interest, over the term of the sublease. Payment of the portion of the Transfer Premium due Landlord hereunder shall be a joint and several obligation of Tenant and the Transferee, and shall be made to Landlord as follows: (1) in the case of an assignment, the Transferor shall pay the portion of the Transfer Premium due to Landlord within ten (10) days after the Transferor receives the consideration described in clause (i)(A) above; and (2) in the case of any other Transfer, on the first day of each month during the term of the Transfer, the Transferee shall pay directly to Landlord fifty percent (50%) of the amount by which the rent, additional rent or other consideration due from the Transferee for such month exceeds (x) the base rent and additional rent payable by the applicable Transferor for said month which is allocable to the Transfer Premises, plus (y) the amortized amount of Recoverable Expenses allocated to such month, unless such Recoverable Expenses are waived by Transferor pursuant to Section 17.F(2).

        2.     Within sixty (60) days after the effective date of any Transfer, Transferor shall provide Landlord a written statement, together with reasonably detailed invoices therefor, certifying the total amount of Recoverable Expenses in connection with any Transfer and Tenant's calculation of the Transfer Premium. If Transferor fails to provide such statement and invoices to Landlord within the sixty (60) day period, Transferor shall be deemed to have waived the deduction of Recoverable Expenses in determining the Transfer Premium. Landlord or its authorized representatives shall have the right at all reasonable times to audit the books, records and papers of Tenant, and any other Transferor, relating to a Transfer, and shall have the right to make copies thereof. If the Transfer Premium respecting any Transfer shall be found to be understated, Tenant shall, within ten (10) days after demand, pay the deficiency; and, if understated by more than two percent (2%), Tenant shall pay Landlord's costs of such audit.

        G.    Recapture. In the case of a proposed assignment, sublease or other Transfer, Landlord may terminate this Lease as to the Transfer Premises by giving Tenant written notice (the "Recapture Notice") within thirty (30) days after Landlord's receipt of the proposed fully executed Transfer agreement submitted by Tenant for Landlord's consent; provided, however, that Tenant shall have the right to withdraw its request for consent to a proposed Transfer by giving Landlord

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written notice of such withdrawal within ten (10) days after Tenant's receipt of Landlord's notice of recapture, whereupon this Lease shall remain in effect and Landlord's election to recapture shall be void and of no effect. Subject to Tenant's right to rescind its Transfer request, such termination by Landlord shall be effective as of the termination date set forth in Landlord's Recapture Notice, and all obligations of Landlord and Tenant under this Lease as to such terminated space shall expire as of such termination date, except those that expressly survive any termination of this Lease. In the event of a recapture by Landlord, if this Lease shall be canceled with respect to less than the entire Premises, the Rent reserved herein shall be prorated on the basis of the number of rentable square feet retained by Tenant in proportion to the number of rentable square feet contained in the Premises, and this Lease as so amended shall continue thereafter in full force and effect, and upon request of either party, the parties shall execute written confirmation of the same.

        H.    Tenant Remedies. Notwithstanding anything to the contrary in this Lease, if Tenant claims that Landlord has unreasonably withheld or delayed its consent under this Section 17 or otherwise has breached or acted unreasonably under this Section 17, Tenant's sole remedy shall be declaratory judgment and an injunction for the relief sought without any monetary damages, and Tenant hereby waives all other remedies, including, without limitation, any right provided under California Civil Code Section 1995.310 or other applicable laws to terminate this Lease.

        18.    CONVEYANCE BY LANDLORD.    If Landlord shall at any time transfer its interest in the Project or this Lease, Landlord shall be released from any obligations occurring after such transfer, except the obligation to return to Tenant any security deposit not delivered to its transferee, and Tenant shall look solely to Landlord's successors for performance of such obligations. This Lease shall not be affected by any such transfer.

        19.    ESTOPPEL CERTIFICATE.    Each party shall, within ten (10) days after receiving a request from the other party, execute, acknowledge in recordable form, and deliver to the other party or its designee a certificate stating, subject to a specific statement of any applicable exceptions, that this Lease as amended to date is in full force and effect, that Tenant is paying Rent and other charges on a current basis, and that to the best of the knowledge of the certifying party, the other party has committed no uncured defaults and has no offsets or claims. The certifying party may also be required to state the date of commencement of payment of Rent, the Commencement Date, the Termination Date, the Base Rent, the current Operating Cost Share Rent and Tax Share Rent estimates, the status of any improvements required to be completed by Landlord, the amount of any security deposit, and such other matters as may be reasonably requested. Tenant's failure to execute or deliver an estoppel certificate in the required time period shall constitute an acknowledgment by Tenant that the statements included in the estoppel certificate are true and correct, without exception. Tenant's failure to execute or deliver an estoppel certificate or other document or instrument required under this Section 19 in a timely manner shall be a material breach of this Lease.

        20.    SECURITY DEPOSIT.    

        A.    Within thirty (30) days following the Commencement Date, Tenant shall deposit with Landlord the cash sum set forth in the Schedule as the Security Deposit. The Security Deposit shall be held by Landlord as security for the faithful performance by Tenant of all its obligations under this Lease. Tenant agrees that, if Tenant fails to pay any Rent, or otherwise defaults with respect to any provision of this Lease, Landlord may (but shall not be obligated to), and without prejudice to any other remedy available to Landlord, use, apply or retain all or any portion of the Security Deposit for the payment of any Rent in default or for the payment of any other sum to which Landlord may become obligated by reason of Tenant's default, or to compensate Landlord for any loss or damage which Landlord may suffer thereby, including, without limitation, prospective damages and damages recoverable pursuant to California Civil Code Section 1951.2. Tenant waives the provisions of California Civil Code Section 1950.7, and all other provisions of

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law now in force or that become in force after the date of execution of this Lease, that restrict the use or application of the Security Deposit by Landlord, or that provide specific time periods for return of the Security Deposit. If Landlord uses or applies all or any portion of the Security Deposit as provided above, Tenant shall, within three (3) days after demand therefor, deposit cash with Landlord in an amount sufficient to restore the Security Deposit to the full amount thereof, and Tenant's failure to do so shall, at Landlord's option, be a default under this Lease with no opportunity to cure. If Tenant performs all of Tenant's obligations hereunder, the Security Deposit, or so much thereof as has not theretofore been applied by Landlord, shall be returned to Tenant (or, at Landlord's option, to the last assignee, if any, of Tenant's interest hereunder) within thirty (30) days following the expiration of the Term and after Tenant has vacated the Premises; provided, however, that if this Lease is terminated by Landlord pursuant to Section 13 above, or by Tenant in a bankruptcy proceeding pursuant to 11 U.S.C. §365, Landlord may retain the Security Deposit and apply the same against its damages recoverable pursuant to California Civil Code Section 1951.2. Landlord shall not be deemed to hold the Security Deposit in trust nor be required to keep the Security Deposit separate from its general funds, and Tenant shall not be entitled to any interest on the Security Deposit. The Security Deposit shall not be construed as an advance payment of Rent nor liquidated damages, and if Landlord's claims hereunder exceed the Security Deposit, Tenant shall remain liable for the balance of such claims.

        B.    If Landlord transfers its interest in the Project or this Lease, Landlord may transfer the Security Deposit to its transferee. If Landlord so transfers the Security Deposit, Landlord shall have no further obligation to return the Security Deposit to Tenant, and Tenant's right to the return of the Security Deposit shall apply solely against Landlord's transferee.

        21.    TENANT'S PERSONAL PROPERTY AND FIXTURES.    Intentionally Deleted

        22.    NOTICES.    All notices, consents, approvals and similar communications to be given by one party to the other under this Lease, shall be given in writing, mailed or personally delivered as follows:

        A.    Landlord. To Landlord as follows:

CarrAmerica Realty Operating Partnership, L.P.
1810 Gateway Drive, Suite 150
San Mateo, CA 94404
Attn: Market Officer

with a copy to:

CarrAmerica Realty Operating Partnership, L.P.
1850 K Street, N.W., Suite 500
Washington, D.C. 20006
Attn: Lease Administration

        or to such other person at such other address as Landlord may designate by notice to Tenant.

        B.    Tenant. To Tenant as follows:

Omneon Video Networks, Inc.
965 Stewart Drive
Sunnyvale, CA 94085
Attn: Lease Administration

        or to such other person at such other address as Tenant may designate by notice to Landlord.

        Mailed notices shall be sent by United States certified or registered mail, or by a reputable national overnight courier service, postage prepaid. Mailed notices shall be deemed to have been given

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on receipt or upon attempted delivery if delivery is refused. Tenant hereby appoints as its agent to receive the service of process in any action, or any notice required by law to be given prior to the commencement of any action, for recovery of possession of the Premises or any part thereof, and to receive service of all notices hereunder (including dispossessory or distraint proceedings and notices thereunder), the person in charge of or occupying the Premises at the time, and, if no person shall be in charge of or occupying the same, then such service may be made by attaching the same on the main entrance of the Premises.

        23.    QUIET POSSESSION.    So long as Tenant shall perform all of its obligations under this Lease, Tenant shall enjoy peaceful and quiet possession of the Premises against any party claiming through the Landlord, subject to all of the terms of this Lease.

        24.    REAL ESTATE BROKERS.    Tenant represents to Landlord that Tenant has not dealt with any real estate broker with respect to this Lease except for any broker(s) listed in the Schedule, and no other broker is in any way entitled to any broker's fee or other payment in connection with this Lease. Tenant shall indemnify and defend Landlord against any Claims by any other broker or third party for any payment of any kind in connection with this Lease.

        25.    MISCELLANEOUS.    

        A.    Successors and Assigns. Subject to the limits on Tenant's assignment contained in Section 17, the provisions of this Lease shall be binding upon and inure to the benefit of all successors and assigns of Landlord and Tenant.

        B.    Date Payments Are Due. Except for payments to be made by Tenant under this Lease which are due upon demand or are due in advance (such as Base Rent), Tenant shall pay to Landlord any amount for which Landlord renders a statement of account within ten (10) days after Tenant's receipt of Landlord's statement.

        C.    Meaning of "Landlord", "Re-Entry", "including" and "Affiliate". The term "Landlord" means only the owner of the Project and the lessor's interest in this Lease from time to time. The words "re-entry" and "re-enter" are not restricted to their technical legal meaning. The words "including" and similar words shall mean "without limitation." The word "affiliate" shall mean a person or entity controlling, controlled by or under common control with the applicable entity. "Control" shall mean the power directly or indirectly, by contract or otherwise, to direct the management and policies of the applicable entity.

        D.    Time of the Essence. Time is of the essence of each provision of this Lease.

        E.    No Option. The submission of this Lease to Tenant for review or execution does not create an option or constitute an offer to Tenant to lease the Premises on the terms and conditions contained herein, and this Lease shall not become effective unless and until it has been executed and delivered by both Landlord and Tenant.

        F.     Severability. If any provision of this Lease is determined to be invalid, illegal or unenforceable, then such provision will be enforced to the maximum extent possible and the other provisions will remain fully effective and enforceable.

        G.    Governing Law. This Lease shall be governed in all respects by the laws of the state in which the Project is located, without regard to the principles of conflicts of laws.

        H.    Lease Modification. Tenant agrees to modify this Lease in any way requested by a mortgagee which does not cause increased expense to Tenant or otherwise materially adversely affect Tenant's interests under this Lease.

        I.     No Oral Modification. No modification of this Lease shall be effective unless it is a written modification signed by both parties.

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        J.     Landlord's Right to Cure. Landlord may cure any default by Tenant, any expenses incurred shall constitute Additional Rent due from Tenant on demand by Landlord.

        K.    Captions. The captions used in this Lease shall have no effect on the construction of this Lease.

        L.    Authority. Landlord and Tenant each represents to the other that it has full power and authority to execute and perform this Lease.

        M.   Landlord's Enforcement of Remedies. Landlord may enforce any of its remedies under this Lease either in its own name or through an agent.

        N.    Entire Agreement. This Lease, together with all Exhibits, constitutes the entire agreement between the parties. No representations or agreements of any kind have been made by either party which are not contained in this Lease.

        O.    Landlord's Title. Landlord's title shall always be paramount to the interest of Tenant, and nothing in this Lease shall empower Tenant to do anything which might in any way impair Landlord's title.

        P.     Light and Air Rights. Landlord does not grant in this Lease any rights to light and air in connection with Project.

        Q.    Singular and Plural; Joint and Several Liability. Wherever appropriate in this Lease, a singular term shall be construed to mean the plural where necessary, and a plural term the singular. For example, if at any time two parties shall constitute Landlord or Tenant, then the relevant term shall refer to both parties together. If more than one individual or entity comprises Tenant, the obligations imposed on each individual or entity that comprises Tenant under this Lease shall be joint and several.

        R.    No Recording by Tenant. Tenant shall not record in any public records any memorandum or any portion of this Lease.

        S.     Exclusivity. Landlord does not grant to Tenant in this Lease any exclusive right except the right to occupy its Premises.

        T.     No Construction Against Drafting Party. The rule of construction that ambiguities are resolved against the drafting party shall not apply to this Lease.

        U.    Survival. The waivers of claims or rights, the releases and the obligations of Tenant under this Lease to indemnify, protect, defend and hold harmless Landlord and other Indemnitees shall survive the expiration or earlier termination of this Lease, and so shall all other obligations or agreements of Landlord or Tenant hereunder which by their terms survive the expiration or earlier termination of this Lease.

        V.     Rent Not Based on Income. No Rent or other payment in respect of the Premises shall be based in any way upon net income or profits from the Premises. Tenant may not enter into or permit any sublease or license or other agreement in connection with the Premises which provides for a rental or other payment based on net income or profit.

        W.    Building Manager and Service Providers. Landlord may perform any of its obligations under this Lease through its employees or third parties hired by the Landlord.

        X.    Late Charge and Interest on Late Payments. Without limiting the provisions of Section 12.A, if Tenant fails to pay any installment of Rent or other charge to be paid by Tenant pursuant to this Lease within five (5) business days after the same becomes due and payable, then Tenant shall pay a late charge equal to the greater of five percent (5%) of the amount of such payment or $250. In addition, interest shall be paid by Tenant to Landlord on any late payments of

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Rent from the date due until paid at the rate provided in Section 2.D(2). Such late charge and interest shall constitute Additional Rent due and payable by Tenant to Landlord upon the date of payment of the delinquent payment referenced above.

        Y.    Tenant's Financial Statements. Within ten (10) days after Landlord's written request therefor, Tenant shall furnish Landlord with sufficient information, in Landlord's reasonable judgment, to perform an assessment of Tenant's then current financial condition. Landlord shall exercise best efforts to keep all such financial information confidential.

        Z.    Attorneys' Fees. In any arbitration, quasi-judicial or administrative proceedings or any action in any court of competent jurisdiction, brought by either party to enforce any covenant or any of such party's rights or remedies under this Lease, including any action for declaratory relief, or any action to collect any payments required under this Lease or to quiet title against the other party, the prevailing party shall be entitled to reasonable attorneys' fees and all costs, expenses and disbursements in connection with such action, including the costs of reasonable investigation, preparation and professional or expert consultation, which sums may be included in any judgment or decree entered in such action in favor of the prevailing party. In addition, Tenant shall pay the attorneys' fees and other costs Landlord incurs in enforcing this Lease where an action or proceeding is not brought.

        AA. Other Improvements. If portions of the Project or property adjacent to the Project (collectively, the "Other Improvements") are owned by an entity other than Landlord, Landlord, at its option, may enter into an agreement with the owner or owners of any of the Other Improvements to provide (i) for reciprocal rights of access, use and/or enjoyment of the Project and the Other Improvements, (ii) for the common management, operation, maintenance, improvement and/or repair of all or any portion of the Project and all or any portion of the Other Improvements, (iii) for the allocation of a portion of Operating Costs and Taxes to the Other Improvements and the allocation of a portion of the operating expenses and taxes for the Other Improvements to the Project, (iv) for the use or improvement of the Other Improvements and/or the Project in connection with the improvement, construction, and/or excavation of the Other Improvements and/or the Project, and (v) for any other matter which Landlord deems appropriate or necessary. Nothing contained herein shall be deemed or construed to limit or otherwise affect Landlord's right to sell all or any portion of the Project or any other of Landlord's rights described in this Lease.

        26.    UNRELATED BUSINESS INCOME.    If Landlord is advised by its counsel at any time that any part of the payments by Tenant to Landlord under this Lease may be characterized as unrelated business income under the United States Internal Revenue Code and its regulations, then Tenant shall enter into any amendment proposed by Landlord to avoid such income, so long as the amendment does not require Tenant to make more payments or accept fewer services from Landlord, than this Lease provides.

        27.    BUILDING RENOVATIONS.    It is specifically understood and agreed that Landlord has made no representation or warranty to Tenant and has no obligation and has made no promises to alter, remodel, improve, renovate, repair or decorate the Premises or any part thereof and that no representations respecting the condition of the Premises have been made by Landlord to Tenant except as specifically set forth herein. However, Tenant hereby acknowledges that Landlord may during the Lease Term renovate, improve, alter, or modify (collectively, the "Renovations") the Project and/or the Building, including without limitation the parking structure, common areas, systems and equipment, roof, and structural portions of the same, and in connection with any Renovations, Landlord may, among other things, erect scaffolding or other necessary structures in the Building, limit or eliminate access to portions of the Project, including portions of the common areas, or perform work in the Building, which work may create noise, dust or leave debris in the Building. Tenant hereby agrees that

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such Renovations and Landlord's actions in connection with such Renovations shall in no way constitute a constructive eviction of Tenant nor entitle Tenant to any abatement of Rent. Landlord shall have no responsibility or for any reason be liable to Tenant for any direct or indirect injury to or interference with Tenant's business arising from the Renovations, nor shall Tenant be entitled to any compensation or damages from Landlord for loss of the use of the whole or any part of the Premises or of Tenant's personal property or improvements resulting from the Renovations or Landlord's actions in connection with such Renovations, or for any inconvenience or annoyance occasioned by such Renovations or Landlord's actions. Notwithstanding any provisions to the contrary contained herein, Landlord shall use commercially reasonable efforts in the performance of any Renovations to minimize interference with the conduct of Tenant's business in the Premises; and, with respect to any Renovations which require work to be performed in the Premises, Landlord shall provide Tenant with at least twenty-four (24) hours' prior written notice.

        28.    HAZARDOUS SUBSTANCES.    

        A.    Prohibition Against Hazardous Substances. Except for de minimis quantities of general office supplies customarily used by office tenants in the ordinary course of their business, such as copier toner, liquid paper, glue, ink and cleaning solvents (which supplies Tenant agrees to use in compliance with all applicable Governmental Requirements), Tenant shall not cause or permit any Hazardous Substances to be brought upon, produced, stored, used, discharged or disposed of in or near the Project without Landlord's prior written consent, which Landlord may give or withhold in its sole discretion. Any handling, transportation, storage, treatment, disposal or use of any Hazardous Substances in or about the Project by Tenant or any Tenant Party shall strictly comply with all applicable Governmental Requirements. Tenant shall be solely responsible for obtaining and complying with all permits necessary for the maintenance and operation of its business, including, without limitation, all permits governing the use, handling, storage, treatment, transport, discharge and disposal of Hazardous Substances. Tenant shall indemnify, defend and hold Landlord harmless from and against any Claims (including, without limitation, diminution in value of the Premises or the Project, damages for the loss or restriction on use of leasable space or of any amenity of the Premises or the Project, damages arising from any adverse impact on marketing of space in the Project, Remedial Work, and sums paid in settlement of claims) which result from or arise out of the use, storage, treatment, transportation, release, or disposal of any Hazardous Substances on or about the Project by Tenant or any Tenant Parties. If any lender or governmental agency shall require testing for Hazardous Substances in the Premises, Tenant shall pay for such testing. Tenant's obligations under this Section shall survive the expiration or earlier termination of this Lease until all Claims within the scope of this Section 28.A are fully, finally, and absolutely barred by the applicable statutes of limitations. For the avoidance of doubt, Tenant shall not be liable or responsible (legally, financially or otherwise) with respect to any violation of or non-compliance with any law, statute, ordinance or governmental rule or regulation relating to Hazardous Substances if such Hazardous Substances were on, in or under the Premises on the Commencement Date, unless and to the extent the pre-existing environmental condition is negligently or intentionally exacerbated by Tenant or any Tenant Party.

        B.    Landlord Notification. Tenant shall promptly provide Landlord with complete copies of all documents, correspondence and other written materials directed to or from, or relating to, Tenant concerning environmental issues at the Premises or the Project, including, without limitation, documents relating to the release, potential release, investigation, compliance, cleanup and abatement of Hazardous Substances, and any claims, causes of action or other legal documents related to same. Within twenty-four (24) hours of any unauthorized release, spill or discharge of Hazardous Substances, in, on, or about the Premises or Project, Tenant shall provide written notice to Landlord fully describing the event. Tenant shall also provide Landlord with a copy of any document or correspondence submitted by or on behalf of Tenant to any regulatory agency as a

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result of or in connection with the unauthorized release, spill or discharge. Within twenty-four (24) hours of receipt by Tenant of any warning, notice of violation, permit suspension or similar disciplinary measure relating to Tenant's actual or alleged failure to comply with any environmental law, rule, regulation, ordinance or permit, Tenant shall provide written notice to Landlord.

        C.    Landlord Representation. Landlord represents and warrants to Tenant that, to Landlord's actual knowledge as of the date of this Lease, without any duty of investigation or inquiry, there are no Hazardous Substances on, in or under the Project in material violation of Governmental Requirements.

        D.    Remedial Work. If any investigation or monitoring of site conditions or any clean-up, containment, restoration, removal or remediation of Hazardous Substances (collectively, "Remedial Work") is required under any Governmental Requirements as a result of any handling, transportation, storage, treatment, disposal or use of any Hazardous Substances in or about the Project by Tenant, its agents, employees, contractors or invitees, then Tenant shall perform or cause to be performed the Remedial Work in compliance with Governmental Requirements or, at Landlord's option, Landlord may cause such Remedial Work to be performed and Tenant shall reimburse Landlord for the reasonable costs thereof within thirty (30) days after demand therefor. All Remedial Work performed by Tenant shall be performed by one or more contractors, selected by Tenant and approved in advance in writing by Landlord, and under the supervision of a consulting engineer selected by Tenant and approved in advance in writing by Landlord. All costs and expenses of such Remedial Work shall be paid by Tenant, including, without limitation, the charges of such contractor(s), the consulting engineer and Landlord's reasonable attorneys' and experts' fees and costs incurred in connection with monitoring or review of such Remedial Work.

        E.    Environmental Questionnaire. Prior to execution of this Lease, Tenant shall complete, execute and deliver to Landlord an Environmental Questionnaire and Disclosure Statement. The completed Environmental Questionnaire shall be deemed incorporated into this Lease for all purposes, and Landlord shall be entitled to rely fully on the information contained therein. Tenant shall immediately update and resubmit to Landlord the Environmental Questionnaire if changes occur in the nature, content, handling, storage, use, treatment, transport, discharge, or disposal of the Hazardous Substances described therein. Attached hereto as Exhibit E is a form of Environmental Questionnaire to be executed in accordance with the foregoing provision.

        F.     Environmental Interruption. If (i) Tenant is prevented from using all or part of the Premises as a result of any Hazardous Substances in, on or about the Premises or the Project (an "Environmental Interruption"), (ii) such Environmental Interruption continues for five (5) consecutive business days after Landlord's receipt of notice thereof from Tenant, and (iii) such Environmental Interruption was not caused by the use, storage, treatment, transportation, release or disposal of any Hazardous Substances on or about the Project by Tenant or any Tenant Party, the Rent payable under this Lease shall be equitably abated or reduced for such time that Tenant continues to be prevented from using the entirety of the Premises in the proportion that the rentable square feet affected by the Hazardous Substances condition bears to the total rentable square feet of the Premises.

        G.    Definition of "Hazardous Substances". "Hazardous Substances" means any hazardous or toxic substances, materials or waste which are or become regulated by any local government authority, the state in which the Project is located or the United States government, including those substances described in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. Section 9601 et seq., the Resource Conservation and. Recovery Act, as amended, 42 U.S.C. Section 6901 et seq., any other applicable federal, state or local law, and the regulations adopted under these laws.

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        29.    EXCULPATION.    Landlord shall have no personal liability under this Lease; its liability shall be limited solely and exclusively to an amount which is equal to the interest of Landlord in the Project. In no event shall Landlord's liability extend to any other property or assets of Landlord, nor shall any officer, director, employee, agent, shareholder, partner, member or beneficiary of Landlord be personally liable for any of Landlord's obligations hereunder. Further, in no event shall Landlord be liable under any circumstances for any consequential damages or for injury or damage to, or interference with, Tenant's business, including but not limited to, loss of profits, loss of rents or other revenues, loss of business opportunity, loss of goodwill, or loss of use, however occurring.

        30.    COMMUNICATIONS AND COMPUTER LINES.    Tenant may install, maintain, replace, remove or use any communications or computer wires and cables (collectively, the "Lines") at the Project in or serving the Premises, provided that (i) Tenant shall obtain Landlord's prior written consent, use an experienced and qualified contractor approved in writing by Landlord, and comply with all of the other provisions of this Lease, (ii) an acceptable number of spare Lines and space for additional Lines shall be maintained for existing and future occupants of the Project, as determined in Landlord's reasonable opinion, (iii) the Lines therefor (including riser cables) shall be appropriately insulated to prevent excessive electromagnetic fields or radiation, and shall be surrounded by a protective conduit reasonably acceptable to Landlord, (iv) any new or existing Lines servicing the Premises shall comply with all Governmental Requirements, (v) as a condition to permitting the installation of new Lines, Landlord may require that Tenant remove existing Lines located in or serving the Premises and repair any damage in connection with such removal, and (vi) Tenant shall pay all costs in connection with the foregoing. Landlord reserves the right to require that Tenant remove any Lines located in or serving the Premises which are installed in violation of these provisions, or which are at any time in violation of any Governmental Requirements or represent a dangerous or potentially dangerous condition.

        31.    SECURITY.    Tenant acknowledges and agrees that, while Landlord may, in its sole and absolute discretion, engage security personnel to patrol the Building or the Project, Landlord is not providing any security services with respect to the Building or the Project and that Landlord shall not be liable to Tenant for, and Tenant waives any claim against Landlord with respect to, any loss by theft or any other damage suffered or incurred by Tenant in connection with any unauthorized entry into the Premises or any other breach of security with respect to the Building or the Project. Tenant hereby agrees to the exercise by Landlord and Landlord's agents, within their sole discretion, of such security measures as, but not limited to, the evacuation of the Building or the Project for cause, suspected cause or for drill purposes, the denial of any access to the Building or the Project and other similarly related actions that Landlord deems necessary to prevent any threat of property damage or bodily injury. The exercise of such security measures by Landlord and Landlord's agents, and the resulting interruption of service and cessation of Tenant's business, if any, shall not be deemed an eviction or disturbance of Tenant's use and possession of the Premises, or any part thereof, or render Landlord or Landlord's agents liable to Tenant for any resulting damages or relieve Tenant from Tenant's obligations under this Lease.

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IN WITNESS WHEREOF, the parties hereto have executed this Lease.

LANDLORD:

SQUARE 24 ASSOCIATES,
a District of Columbia limited partnership
dba Square 24 Associates L.P.

By:

Carr Real Estate Services, L.L.C.,
a Delaware limited liability company
Its: General Partner

By:

Carr Real Estate Services Partnership,
a Delaware partnership
Its: Sole Member

By:

Carr Realty Holdings, L.P.,
a Delaware limited partnership
Its: Managing Partner

By:

CarrAmerica Realty Operating Partnership, L.P.,
a Delaware limited partnership
Its: General Partner

By:

CarrAmerica Realty Corporation,
Maryland corporation
Its: General Partner

By:

/s/ Christopher Peatross                             
Christopher Peatross
Managing Director

Date of Execution: 12/8/04                                                                    

[Signatures continue on next page]

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TENANT:

OMNEON VIDEO NETWORKS, INC.,
a Delaware corporation

By:
Name:
Title:
	[chairman, president or vice-president]
By:	/s/ Laura Perrone
Name:		Laura Perrone
Title:		VP & CFO
	[secretary, assistant secretary, chief financial officer or assistant treasurer]
Date of Execution:

39

EXHIBIT A

DESCRIPTION OF PREMISES

[See Attached]

40

EXHIBIT B

RULES AND REGULATIONS

        1.     Tenant shall not place anything, or allow anything to be placed near the glass of any window, door, partition or wall which may, in Landlord's judgment, appear unsightly from outside of the Project.

        2.     The sidewalks, exits and entrances located in the common areas of the Project shall not be obstructed by Tenant or used by Tenant for any purposes other than for ingress to and egress from the Premises. Tenant shall lend its full cooperation to keep such areas free from all obstruction and in a clean and sightly condition and shall move all supplies, furniture and equipment as soon as received directly to the Premises and move all such items and waste being taken from the Premises (other than waste customarily removed by employees of the Building) directly to the shipping platform at or about the time arranged for removal therefrom.

        3.     Tenant shall not bring upon, use or keep in the Premises or the Project any kerosene, gasoline or inflammable or combustible fluid or material, or any other articles deemed hazardous to persons or property.

        4.     Landlord shall have sole power to direct electricians as to where and how telephone and other wires are to be introduced. No boring or cutting for wires is to be allowed without Landlord's prior written consent. The location of telephones, call boxes and other office equipment affixed to the Premises shall be subject to Landlord's prior approval.

        5.     No additional locks shall be placed upon any doors, windows or transoms in or to the Premises. Tenant shall not change existing locks or the mechanism thereof. Upon termination of the Lease, Tenant shall deliver to Landlord all keys and passes for offices, rooms, parking lot and toilet rooms which shall have been furnished Tenant. If the keys so furnished are lost, Tenant shall pay Landlord therefor. Tenant shall not make, or cause to be made, any such keys and shall order all such keys solely from Landlord and shall pay Landlord for any keys in addition to the two sets of keys originally furnished by Landlord for each lock.

        6.     Tenant shall not install linoleum, tile, carpet or other floor covering so that the same shall be affixed to the floor of the Premises in any manner except as approved by Landlord.

        7.     No furniture, packages, supplies, equipment or merchandise will be received in the Project, except between such hours as shall be designated by Landlord.

        8.     Without Landlord's prior written consent, Tenant shall not use the name of the Project or any picture of the Project in connection with, or in promoting or advertising the business of, Tenant, except Tenant may use the address of the Project as the address of its business.

        9.     Tenant assumes full responsibility for protecting the Premises from theft, robbery and pilferage, which may arise from a cause other than Landlord's negligence, which includes keeping doors locked and other means of entry to the Premises closed and secured, similar device in the Building, nor install or operate any antenna, aerial, wires or other equipment inside or outside the Building, nor operate any electrical device from which may emanate electrical waves which may interfere with or impair radio or television broadcasting or reception from or in the Building or elsewhere, without in each instance Landlord's prior written approval. The use thereof, if permitted, shall be subject to control by Landlord to the end that others shall not be disturbed.

        19.   Tenant shall promptly remove all rubbish and waste from the Premises.

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        20.   Tenant shall not exhibit, sell or offer for sale, rent or exchange in the Premises or at the Project any article, thing or service, except those ordinarily embraced within the use of the Premises specified in Section 6 of this Lease, without Landlord's prior written consent.

        21.   Tenant shall not overload any floors in the Premises or any public corridors or elevators in the Building.

        22.   Tenant shall not do any painting in the Premises, or mark, paint, cut or drill into, drive nails or screws into, or in any way deface any part of the Premises, outside or inside, without Landlord's prior written consent.

        23.   Whenever Landlord's consent, approval or satisfaction is required under these Rules, then unless otherwise stated, any such consent, approval or satisfaction must be obtained in advance, such consent or approval may be granted or withheld in Landlord's sole discretion, and Landlord's satisfaction shall be determined in its sole judgment.

        24.   Tenant and its employees shall cooperate in all fire drills conducted by Landlord in the Building.

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EXHIBIT C

INTENTIONALLY OMITTED

43

EXHIBIT D

COMMENCEMENT DATE CONFIRMATION

        THIS CONFIRMATION AGREEMENT is entered into as of                        , 20    by and between SQUARE 24 ASSOCIATES, a District of Columbia limited partnership, dba Square 24 Associates L.P. ("Landlord"), and OMNEON VIDEO NETWORKS, INC., a Delaware corporation ("Tenant"), with respect to that certain Lease dated as of December 2, 2004 (the "Lease") respecting certain premises (the "Premises") located at 965 Stewart Drive, Sunnyvale, California.

        Pursuant to Section 1.A of the Lease, Landlord and Tenant hereby confirm and agree that the Commencement Date (as defined in the Lease) is                        , 20    and that the Termination Date (as defined in the Lease) is                        , 20    .

        This Confirmation Agreement supplements, and shall be a part of, the Lease.

        [Signatures follow on next page.]

44

        IN WITNESS WHEREOF, Landlord and Tenant have executed and delivered this Confirmation Agreement as of the day and year first above written.

LANDLORD:

SQUARE 24 ASSOCIATES,
a District of Columbia limited partnership
dba Square 24 Associates L.P.

By:

Carr Real Estate Services, L.L.C.,
a Delaware limited liability company
Its: General Partner

By:

Carr Real Estate Services Partnership,
a Delaware partnership
Its: Sole Member

By:

Carr Realty Holdings, L.P.,
a Delaware limited partnership
Its: Managing Partner

By:

CarrAmerica Realty Operating Partnership, L.P.,
a Delaware limited partnership
Its: General Partner

By:

CarrAmerica Realty Corporation,
Maryland corporation
Its: General Partner

By:

                                                           
Christopher Peatross
Managing Director

Date of Execution:                                                                          

TENANT:
OMNEON VIDEO NETWORKS, INC.,
a Delaware corporation

By:

Name:

Title:

Date of Execution:

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EXHIBIT E

ENVIRONMENTAL QUESTIONNAIRE

        Answer based upon: (1) any existing or previous operations of the same kind which Tenant has conducted in the Premises or elsewhere, and (2) Tenant's plans for the Premises. For each answer, specify which operation(s) you are describing.

1.

Solid Waste.

        a.     Does the facility have an EPA Hazardous Waste generator number?

        b.     Does the facility produce Hazardous Waste? Other chemical waste?

        c.     Describe each type of waste generated (whether or not hazardous).

        d.     If the facility produces hazardous waste, is it classified as a large quantity generator, small quantity generator or conditionally exempt small quantity generator?

        e.     Are hazardous waste manifests maintained for three years on site?

        f.      Please identify the waste disposal contractor.

2.

Wastewater.

        a.     Does the facility produce any "process wastewater," meaning any wastewater that has come in contact with chemicals or other materials in process (essentially, any discharge of water other than from sinks and toilets)?

        b.     If so, please describe each type of process wastewater produced.

        c.     Is any water discharged down the floor drains?

        d.     Does the facility have a permit for its wastewater discharges?

3.

Air Emissions.

        a.     Does the facility emit any chemicals or wastes into the air?

        b.     Does the facility have an air permit?

        c.     Does the facility treat any of its air emissions to remove air pollutants?

        d.     Describe the ventilation system for the facility.

4.

General.

        a.     Has the facility ever been charged with any violation of, or found in violation of any environmental requirements? If yes, please describe.

        b.     Are you aware of any testing of soil or groundwater to determine whether any contamination exists in or around the facility? If so, please provide results.

        c.     Please describe any hazardous materials present on site, their respective quantities and the containment measures for those materials.

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QuickLinks

Exhibit 10.15

LEASE
SCHEDULE
EXHIBIT A DESCRIPTION OF PREMISES
EXHIBIT B RULES AND REGULATIONS
EXHIBIT C INTENTIONALLY OMITTED
EXHIBIT D COMMENCEMENT DATE CONFIRMATION
EXHIBIT E ENVIRONMENTAL QUESTIONNAIRE

EX-10.16

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 10.16

OMNEON VIDEO NETWORKS LOGO

OMNEON VIDEO NETWORKS
SYSTEMS INTEGRATOR PURCHASING AGREEMENT

        THIS SYSTEMS INTEGRATOR (S.I.) PURCHASING AGREEMENT is made and entered into on April 25, 2002, by and between OMNEON VideoNetworks ("OMNEON"), with its principal offices at 965 Stewart Drive Sunnyvale, CA 94085-3913 and A.F. Associates, Inc. ("S.I."), with principal offices at 100 Stonehurst Ct, Northvale, NJ 07647.

Recitals

        A.    OMNEON is a manufacturer and supplier of computer products associated with digital infrastructure, including products listed on the S.I. Price List which is attached hereto as Schedule A (the "Price List").

        B.    S.I. is an integrator and reseller of products similar to OMNEON products.

        C.    OMNEON and S.I. desire to enter into an agreement to develop and increase unit and dollar volume sales of certain OMNEON products, in the mutual interest of the parties, through the solicitation and obtaining of orders and contracts for such products.

Agreement

        NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, OMNEON and S.I. hereby agree as follows:

1.     Appointment

        OMNEON hereby appoints S.I., and S.I. hereby agrees to act, as a nonexclusive S.I. of the products listed on the Price List (the "Products") in accordance with the terms and conditions set forth in this Agreement and in each of the schedules attached hereto, which schedules are incorporated in, and made a part of, this Agreement by this reference.

2.     Products

        OMNEON reserves the right from time to time, in its sole discretion and without liability to S.I., to add items to, or delete items from, the list of Products by an addition to or deletion from the Price List. Each such modification to the list shall be effective thirty (30) days after S.I.'s receipt of the modified list. OMNEON has the sole right to determine which Products may be ordered and sold by S.I.

        (a)   OMNEON reserves the right from time to time, in its sole discretion and without liability to the S.I., to (a) modify, alter, change or enhance any or all of the Products at any time, and (b) discontinue any of the Products, upon thirty (30) days notice in writing of such action to S.I. by means of either a Sales Bulletin or Price List change notification.

        (b)   For the purposes of this Agreement, the aggregate net purchase price of a Product shall be the purchase price of such Product shown on the then most recent invoice sent to the S.I. by OMNEON or, if no such invoice has been sent, at the purchase price for such Product shown on the then effective Price List.

3.     Territory

        Under this Agreement, S.I. shall have the non-exclusive right to purchase and distribute the Products within the assigned geographic area. The territory assigned to S.I. shall be the United States

of America (hereinafter referred to as the "Assigned Territory"). It is understood and agreed that nothing in this Agreement shall prevent or preclude any present or future customer or S.I. of OMNEON, from marketing in the Assigned Territory any products (whether alone or incorporated in a system) purchased by them from OMNEON, any of its subsidiaries, or such customers or S.I.s. OMNEON expressly reserves the right from time to time, in its sole discretion and without liability to S.I., to appoint other S.I.s or representatives to solicit and make sales directly, both nationally and internationally, including, without limitation, within S.I.'s Assigned Territory or to modify S.I.'s Assigned Territory upon giving S.I. thirty (30) days prior written notice of such modification.

4.     Duties of S.I.

        (a)   S.I. will promote the goodwill, name and reputation of OMNEON and the Products in connection with sales and support activities.

        (b)   S.I. shall make no warranties or representations with respect to any Product without the prior written consent of OMNEON. S.I shall indemnify and defend OMNEON, and hold it harmless, from and against any and all claims, losses, liabilities, suits, actions, demands, damages, costs and other expenses arising from any such warranties or representations by S.I.

        (c)   S.I. shall notify OMNEON immediately, in writing, of any infringement of any patent, trademark, trade name, packaging design or copyright of OMNEON in the Assigned Territory of which it becomes aware. S.I. shall not, directly or indirectly, infringe or contest the validity of or the title to any patent, trademark, trade name, packaging design or copyright of OMNEON or under which OMNEON is licensed.

        (d)   S.I. shall conduct all business in its own name as an independent S.I. and independent contractor. No employment, agency or similar arrangement is created hereby or is intended to be created between OMNEON and S.I. S.I. has no right or power to act for or on behalf of OMNEON or to bind OMNEON in any respect, to pledge its credit, to accept any service of process upon it, or to receive any notices of any nature whatsoever on its behalf.

5.     Training

        OMNEON, or its designated sales agent, will provide reasonable support and training to S.I. via telephone or at OMNEON's Sunnyvale, California, facilities. Specific training sessions may also be established, by mutual agreement, at S.I.'s facilities.

6.     Term and Termination

        (a)   The term of this Agreement is one year from the date of this Agreement, subject to the terms and conditions set forth below with regard to early termination (the "Term"); provided, however, the Term of this Agreement shall automatically extend for successive one year terms unless terminated pursuant to such terms and conditions.

        (b)   This Agreement may be terminated at any time by either party, with or without cause, upon thirty (30) days written notice to the other party.

        (c)   This Agreement may also be terminated in the event of one party's breach of any of the terms and conditions set forth herein, providing that such breach is not remedied within ten (10) business days of the breaching party receiving written notice of such breach from the other party.

        (d)   In the event that this Agreement is terminated by either party, OMNEON will repurchase from S.I., and S.I. will sell to OMNEON, only those Products that have not been discontinued and are in new and unused condition and in the original shipping carton, at each Product's then current price on the S.I. Price List or its net purchase price, whichever is lower. After such termination, S.I. shall

2

promptly ship such Products to OMNEON, at S.I.'s expense, using such method of transportation as OMNEON used to ship such Products to S.I. OMNEON shall pay S.I. the current list S.I. AGREEMENT price for such Products less any discounts that may have been given, within thirty (30) days of receiving such Products. At S.I.'s request, OMNEON shall fill any orders remaining outstanding at the effective date of termination. OMNEON shall have no obligations of price protection, stock rotation, or repurchase after such date.

7.     Purchasing Procedure

        (a)   Shipment of the Products shall be made pursuant to an individual purchase order from S.I. (the "Order"), the terms of which shall be governed by this Agreement. No terms and conditions on any Order shall be deemed to be a part of such Order unless specifically accepted in writing by OMNEON. Each Order for Products received by OMNEON from S.I. must include price, terms, definition of Products ordered, carrier, freight terms, quantities, and requested shipping dates.

        (b)   No Order placed by S.I. shall be binding upon OMNEON until accepted by OMNEON in writing. OMNEON shall accept or reject, in whole or in part, such Order in writing at the earliest practical date, but in any event within ten (10) business days following receipt thereof. In each acceptance of an Order, OMNEON shall confirm the requested shipping date or specify an alternative shipping date (the "Acknowledged Shipping Date"). All Orders will be subject to clearance by OMNEON's credit department.

        (c)   OMNEON will endeavor to make Products available to S.I. as ordered, but OMNEON reserves the right to accept or reject any Order or to ship all or part of any Order after the requested shipping date, which right shall not be exercised unreasonably.

        (d)   S.I. may cancel or reschedule an Order, or any part thereof, at no charge to S.I., by giving OMNEON written notice thereof not less than fifteen (15) days prior to the Acknowledged Shipping Date for the part canceled or rescheduled.

8.     Pricing and Shipping Policies

        (a)   S.I. shall pay the purchase price for Products as stated in the then current Price List of OMNEON, which list is published periodically by OMNEON and subject to change as provided in this Agreement. OMNEON reserves the absolute right from time to time, in its sole discretion and without liability to S.I., to establish, change, alter or amend (collectively, "Change") the prices, charges, or any of the other terms and conditions governing the sale of the Products (collectively "Sales Policies") by giving S.I. written notice of such action. Except as provided in subsection (c) below, any such Change shall become effective upon the date of S.I.'s receipt of such written notice, and each Order received by OMNEON after such date shall be subject to such Change.

        (b)   S.I. shall be responsible for all shipping, insurance, sales and use taxes, duties, value-added, withholding or other governmental taxes, excises and tariffs. Such amounts shall not be included in calculating any credits, refunds, price protection, or other offsets permitted under this Agreement. ALL SHIPMENTS OF PRODUCT SHALL BE F.O.B. OMNEON'S HEADQUARTERS, SUNNYVALE, CALIFORNIA. RISK OF LOSS SHALL BE TRANSFERRED TO S.I. AT THAT F.O.B. POINT.

        (c)   For Orders not made, accepted or completely shipped by OMNEON prior to the effective date of a price change, the billing procedures shall be as follows:

        (i)    Price Increases

        (A)  All back ordered Products from Orders received prior to the effective date of the price increase which were previously scheduled by S.I. for shipment prior to the effective date of the price increase, or within ninety (90) days following the effective date of the price

3

increase as shown in the Order for such Products, will be billed at the price in effect prior to the increase.

        (B)  All Products scheduled by S.I. for shipment more than ninety (90) days from the effective date of the price increase will be billed at the new increased price.

        S.I. shall have the right to cancel, at no cost to S.I., any Order of any Products affected by a price increase, if it gives OMNEON written notice of such cancellations within ten (10) business days following the effective date of the price increase.

        (ii)   Price Decreases

        (A)  When a price decrease becomes effective, the new price will apply to all unshipped items on Orders accepted by OMNEON prior to the effective date of the price decrease, and on new Orders accepted by OMNEON on or after the effective date of the price decrease.

9.     Payment Terms

        (a)   Payment by S.I. to OMNEON for each Order shall be made in U. S. dollars within thirty (30) days after date of the invoice for shipments under such Order. Late payments shall be subject to a charge of 1.5% per month or portion thereof (18% per annum) from the due date until paid.

        (b)   Payment shall be by letter of credit, cash in advance, C.O.D., wire transfer, or other credit terms, as determined by OMNEON's credit department. OMNEON reserves the right from time to time, in its sole discretion and without liability to S.I., to establish and change, without notice, payment requirements and credit limitations based upon S.I.'s financial condition and to delay and/or withhold shipment of specific Orders, or parts thereof, based upon these limitations. S.I. shall provide to OMNEON such financial information concerning S.I. as OMNEON may reasonably request from time to time.

        (c)   OMNEON retains title to all Products sold hereunder and all proceeds thereof until the full purchase price thereof (including; without limitation, all taxes and additional charges thereon) have been paid.

10.   Product Return Policy

        No Product may be returned, regardless of reason, without a valid RMA number issued by OMNEON, which number S.I. must request directly from OMNEON. OMNEON shall not unreasonably refuse to issue, or unreasonably delay the issuance of, an RMA number to which S.I. is entitled under this Agreement.

11.   Intellectual Property Rights

        (a)   S.I. understands and agrees that (i) it does not possess and will not acquire any title to or ownership in the technology pertaining to the Products; (ii) it is not authorized to transfer any title to or ownership in the technology pertaining to the Products; and (iii) all patents, trademarks, trade names, copyrights and other intellectual property rights relating to the Products and associated technology belong to OMNEON.

        (b)   During the term of this Agreement, S.I. is authorized by OMNEON to use the trademarks, trade names, logos, and designations used by OMNEON for Products in connection with S.I.'s advertisement and promotion of Products, with such use to be in accordance with OMNEON's policies with respect to such use in effect from time to time which are provided to S.I.

        (c)   S.I. shall use reasonable efforts to protect OMNEON's intellectual property rights and to cooperate, at S.I.'s expense, in OMNEON's efforts to protect such rights, as such efforts relate to S.I.

4

or this Agreement. S.I. acknowledges that only OMNEON has the right to sue for infringement of OMNEON's intellectual property rights.

        (d)   OMNEON will provide S.I., free of charge, from time to time, at S.I.'s place of business or, whenever appropriate, directly to customers solicited by S.I., reasonable quantities of OMNEON's advertising and sales literature, samples, displays, drawings, engineering and other product data, as designated and made available for such use by OMNEON and which would be helpful in, and enhance the reputation, usefulness and acceptance of, the Products. All such materials and items furnished by OMNEON to S.I. shall remain the property of OMNEON and, other than advertising and sales literature which is distributed, shall be returned to OMNEON upon termination of this Agreement in good and usable condition. If S.I. fails to return such materials, the cost of such materials to OMNEON will be payable by S.I. and deducted from amounts otherwise payable to S.I. by OMNEON.

        (e)   Upon termination of this Agreement, S.I. will immediately cease all display, advertising and use of all OMNEON trademarks, trade names, logos and designations and will not thereafter use, advertise, or display any trademark, trade name, logo of designation which is, or any part of which is, similar to or confusing with any trademark, trade name, logo or designation associated with any Product.

12.   Proprietary Information

        PARTNER agrees to execute OMNEON's Non-Disclosure Agreement.

13.   Disclaimer of Partnership and Agency

        The parties hereto are independent contractors and have no power, and shall have no power, nor will either party represent that it has any power, to bind the other party or to assume or to create any obligation or responsibility, express or implied, on behalf of the other party or in the other party's name. This Agreement shall not be construed as constituting OMNEON and S.I. as partners or joint venturers or to create any other form of legal association which would impose liability upon one party for the act or failure to act of the other.

14.   Export Restrictions

        S.I. shall not directly export any Product purchased from OMNEON or any technical data derived therefrom to any country for which the United States Government or any agency thereof may require an export license or other governmental approval without first acquiring that license or approval. S.I. will permit audits or reviews by OMNEON of any export activity of S.I. regarding OMNEON Products, and S.I. will not engage in any transaction or activity with any country, party, firm or company notified by the U. S. Department of Commerce Office of Export Administration to be unsuitable or listed on the table of denial orders.

15.   Limited Warranty

        WARRANTY TO CUSTOMER: (a) Limited Warranty: Subject to (b) ("Limitation"), Omneon warrants to Customer that, during the period commencing on Customer's receipt of the Products and terminating on the earlier of (i) one (1) year thereafter or (ii) fifteen (l5) months following receipt of the Products by the original purchaser of the Products, the hardware portion of the products will perform substantially in accordance with the then-current appropriate Documentation. Omneon warrants to Customer that during the one (1) year period following Customer's receipt of the Products, the Software portion of the Products will perform substantially in accordance with the then-current appropriate Documentation. In the event of a failure of any Product to comply with the foregoing warranty during the applicable warranty period (a "Defect"), Omneon shall, at its option, repair or replace the Product or refund the fees paid by Customer for such Product (following Customer's return

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of such Product), or provide a workaround for the Defect. The foregoing sets forth Customer's sole and exclusive remedies for breach of the above warranties. Replacement Products will be warranted for the remaining warranty period of the original Products. (b) Limitation: The warranties set forth above shall not apply to (i) any third party software or hardware, whether or not such third party software or hardware is provided by Omneon (and Customer agrees to any additional terms and conditions relating to the third party software or hardware which are specific to Omneon's suppliers as described in the Documentation which are incorporated by reference herein); (ii) any Products which have been modified or repaired, except by Omneon; or (iii) any Products which have not been maintained in accordance with any handling or operating instructions supplied by Omneon or have been subjected to unusual physical or electrical stress, misuses, negligence or accidents. (c) Disclaimer of Warranties: EXCEPT AS SET FORTH ABOVE, OMNEON MAKES NO OTHER WARRANTIES, EXPRESS, IMPLIED, OR STATUTORY, REGARDING THE PRODUCTS. ALL IMPLIED WARRANTIES AS TO SATISFACTORY QUALITY, PERFORMANCE, MERCHANTABILITY, FITNESS FOR PARTICULAR PURPOSE OR NONINFRINGEMENT ARE EXPRESSLY DISCLAIMED. SOME JURISDICTIONS DO NOT ALLOW THE EXCLUSION OF IMPLIED WARRANTY OR LIMITATIONS ON HOW LONG AN IMPLIED WARRANTY MAY LAST, SO SUCH EXCLUSIONS MAY NOT APPLY TO CUSTOMER.

16.   Indemnification

        (a)   OMNEON shall indemnify S.I., and hold it harmless, from and against any and all claims, liabilities, damages, losses, costs, and expenses incurred by S.I. arising from any claim or proceeding made or brought against S.I. based on an allegation that a Product as supplied hereunder infringes any U.S. patent, trademark or copyright of any third party. S.I. shall promptly notify OMNEON of any such claim or proceeding, and OMNEON shall be responsible for defending such claim or proceeding, with counsel of OMNEON's choice, provided that S.I. (i) gives OMNEON prompt written notice of any such claim or proceeding, (ii) allows OMNEON to direct the defense and settlement of the claim or proceeding, and (iii) provides OMNEON with the authority, information, and assistance that OMNEON deems reasonably necessary for the defense and settlement of such claim or proceeding.

        (b)   If a final injunction against S.I.'s use of a Product by reason of such infringement is obtained in an action based on any such claim, or if in OMNEON's sole discretion such an injunction is likely to be obtained, OMNEON may, at its sole option, either (i) obtain for S.I. the right to continue using and selling such Product, (ii) replace or modify such Product so it becomes non-infringing, or (iii) if neither (i) or (ii) cannot be reasonably effected by OMNEON, credit to S.I. the aggregate net purchase price paid for such Products purchased by S.I. during the six (6) months prior to such credit being given, provided that such Products for which the credit is given are new and unused and in their original shipping carton and are returned to OMNEON, at S.I.'s expense, within thirty (30) days of OMNEON giving S.I. written notice of its intention to provide such credit.

        (c)   Notwithstanding the above, OMNEON shall not be liable to S.I. for any claim arising from or based upon the combination, operation, or use of any Product with equipment, data or programming not supplied by OMNEON, or arising from any alteration or modification of Products. THE PROVISIONS OF THIS SECTION SET FORTH THE ENTIRE LIABILITY OF OMNEON AND THE SOLE REMEDIES OF S.I. WITH RESPECT TO INFRINGEMENT AND ALLEGATIONS OF INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS OR OTHER PROPRIETARY RIGHTS OF ANY KIND IN CONNECTION WITH THE INSTALLATION, OPERATION, DESIGN, DISTRIBUTION OR USE OF PRODUCTS.

        (d)   S.I. shall indemnify OMNEON (including paying all reasonable attorneys' fees and costs of litigation), and hold OMNEON harmless, from and against any and all claims against OMNEON by

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any other party resulting from S.I.'s acts or inaction's or misrepresentations, including, without limitation, breach of any of its obligations under this Agreement, regardless of the form of action.

17.   Limitation of Liability

EXCEPT FOR ANY BREACH OF SECTION 12 (PROPRIETARY INFORMATON) IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES, WHETHER ARISING IN AN ACTION OF CONTRACT, TORT OR OTHER LEGAL THEORY EVEN IF THE PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN NO EVENT SHALL EITHER PARTY'S LIABILITY EXCEED THE AMOUNTS PAID BY SYSTEMS INTEGRATOR UNDER THIS AGREEMENT.

18.   Force Majeure

        Neither party shall be responsible for failure to fulfill its obligations under this Agreement, except with respect to the making of payments hereunder, due to causes beyond its control for the period such causes are beyond its control and have not resulted directly or indirectly from its negligence or willful misconduct.

19.   Assignment

        Neither party may assign this Agreement, or any rights and obligations hereunder, to any third party without the express written permission of the other party. Notwithstanding the foregoing, OMNEON may assign its rights and obligations under this Agreement to an "Affiliate," provided such Affiliate agrees in writing to assume all rights and obligations of OMNEON under this Agreement. For purposes of this paragraph, "Affiliate" shall mean any corporation that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, OMNEON.

20.   General Provisions

        (a)   Severability. If any part of this Agreement is found to be invalid or unenforceable by any law, rule, order or regulation of any government, or by the final determination of any state or federal court, that part of this Agreement shall be amended to achieve as nearly as possible the same economic effect as the original provision and the remaining provisions of this Agreement shall remain in full force and effect.

        (b)   Entire Agreement. This Agreement, together with the schedules attached hereto, constitute and contain the complete agreement and understanding of the parties with respect to the subject matter hereof and supersede any and all prior correspondence, agreements, representations, statements, negotiations and undertakings between the parties relating to the subject matter hereof. Amendments to this Agreement must be in writing, specifying such amendment, signed by duly authorized representatives of both parties.

        (c)   Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California, except for that body of law dealing with conflicts of law.

        (d)   Dispute Resolution. Any dispute, controversy, or claim arising out of or relating to this Agreement, or the breach, termination or invalidity thereof, shall be settled by arbitration pursuant to the Arbitration Rules of the International Chamber of Commerce. The prevailing party in any such proceeding shall be entitled to recover, from the other party, its reasonable attorneys' fees and costs in connection with such proceeding. Any such arbitration shall be conducted in English. In the event OMNEON initiates such an arbitration, it shall be held in the city specified in Item 3 of this agreement. In the event S.I. initiates such an arbitration, it shall be held in San Francisco, California, United States of America.

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        (e)   Notices. Any notice which may be or is required to be given under this Agreement shall be in writing. All written notices shall be sent by registered or certified mail, postage prepaid, return receipt requested, personal delivery, air freight (notice of receipt of which is required) or by facsimile transmission (followed by a confirmation notice utilizing any of such other means within five (5) business days thereafter). All such notices shall be deemed to have been given when received, addressed as indicated below or to such other address with respect to which the receiving party may from time to time give notice to the other party.

If to OMNEON:	Title: Andy Brinek—Dir. Of Strategic Alliances OMNEON Corporation 965 Stewart Drive Sunnyvale, California 94085-3913 Facsimile No:
If to S.I.:	Title: President A.F. Associates, Inc. 100 Stonehurst Ct. Northvale, NJ 07647 Facsimile No: 201-784-8637

        (f)    Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their authorized representatives, effective as of the date first written above.

OMNEON Corporation		PARTNER
By:	/s/  DAN MARSHALL	Company:	A.F. Associates, Inc.
Name:	Dan Marshall	Signature:	/s/  TOM CANAVAN
Title:	VP WW Sales	Name:	Tom Canavan
		Title:	President

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OMNEON
VIDEONETWORKS

OMNEON VIDEO NETWORKS
PARTNER NETWORK PROGRAM AGREEMENT

        This Omneon Partner Network Program Agreement is made and entered into on April 25, 2002, (the "Effective Date"), by and between OMNEON Video Networks ("OMNEON"), with its principal offices at 965 Stewart Drive, Sunnyvale, CA 94085-39l3 and A.F. Associates, Inc. (PARTNER) with principal offices at 100 Stonehurst Ct, Northvale, NJ 07647

1.     Recitals.

        (a)   OMNEON is a manufacturer and supplier of computer products associated with digital infrastructure.

        (b)   Automation Partner (APP) is any automation application developer that interfaces and is, or in process of, completing compatibility integration with OMNEON's products.

        (c)   System Integrator (S.I.) is any company performing system integration of equipment, software, and services that may include an OMNEON system. For the purpose of OMNEON's Partner Network we categorize a System Integrator as one that does not develop or manufacture application software.

        (d)   Developer Partner (DEVELOPER) is any company that engages with OMNEON to perform ongoing testing and certification compatibility of their products with the OMNEON products. This is a joint effort whereby both parties have a vested interest in maintaining and assuring system compatibility and support.

        (e)   Referral Partner (REFERRAL) see the OMNEON Referral agreement for details.

        (f)    Unless otherwise specifically specified, PARTNER refers to APP, SI, Developers, and Referral Partners.

        (g)   OMENON and PARTNER desire to enter into an agreement to develop and increase market awareness for OMNEON products, in the mutual interest of the parties, through sales, marketing, product compatibility, and key business differentiators as described in this program.

2.     OMNEON Obligations to (APP and DEVELOPER).    OMNEON hereby covenants to perform the following activities in connection with the APP and DEVELOPER Partners at its own and sole expense (except as otherwise set forth herein).

        (a)   Development System Allocation—OMNEON will provide the appropriate hardware as a way to ensure the interoperability and compatibility with current and future products offered by the program participant. These systems will remain the sole property of OMNEON and be made available to the APP or DEVELOPER specifically for the above-mentioned purposes. These systems may not be resold unless otherwise authorized by OMNEON.

        (b)   Market Development—OMNEON will provide each APP access to Market Development Funds (MDF) in order to generate new leads and increase market share. MDF may be used for, but is not limited to, advertising campaigns, advanced notice on new product introductions, bundled solution development, sales campaigns, and trade show participation. *Applies to APP Partners Only.

MDF will be accrued at the rate of three percent (3%) on every dollar of purchases from OMNEON when sold at standard discounts. Each participating APP will be responsible for allocating funds to

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their respective channels for market development. OMNEON will also provide discretionary market development funds for partnership kickoff activities once a PARTNER has been established. See Exhibit A for MDF guidelines.

3.     OMNEON Obligations to (APP and S.I.).    OMNEON hereby covenants to perform the following activities in connection with the OMNEON PARTNER NETWORK to both APP and SI (PARTNER) at its own and sole expense (except as otherwise set forth herein).

        (a)   Competitive Differentiators—OMNEON will offer a number of business incentives to the APP and SI for selecting and/or recommending OMNEON products and services.

        (i)    Buy Back Program—OMNEON will, at certain times, and specifically associated to specific marketing campaigns, offer Buy Back programs that will assist the PARTNER member in unseating a current solution/competitor. These programs will be tied to specific market campaigns and offered on a campaign basis only.

        (ii)   Free Installation—Omneon will provide our PARTNER members with 2 days of installation at no charge on installation of $100K or more of Omneon products or greater.

OMNEON's standard price for installation is $1500.00 per day as a professional service on all installations of OMNEON product that requires the support of an on-site field technician. If an installation through a PARTNER member requires more than two days on site installation service, OMNEON will invoice the PARTNER at a reduced rate of $1200.00 per day for the remaining days required to complete the installation.

        (iii)  No Charge Service Upgrades—OMNEON will provide, at no additional cost, Service Plus service for all installations of OMNEON products that were sold by an APP or SI PARTNER member.

        (iv)  Special Pricing (Demo and B Stock Inventory)—OMNEON will make available, at certain times as defined by OMNEON, a discount of 37.5% off of list price for the purchase of demonstration or B-stock inventory. OMNEON will provide standard new warranty on all demonstration and B Stock inventory. Demo and B-stock inventory can be used for resale or demonstration purposes but cannot be advertised as new product.

        (v)   Financing Options—At its discretion, OMNEON will provide the PARTNER member with payment terms and financing options outside the standard Net 30 days. The request for financing options or flexible payment terms will be considered on an opportunity-by-opportunity basis, and must be approved in writing by OMNEON prior to purchase order acceptance.

        (vi)  Network Operations Center Services—OMNEON will provide remote monitoring, at the request and approval of the end-user, of the customers environment from the OMNEON Network Operations Center located in Sunnyvale, CA. The OMNEON NOC features remote monitoring, diagnostics, and management of the OMNEON installation at the customer site. Remote monitoring is included with the Silver Level Service.

4.     PARTNER Obligations (APP).    APP hereby covenants to perform the following activities in connection with this Program at its own and sole expense (except as otherwise set forth herein).

        (a)   Certification Labs—PARTNER must agree to provide all necessary products (hardware/software) to the OMNEON Certification Labs at no cost, and commit as best practice the technology expertise to assist in maintaining compatibility assurance of PARTNER member and OMNEON products. OMNEON agrees to use these products for development and compatibility certification purposes only unless otherwise authorized by PARTNER'S sales management team.

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        (b)   Lead Referral Obligation—PARTNER agrees to provide in writing to OMNEON potential customer leads as confirmed in writing by OMNEON. PARTNER must fulfill a quarterly lead referral amount of five (5) opportunities sent to OMNEON via the Opportunity Registration Form (ORF) see Exhibit B. PARTNER agrees to cooperate with OMNEON by providing any additional information that may be reasonably required to confirm that potential customer leads identified by PARTNER are qualified leads.

        (c)   Sales and Marketing—PARTNER agrees to provide a forum for OMNEON sales training of the PARTNER member's sales and marketing force on OMNEON products and services. Minimum obligation is two (2) sessions per year.

        (d)   Partner Introduction—For those PARTNER members that do not provide system integration, OMNEON requires an introduction to the distribution network used by the PARTNER member as a sales channel. This can include, but is not limited to, system integrators, distributors, independent sales representatives and consultants.

5.     PARTNER Obligations (DEVELOPER).    DEVELOPER hereby covenants to perform the following activity in connection with the Program at its own and sole expense (except as otherwise set forth herein).

        (a)   Certification Labs—PARTNER must agree to provide all necessary products (hardware/software) to the OMNEON Certification Labs at no cost, and commit as best practice the technology expertise to assist in maintaining compatibility assurance of PARTNER member and OMNEON products. OMNEON agrees to use these products for development and compatibility certification purposes only unless otherwise authorized.

        (b)   Partner Introduction—For those PARTNER members that do not provide system integration, OMNEON requires an introduction to the distribution network used by the PARTNER member as a sales channel. This can include, but is not limited to, system integrators, distributors, independent sales representatives and consultants.

6.     Systems Integrator Discounts.—These discounts apply to all APP and System Integrator Partners.

        (a)   System Integration—OMNEON will extend a 25% discount off List Price to the PARTNER for providing the system integration services. Each System Integrator must agree to the terms and conditions set forth in the OMNEON Systems Integrator Purchasing Contract. See SI addendum.

7.     Price Discounts and Referral Fees.    In consideration of the performance of PARTNER's obligations under this Agreement each registered lead first introduced to OMNEON by a PARTNER that results in a purchase of products from OMNEON, will be paid a referral fee upon product installation. Each registered lead must include an Opportunity Registration Form (ORF) (see Exhibit B) and be approved by OMNEON in order to be valid. In all cases, if a registered lead has not purchased product/services from OMNEON within a reasonable period of time (180 days of referral), OMNEON reserves the right to notify PARTNER that such customer will no longer be considered a registered lead, and PARTNER will no longer be entitled to any referral fees based on subsequent purchases of OMNEON services by such customer. Installation commissions will be paid only when sales of OMNEON product sold at standard discounts are met unless otherwise authorized in writing by OMNEON VP of worldwide sales.

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        (a)   Referral Fees—All fees will be paid within thirty (30) days after OMNEON has received payment from the end-user customer. OMNEON will pay the PARTNER a referral commission in one of two ways:

        (i)    OMNEON will pay a fee of 5% of the net sales price for each installation to the PARTNER on whose automation application OMNEON is integrated with. This does NOT apply when the APP performs the integration.

        (ii)   For all PARTNERS recommending OMNEON's products, OMNEON will provide a commission incentive of 2.5% of net sales on referrals. This will be paid to APP and S.I. PARTNERS in addition to the System Integration discount if the opportunity was registered by them initially.

8.     Public Statements.    The parties will agree in advance to the text of all press releases and public disclosure associated with activities under this Agreement, including announcement of the termination or expiration of this Agreement.

9.     Term.    The term of this agreement begins on the effective date and continues for a period of twelve months. Either party may terminate this Agreement at any time by providing sixty (60) days' prior written notice to the other party. OMNEON will continue to tender any referral fees owed to the PARTNER pursuant to the terms and conditions of this Agreement. Each party understands that the rights of termination hereunder are absolute. Upon expiration of this Agreement or termination, PARTNER shall not be entitled to any separation compensation or damages of any kind, including indemnification, compensation, reimbursement, or damages for loss of prospective compensation, goodwill or loss thereof, or expenditures, investments, leases, or any type of commitment made in connection with the business of such party or in reliance on the existence of this Agreement including, but not limited to advertising and promotion costs, costs of supplies, termination of employees, employee salaries, and other such costs and expenses.

10.   Non-exclusive Arrangement; Competitive Activities.    Each Party acknowledges that the Partner arrangements set forth in this Agreement are non-exclusive arrangements. Nothing in this Agreement shall be construed to restrict a Party from entering into any other similar or different Partner arrangements with third parties. Nothing in this Agreement shall be construed in any way to require OMNEON to provide services to any PARTNER.

11.   Confidential Information.    PARTNER agrees to execute OMNEON's Non-Disclosure Agreement (see Exhibit C).

12.   Mutual Warranties.    Each party represents and warrants to the other that it has full power and authority to enter into this Agreement and to grant any licenses or rights provided for herein, and that this Agreement has been duly authorized, executed and delivered and constitutes a valid, binding and legally enforceable agreement. PARTNER warrants that the services provided by PARTNER in connection with this Agreement will be rendered by qualified personnel and consistent with commercial practices standard in the industry.

13.   Limitation of Liability.    IN NO EVENT WILL OMNEON BE LIABLE TO PARTNER OR OTHERS FOR ANY LOST REVENUE, LOST PROFITS, REPLACEMENT GOODS, LOSS OF TECHNOLOGY, RIGHTS OR SERVICES, INCIDENTAL, PUNITIVE, INDIRECT OR CONSEQUENTIAL DAMAGES ARISING FROM OR RELATED TO THIS AGREEMENT, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, WHETHER UNDER THEORY OF CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY OR OTHERWISE. IN NO EVENT SHALL OMNEON'S LIABILITY EXCEED THE AMOUNTS DUE UNDER THIS AGREEMENT.

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14.   Miscellaneous.    This Agreement is made under and will be governed by and construed in accordance with the laws of the State of California, United States of America (except that body of law controlling conflicts of law). This Agreement, including all documents incorporated herein by reference, constitutes the complete and exclusive agreement between the parties with respect to the subject matter thereof, and supersedes and replaces any and all prior or contemporaneous discussions, negotiations, and understandings and agreements, written and oral, regarding such subject matter. This Agreement may be executed in counterparts, each of which will be deemed an original, but both of which together shall constitute one and the same instrument. PARTNER shall not assign this Agreement without the prior consent of OMNEON.

15.   Entire Agreement.    This Agreement, together with the schedules attached hereto, constitute and contain the complete agreement and understanding of the parties with respect to the subject matter hereof and supersede any and all prior correspondence, agreements, representations, statements, negotiations and undertakings between the parties relating to the subject matter hereof. Amendments to this Agreement must be in writing, specifying such amendment, signed by duly authorized representatives of both parties.

16.   Survival.    The confidentiality and referral fee obligations set forth in this Agreement shall survive termination of the Agreement by either party.

17.   Trademarks and Logos.

        (a)   All right, title and interest in the package, and all trademarks, service marks, logos, and other OMNEON VIDEO NETWORKS, service, or product identifiers and indicia of origin now or hereinafter used by OMNEON VIDEO NETWORKS, whether registered or not, and all goodwill associated therewith including the name "OMNEON VIDEO NETWORKS" and any abbreviations thereof (hereinafter all collectively referred to as "Trademarks") shall be exclusively owned by OMNEON VIDEO NETWORKS. PARTNER warrants that it has not applied for trademark registration of any Trademarks or marks substantially similar to the Trademark and agrees not to apply in the future for such trademark registration. All uses of the Trademarks will inure solely to OMNEON VIDEO NETWORKS, and PARTNER shall obtain no rights with respect to any of these Trademarks, other than the right to resell OMNEON VIDEO NETWORKS' products as set forth herein, and PARTNER irrevocably assigns to OMNEON VIDEO NETWORKS all such right, title and interest, if any, in any Trademarks.

        (b)   PARTNER agrees to provide reasonable assistance to OMNEON VIDEO NETWORKS for OMNEON VIDEO NETWORKS to establish and/or maintain the validity of the Trademarks. Prior permission of OMNEON VIDEO NETWORKS is required if PARTNER intends to reproduce any OMNEON VIDEO NETWORKS logos, Trademarks or the like on PARTNERS stationery, business cards or otherwise any use of trademarks by PARTNER shall only be for the purpose of fulfilling the terms of the Agreement. Use by PARTNER of any OMNEON VIDEO NETWORKS Trademarks shall cease immediately upon termination of this agreement.

        IN WITNESS WHEREOF, the parties hereto have executed this Agreement by causing their duly authorized representatives to sign below as of the day and year first above written.

OMNEON Video Networks, INC		PARTNER
Signature:	/s/  DAN MARSHALL	Company:	A.F. Associates, Inc.
Print Name:	Dan Marshall	Signature:	/s/  TOM CANAVAN
Title:	VP WW Sales	Print Name:	Tom Canavan
		Title:	President

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Exhibit 10.16

OMNEON VIDEO NETWORKS SYSTEMS INTEGRATOR PURCHASING AGREEMENT

OMNEON VIDEONETWORKS

OMNEON VIDEO NETWORKS PARTNER NETWORK PROGRAM AGREEMENT

EX-21.01

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Exhibit 21.01

OMNEON VIDEO NETWORKS
SUBSIDIARIES OF THE REGISTRANT

Name	Jurisdiction
Omneon Video Networks K.K.	Japan
Omneon Singapore Pte. Limited	Singapore
Omneon U.K. Ltd	United Kingdom
Omneon Asia Pacific, Limited	Hong Kong

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OMNEON VIDEO NETWORKS SUBSIDIARIES OF THE REGISTRANT

EX-23.02

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Exhibit 23.02

Consent of independent registered public accounting firm

We hereby consent to the use in this Registration Statement on Form S-1 of our report dated July 24, 2006, except as to the change in accounting for warrants and segment information described in Notes 1 and 9, respectively, which are as of December 28, 2006, relating to the consolidated financial statements of Omneon Video Networks, Inc., which appears in such Registration Statement. We also consent to the references to us under the headings "Experts" and "Selected Financial Data" in such Registration Statement.

/s/ PricewaterhouseCoopers LLP

San Jose, CA
December 28, 2006

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Consent of independent registered public accounting firm