May 26, 2005

John A. Tanner

1224 Serene Valley Court

San Jose, CA 95120

David J. Richter

825 Fifth Ave

#301

San Diego, CA 92101

Via Hand Delivery

Re: 280G Gross-Up Payments

Dear John and David,

This letter will confirm the terms of your Section 280G coverage as to which we agreed in principle in November 2004 subject to approval by the Board of Directors.

For the purpose of this agreement:

l John Tanner and David Richter are referred to collectively as "Executives" and each individually as an "Executive."

l "Change of Control" has the meaning set forth in each Executive's employment agreement with DivX, Inc. as amended.

l "Company" means DivX, Inc.

In the event that any payments or benefits to be received by one or more of Executives in connection with a Change in Control (collectively, the "Payments") will be subject to the excise tax (the "Excise Tax") imposed under Section 4999 of the Internal Revenue Code of 1986, as amended from time to time (the "Code"), then, subject to the two paragraphs immediately following this paragraph, Company shall pay to each Executive an additional amount (the "Gross-Up Payment") such that the net amount retained by each Executive, after deduction of any Excise Tax on the Payments and any Federal, state and local income and employment taxes and Excise Tax upon the Gross-Up Payment, shall be equal to the Payments to each Executive; provided, however, that in no event shall the Gross-Up Payment to the Executives exceed One Million Dollars in the aggregate. In the event that the Gross-Up Payment would exceed One Million Dollars in the aggregate, the Gross-Up Payment shall be divided between the Executives on a pro rata basis based upon their relative exposure to the Excise Tax (calculated without giving effect to any portion of the Gross-Up Payment). The Gross-Up Payment shall be made by Company to each Executive immediately upon the payment to each such Executive of the Payments.

Notwithstanding the foregoing, in the event that (i) the Gross-Up Payment to the Executives would, but for the limitations set forth in the paragraph above, exceed One Million Dollars in the aggregate, and (ii) an Executive becomes entitled to a pro rata portion of the Gross-Up Payment based upon his or her relative exposure to the Excise Tax (as provided above), then, notwithstanding the foregoing, such Executive's Payments shall not exceed the Reduced Amount. the "Reduced Amount" shall be either (x) the largest portion of the Payments that would result in no portion of the Payments being subject to the Excise Tax or (y) the largest portion of the Payments, up to and including the total Payments, whichever amount, after taking into account (I) all applicable federal, state and local employment taxes, income taxes and the Excise Tax (all computed at the highest applicable marginal rate) and (II) the Gross-Up Payment, results in the Executive's receipt, on an after-tax basis, of the greater amount of the Payments notwithstanding that all or some portion of the Payments may be subject to the Excise Tax. If a reduction in payments or benefits constituting "parachute payments" is necessary so that the Payments equal the Reduced Amount, reduction shall occur in the following order unless the Executive elects in writing a different order (provided, however, that such election shall be subject to Company approval if made on or after the date on which the event that triggers the Payments occur: reduction of the Gross-Up Payment; reduction of other cash payments; cancellation of accelerated vesting of stock awards; reduction of employee benefits. If acceleration of vesting of stock award compensation is to be reduced, such acceleration of vesting shall be cancelled in the reverse order of the date of grant of the Executive's stock awards unless the Executive elects in writing a different order for cancellation.

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