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MPEG-2 License Agreement



The following electronic copy of the MPEG-2 Patent Portfolio License is provided as a convenience for informational purposes only. To conclude the MPEG-2 Patent Portfolio License, a hard copy must be requested from MPEG LA. If you would like a hard copy, please go to http://www.mpegla.com/main/programs/M2/Pages/AgreementExpress.aspx.

MPEG-2 PATENT PORTFOLIO LICENSE

This Agreement is made this _________ day of ________________, 20___ by and between MPEG LA, LLC, a limited liability company of Delaware, having a principal place of business in Denver, Colorado, U.S.A. (hereinafter “Licensing Administrator”); and ________________________________, having a principal place of business in_____________________________ (hereinafter “Licensee”).

WHEREAS, ISO/IEC JTC 1 and The International Telecommunications Union have jointly adopted an international standard relating to video data compression and data transport, formally known as ISO/IEC 13818-1 and 13818-2, and referred to in this Agreement as the “MPEG-2 Standard” (as more fully defined herein below);

WHEREAS, Alcatel Lucent, a corporation of France, having a principal place of business in Paris, France; British Telecommunications plc, a corporation of United Kingdom, having a principal place of business in London, United Kingdom; Canon Inc., a corporation of Japan, having a principal place of business in Tokyo, Japan; CIF Licensing, LLC, a limited liability corporation of Delaware, U.S.A., having a principal place of business in Princeton, New Jersey, U.S.A.; Cisco Technology, Inc., a corporation of California, U.S.A., having a principal place of business in San Jose, CA, U.S.A.; Fujitsu Limited, a corporation of Japan, having a principal place of business in Kawasaki, Japan; GE Technology Development, Inc., a corporation of Delaware, U.S.A., having a principal place of business in Princeton, New Jersey, U.S.A; General Instrument Corporation, a corporation of Delaware, U.S.A., having a principal place of business in Horsham, Pennsylvania, U.S.A.; Hitachi, Ltd., a corporation of Japan, having a principal place of business in Tokyo, Japan; Hewlett-Packard Company, a corporation of Delaware, U.S.A., having a principal place of business in Palo Alto, CA, U.S.A.; JVC KENWOOD Corporation, a corporation of Japan, having a principal place of business in Yokohama, Japan; KDDI Corporation, a corporation of Japan, having a principal place of business in Tokyo, Japan; Koninklijke Philips N.V. (“KPNV”), a corporation of The Netherlands, having a principal place of business in Eindhoven, The Netherlands, and U.S. Philips Corporation (“USPC”), a corporation of Delaware, U.S.A., having a principal place of business in Tarrytown, N.Y., U.S.A (KPNV and USPC being hereinafter referred to, individually or collectively, as “Philips”); LG Electronics Inc., a corporation of Korea, having a principal place of business in Seoul, Korea; Mitsubishi Electric Corporation, a corporation of Japan, having a principal place of business in Tokyo, Japan; Multimedia Patent Trust, a corporation of Delaware, having a principal place of business in Neshanic, NJ, U.S.A.; Nippon Telegraph and Telephone Corporation, a corporation of Japan, having a principal place of business in Tokyo, Japan; Orange SA, a corporation of France, having a principal place of business in Paris, France; Panasonic Corporation, a corporation of Japan, having a principal place of business in Osaka, Japan; Robert Bosch GmbH, a corporation of Germany, having a principal place of business in Stuttgart, Germany; Samsung Electronics Co., Ltd., a corporation of Korea, having a principal place of business in Seoul, Korea; SANYO Electric Co., Ltd., a corporation of Japan, having a principal place of business in Osaka, Japan; Sharp Corporation, a corporation of Japan, having a principal place of business in Osaka, Japan; Sony Corporation, a corporation of Japan, having a principal place of business in Tokyo, Japan; The Trustees of Columbia University in the City of New York, a not-for-profit corporation of New York, U.S.A., having a principal place of business in New York City, New York, U.S.A.; Thomson Licensing, a corporation of France, having a principal place of business in Boulogne-Billancourt, France; and Toshiba Corporation, a corporation of Japan, having a principal place of business in Tokyo, Japan, (hereinafter collectively the “Licensors” or individually “Licensor,” as more fully defined in this Agreement), each own and have the right to license, or have the right to sublicense one or more patents, utility models and/or allowed patent or utility model applications published for opposition which claim apparatus and/or methods necessary for compliance with the MPEG-2 Standard (hereinafter referred to as “MPEG-2 Essential Patent(s)”);

WHEREAS, each Licensor believes that the MPEG-2 Standard represents a significant advance in the field of digital video data compression for transmission and storage, which will make available innovative new products and services to the public, and for this reason desires to encourage widespread adoption of the MPEG-2 Standard by video product and video service industries throughout the world;

WHEREAS, each Licensor hereby commits on behalf of itself and its Affiliates to make available licenses and/or sublicenses under any and all MPEG-2 Essential Patents licensable or sublicensable by the Licensor and its Affiliates to any individual, company or other entity desiring such a license and/or sublicense on fair, reasonable and nondiscriminatory terms and conditions;

WHEREAS, each Licensor has granted the Licensing Administrator a worldwide, nonexclusive license and/or sublicense under all MPEG-2 Essential Patents licensable or sublicensable by the Licensor to allow the Licensing Administrator to grant worldwide, non-exclusive sublicenses under all such MPEG-2 Essential Patent(s) under the terms hereof;

WHEREAS, the Licensors desire to make available through the Licensing Administrator license rights under their and their Affiliates’ respective MPEG-2 Essential Patents in a single sublicense for the convenience of any individual, company or other entity desirous of acquiring such rights, thereby avoiding the need of such individual, company or other entity to obtain a separate license from each of the Licensors under its MPEG-2 Essential Patent(s);

WHEREAS, the Licensing Administrator desires to grant MPEG-2 Patent Portfolio Licenses to all individuals, companies and other entities desiring such a license under the terms and conditions set forth herein;

WHEREAS, nothing in this Agreement precludes the respective Licensors from licensing or sublicensing rights under individual MPEG-2 Essential Patent(s) to make, use, sell, or offer to sell products or processes including but not limited to the rights licensed in the MPEG-2 Patent Portfolio License;

WHEREAS, Licensee understands that this MPEG-2 Patent Portfolio License is offered for the convenience of Licensee and that Licensee is free to contact any Licensor to negotiate a license for any Patent offered herein on terms and conditions different from those set forth herein which may be mutually acceptable to such Licensee and Licensor;

WHEREAS, Licensee desires for its own convenience to obtain rights under the MPEG-2 Essential Patent(s) of all the Licensors in a single sublicense from the Licensing Administrator under the terms hereof which terms shall be deemed fair and reasonable for a portfolio license given, among other things, its efficiencies; and

WHEREAS, each Licensor has elected, in its sole discretion, to offer its and its Affiliates’ MPEG-2 Essential Patents to be sublicensed by the Licensing Administrator in this MPEG-2 Patent Portfolio License under the terms specified herein as an alternative to negotiating individual licenses under whatever Patent(s) Licensee desires.

NOW, THEREFORE, the Licensing Administrator AND Licensee AGREE AS FOLLOWS:

0. EFFECTIVE DATE

0.1 This License Agreement shall be deemed effective as of June 1, 1994.

1. DEFINITIONS

The definitions set forth in this Article shall apply to the following terms when used with initial capital letters in this Agreement, its attachments, and amendments hereto.

1.1. Affiliate – shall mean a legal entity which now or hereinafter directly or indirectly controls, is controlled by, or is under common control with a party. For purposes of Section 1.1, control shall mean direct or beneficial ownership of more than 50% of the outstanding shares representing the right to vote for directors or other managing officers of such legal entity, or the power to directly or indirectly instruct, appoint, or remove the party or parties who have the right to make decisions for such entity.

1.2. Agreement – shall mean this sublicense between the Licensing Administrator and Licensee, including exhibits, attachments, amendments and modifications hereto.

1.3. Confidential Information – shall mean any information given to the Licensing Administrator pursuant to Article 5 of this Agreement which is designated “confidential” by Licensee.

1.4. Consumer Product – shall mean a single, self-contained MPEG-2 Royalty Product Sold to an End User which has both MPEG-2 encoding and decoding capabilities primarily for personal, family, or household use, including without limitation a DVD player/recorder, a Blu-ray Disc player/recorder, a digital camcorder, a digital video recorder or personal video recorder, encoder/decoder software, and a personal computer having a manufacturer’s suggested retail price of less than U.S. $15,000 or the equivalent in the currency of another country. For purposes of this Agreement, an MPEG-2 Packaged Medium shall not be considered a Consumer Product.

1.5. Days – shall mean calendar days unless otherwise specifically stated in this Agreement.

1.6. End User – shall mean any person or entity which orders, sends, purchases, retrieves, receives or is specifically sent an MPEG-2 Royalty Product only for the End User’s personal or commercial use, whether alone or in combination with any other product and not for re-Sale.

1.7. Licensors (individually Licensor) – shall mean Alcatel Lucent; British Telecommunications plc; Canon Inc.; CIF Licensing, LLC; Cisco Technology, Inc.; Fujitsu Limited; GE Technology Development, Inc.; General Instrument Corporation; Hewlett-Packard Company; Hitachi Ltd.; JVC KENWOOD Corporation; KDDI Corporation; LG Electronics Inc.; Mitsubishi Electric Corporation; Multimedia Patent Trust; Nippon Telegraph and Telephone Corporation; Orange SA; Panasonic Corporation; Philips; Robert Bosch GmbH; Samsung Electronics Co., Ltd.; SANYO Electric Co., Ltd.; Sharp Corporation; Sony Corporation; The Trustees of Columbia University in the City of New York; Thomson Licensing; and Toshiba Corporation subject to additions and deletions from time to time, identified in Attachment 1 hereto.

1.8. Manufacture (Manufactured) – shall mean fabrication, assembly, or otherwise making of substantially the entire finished MPEG-2 Royalty Product in the form in which it is Sold to an End User.

1.9. Movie – shall mean a single motion picture as well as related video materials typically packaged with the motion picture including, without limitation, previews of other motion pictures, information about the making of the motion picture or the artists appearing therein. Movie shall not include a second motion picture regardless of whether such second motion picture is related to the first.

1.10. MPEG-1 Standard – shall mean the MPEG-1 video standard as defined in ISO document IS 11172.

1.11. MPEG-2 Decoding Product – shall mean any instrumentality or combination of instrumentalities, including by way of example and without limitation: a DVD player or Blu-ray Disc player; decoding software; a digital television receiver; cable broadcast, terrestrial broadcast, satellite broadcast or IPTV television “set top box” or receiving equipment; a computer, a computer accelerator card or a computer tuner card; a digital camcorder; video telecommunications equipment; video packaged media playback equipment; and video game equipment; which is capable of or primarily designed in whole or in part for decoding video information in accordance with the MPEG-2 Standard, and which is Sold to an End User.

1.12. MPEG-2 Encoding Product – shall mean any instrumentality or combination of instrumentalities, including by way of example and without limitation: encoding software, an encoder, a DVD recorder, a Blu-ray Disc recorder, a digital video recorder or personal video recorder television signal transmitting equipment, a computer card, a digital camcorder, video telecommunications equipment and consumer video recording equipment, which is capable of or primarily designed in whole or in part for encoding video information into a format in compliance with the MPEG-2 Standard, and which is Sold to an End User.

1.13. MPEG-2 Essential Patent – shall mean a Patent which is necessarily infringed in connection with the use or implementation of the MPEG-2 Standard under the laws of the country which issued or published the Patent.

1.14. MPEG-2 Packaged Medium (Media) – shall mean any storage medium, including by way of example and without limitation magnetic tape, magnetic disc and optical disc, storing one or more MPEG-2 Video Events.

1.15. MPEG-2 Patent Portfolio – shall mean the portfolio of MPEG-2 Essential Patent(s) identified in Attachment 1 hereto, which portfolio may be supplemented or reduced from time to time in accordance with the provisions of this Agreement.

1.16. MPEG-2 Patent Portfolio Patent – shall mean an MPEG-2 Essential Patent under which a Licensor has the right to grant a license or sublicense to a third party with the right of such third party to grant sublicenses, and which is included in the MPEG-2 Patent Portfolio.

1.17. MPEG-2 Related Patent – shall mean any Patent which is not an MPEG-2 Essential Patent but which has one or more claims directed to an apparatus or a method that may be used in the implementation of a product or a service designed in whole or in part to exploit the MPEG-2 Standard under the laws of the country which issued or published the Patent.

1.18. MPEG-2 Royalty Product – shall mean a hardware and/or software product which may be licensed under Article 2.

1.19. MPEG-2 Standard – shall mean the MPEG-2 video standard as defined in ISO documents IS 13818-1 (including annexes C, D, F, J and K), IS 13818-2 (including annexes A, B, C and D, but excluding scalable extensions), and IS 13818-4 (only as it is needed to clarify IS 13818-2). The definition of MPEG-2 Standard shall be considered amended for all purposes upon the posting of a new definition to the website of the Licensing Administrator, www.mpegla.com (“Amended Definition”); provided, however, that no Amended Definition shall reduce the scope of any definition of the MPEG-2 Standard immediately prior to the posting of the Amended Definition. The Notice Provisions of this Agreement shall not apply to any Amended Definition.

1.20. MPEG-2 Video Event – shall mean video information having a normal playing time of any length up to and including 133 minutes encoded into a format in compliance with the MPEG-2 Standard that comprises video programming, including by way of example and without limitation, one or more Movies, television shows, video games, video advertisements, music videos and short subject video clips, or any compilation of any of the foregoing.

1.21. Patent(s) – shall mean any issued patent (including reexaminations, reissues, continuations, divisions and continuations-in-part), enforceable invention certificates, or issued utility model of any country, or any enforceable allowed patent application or enforceable allowed utility model application, published for opposition in any country.

1.22. Sale (Sold) – shall mean any sale, rental, lease, license or other form of distribution by Licensee of an MPEG-2 Royalty Product, either directly or through a chain of distribution, to an End User. A Sale shall be deemed to take place in the country in which title to the MPEG-2 Royalty Product passes to End User from Licensee or, at the election of the Licensing Administrator, in the country in which the MPEG-2 Royalty Product is received by the End User, except that if there is no MPEG-2 Essential Patent in such country, then a Sale shall be deemed to take place in the country in which the MPEG-2 Royalty Product is used.

2. LICENSING ADMINISTRATOR GRANT

2.1. MPEG-2 Decoding Products. Upon the Licensee’s payment of applicable royalties due under Article 3 and subject to other terms and conditions of this Agreement, the Licensing Administrator hereby grants to Licensee a royaltybearing worldwide, nonexclusive, nontransferable sublicense under all MPEG-2 Patent Portfolio Patents to make, have made, use, and Sell or offer for Sale MPEG-2 Decoding Products (i) that bear the brand name that Licensee owns or otherwise has the right to use at Licensee’s discretion or (ii) Sold without a brandname if the decision to do so is at the discretion of Licensee. NO LICENSE IS GRANTED UNDER THIS SECTION 2.1 UNLESS AND UNTIL ROYALTIES APPLICABLE UNDER ARTICLE 3 OF THIS AGREEMENT ARE PAID BY LICENSEE.

2.2. MPEG-2 Encoding Products. Upon the Licensee’s payment of applicable royalties due under Article 3 and upon compliance with Paragraph 7.16.1 hereof and subject to other terms and conditions of this Agreement, the Licensing Administrator hereby grants to Licensee a royalty-bearing worldwide, nonexclusive, nontransferable sublicense under all MPEG-2 Patent Portfolio Patents to make, have made, use for purposes other than encoding an MPEG-2 Video Event for recording on an MPEG-2 Packaged Medium, and Sell or offer for Sale MPEG-2 Encoding Products (i) that bear the brand name that Licensee owns or otherwise has the right to use at Licensee’s discretion or (ii) Sold without a brand-name if the decision to do so is at the discretion of Licensee. NO LICENSE IS GRANTED UNDER THIS SECTION 2.2 UNLESS AND UNTIL ROYALTIES APPLICABLE UNDER ARTICLE 3 OF THIS AGREEMENT ARE PAID BY LICENSEE AND, NOTWITHSTANDING ANY SUCH PAYMENT, NO LICENSE IS GRANTED HEREIN, BY IMPLICATION OR OTHERWISE, TO CUSTOMERS OF LICENSEE TO USE MPEG-2 ENCODING PRODUCTS, FOR ENCODING OR HAVING ENCODED ONE OR MORE MPEG-2 VIDEO EVENTS FOR RECORDING ON AN MPEG-2 PACKAGED MEDIUM FOR ANY USE OR DISTRIBUTION OTHER THAN PERSONAL USE OF LICENSEE’S CUSTOMER.

2.3. MPEG-2 Packaged Medium. Upon the Licensee’s payment of applicable royalties due under Article 3 and subject to other terms and conditions of this Agreement, the Licensing Administrator hereby grants to Licensee a royaltybearing worldwide, nonexclusive, nontransferable sublicense under all MPEG-2 Patent Portfolio Patents to use MPEG-2 Encoding Products as limited below, for encoding or having encoded one or more MPEG-2 Video Event(s) for recording on an MPEG-2 Packaged Medium, and to Sell or offer for Sale MPEG-2 Packaged Medium. NO LICENSE IS GRANTED UNDER THIS SECTION 2.3 UNLESS AND UNTIL ROYALTIES APPLICABLE UNDER ARTICLE 3 OF THIS AGREEMENT ARE PAID BY LICENSEE.

2.4. No License or Immunity Unless Expressly Granted. No license or immunity is granted by either party hereto to the other party hereto, either directly or by implication, estoppel or otherwise, other than as expressly provided in Sections 2.1 through 2.3, 2.6, 7.3 and 7.4.

2.5. Sublicenses. Except as provided in Section 2.6, the sublicenses granted in Sections 2.1 through 2.3 do not include the right of the Licensee to grant any further sublicenses.

2.6. Extension of Sublicense to Affiliates. The sublicenses granted herein by the Licensing Administrator shall include the right of Licensee to grant further sublicenses to its Affiliates, subject to the condition that any and all Affiliates of Licensee receiving such further sublicenses be identified in an attachment to this sublicense entitled “Licensed Affiliates.” Each sublicensed Affiliate shall be bound by the terms and conditions of this sublicense as if it were named herein in the place of the Licensee; provided, however that Licensee shall pay and account to the Licensing Administrator for royalties hereunder payable as a result of the activities of any and all sublicensed Affiliates. Any sublicense granted to an Affiliate shall terminate automatically and without notice on the date such Affiliate ceases to be an Affiliate.

2.6.1. Notice to Licensing Administrator of Sublicense Termination. In the event that a sublicense to an Affiliate of Licensee is terminated either as a result of the Affiliate ceasing to be an Affiliate, or as a result of a termination of the sublicense of the Affiliate by Licensee, Licensee shall notify the Licensing Administrator of the termination within ten (10) Days of such termination, and the attachment entitled “Licensed Affiliates” shall be modified to reflect such termination of an Affiliate.

2.6.2. Notice to Licensing Administrator of New Sublicense. In the event that Licensee grants a new further sublicense to either a new Affiliate or an existing Affiliate not previously sublicensed, such new further sublicense shall be effective immediately upon the grant thereof; provided that Licensee notifies the Licensing Administrator within ten (10) Days of the grant of such new further sublicense, and the attachment entitled “Licensed Affiliates” is modified to include the new sublicensed Affiliate.

2.7. Scope of License Grant. NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, ALL LICENSES GRANTED UNDER THIS AGREEMENT ARE LIMITED TO A FIELD OF USE TO COMPLY WITH THE MPEG-2 STANDARD. NO OTHER LICENSES FOR ANY OTHER PURPOSE OR USE ARE GRANTED HEREIN NOR ARE ANY LICENSES GRANTED TO ANY PORTION OR SEGMENT OF ANY PRODUCT EXCEPT THOSE PORTIONS OR SEGMENTS OF SUCH PRODUCTS THAT COMPLY WITH THE MPEG-2 STANDARD. THE LICENSES GRANTED UNDER THIS AGREEMENT FOR MPEG-2 ESSENTIAL PATENTS DO NOT EXTEND TO STRUCTURES, FEATURES, FUNCTIONS, OR PROCESSES NOT USED TO PRACTICE THE MPEG-2 STANDARD. IN PARTICULAR, AND WITHOUT LIMITATION, THERE IS NO LICENSE GRANTED UNDER THIS AGREEMENT FOR ANY VIDEO ENCODER OR DECODER FOR OTHER VIDEO COMPRESSION STANDARDS (E.G., AVC, VC-1). FURTHER, IT IS UNDERSTOOD AND AGREED THAT ANY LICENSE GRANTED HEREIN SHALL NOT INCLUDE ANY RIGHT TO MAKE, HAVE MADE, USE, OR SELL ANY PRODUCT OR PROCESS CAPABLE OF COMPLYING SOLELY WITH THE MPEG-1 STANDARD AND NO OTHER PORTION OF THE MPEG-2 STANDARD.

3. ROYALTY AND PAYMENTS

3.1. Royalty. Licensee shall pay to the Licensing Administrator a running royalty throughout the term of this Agreement on all MPEG-2 Royalty Products licensable by this Agreement that are Sold by Licensee or as otherwise required by this Agreement as follows:

3.1.1. MPEG-2 Decoding Product. The royalty for the sublicense granted pursuant to Section 2.1 shall be four United States Dollars (U.S. $4.00) for MPEG-2 Decoding Products Sold prior to January 1, 2002, and two and one half United States Dollars (U.S. $2.50) for MPEG-2 Decoding Products Sold between January 1, 2002 and December 31, 2009 or the execution date of this Agreement (whichever is later), and two United States Dollars ($2.00) for MPEG-2 Decoding Products Sold thereafter upon the Sale of each such product Manufactured or Sold in a country in which one or more MPEG-2 Patent Portfolio Patent(s) is in force.

3.1.2. MPEG-2 Encoding Product. The royalty for the sublicense granted pursuant to Section 2.2 shall be four United States Dollars (U.S. $4.00) for MPEG-2 Encoding Products Sold prior to January 1, 2002, and two and one half United States Dollars (U.S. $2.50) for MPEG-2 Encoding Products Sold between January 1, 2002 and December 31, 2009 or the execution date of this Agreement (whichever is later), and two United States Dollars ($2.00) for MPEG-2 Encoding Products Sold thereafter upon the Sale of each such product Manufactured or Sold in a country in which one or more MPEG-2 Patent Portfolio Patent(s) is in force.

3.1.3. Consumer Product. The royalty for the sublicenses granted pursuant to Sections 2.1 and 2.2 for a Consumer Product shall be six United States Dollars (U.S. $6.00) for Sales of such products prior to January 1, 2002, and two and one half United States Dollars (U.S. $2.50) for Sales of such products between January 1, 2002 and December 31, 2009 or the execution date of this Agreement (whichever is later), and two United States Dollars ($2.00) for Sales of such products thereafter upon the Sale of each such product Manufactured or Sold as a Consumer Product in a country where one or more MPEG-2 Patent Portfolio Patent(s) is in force.

3.1.4. MPEG-2 Packaged Medium. Subject to Sections 3.1.5 through 3.1.7, the royalty for the sublicense granted pursuant to Section 2.3 for each copy of MPEG-2 Packaged Medium (Manufactured or Sold in a country in which one or more MPEG-2 Patent Portfolio Patent(s) is in force) containing one or more MPEG-2 Video Event(s) encoded using an MPEG-2 Encoding Product shall be as follows:

3.1.4.1. For the period prior to September 1, 2001, four United States Cents (U.S. $0.04) for the first MPEG-2 Video Event on any MPEG-2 Packaged Medium;

3.1.4.2. For the period from September 1, 2001 through February 28, 2003, three and one half United States Cents (U.S. $0.035) for the first MPEG-2 Video Event on any MPEG-2 Packaged Medium;

3.1.4.3. For the period from March 1, 2003 through December 31, 2009 or the execution date of this Agreement (whichever is later), three United States Cents (U.S. $0.03) for the first MPEG-2 Video Event on any MPEG-2 Packaged Medium; but for Licensees that executed the MPEG-2 Packaged Medium Amendment, the royalty rates as provided in the MPEG-2 Packaged Medium Amendment apply from January 1, 2007 through December 31, 2009 or the execution date of this Agreement (whichever is later);

3.1.4.4. For Licensees that execute this Agreement before January 1, 2011, the applicable royalty rates from January 1, 2010 or the execution date of the Agreement (whichever is later) to December 31, 2010, one and seventy six one hundredths United States Cents (U.S. $0.0176) for the first MPEG-2 Video Event on any MPEG-2 Packaged Medium;

3.1.4.5. The applicable royalty rates from January 1, 2011 or the execution date of this Agreement (whichever is later) through the term of the Agreement, one and six tenths United States Cents (U.S. $0.016) for the first MPEG-2 Video Event on any MPEG-2 Packaged Medium; and

3.1.4.6. Notwithstanding the above, for the term of this Agreement, the applicable royalty rate for each MPEG-2 Packaged Medium having a normal playing time up to and including twelve (12) minutes, but not more than twelve (12) minutes of video programming, shall be one United States Cent (U.S. $0.01).

3.1.5. MPEG-2 Video Event Additive Royalty. From the Effective Day of the Agreement through its term, the royalty rate for each MPEG-2 Packaged Medium containing an MPEG-2 Video Event shall be the applicable royalty rate set forth in the relevant subsection of Section 3.1.4, plus one United States Cent (U.S. $0.01) for each additional thirty (30) minutes of video playing time or portion thereof on the same MPEG-2 Packaged Medium.

3.1.6. Movie Royalty Exception. The applicable royalty rate for a Movie shall not exceed the MPEG-2 Video Event royalty rate pursuant to the applicable subsection of Section 3.1.4 for each copy of such Movie, and for the second Movie contained on the same MPEG-2 Packaged Medium as such Movie, the royalty rate shall not exceed an additional two United States Cents (U.S. $0.02).

3.1.7. Alternative Computation Option. From September 1, 2005 forward, Licensee may elect a simplified option for reporting and paying for all its MPEG-2 Packaged Medium royalties under which Licensee pays the MPEG-2 Video Event royalty rate pursuant to the applicable subsection of Section 3.1.4 for each and every MPEG-2 Packaged Medium regardless of its specific content or playing time (except where the playing time is 12 minutes or less in which case the royalty would continue to be $0.01).

3.1.8. Royalties Are Additive. Subject to Section 3.1.3, the royalties set forth in this Section 3.1 are additive as to each MPEG-2 Royalty Product to the extent that individual royalties are applicable.

3.1.9. Election of Remedies. Licensee understands that no product is licensed under this Agreement unless applicable royalties under Article 3 have been paid by Licensee for such product and that this Agreement requires Licensee to pay applicable royalties for all MPEG-2 Royalty Products licensable under this Agreement that are Sold by Licensee and as otherwise provided herein. In the event that Licensee breaches its obligations to pay royalties under Article 3 for licensable MPEG-2 Royalty Products Sold by Licensee, the Licensing Administrator may elect to sue for breach of contract or the Licensors may elect to sue for infringement of applicable patents. Licensee will not object to either choice of remedy.

3.2. The Payment of Royalties. Royalties pursuant to this Article 3 for each MPEG- 2 Decoding Product(s), MPEG-2 Encoding Product(s), or any Consumer Product (for purposes of this Section 3.2 “Product(s)”) are payable upon the Sale of:

3.2.1. Products which allow the End User to decode and/or encode (consistent with the limitations set forth in Section 2.3) MPEG-2 compliant bit streams; provided, however, that no royalty shall be payable upon the Sale or distribution of Product(s) incorporated in a single self-contained device with an MPEG-2 Royalty Product with which such Product(s) cannot be used simultaneously and on which all royalties have been paid to the Licensing Administrator pursuant to Article 3.

3.2.2. Products in which the MPEG-2 functionality of the Product is encrypted, disabled or otherwise unusable only:

3.2.2.1. Upon the distribution of a key or other instrumentality allowing the Product to be used to decode and/or encode MPEG-2 compliant bit streams; or

3.2.2.2. If the encryption, disablement or other method employed to prevent use is generally breached; or

3.2.2.3. If Licensee fails to take reasonable steps to insure that the MPEG-2 functionality is encrypted, disabled or otherwise unusable, royalties for all such Products Sold shall become payable pursuant to Article 3.

3.2.3. MPEG-2 Decoding Product updates and/or MPEG-2 Encoding Product updates; provided, however, that no royalty shall be due if such update (i) is Sold or distributed for use in connection with an MPEG-2 Royalty Product upon which a royalty has been paid to the Licensing Administrator in accordance with Article 3, and (ii) the update which is Sold or distributed overwrites or otherwise renders not usable the preexisting MPEG-2 capability on the MPEG-2 Royalty Product which is upgraded.

3.3. Payment Schedule.

3.3.1. Except as provided in Section 3.4, royalties payable pursuant to Section 3.1 that accrue after the latest signature date of this Agreement shall be paid by Licensee to the Licensing Administrator semiannually either: (i) as previously agreed between Licensee and the Licensing Administrator in connection with a prior MPEG-2 Patent Portfolio License, or if there was no such agreement, (ii) as measured from the date of the Licensing Administrator’s signature on this Agreement to the last business day of each six month period thereafter with the royalty payment to be made within two calendar months of such last business day. Such payment shall be preceded by a statement pursuant to Section 3.9, which statement shall be deemed to be true and correct unless shown otherwise in an audit in accordance with Section 3.10.

3.3.2. Back Royalties. Any royalties pursuant to the above schedule which accrued during the period from June 1, 1994 to the latest signature date specified above shall be payable within thirty (30) Days of such signature date, together with accrued interest of 10% per annum and shall be preceded by a royalty statement in accordance with Section 3.9.

3.4. Payments Upon Termination or Expiration. Within thirty (30) Days after the effective date of termination or expiration of this Agreement, Licensee shall pay the Licensing Administrator (i) any and all amounts that are due pursuant to this Agreement as of the effective date of such termination or expiration, preceded by a royalty statement for such payment in accordance with Section 3.9, and (ii) all amounts at the applicable royalties specified in Section 3.1 for all MPEG-2 Royalty Products in the possession of the Licensee as if such MPEG-2 Royalty Product had been Sold as of the effective date of such termination or expiration.

3.5. Form of Payment. Any payment made under the provisions of this Agreement shall be made by wire transfer or by other means of payment acceptable to the Licensing Administrator.

3.5.1. The amounts payable hereunder shall be paid to the Licensing Administrator by the Licensee in United States Dollars.

3.6. Taxes. In addition to the royalties set forth in Section 3.1, Licensee shall pay or reimburse the Licensing Administrator for any and all taxes, such as sales, excise, value added, use taxes, consumption taxes, and similar taxes of the Licensee, based on payments to be made hereunder in a jurisdiction(s) where such taxes are required. The royalties set forth in Section 3.1 shall be subject to withholding of any taxes of the Licensor required by applicable law. Withholding taxes, although withheld from royalty payments and remitted to the tax authority as required by law, are deemed paid by Licensors because the Licensors are the beneficial owners of all royalties.

3.6.1. At the Licensing Administrator’s request, the Licensee shall file any necessary tax forms required or desirable in order to apply for the application of rates under tax treaties. Nothing in this Section 3.6.1 shall require Licensee to take any action inconsistent with any applicable law or government regulation.

3.6.2. The Licensee shall not be required to pay or reimburse the Licensing Administrator for taxes based upon the net worth, capital, net income, or franchise of the Licensing Administrator, nor for taxes imposed upon the Licensing Administrator solely by reason of the Licensing Administrator’s doing business in or being incorporated in the jurisdiction imposing such taxes.

3.6.3. The Licensee shall reasonably cooperate with the Licensing Administrator in respect to mitigation of any withholding taxes, including providing such information as may be required by the Licensing Administrator for purposes of obtaining refunds of any taxes withheld.

3.6.4. The Licensing Administrator shall reasonably cooperate and provide such information as may be required by the Licensee for any purpose or reason relating to taxation.

3.6.5. If the Licensee in good faith contests any tax that is payable or reimbursable by the Licensee, the Licensing Administrator shall reasonably cooperate in such contest at the Licensee’s expense.

3.6.6. The Licensing Administrator shall pass on to the Licensee any tax refunds received by the Licensing Administrator with respect to the Licensee’s previous payment or reimbursement of applicable taxes, if any.

3.7. Late Payments. Any payment required hereunder that is received by the Licensing Administrator after the date it is due pursuant to the terms of Article 3 (including unpaid portions of amounts due) shall bear interest, compounded monthly, at the lesser of 10% per annum or the highest interest rate permitted to be charged by the Licensing Administrator under applicable law.

3.7.1. Any interest charged or paid in excess of the maximum rate permitted by applicable law shall be deemed the result of a mistake and interest paid in excess of the maximum rate shall be promptly credited or refunded (at Licensee’s option) to Licensee.

3.7.2. When Payments are Deemed Made. No payment shall be deemed made under this Agreement until the funds in the appropriate amount and as specified in this Agreement are actually received by the Licensing Administrator.

3.8. Dishonored Checks. If a payment due under this Agreement is permitted to be paid by check by the Licensing Administrator and the Licensee’s check is dishonored, the payment may at the Licensing Administrator’s option be deemed not to have been made. The Licensing Administrator may at its option, by written notice to Licensee, require subsequent payments to be made by wire transfer or cashier’s check in immediately available funds.

3.9. Statements. Licensee shall provide the Licensing Administrator with a statement for each period as defined in Sections 3.3.1, 3.3.2 and 3.4. Such statement shall be provided in electronic form to the Licensing Administrator at least thirty (30) Days before a royalty payment, if any, associated with such statement is due. For the convenience of Licensee, the Licensing Administrator may, in its sole discretion, agree to other forms or reports.

3.9.1. A statement shall show in reasonable detail and separately identify for each MPEG-2 Royalty Product both the quantity and country of Manufacture and the quantity and country of Sale of any and all MPEG-2 Royalty Products Sold by Licensee and its Affiliates during such reporting period, and a calculation of the royalties, if any, which are payable by virtue of such Manufacture and Sale of MPEG-2 Royalty Products during the period when the payment, if any, accrued.

3.9.2. All such statements shall be certified by an employee of Licensee authorized to make such certification.

3.9.3. The Licensing Administrator shall maintain all information in such statements of Licensee as Confidential Information in accordance with Article 5 of this Agreement, except to the extent that the information is needed by the Licensing Administrator to either (i) enforce any rights under this Agreement, or (ii) report to the Licensors the aggregate royalties paid by all sublicensees of the Licensing Administrator. In no event shall the Licensing Administrator provide to any of the Licensors information on royalties paid on a licensee-by-licensee basis unless required by law, court order, or rule or regulation.

3.10. Audits.

3.10.1. Books and Records. Licensee shall keep and maintain accurate and detailed books and records adequate for the Licensing Administrator to ascertain the royalties payable hereunder. Books and records pertaining to a particular royalty reporting period shall be maintained for at least three (3) years from the date on which a royalty is paid or becomes due in respect of such period.

3.10.2. Audit Rights. The Licensing Administrator shall have the right to audit or have audited the books and records of Licensee relating to payments made or due hereunder for any and all period(s) of MPEG-2 Patent Portfolio coverage from the Effective Date for the sole purpose of verifying the amounts due and payable hereunder, not more than once per calendar year (unless audit reveals a shortfall as provided in this Section in which case there shall be no such limitation) upon reasonable notice to the Licensee. If reasonably practicable, all such audits shall be conducted during reasonable business hours of the Licensee.

3.10.2.1. Any such audit shall be performed by an independent certified public accountant(s), consultant(s), or equivalent (“Auditor”) authorized to practice in the country where the audit is to take place. Licensee shall fully cooperate with Auditor in conducting such audit and shall permit Auditor to inspect and copy such portions of the Licensee’s books and records that the Auditor deems appropriate and necessary in accordance with the professional standards applicable to the Auditor in the country where the Audit is to take place (“Necessary Records”). It shall be a material breach of this Agreement for the Licensee to fail to provide to Auditor such Necessary Records.

3.10.2.2. The Licensing Administrator shall have the Auditor (and each member or employee thereof participating in the audit) agree not to disclose any information learned by the Auditor in the audit to any Licensor, nor use any such information, except (i) for providing the Licensing Administrator with a statement of payments due by Licensee in sufficient detail consistent with Section 3.9; or (ii) in connection with the Licensing Administrator’s enforcement of rights under this Agreement. Such agreement shall constitute the complete nondisclosure obligation of the Auditor.

3.10.2.3. The cost of an audit in accordance with Section 3.10.2 shall be at the expense of the Licensing Administrator; provided, however, the Licensee shall pay the full cost of the audit if the audit reveals any underpayment which in the aggregate is greater than five percent (5%) of the amount actually due for the period being audited. Any payments due by the Licensee under Section 3.10 shall be due within thirty (30) days of notice from Licensing Administrator.

3.10.2.4. Within thirty (30) Days after receiving notice from the Licensing Administrator of any shortfalls uncovered, Licensee shall pay (i) any shortfalls plus interest as set forth in Section 3.7, as measured from the date when such shortfall should have been paid and (ii) the cost of the audit if required under Section 3.10.2.3.

4. REPRESENTATIONS AND WARRANTIES

4.1. The Licensing Administrator represents and warrants that it has the authority, power and right to grant the rights and licenses to Licensee under this Agreement.

4.2. The Licensing Administrator makes no representation or warranty that the MPEG-2 Patent Portfolio Patent(s) sublicensed hereunder includes all MPEG-2 Essential Patent(s) throughout the world, or that the making, using or selling of products, or providing services covered by the claims of the MPEG-2 Patent Portfolio Patent(s) licensed hereunder will not infringe, directly, contributorily, by inducement or otherwise, any patent or other intellectual property right of a person or entity other than the MPEG-2 Patent Portfolio Patents of the Licensors.

4.3. The Licensing Administrator makes no representation or warranty about the infringement (direct, contributory, by inducement or otherwise) of any Patent by any MPEG-2 Royalty Product(s) licensed under this Agreement.

4.4. Licensee represents and warrants that (a) Licensee is entering into this Agreement for its own convenience in acquiring patent rights necessary for compliance with the MPEG-2 Standard from multiple licensors in a single transaction rather than electing its option to negotiate separate license agreements with individual Licensors, (b) Licensee is fully aware that the patents in the MPEG-2 Patent Portfolio may not include all present and future MPEG-2 Essential Patent(s), and that this Agreement may not provide Licensee with all the patent rights or other rights needed to perform the activities contemplated by Licensee in entering into this Agreement; and (c) Licensee understands that the terms of this Agreement require the payment of the same specified royalty regardless of whether one or more MPEG-2 Patent Portfolio Patents are infringed. The Licensing Administrator and Licensee recognize that Licensee has the right to separately negotiate a license with any or all of the Licensors under any and all of the MPEG-2 Patent Portfolio Patents under terms and conditions to be independently negotiated by each Licensor, and that this Agreement has been entered into freely and at the option of the Licensee.

4.5. Licensee represents and warrants that it has not granted an exclusive license under an MPEG-2 Essential Patent owned by Licensee and has not assigned an MPEG-2 Essential Patent in anticipation of entering into this Agreement. Notwithstanding anything to the contrary in this Agreement, Licensors reserve the right to grant to Licensing Administrator an exclusive license under any MPEG-2 Patent Portfolio Patent with respect to any particular party.

4.6. Licensee represents that it understands it is not required by this Agreement to use all MPEG-2 Patent Portfolio Patents licensed herein, and that the respective royalty rates specified in this Agreement represent the value to Licensee of making, selling and/or offering for Sale an MPEG-2 Royalty Product that is licensed under this Agreement and not the value of using any particular MPEG-2 Patent Portfolio Patent or package of MPEG-2 Patent Portfolio Patents. Licensee further represents that in using the MPEG-2 Standard in any product it is using one or more MPEG-2 Essential Patent(s).

4.7. Licensee represents that it understands that nothing in this Agreement prevents Licensee from using, licensing or in any other way dealing in or with any other technology, whether or not such technology is deemed to be competitive with the MPEG-2 Standard, including the MPEG-2 Patent Portfolio Patent(s) licensed in this Agreement.

4.8. Licensee represents that it understands that the royalty rates specified in this Agreement are payable under the terms of this Agreement for the life of this Agreement and that nothing shall compel the Licensors or the Licensing Administrator to reduce the royalties specified in this Agreement during the term of this Agreement.

4.9. Each party represents and warrants that it will comply with all applicable laws, regulations or ordinances pertaining to its performance hereunder.

4.10. Each party represents and warrants that this Agreement and the transactions contemplated hereby do not violate any agreements to which it is subject as a party or otherwise.

4.11. Each party further represents and warrants that in executing this Agreement, it does not rely on any promises, inducements, or representations made by any party or third party with respect to this Agreement or any other business dealings with any party or third party, now or in the future.

4.12. Each party represents and warrants that it is not presently the subject of a voluntary or involuntary petition in bankruptcy or the equivalent thereof, does not presently contemplate filing any such voluntary petition, and does not presently have reason to believe that such an involuntary petition will be filed against it.

4.13. Licensee and the Licensing Administrator recognize that the royalties payable shall neither increase nor decrease because of an increase or decrease in the number of MPEG-2 Patent Portfolio Patents licensed or because of an increase or decrease in the prices of its MPEG-2 Royalty Products.

4.14. Other than the express warranties of this Article 4, there are NO OTHER WARRANTIES, EXPRESS OR IMPLIED.

5. CONFIDENTIAL INFORMATION

5.1. For a period of five (5) years as measured from the first date of disclosure pursuant to this Agreement, the Licensing Administrator agrees to use reasonable care and discretion, at least commensurate with that degree of care it uses to protect similar information of its own, to avoid disclosure, publication, or dissemination of received Confidential Information, outside of those employees, officers, or consultants of the Licensing Administrator who have a need to know Confidential Information.

5.2. Disclosure by the Licensing Administrator of Confidential Information under Section 5.1 of this Agreement shall be permitted in the following circumstances; provided that (except with respect to Section 5.2.3) the Licensing Administrator shall have first given reasonable notice as practicable to Licensee that such disclosure is to be made:

5.2.1. In response to an order of a court, legal process or other governmental body;

5.2.2. Otherwise required by law;

5.2.3. Necessary to establish rights under this Agreement; or

5.2.4. If necessary in a proceeding before a governmental tax authority.

5.3. Notwithstanding any other provisions of this Agreement, the obligations specified in Section 5.1 of this Agreement will not apply to any information that:

5.3.1. Is or becomes publicly available without breach of this Agreement; or

5.3.2. Is released for disclosure by written consent of the Licensee.

6. TERM AND TERMINATION

6.1. Term. This Agreement shall expire on the expiration of all MPEG-2 Patent Portfolio Patents.

6.2. Termination for Material Breach. The Licensing Administrator shall have the right to terminate this Agreement upon breach of a material provision thereof by the Licensee. Subject to Sections 6.5.6 and 6.5.7, such termination for material breach shall become effective upon the Licensing Administrator sending written notice to the Licensee specifying the breach, and the failure of the Licensee to demonstrate, to the satisfaction of the Licensing Administrator, that Licensee has cured such breach within thirty (30) Days of the sending of such notice. A material breach as that term is used herein shall include, but is not limited to:

6.2.1. Failure of the Licensee to make payments and provide statements in accordance with this Agreement;

6.2.2. Failure of the Licensee to maintain adequate books and records or to permit an audit in accordance with Section 3.10; or

6.2.3. Failure of the Licensee to grant licenses to MPEG-2 Essential Patent(s) licensable or sublicensable by Licensee in accordance with Sections 7.3 or 7.4.

6.3. Partial Termination in the Event of Litigation. The Licensing Administrator, upon the instruction of a Licensor, shall terminate Licensee’s sublicense under any MPEG-2 Patent Portfolio Patent(s) licensed or sublicensed to the Licensing Administrator by such Licensor in the event that the Licensee has brought a lawsuit or other proceeding for infringement of an MPEG-2 Related Patent(s) and/or an MPEG-2 Essential Patent(s) against such Licensor, and Licensee has refused to grant the Licensor a license on fair and reasonable terms and conditions under the MPEG-2 Related Patent(s) and/or MPEG-2 Essential Patent(s) upon which the lawsuit or other proceeding is based. As part of the consideration for the licenses granted in this Agreement and for purposes of this Section 6.3 only, the Licensor’s per Patent share of royalties payable pursuant to Section 3.1 shall be presumed to be a fair and reasonable royalty rate for Licensee’s Patent(s), but Licensors who are Licensees are exempted from this presumption as a result of, among other things, the costs incurred in connection with this licensing program.

6.3.1. In the event Licensee exercises any of its have made rights under Article 2 with any party not otherwise licensed under the rights extended by the Licensee pursuant to the Licensee’s have made rights (“Unlicensed Other Party”) and (i) such Unlicensed Other Party brings a lawsuit or other proceeding for infringement of any MPEG-2 Essential Patent or MPEG-2 Related Patent against a Licensor, (ii) such Unlicensed Other Party refuses to grant the Licensor a license on reasonable and non-discriminatory terms and conditions under the MPEG-2 Essential Patent(s) and/or MPEG-2 Related Patent(s) upon which the lawsuit or other proceeding is based, and (iii) Licensor requests that Licensing Administrator revoke the Licensee’s have made rights pursuant to Section 6.3.1, then the Licensing Administrator shall revoke Licensee’s have made rights under any MPEG- 2 Patent Portfolio Patent(s) licensed or sublicensed to the Licensing Administrator by such Licensor with respect to such Unlicensed Other Party, and any MPEG-2 Royalty Product(s) which is made by such Unlicensed Other Party shall not be licensed under the have made rights provided in this Agreement as they relate to such Licensor’s MPEG-2 Essential Patents in any respect whatsoever. For purposes of Section 6.3.1, the Licensor’s per patent share of royalties payable pursuant to Section 3.1 shall be presumed to be a fair, reasonable and nondiscriminatory royalty rate for the Unlicensed Other Party’s Patent(s) considering the essential nature of the Licensor’s Patent(s) licensed hereunder).

6.4. Voluntary Termination. Licensee may not terminate this Agreement prior to December 31, 2015. Following that date, a Licensee may terminate this Agreement by providing thirty (30) Days’ written notice.

6.5. Other Terminations. In addition to other provisions set forth in this Agreement, this Agreement may be terminated by the Licensing Administrator upon the occurrence of the following events:

6.5.1. If Licensee files a petition in bankruptcy or the equivalent thereof, or is the subject of an involuntary petition in bankruptcy that is not dismissed within sixty (60) Days after the filing date thereof, or is or becomes insolvent, or admits of a general inability to pay its debts as they become due.

6.5.2. Upon the de facto or de jure nationalization or expropriation of Licensee by governmental or military action, whether or not with valid authority.

6.5.3. Upon any failure by Licensee to provide, within thirty (30) Days after written notice from the Licensing Administrator, satisfactory and adequate assurances that Licensee is able and willing to fully and effectively perform its obligations under this Agreement.

6.5.4. Upon Licensee’s failure during the term of this Agreement to pay royalties and/or provide statements as required by this Agreement.

6.5.5. Upon determination of a court of competent jurisdiction that an Affiliate of Licensee has infringed a Patent licensed under this Agreement.

6.5.6. If Licensee in any judicial or administrative proceeding or the equivalent thereof (i) asserts that any MPEG-2 Essential Patent is not enforceable or is invalid and/or (ii) asserts a position that is in conflict with any of the representations, warranties, or covenants made by Licensee in this Agreement, regardless of whether such representations and/or warranties are set forth in the whereas clauses of this Agreement or in Article 4 or in Sections 7.5 and 7.14. Termination pursuant to this Section 6.5.6 shall be effective as of the date written notice is sent to Licensee by Licensing Administrator.

6.5.7. In the event that any of the events listed in Sections 6.5.1, 6.5.2, 6.5.3, 6.5.4, or 6.5.5 hereof occur, this Agreement may be terminated by the Licensing Administrator upon thirty (30) Days’ written notice to Licensee, without any right of Licensee to cure.

6.6. Survival. The following provisions of this Agreement shall survive expiration or termination of this Agreement:

6.6.1. The obligation of Licensee to pay all royalties accrued pursuant to Article 3 as of the effective date of expiration or termination;

6.6.2. The obligation of Licensee to provide statements under Section 3.9 and to allow for an audit pursuant to Section 3.10;

6.6.3. The obligation of the Licensing Administrator to maintain confidentiality under Article 5; and

6.6.4. The obligations of Licensee pursuant to Sections 7.3 and 7.4.

7. MISCELLANEOUS PROVISIONS

7.1. Assignment.

7.1.1. In the event that the right of the Licensing Administrator to grant MPEG-2 Patent Portfolio Licenses is transferred to a successor Licensing Administrator, this Agreement shall be deemed assigned to the successor Licensing Administrator.

7.1.2. This Agreement may not be assigned by the Licensee to any other person or entity under any circumstances. This Agreement shall terminate upon the sale by Licensee of (i) all or substantially all of its assets, (ii) all or substantially all of its assets used in the activities contemplated by this Agreement, or (iii) its capital shares (or similar indicia of ownership) or upon similar transaction. This provision does not exempt a Licensee’s successor(s) in interest from liability for any unpaid royalties regardless of whether the Agreement is executed by such Licensee’s successor(s) in interest.

7.2. Notice.

7.2.1. All notices required or permitted under this Agreement (except Section 1.19) to Licensee or Licensing Administrator shall be sent by either Certified Mail with return receipt requested, overnight delivery by commercial or other service which can verify delivery, fax to the number indicated herein, or by e-mail to the address indicated herein, which may be updated by Licensee from time to time. Such notice so sent shall be effective as of the date it is sent. Notwithstanding anything to the contrary herein, amendments to Attachment 1 hereto, if any, shall be effective upon the posting of the new Attachment 1 on the website of the Licensing Administrator and such posting shall constitute notice pursuant to this Section.

7.2.2. All notices from the Licensing Administrator to Licensee shall be sent to:

Name:
Title:
Company:
Address:
Tel:
Fax:
E-mail:
CC:
Name:
Title:
Company:
Address:
Tel:
Fax:
E-mail:

7.2.3. All notices from the Licensee to the Licensing Administrator or its successor shall be sent to:

Contract Administrator
MPEG LA, LLC
4600 S. Ulster St., Suite 400
Denver, CO, USA 80237
Tel: 303-331-1880
Fax: 303-331-1879
E-mail: Contractadministrator@mpegla.com
Website: www.mpegla.com

7.3. Licensee Grant. Upon full execution of this Agreement, and as part of the consideration for the licenses granted in this Agreement, Licensee agrees to grant a worldwide, nonexclusive license and/or sublicense under any and all MPEG-2 Essential Patent(s) that Licensee or its Affiliate(s), if any, has the right to license and/or sublicense, to any Licensor or any sublicensee of the Licensing Administrator desiring such a license and/or sublicense on fair and reasonable terms and conditions. As part of the consideration for the licenses granted in this Agreement and for purposes of this Section 7.3 only, the Licensors’ per Patent share of royalties payable pursuant to Section 3.1 of this Agreement shall be presumed to be a fair and reasonable royalty rate for Licensee’s Patent(s), taking into account any bona fide payment required to be made by Licensee to any unrelated third party upon the Licensee’s sublicensing of such Patent(s), but Licensors who are Licensees are exempted from this presumption as a result of, among other things, the costs incurred in connection with this licensing program.

7.4. Licensee’s Option. In lieu of Section 7.3, Licensee shall have the option to hereby grant a worldwide, nonexclusive, nontransferable (except to a successor Licensing Administrator) license and/or sublicense under any and all of its MPEG-2 Essential Patent(s) to the Licensing Administrator with the right by the Licensing Administrator to grant MPEG-2 Patent Portfolio Licenses that include the MPEG-2 Essential Patent(s) that Licensee or its Affiliate(s), if any, has the right to license or sublicense. Licensee shall identify to the Licensing Administrator any and all of its patents and patents of its Affiliate(s), if any, which Licensee believes in good faith to be MPEG-2 Essential Patent(s). Whether each of the patent(s) identified by Licensee is an MPEG-2 Essential Patent(s) shall be determined according to an established procedure applicable to all new patents identified to the Licensing Administrator pursuant to the terms of an agreement referred to as the “Agreement Among Licensors.” The terms and conditions of the license and/or sublicense granted by the Licensee to the Licensing Administrator under this Section 7.4 shall be identical to the terms and conditions of the license and/or sublicense granted by each Licensor to the Licensing Administrator. If Licensee elects the option set forth in this Section 7.4, it shall be required to enter into the “Agreement Among Licensors,” which has been entered into by all Licensors.

7.5. Licensee Covenants.

7.5.1. Licensee hereby covenants to notify promptly the Licensing Administrator in the event that any allowed Patent application(s) published for opposition, which is licensed or sublicensed to the Licensing Administrator pursuant to Section 7.4 of this Agreement as an MPEG-2 Essential Patent(s), does not issue as an MPEG-2 Essential Patent(s).

7.5.2. Licensee shall promptly identify to the Licensing Administrator each Patent(s), except for MPEG-2 Patent Portfolio Patents of the Licensors, licensable or sublicensable by Licensee or its Affiliate(s), if any, which Licensee believes in good faith to be an MPEG-2 Essential Patent(s) within fourteen (14) Days of execution of this Agreement.

7.5.3. In the event that Licensee or any of its Affiliates has granted an exclusive license to a third party under an MPEG-2 Essential Patent(s) prior to the date of Licensee’s execution of this Agreement, Licensee shall advise the Licensing Administrator prior to the execution of this Agreement of such an exclusive license and identify to the Licensing Administrator such third party.

7.6. Licensing Administrator Covenants.

7.6.1. The Licensing Administrator covenants that if during the term of this Agreement, it acquires rights to grant sublicenses under additional MPEG- 2 Essential Patent(s), the MPEG-2 Patent Portfolio License herein will be supplemented to include such additional MPEG-2 Essential Patent(s).

7.6.2. The Licensing Administrator covenants that, with the exception of partial termination under Section 6.3, any deletion from the MPEG-2 Patent Portfolio shall occur only upon a determination in good faith by the Licensors, or upon a final adjudication of a tribunal of competent jurisdiction from which no appeal is taken or allowed, that the deleted Patent(s) is invalid or unenforceable in the country which issued or published the Patent(s), and that any addition to the MPEG-2 Patent Portfolio shall occur only upon the determination pursuant to established procedures that the additional Patent(s) is an MPEG-2 Essential Patent(s) in the country which issued or published the Patent(s).

7.6.3. The Licensing Administrator covenants that if any Patent(s) in the MPEG- 2 Patent Portfolio sublicensed by the Licensing Administrator to Licensee pursuant to the terms hereof is found not to be an MPEG-2 Essential Patent(s) in the country which issued or published the Patent(s), either by the Licensors or upon a final adjudication of a tribunal of competent jurisdiction from which no appeal is taken or allowed and such Patent(s) which is licensed to Licensee is to be deleted from the MPEG-2 Patent Portfolio, the Licensing Administrator shall give notice to Licensee of such deletion, and Licensee shall have the option to retain its sublicense under the deleted Patent(s) for the remainder of the term of this Agreement.

7.6.4. The Licensing Administrator covenants that it shall not delete from or add to the MPEG-2 Patent Portfolio for reasons other than stated in Sections 7.6.1, 7.6.2, 7.6.3 and Section 6.3.

7.6.5. The Licensing Administrator covenants that the royalties set forth in Section 3.1 shall not increase during the term of this Agreement, as set forth in Article 6.

7.7. Most Favorable Royalty Rates. Except as provided in Section 7.7.1, in the event that the Licensing Administrator grants an MPEG-2 Patent Portfolio License to another party with royalty rates more favorable than those set forth in Section 3.1 of this Agreement as they pertain to the specific products which are licensed thereunder, whether or not such more favorable royalty rates are on terms and/or conditions that are different than those set forth herein, the Licensing Administrator shall send written notice to Licensee specifying the more favorable royalty rates and any terms and/or conditions that are different than those set forth herein within thirty (30) Days of the granting of the MPEG-2 Patent Portfolio License providing for such more favorable royalty rates. Licensee shall be entitled to an amendment of this Agreement to the extent of providing for royalty rates as favorable as that available to such other party within thirty (30) Days of sending written notice to the Licensing Administrator requesting such amendment; provided, however, that this Agreement shall also be amended to include any additional terms provided in connection with the more favorable royalty rate as specified by the Licensing Administrator. Any amendment made pursuant to this Section 7.7 shall be effective as of the date it is made, and such more favorable royalty rates shall not be retroactively applicable in favor of the Licensee, and shall not be a basis for claiming any refund of royalties paid prior to such effective date.

7.7.1. Section 7.7 shall not apply to:

7.7.1.1. Settlement of litigation;

7.7.1.2. Determination by the Licensing Administrator of back royalties owed by a sublicensee or prospective sublicensee;

7.7.1.3. Compromise or settlement of royalty payments owed by a sublicensee in financial distress;

7.7.1.4. Individual licenses or sublicenses granted by a Licensor to a third party;

7.7.1.5. An order of a court or an administrative body; and

7.7.1.6. An unauthorized act of the Licensing Administrator.

7.8. Freedom of Independent Development. Nothing in this Agreement shall be construed as prohibiting or restricting Licensee from independently developing competitive video products or video services.

7.9. Relationship. Nothing in this Agreement shall be construed to create a principalagent relationship, partnership or joint venture between the parties, or give rise to any fiduciary duty from one party to the other party.

7.10. Severability. If any provision of this Agreement is held by a court of competent jurisdiction to be unenforceable or contrary to law, the remaining provisions of this Agreement will remain in full force and effect to the extent that the interests of the parties in entering this Agreement can be realized.

7.11. No Waiver. The failure of either party at any time to require performance by the other party of any provision of this Agreement shall not be construed as acquiescence or waiver of such failure to perform such provision. The failure of either party to take action upon the breach of any provision of this Agreement shall not be construed as acquiescence or waiver of any such breach.

7.12. Binding on Successors. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and assigns to the extent assignment is permitted by this Agreement.

7.13. Article and Section Headings. The Article and Section headings contained in this Agreement are for reference purposes only and shall not in any way control the meaning or interpretation of this Agreement.

7.14. Representation of Counsel; Mutual Negotiation. Each party had the opportunity to be represented by counsel of its choice in negotiating this Agreement. This Agreement shall therefore be deemed to have been negotiated at arms length, with the advice and participation of counsel, and prepared at the joint request, direction, and instruction of the parties, and shall be interpreted in accordance with its terms without favor to any party.

7.15. English Language. The parties have required that this Agreement and all documents relating thereto be drawn up in English.

7.16. Notice to Customers.

7.16.1. MPEG-2 Packaged Media Notice: Licensee agrees to provide to its customers or any other party that receives from it an MPEG-2 Encoding Product licensed under Section 2.2 of this Agreement a notice which specifies that: “ANY USE OF THIS PRODUCT IN ANY MANNER OTHER THAN PERSONAL USE THAT COMPLIES WITH THE MPEG-2 STANDARD FOR ENCODING VIDEO INFORMATION FOR PACKAGED MEDIA IS EXPRESSLY PROHIBITED WITHOUT A LICENSE UNDER APPLICABLE PATENTS IN THE MPEG-2 PATENT PORTFOLIO, WHICH LICENSE IS AVAILABLE FROM MPEG LA, LLC, 4600 S. ULSTER ST., SUITE 400, DENVER, CO 80237.”

Licensee understands that the license granted pursuant to Section 2.2 of this Agreement is conditioned on the Licensee providing the notice specified in this Section.

7.17. Bankruptcy.

7.17.1. In the event that the Licensing Administrator should file a petition under the United States federal bankruptcy laws, or that an involuntary petition shall be filed against the Licensing Administrator, the parties intend that Licensee shall be protected in the continued enjoyment of its rights as Licensee under the MPEG-2 Patent Portfolio Patents sublicensed hereunder to the maximum feasible extent including, without limitation, if it so elects, the protection conferred upon licensees under 11 U.S.C. Section 365(n). The Licensing Administrator agrees that it will give Licensee notice of the filing of any voluntary or involuntary petition under the United States federal bankruptcy laws.

7.17.2. The MPEG-2 Patent Portfolio Patents sublicensed hereunder shall be deemed to be “intellectual property” as the term is defined in 11 U.S.C. Section 101(35A). All written agreements entered into in connection with the parties’ performances hereunder from time to time shall be considered agreements “supplementary” to this Agreement for purposes of said Section 365(n).

7.18. Choice of Law and Consent to Jurisdiction. The validity, construction and performance of this Agreement shall be governed by the substantive law of the State of New York, United States of America, without regard to the conflict of law rules. The parties to this Agreement hereby consent to the jurisdiction of the federal and state courts of the states of Colorado, Delaware, Maryland and/or New York (“Applicable Courts”) in the event of any dispute arising under or in connection with this Agreement. In the event either party files an action against the other in any Applicable Court, the other party hereby waives any right to assert lack of personal jurisdiction.

7.19. No Third Party Beneficiaries. Except as provided in this Section 7.19, nothing in this Agreement shall be construed to give rise to any obligation on either party hereto for the benefit of a third party other than the Licensors or to confer any rights on any third party other than the Licensors. Notwithstanding anything to the contrary herein, any Licensee under an MPEG-2 Patent Portfolio License which is in full compliance with its obligations under such License shall be deemed a third party beneficiary of the obligations under Section 7.3 of any other Licensee.

7.20. Entire Agreement.

7.20.1. The provisions of this Agreement, including its attachments and any amendments, constitute the entire agreement between the parties, and supersede any and all prior communications and understandings, oral or written, between the parties relating to the subject matter hereof. 7.20.2. Except for supplementation of or deletion from the MPEG-2 Patent Portfolio by the Licensing Administrator or amendments to the MPEG-2 Standard as provided in Article 1, no amendment of this Agreement shall be effective unless such amendment is in writing and specifically references this Agreement, and is signed by all parties hereto. The Licensing Administrator shall promptly notify Licensee of any supplementation of or deletion from the MPEG-2 Patent Portfolio.

7.21. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

(Licensee)

Date: _______________ By: ________________________________

MPEG LA, LLC

Date: _______________ By: ________________________________

Lawrence A. Horn
President and CEO

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