Dolby

              Dolby
                Laboratories, Inc.

              Dolby
                Laboratories Licensing Corporation 

              100
                Potrero Avenue

              San
                Francisco, CA 94108-4813 

              Telephone
                415.558.0200 

              Fax
                415-863-1373 

              www.dolby.corn

            
	 	 


    

    12
      August
      2003

     

    Mr.
      Itzik
      Ben-Basat

    Scopus
      Network Technologies

    10
      Ha’amal St., Park Afek 

    Rosh
      Ha’ayin 48092 

    ISRAEL

     

    Dear
      Mr.
      Ben-Basat:

    


    Enclosed
      are Scopus Network Technologies’ copies of the agreements to the Dolby Digital
      Professional Encoder (L3D-ACPE and L3D-SCER.) Please note that Scopus Network
      Technologies is required to submit a sample product for technical evaluation
      and
      approval. This requirement is also true for all new models containing Dolby
      technology in the future.

    


    Please
      use the 2003 Royalty Reporting Form (Comprehensive-V) that was enclosed with
      Dolby Digital Professional Decoder System Agreement. Do not hesitate to contact
      me if I can be of further assistance.

     

    Yours
      sincerely,

     

    


    


    /s/
      Katie
      Jennette

    


    Katie
      Jennette

    Intellectual
      Property Licensing Specialist 

    Dolby
      Laboratories Licensing Corporation

     

    Enclosure:
      L3D-ACPE; L3D-SCER

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    


    
      	
              
                Dolby

            	
              Dolby
                Laboratories Licensing
                Corporation

            


    

    
      
        

      



    L3D-SCER

     

    DIGITAL
      AUDIO SYSTEM LICENSE AGREEMENT

    Professional
      Encoders

     

    Hardware,
      Software, Copyright, Trademark and Know-How License

    


    


    AN
      AGREEMENT

    BY
      AND
      BETWEEN

    


    
      	
              Dolby
                Laboratories Licensing Corporation

            	
              and

            	
              Scopus
                Network Technologies

            
	
              (hereinafter
                “Licensor”)

            	 	
              (hereinafter
                “Licensee”)

            
	
              of
                100 Potrero Avenue

            	 	
              of
                10 Ha’amal St., Park Afek 

            
	
              San
                Francisco, CA 94103-4813 

            	 	
              Rosh
                Ha’ayin 48092

            
	
              United
                States of America

            	 	
              Israel

            
	
              telephone:
                (415) 558-0200

            	 	
              telephone:
                972-3-900-7885

            
	
              facsimile:
                (415) 863-1373

            	 	 


    

    


    LICENSOR’s
      bank and account number for wire transfer of royalty payments (Section 4.05):
      

    


    
      	
              Bank:

            	
              Wells
                Fargo Bank

            
	
              Address:

            	
              464
                California Street, San Francisco, CA 94104 U.S.A.

            
	
              Account
                Name:

            	
              Dolby
                Laboratories Licensing Corporation 

            
	
              Account
                Number:

            	
              4001-191451

            
	
              ABA
                Number:

            	
              121000248

            


    

    


    Identification
      of bank with respect to whose prime rate interest is calculated on overdue
      royalties (Section 4.06): Wells Fargo Bank

     

    Address
      of LICENSEE for communications not otherwise specified (Section
      8.04):

     

    
      	 	 	 	 	 
	
              SIGNATURES:

            	 	 	 	 
	
              On
                behalf of LICENSOR

            	 	 	
              On
                behalf of LICENSEE

            	 
	 	 	 	 	 
	
              Signature:
                

            	
              /s/

            	 	
              Signature:
                

            	
              /s/

            
	
              Name:
                

            	
              Grechen
                K. Likander

            	 	
              Name:
                

            	
              David
                Mahlab

            
	
              Title:
                

            	
              Manager,
                IP Licensing

            	 	
              Title:
                

            	
              President
                & CEO

            
	
              Place:
                

            	
              San
                Francisco, CA

            	 	
              Place:
                

            	
              Rosh
                Ha’ayin, Israel

            
	
              Date:
                

            	
              11
                August 2003

            	 	
              Date:
                

            	
              5/8/03

            
	
              Witnessed
                By:

            	 	 	
              Witnessed
                By:

            	 
	
              /s/ J.
                 K. Jennette

            	 	 	
               

            	
              /s/
                Itzik Ben-Basat

            
	 	 	 	 	 
	Effective
              Date of Agreement:	11
              Aug 2003 	 	Initial
              Payment:	 $10,000.00
	 	 	 	 	 


    

    


     

    
      

      

    

    100
      Potrero Avenue, San Francisco, CA 94103-4813 Telephone 415-558-0200 Fax
      415-863-1373

    Dolby
      and the double-D symbol are registered trademarks of Dolby
      Laboratories.

     

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    DIGITAL
      AUDIO SYSTEM LICENSE AGREEMENT

    Professional
      Encoders

    


    INDEX
      

     

    Preamble

    


    I. DEFINITIONS

     

    Section
      1.01 - “LICENSOR”

    Section
      1.02 - “LICENSEE”

    Section
      1.03 - “Dolby Digital Audio System Specifications”

    Section
      1.04 - “Licensed Trademark”

    Section
      1.05 - “Licensed Device”

    Section
      1.06 - “Licensed Product”

    Section
      1.07 - “Licensed Copyrighted Works”

    Section
      1.08 - “Derivative Works”

    Section
      1.09 - “System Development Kit”

    Section
      1.10 - “Know-How”

    Section
      1.11 - “Sensitive Information”

    Section
      1.12 - Section Deleted

    Section
      1.13 - “LICENSEE’s Trade Name and Trademarks”

    Section
      1.14 - “Other-Trademark Purchaser”

    Section
      1.15 - The “Consumer Price Index”

    Section
      1.16 - The “Effective Date”

    


    II. LICENSES
      GRANTED

    


    Section
      2.01 - Licenses Granted to LICENSEE 

    Section
      2.02 - Limitation of Licenses Granted

    


    III.
       OTHER
      OBLIGATIONS OF LICENSEE AND LICENSOR

     

    Section
      3.01 - Use of Licensed Trademarks

    Section
      3.02 - Ownership of the Licensed Trademarks 

    Section
      3.03 - Maintenance of Trademark Rights 

    Section
      3.04 - Trademark Enforcement 

    Section
      3.05 - Other-Trademark Purchasers 

    Section
      3.06 - Section Deleted 

    Section
      3.07 - Copyright Notice

    Section
      3.08 - Furnishing of Licensed Copyrighted Works 

    Section
      3.09 - License Notice 

    Section
      3.10 - Furnishing of Know-How

    Section
      3.11 - Use of Know-How and Sensitive Information 

    Section
      3.12 - Confidential Material

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    


    IV.
      PAYMENTS

     

    Section
      4.01 - Initial Payment

    Section
      4.02 - Royalties 

    Section
      4.03 - Section Deleted 

    Section
      4.04 - Royalty Applicability

    Section
      4.05 - Royalty Payments and Statements 

    Section
      4.06 - Section Deleted 

    Section
      4.07 - Books and Records

    Section
      4.08 - Rights of Inspecting Books and Records

     

    V.
      STANDARDS OF MANUFACTURE AND QUALITY

    


    Section
      5.01 - Standardization and Quality 

    Section
      5.02 - Right to Inspect Quality

    


    VI.
      TERMINATION AND EFFECT OF TERMINATION

    


    Section
      6.01 - Expiration of Agreement 

    Section
      6.02 - Termination for Cause 

    Section
      6.03 - Section Deleted 

    Section
      6.04 - Effect of Termination

     

    VII.
      LIMITATIONS OF RIGHTS AND AUTHORITY

    


    Section
      7.01 - Limitation of Rights

    Section
      7.02 - Limitation of Authority

    Section
      7.03 - Disclaimer of Warranties and Liability; Hold Harmless 

    Section
      7.04 - Limitation of Assignment by LICENSEE 

    Section
      7.05 - Compliance with U.S. Export Control Regulations

    


    VIII.
      MISCELLANEOUS PROVISIONS

    


    Section
      8.01 - Language of Agreement; Language of Notices 

    Section
      8.02 - Stability of Agreement

    Section
      8.03 - Public Announcements

    Section
      8.04 - Address of LICENSEE and LICENSOR for all Other Communications


    Section
      8.05 - Applicable Law

    Section
      8.06 - Choice of Forum; Attorneys’ Fees 

    Section
      8.07 - Construction of Agreement

    Section
      8.08 - Captions

    Section
      8.09 - Singular and Plural

    Section
      8.10 - Complete Agreement

    Section
      8.11 - Severability

    Section
      8.12 - Company Representation and Warranty 

    Section
      8.13 - Execution

    


    Appendix
      A - Appendix Deleted

    Appendix
      B - Dolby Digital Audio System

    Appendix
      C - Preliminary Specifications for Dolby Digital Encoders 

    Appendix
      D - Table of Contents for the System Development Kit 

    Appendix
      E - Royalty Schedule

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    DIGITAL
      AUDIO SYSTEM LICENSE AGREEMENT

    


    WHEREAS,
      LICENSOR is engaged in the field of audio signal processing systems and has
      developed signal processing systems useful for audio tape recording and playback
      and for other applications;

    WHEREAS,
      LICENSOR’s signal processing systems have acquired a reputation for excellence
      and LICENSOR’s trademarks
      have acquired valuable goodwill;

    WHEREAS,
      LICENSOR has licensed over 160 companies to make, use and sell consumer audio
      hardware incorporating LICENSOR’s noise reduction systems and marked with
      LICENSOR’s trademarks; and

    WHEREAS,
      LICENSOR has developed the model Dolby Digital audio system which uses a new
      technique for encoding and decoding of audio frequency data in digital form
      with
      a substantially reduced bit-rate while maintaining a high quality decoded audio
      signal;

    WHEREAS,
      LICENSOR represents and warrants that it has rights to grant licenses under
      its
      copyrights, know-how and trademarks;

    WHEREAS,
      LICENSEE is engaged in the manufacture of equipment for the encoding of
      entertainment source material into a variety of digitally compressed
      formats;

    WHEREAS,
      LICENSEE believes it can develop a substantial demand for equipment marked
      with
      LICENSOR’s trademarks used to encode audio signals using LICENSOR’s model Dolby
      Digital audio system;

    WHEREAS,
      LICENSEE desires a non-exclusive license to manufacture and sell professional
      encoding equipment using LICENSOR’s model Dolby Digital audio system based on
      LICENSOR’s reference design and software, or an approved
      implementation from a third
      party, and using LICENSOR’s know-how and trade secrets and under LICENSOR’s
      trademarks; and

    WHEREAS,
      LICENSOR is willing to grant such a license under the terms and conditions
      set
      forth in this Agreement.

    NOW,
      THEREFORE, it is agreed by and between LICENSOR and LICENSEE as
      follows:

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      I

    DEFINITIONS

     

    Section
      1.01 - “LICENSOR”
      means
      Dolby Laboratories Licensing Corporation, a corporation of the State of New
      York, having a place of business as indicated on the title page of this
      Agreement, and its successors and assigns.

    Section
      1.02 - “LICENSEE”
      means
      the corporation identified on the title page of this Agreement and any
      subsidiary thereof of whose ordinary voting shares more than 50% are controlled
      directly or
      indirectly
      by such corporation, but only so long as such control exists.

    Section
      1.03 - “Dolby Digital Audio System Specifications”
      means
      the specifications for the Dolby Digital audio system, comprising the Dolby
      Digital Audio System operating parameters as specified in Appendix B entitled
      “Dolby Digital Audio System,” the “Preliminary Specifications for Dolby Digital
      Encoders” as specified in Appendix C, attached hereto and an integral part of
      this Agreement.

    Section
      1.04 - “Licensed Trademark”
      means
      one or more of the following: (a) the word mark “Dolby” (b) the device
      mark [graphic omitted] which
      is
      also referred to as the double-D symbol.

    Section
      1.05 - “Licensed Device”
      means a
      digital audio circuit having Dolby Digital Audio System Specifications, whether
      made in discrete component, integrated circuit, or other forms, for encoding
      one
      audio channel into a Dolby Digital bitstream. A circuit counts as one “Licensed
      Device” for each input audio channel it can simultaneously encode.

    Section
      1.06 - “Licensed Product”
      means a
      complete ready-to-use professional hardware encoder product which:

    (1) contains
      one or more Licensed Devices; and

    (2) is
      based
      on an implementation tested and approved by LICENSOR; and

    (3) is
      intended to encode a maximum of two audio channels from digital or analog
      sources into a Dolby Digital bitstream; and

    (4) may
      have
      a built in “confidence” audio decoder for checking the encoded bitstream. Such
      confidence decoder may not include Dolby Pro Logic decoding capability, a noise
      sequencer, any bass management or level trims, and may not be sold, or otherwise
      exchanged for value as a stand-alone unit.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    


    (5) Notwithstanding
      the above, a Licensed Product shall not mean an audio encoder which is a
      complete self contained unit including power supply, input/output interfaces,
      and control means.

    Section
      1.07 - “Licensed Copyrighted Works”
      shall
      mean all copyrighted works including the Dolby Digital object code, implementing
      Dolby Digital encoder and/or decoder functions in real-time (assembly code),
      owned by DOLBY or owned by others to which DOLBY has the right to sublicense,
      relating to Dolby Digital and which are useful for the development, design,
      manufacture, sale, or use of Licensed Products.

    Section
      1.08 - “Derivative Works”
      shall
      mean any derivative works based on any of the Licensed Copyrighted Works
      (including the Dolby Digital encoder code), whether in human readable (C-code),
      machine language (object code), or any other form.

    Section
      1.09 - “System Development Kit”
      (hereinafter Development Kit) shall mean the package of materials the contents
      of which are scheduled at Appendix D entitled, “Table of Contents for the System
      Development Kit,” and which may be updated from time to time by Licensor, as
      significant developments arise.

    Section
      1.10 - “Know-How”
      means
      all proprietary information, trade secrets, skills, experience, recorded or
      unrecorded, accumulated by LICENSOR, from time to time prior to and during
      the
      term of this Agreement, or licensable by LICENSOR, relating to the Licensed
      Products and all designs, drawings, reports, memoranda, blue-prints,
      specifications and the like, prepared by LICENSOR or by others and licensable
      by
      LICENSOR, insofar as LICENSOR deems the same to relate to and be useful for
      the
      development, design, manufacture, sale or use
      of
      Licensed Products. Know-How does not include Licensed Copyrighted Works, whether
      or not published.

    Section
      1.11 - “Sensitive Information”
      means
      non-technical proprietary information of LICENSOR or LICENSEE, including,
      without limiting the foregoing, marketing information, product plans, business
      plans, royalty, and sales information.

    Section
      1.12 - Section Deleted

    Section
      1,13 - “LICENSEE’s Trade Name and Trademarks”
      means
      any trade name or trademark used and owned by LICENSEE.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    


    Section
      1.14 - “Other-Trademark Purchaser”
      means
      any customer of LICENSEE who, with LICENSEE’s knowledge, intends to resell, use
      or lease the Licensed Products under a trademark other than LICENSEE’s Trade
      Name and Trademarks.

    Section
      1.15 - The “Consumer Price Index”
      means
      the U.S. City Average Index (base of 1982-1984=100) of the Consumer Price Index
      for All Urban Consumers as published by the Department of Labor, Bureau of
      Labor
      Statistics of the United States Government. In the event that said Index ceases
      to be published under its present name or form or ceases to be published by
      the
      same government entity, reference shall be made to the most similar index then
      available.

    Section
      1.16 - The “Effective Date”
      of this
      Agreement is the date of execution hereof by the last party to execute the
      Agreement, or, if this Agreement requires validation by any governmental or
      quasi-governmental body, the “Effective Date” is the date of validation of this
      Agreement.

    


    ARTICLE
      II

    LICENSES
      GRANTED

    


    Section
      2.01 - Licenses Granted to LICENSEE

    A.
      Hardware:

    LICENSOR
      hereby grants to LICENSEE:

    a
      personal, non-transferable, indivisible, and non-exclusive license throughout
      the world

    (1)
      to
      manufacture, market, sell
      and
      import Licensed Products subject to the conditions set forth in this Agreement
      and LICENSEE’s performance of its obligations, including the payment of
      royalties,

    (2)
      to
      use the Licensed Know-How and the Licensed Trademarks on Licensed Products
      and
      in connection with the advertising and offering for sale of Licensed Products
      bearing one or more of the Licensed Trademarks subject to the conditions set
      forth in this Agreement and LICENSEE’s performance of its
      obligations;

    B.
      Software:

    LICENSOR
      hereby grants to LICENSEE:

    a
      personal, non-transferable, indivisible, and non-exclusive license throughout
      the world

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    


    (1)
      to
      use and modify the Licensed Copyrighted Works (except the Dolby Digital object
      code) in order to prepare Derivative Works that run on Licensed
      Products,

    (2)
      to
      market, sell, distribute, maintain, and support the Derivative Works in object
      or executable form only, to grant end-user licenses to executable code to use
      but not to modify executable versions of the Derivative Works in connection
      with
      Licensed Products, and to copy the Derivative Works for execution, backup,
      and
      archival purposes subject to the conditions set forth in this Agreement and
      LICENSEE’s performance of its obligations, including the payment of
      royalties.

    Section
      2.02 - Limitation of Licenses Granted

    Notwithstanding
      the licenses granted under Section 2.01:

    (1)
      no
      license is granted under this Agreement to lease, sell, transfer, or otherwise
      dispose of any subset or portion of a Licensed Product, partially assembled
      products, products in kit form, and knocked-down or semi-knocked-down
      products;

    (2)
      no
      license is granted under this Agreement to use any Licensed Trademark in
      connection with offering for sale or in advertising and/or informational
      material relating to any Licensed Product which is not marked with the mark
      specified in Section 3.01(1) of this Agreement;

    (3)
      no
      license is granted under this Agreement with respect to the use of any Licensed
      Trademark on or in connection with products other than Licensed
      Products;

    (4)
      no
      right is
      granted
      with
      respect to LICENSOR’s
      trade name “Dolby Laboratories” except with respect to the use of said tradename
      on and in connection with Licensed Products for the acknowledgments and notices
      required herein; 

    (5)
      no
      license is granted to sell, distribute, lease, rent or otherwise dispose of
      Licensed Derivative Works that are not linked to the sale of a specific Licensed
      Product; and

    (6)
      no
      right to grant sublicenses other than end-user licenses specifically allowed
      under Section 2.01 B. (2) is granted under this Agreement.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    


    ARTICLE
      III

    OTHER
      OBLIGATIONS OF THE LICENSOR AND LICENSEE

    


    Section
      3.01 - Use of Licensed Trademarks

    The
      Licensed Trademarks have acquired a reputation for high quality among
      professionals and consumers around the world. The performance capability of
      the
      Dolby Digital audio system is
      such
      that
      LICENSOR is willing, by virtue of this Agreement, to allow the use of the
      Licensed Trademarks on Licensed Products or on the user interface to Licensed
      Products and in connection with their advertising and marketing to indicate
      that
      the quality of such products conforms with the general reputation for high
      quality associated with the Licensed Trademarks. LICENSEE’s use of the Licensed
      Trademarks is optional, however, if LICENSEE opts to use one or more Licensed
      Trademarks, such use shall be subject to the obligations of this Agreement
      as
      well as detailed regulations issued from time to time by LICENSOR. LICENSEE
      shall comply with the requirements of the body of this Agreement and such
      additional regulations as LICENSOR may issue and shall ensure that its
      subsidiaries, agents, distributors, and dealers throughout the world comply
      with
      such requirements (in the case of any inconsistencies among the body of this
      Agreement, the Dolby Digital Licensee Information Manual of Appendix D and
      any
      additional regulations, the body of this Agreement shall govern):

    (1)
      LICENSEE shall prominently mark the Licensed Product or the user interface
      to
      the Licensed Product in the following way:

     

    [logo]
      Dolby

    Digital

    


    (2)
      The
      mark specified in subsection (1) of this Section 3.01, shall also be used at
      least once in a prominent manner in all advertising and promotions for such
      Licensed Product; such usages shall be no less prominent and in the same
      relative size as the most prominent third party other trademark(s) appearing
      on
      such Licensed Product or in the advertising and promotion thereof.

    (3)
      LICENSEE may not use the Licensed Trademarks in advertising and promotion of
      a
      product not marked in accordance with subsection (1) of this Section
      3.01.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (4)
      In
      every use of a Licensed Trademark, except on the main control surface of a
      Licensed Product, LICENSEE shall give notice to the public that such Licensed
      Trademark is a trademark by using the superscript letters “TM” after the
      respective trademark, or by use of the trademark registration symbol “®” (the
      capital letter R enclosed in a circle) as a superscript after the respective
      trademark. LICENSOR shall inform LICENSEE as to which notice form is to be
      used.

    (5)
      LICENSEE shall use its best efforts to ensure that the appropriate trademark
      notices, as set forth in subsection (3) above, appear in advertising for such
      Licensed Products at the retail level.

    (6)
      LICENSOR’s ownership of Licensed Trademarks shall be indicated whenever used by
      LICENSEE, whether use is on a product or on descriptive, instructional,
      advertising, or promotional material, by the most relevant of the following
      acknowledgments: “‘Dolby’ is a trademark of Dolby Laboratories”, “The double-D
      symbol is a trademark of Dolby Laboratories”, or “‘Dolby’ and the double-D
      symbol are trademarks of Dolby Laboratories.” On Licensed Products such words
      shall be used on an exposed surface, such as the back or the bottom. LICENSEE
      shall use its best efforts to ensure that such an acknowledgment appears in
      advertising at the retail level.

    (7)
      Licensed Trademarks shall always be used in accordance with established United
      States practices for the protection of trademark and service mark rights, unless
      the requirements in the country or jurisdiction in which the product will be
      sold are more stringent, in which case the practice of such country or
      jurisdiction shall be followed. In no event shall any Licensed Trademark be
      used
      in any way that suggests or connotes that it is a common, descriptive or generic
      designation. Whenever the word “Dolby” is used, the letter D shall be
      upper-case. The word “Dolby” shall be used only as an adjective referring to a
      digital audio product, never as a noun or in any other usage which may
      contribute to a generic meaning thereof. In descriptive, instructional,
      advertising, or promotional material or media relating to Licensed Products,
      LICENSEE must use the Licensed Trademarks and expressions which include the
      Licensed Trademark “Dolby” with an appropriate generic or descriptive term
      (e.g., “Dolby Digital encoder”, “Dolby Digital audio circuit”, “Dolby Digital
      transmission” etc.), with reference to Licensed Products and their
      use.

    (8)
      All
      uses of the Licensed Trademarks are subject to approval by LICENSOR. LICENSOR
      reserves the right to require LICENSEE to submit proposed uses to LICENSOR
      for
      written approval prior to actual use. Upon request of LICENSOR, LICENSEE shall
      submit to LICENSOR samples of its own 


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    usage of the Licensed Trademarks and usage of the Licensed
      Trademarks by its subsidiaries, agents, distributors, and dealers.

     

    


    (9)
      Licensed Trademarks shall be used in a manner that distinguishes them from
      other
      trademarks, service marks, symbols or trade names, including LICENSEE’s Trade
      Name and Trademarks.

    (10)
      LICENSEE may not use the Licensed Trademarks on and in connection with products
      that do not meet LICENSOR’s quality standards.

    (11)
      LICENSEE may not use the Licensed Trademarks on and in connection with products
      other than Licensed Products.

    Section
      3.02 - Ownership of the Licensed Trademarks

    LICENSEE
      acknowledges the validity and exclusive ownership by LICENSOR of the Licensed
      Trademarks.

    LICENSEE
      further acknowledges that it owns no rights in the Licensed Trademarks nor
      in
      the tradename “Dolby Laboratories.” LICENSEE acknowledges and agrees that all
      rights that it may accrue in the Licensed Trademarks and in the tradenames
      “Dolby Laboratories” will inure to the benefit of the owner thereof, LICENSOR or
      LICENSOR’s parent Dolby Laboratories, Inc.

    LICENSEE
      further agrees that it will not file any application for registration of the
      Licensed Trademarks or “Dolby Laboratories” in any country, region, or under any
      arrangement or treaty. LICENSEE also agrees that it will not use
      nor
      will
it file
      any
      application to register in any country, region, or under any arrangement or
      treaty any mark, symbol or phrase, in any language, which is confusingly similar
      to the Licensed Trademarks or “Dolby Laboratories”.

    Section
      3.03 - Maintenance of Trademark Rights

    The
      expense of obtaining and maintaining Licensed Trademark registrations shall
      be
      borne by LICENSOR. LICENSOR, as it deems necessary, will advise LICENSEE of
      the
      grant of registration of such trademarks. As LICENSOR deems necessary, LICENSEE
      and LICENSOR will comply with applicable laws and practices of the country
      of
      registration, including, without limiting the foregoing, the marking with notice
      of registration and the recording of LICENSEE as a registered or licensed user
      of such trademarks. The expense of registering or recording LICENSEE as a
      registered user or otherwise complying with the laws of any country pertaining
      to such registration or the recording of trademark 


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    agreements
      shall be borne by LICENSEE. LICENSEE shall
      advise LICENSOR of all countries where Licensed Products are sold, leased or
      used.

    Section
      3.04 - Trademark Enforcement

    LICENSEE
      shall immediately inform LICENSOR of all infringements, potential or actual,
      which may come to its attention, of the Licensed Trademarks. It shall be the
      exclusive responsibility of LICENSOR, at its own expense, to terminate,
      compromise, or otherwise act at its discretion with respect to such
      infringements. LICENSEE agrees to cooperate with LICENSOR by furnishing, without
      charge, except out-of-pocket expenses, such evidence, documents and testimony
      as
      may be required therein.

    Section
      3.05 - Other-Trademark Purchasers

    To
      the
      extent only that technical standardization, equipment or signal source
      interchangeability, product identification and usage of the Licensed Trademarks
      are affected, the following conditions shall apply if LICENSEE sells or leases
      Licensed Products on a mass basis to an Other-Trademark Purchaser who does
      not
      hold a license with terms and conditions substantially similar to this
      Agreement. LICENSEE shall inform LICENSOR of the name, place of business,
      trademarks, and trade names of the Other-Trademark Purchaser before such
      Other-Trademark Purchaser sells, leases, or uses Licensed Products. LICENSEE
      shall obtain agreement from such Other-Trademark Purchaser not to modify,
      install, use, lease, sell, provide written material for or about, advertise,
      or
      promote Licensed Products in any way which is in conflict with any provision
      of
      this Agreement. It shall be the responsibility of LICENSEE to inform the
      Other-Trademark Purchaser of the provisions of this Agreement, to notify such
      Other-Trademark Purchaser that the provisions of this Agreement shall be
      applicable, through LICENSEE, in the same way as if the Licensed Products were
      sold by LICENSEE under LICENSEE’s Trade Names and Trademarks, to ensure by all
      reasonable means that such provisions are adhered to and, if requested by
      LICENSOR, to provide to LICENSOR samples on a loan basis of the Other-Trademark
      Purchaser’s embodiment of the Licensed Products, as well as copies of such
      Other-Trademark Purchaser’s advertising, public announcements, literature,
      instruction manuals, and the like.

    Section
      3.06 - Section Deleted

    Section
      3.07 - Copyright Notice

    3.07(1)
      - Where Applied
      LICENSEE
      shall apply the copyright notice specified in subsection 3.07(2) of this Section
      3.07 to all media in which the program is distributed as permitted by
      this

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    


    Agreement,
      whether as an integral part of a Licensed Product or as a spare part solely
      for
      the repair of a Licensed Product.

    3.07(2)
      - Form of Notice
      LICENSEE
      shall apply the following copyright notice as required in subsection 3.07(1)
      of
      this Section 3.07:

    “This
      product contains one or more programs protected under international and U.S.
      copyright laws as unpublished works. They are confidential and proprietary
      to
      Dolby Laboratories. Their reproduction or disclosure, in whole or in part,
      or
      the production of derivative works therefrom without the express permission
      of
      Dolby Laboratories is prohibited. Copyright 1992-1997 by Dolby Laboratories,
      Inc. All rights reserved.”

    Section
      3.08 - Furnishing of Licensed Copyrighted Works

    Subject
      to any restrictions under the export control regulations of the United States
      or
      any other applicable restrictions, LICENSOR will promptly after the Effective
      Date, furnish to LICENSEE copies of all programs constituting the Copyrighted
      Works in the form of executable object code (machine readable code). LICENSEE
      agrees to use such programs only as specifically laid out in this
      Agreement.

    Upon
      termination of this Agreement, LICENSEE shall promptly return to LICENSOR,
      at
      LICENSEE’s expense, all documents and things supplied to LICENSEE as Licensed
      Copyrighted Works, as well as all copies and reproductions thereof.

    Section
      3.09 - License Notice

    On
      all
      Licensed.
      Products, LICENSEE shall acknowledge that the Licensed Products are manufactured
      under license from LICENSOR. The following notice shall be used by LICENSEE
      on
      an exposed surface, such as the back or the bottom, of all Licensed Products:
      “Manufactured under license from Dolby Laboratories”. Such notice shall also be
      used in all instruction and servicing manuals.

    Section
      3.10 - Furnishing of Development Kit and Know-How

    Subject
      to any restrictions under the export control regulations of the United States
      or
      any other applicable restrictions, LICENSOR will promptly, after the Effective
      Date, furnish to LICENSEE:

    (1)
      The
      Development Kit, copies of all documents and things comprising the Know-How;
      and

    (2)
      when
      requested by LICENSEE, provide, as LICENSOR deems reasonable, consulting
      services regarding design considerations and general advice relating to the
      Licensed Products and the sale and 


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    use
      thereof, for all of which LICENSEE will
      reimburse
      LICENSOR for travel and reasonable per diem expenses.

    Section
      3.11 - Use of Know-How and Sensitive Information

    3.11(1)
      - By LICENSEE

    LICENSEE
      shall use all Know-How and Sensitive Information obtained heretofore or
      hereafter from LICENSOR solely for the purpose of manufacturing and selling
      Licensed Products under this Agreement, shall not use such Know-How or Sensitive
      Information in an unauthorized way, and shall not divulge such Know-How or
      Sensitive Information or any portion thereof to third parties, unless such
      Know-How or Sensitive Information (a) was known to LICENSEE prior to its
      obtaining the same from LICENSOR; (b) becomes known to LICENSEE from sources
      other than either directly or indirectly from LICENSOR; or (c) becomes public
      knowledge other than by breach of this Agreement by LICENSEE or by another
      licensee of LICENSOR. The obligations of this subsection 3.11(1) shall cease
      six
      (6) years from the date on which such Know-How or Sensitive Information are
      acquired by LICENSEE from LICENSOR under this Agreement.

    Upon
      termination of this Agreement, with respect to Know-How or Sensitive Information
      subject to the obligations of this subsection 3.11(1), LICENSEE shall promptly
      return to LICENSOR, at LICENSEE’s expense, all documents and things supplied to
      LICENSEE as Know-How, as well as all copies and reproductions
      thereof.

    3.11(2)
      - By LICENSOR

    Except
      as
      provided by Article IV of this Agreement, LICENSEE is not obligated to disclose
      to LICENSOR any information that it deems
      proprietary
      or sensitive. Except as provided by Article
      IV
of
      this
      Agreement, LICENSOR has no obligation to treat in confidence, nor to restrict,
      in anyway, the use, reproduction, or publication of information obtained from
      LICENSEE, including, without limiting the foregoing, information obtained by
      LICENSOR in the course of providing consulting services under Section 3.10(2)
      of
      this Agreement and information obtained by LICENSOR in the course of exercising
      its right to maintain quality control over LICENSEE’s Licensed Products under
      Sections 5.01 and 5.02 of this Agreement.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
      3.12 - Confidential Material

    Parts
      of
      the Development Kit are confidential and will be marked as such. Disclosure
      of
      these materials to third parties without the advance written permission of
      Licensor is prohibited. Licensee may reproduce and/or internally disseminate
      these materials only on a disciplined “as needed” basis to the extent necessary
      to facilitate development of the Licensed Product, and only among its
      employees/consultants who have executed confidentiality agreements establishing
      a duty to maintain the secrecy of Licensor’s confidential material, and in no
      instance among individuals not maintaining a Work Made for Hire Relationship
      with Licensee. Licensee shall keep a record of each copy made and shall permit
      Licensor access to said record at times and places as Licensor may reasonably
      require.

    


    ARTICLE
      IV

    PAYMENTS

    


    Section
      4.01 - Initial Payment

    LICENSEE
      shall promptly upon the Effective Date of this Agreement pay LICENSOR the sum
      specified on the title page and shall pay all local fees, taxes, duties, or
      charges of any kind and shall not deduct them from the payment due.

    Section
      4.02 - Royalties

    Subject
      to the provisions of Section 4.05, LICENSEE shall pay to LICENSOR royalties
      on
      Licensed Devices manufactured by or for LICENSEE and incorporated in
      Licensed
      Products which are used, sold, leased, or otherwise disposed of by LICENSEE,
      except for
      Licensed
      Devices incorporated in Licensed Products returned to LICENSEE by customers
      of
      LICENSEE, other than in exchange for an upgraded product, on which a credit
      has
      been allowed by LICENSEE to said customers. The royalty payable shall be based
      on the number of Licensed Devices, hereinbefore defined, contained in Licensed
      Products, which are used, sold, leased or otherwise disposed of by LICENSEE
      in
      successive calendar quarters from the effective date hereof, based on the
      schedule given in Appendix E of this Agreement.

    On
      the
      Effective Date of this Agreement, and annually thereafter on first day of each
      calendar year, the rate at which the total royalties are calculated shall be
      adjusted in accordance with the Consumer Price Index. The adjustment shall
      be
      made by multiplying the royalties calculated as specified

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    


    above
      by
      the ratio between the Consumer Price Index for the last month of the year
      preceding the year in which the adjustment takes place and the Consumer Price
      Index for the month of December 1993. LICENSOR will, during the first quarter
      of
      each calendar year, or as soon as such information is known, if later, inform
      LICENSEE of the adjustment ratio to be applied to royalties due in that
      year.

    Section
      4.03 - Section Deleted

    Section
      4.04 - Royalty Applicability

    A
      Licensed Product shall be considered sold under Section 4.02 when invoiced,
      or
      if not invoiced, delivered to another by LICENSEE or otherwise disposed of
      or
      put into use by LICENSEE, except for consignment shipments, which will be
      considered sold when the payment for such shipments is agreed upon between
      LICENSEE and customer.

    Section
      4.05 - Royalty Payments and Statements

    Unless
      Licensed Products are manufactured for LICENSEE under the provisions of Section
      4.03 of this Agreement, LICENSEE shall render statements and royalty payments
      as
      follows:

    (1)
      LICENSEE shall deliver to the address shown on the cover sheet of this Agreement
      or such place as LICENSOR may from time to time designate, quarterly reports
      certified by LICENSEE’s chief financial officer or the officer’s designate
      within 30 days after each calendar quarter ending with the last day of March,
      June, September and December. Alternatively, such reports may be delivered
      by
      facsimile by transmitting them to LICENSOR’s facsimile telephone number shown on
      the cover sheet of this Agreement or such other number as LICENSOR may from
      time
      to time designate. Royalty payments are due for each quarter at the same time
      as
      each quarterly report and shall be made by wire transfer in United States funds
      to LICENSOR’s bank as identified on the cover sheet of this
      Agreement or such other bank as LICENSOR may
      from
      time to time designate. LICENSEE shall pay all local fees, taxes, duties, or
      charges of any kind and shall not deduct them from the royalties due unless
      such
      deductions may be offset against LICENSOR’s own tax liabilities.

    Each
      quarterly report shall:

    (a)
      state
      the number of each model type of Licensed Products leased, sold, or otherwise
      disposed of by LICENSEE during the calendar quarter with respect to which the
      report is due; 

    (b)
      state
      the number of Licensed Devices in each model type of Licensed Product;
      and

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    


    (c)
      contain such other information and be in such form as LICENSOR or its outside
      auditors may prescribe that is required by Licensor to enforce its rights (for
      example: complete contact information and Quarterly Reports details for an
      entity other than LICENSEE paying a portion of any obligation on Licensee’s
      behalf; and/or information relating to the quantities and source of products
      containing Dolby Intellectual Property (such as Implementations) received by
      Licensee or other entities on Licensee’s behalf).

    (2)
      Any
      remittance in excess of royalties due with respect to the calendar quarter
      for
      which the report is due shall be applied by LICENSOR to the next payment
      due.

    (3)
      LICENSEE’s first report shall be for the calendar quarter in which LICENSEE
      sells its first Licensed Product.

    (4)
      LICENSEE shall deliver a final report and payment of royalties to LICENSOR
      certified by LICENSEE’s
      chief financial officer or the officers designate within 30 days after
      termination of this Agreement throughout the world. Such a final report shall
      include a report of all royalties due with respect to Licensed Products not
      previously reported to LICENSOR. Such final report shall be supplemented at
      the
      end of the next and subsequent quarters, in the same manner as provided for
      during the Life of the Agreement, in the event that LICENSEE learns of any
      additional royalties due.

    (5)
      LICENSEE shall pay interest to LICENSOR from the due date to the date payment
      is
      made of any overdue royalties or fees, including the Initial Payment, at the
      rate of 2% above the prime rate as is in effectfrom
      time to time at the bank identified on
      the
      cover
      page of thisAgreement, or
      another
      major bank agreed
      to
      by the LICENSOR and LICENSEE in the event that the identified bank should cease
      to exist, provided however, that if the interest rate thus determined is in
      excess of rates allowable by any applicable law, the maximum interest rate
      allowable by such law shall apply.

    Section
      4.06 - Section Deleted

    Section
      4.07 - Books and Records

    LICENSEE
      shall keep complete books and records of all sales, leases, uses, returns,
      or
      other disposals by LICENSEE of Licensed Products.

    Section
      4.08 - Rights of Inspecting Books
      and Records

    LICENSOR
      shall have the right, through a professionally registered accountant at
      LICENSOR’s expense, to inspect, examine and make abstracts of the said books and
      records insofar as may be necessary to verify the accuracy of the same and
      of
      the statements provided for herein but such

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    


    inspection
      and examination shall
      be
      made
      during business hours upon reasonable notice and not more
      often
      than once per calendar year. LICENSOR agrees not
      to
      divulge to third parties any Sensitive information obtained from the books
      and
      records of LICENSEE as a result of such inspection unless such information
      (a)
      was known to LICENSOR prior to its acquisition from LICENSEE as a result of
      such
      inspection; (b) becomes known to LICENSOR from sources other than directly
      or
      Indirectly from LICENSEE; or (c) becomes a matter of public knowledge other
      than
      by breach of this Agreement by LICENSOR.

    ARTICLE
      V

    STANDARDS
      OF MANUFACTURE AND QUALITY

    


    Section
      5.01 - Standardization and Quality

    LICENSEE
      shall abide by the Dolby Digital Audio System Specifications, hereto appended
      in
      Appendix C and as modified from time to time by LICENSOR. All Licensed Product
      types are subject to acceptance testing for bitstream compliance by LICENSOR.
      All Licensed Products marked with the .Licensed Trademarks must additionally
      comply with all applicable minimum quality standards issued and modified from
      time to time by LICENSOR. On all Licensed Products marked with the Licensed
      Trademarks LICENSEE shall abide by reasonable standards of quality and
      workmanship. Such quality Standard
      shall apply to all aspects of Licensed Products which
      influence or
      reflect
      upon the audio quality or performance of the Licensed Products as perceived
      by
      the end user. LICENSEE shall with respect to all Licensed Products conform
      to
      any reasonable new quality standards requirements as specified by LICENSOR
      within a period of ninety (90) days of such specification in
      writing.

    Licensed
      Products shall not be designed, presented or advertised in any way which
      contributes to confusion of
      the
      Dolby
      Digital audio system with any of LICENSOR’s other digital audio systems, audio
      noise reduction or headroom extension systems or LICENSOR’s motion picture sound
      system.

    Section
      5.02 - Right to Inspect Quality

    LICENSEE
      shall provide LICENSOR with such non-sensitive information concerning Licensed
      Products as it may reasonably require in performing its right to enforce quality
      standards under this Agreement. LICENSEE will, upon request, provide on a loan
      basis to LICENSOR a reasonable number of samples of Licensed Products for
      testing, together with instruction and service manuals. In the
      event

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    


    inspection
      and examination shall be made during business hours upon reasonable notice
      and
      not more often than once per calendar year. LICENSOR agrees not to divulge
      to
      third parties any Sensitive information obtained from the books and records
      of
      LICENSEE as
      a
      result
      of such inspection unless such information (a) was known to LICENSOR prior
      to
      its acquisition from LICENSEE as a result of such inspection; (b) becomes known
      to LICENSOR from sources other than directly or indirectly from LICENSEE; or
      (c)
      becomes a matter of public knowledge other than by breach of this Agreement
      by
      LICENSOR.

    ARTICLE
      V

    STANDARDS
      OF MANUFACTURE AND QUALITY

    


    Section
      5.01 - Standardization and Quality

    LICENSEE
      shall abide by the Dolby Digital Audio System Specifications, hereto appended
      in
      Appendix C and as modified from
      time
      to
      time by LICENSOR. All Licensed Product types are subject to acceptance testing
      for bitstream compliance by LICENSOR. All Licensed Products marked with the
      Licensed Trademarks must additionally comply with all applicable minimum quality
      standards issued and modified from time to time by LICENSOR. On all Licensed
      Products marked with the Licensed Trademarks LICENSEE shall abide by reasonable
      standards of quality and workmanship. Such quality standards shall apply to
      all
      aspects of Licensed Products which influence or reflect upon the audio quality
      or performance of the Licensed Products as perceived by the end user. LICENSEE
      shall
      with
      respect to all Licensed Products conform to any reasonable new quality standards
      requirements as specified by LICENSOR within a period of ninety (90) days of
      such specification in writing.

    Licensed
      Products shall not be designed, presented or advertised in any way which
      contributes to confusion of the Dolby Digital audio system with any of
      LICENSOR’s other digital audio systems, audio noise reduction or headroom
      extension systems or LICENSOR’s motion picture sound system.

    Section
      5.02 - Right to Inspect Quality

    LICENSEE
      shall provide LICENSOR with such non-sensitive information concerning Licensed
      Products. as it may reasonably require in performing its right to enforce
      quality standards under this Agreement. LICENSEE will, upon request, provide
      on
      a loan basis to LICENSOR a reasonable number of samples of Licensed Products
      for
      testing, together with instruction and service manuals. In the
      event

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    


    that
      LICENSOR shall complain that any Licensed Product does not comply with
      LICENSOR’s quality standards, excepting newly specified standards falling within
      the ninety (90) day time limit of Section 5.01, it shall promptly so notify
      LICENSEE by written communication whereupon LICENSEE shall within ninety (90)
      days suspend the lease, sale or other disposal of the same.

    


    ARTICLE
      VI

    TERMINATION
      AND EFFECT OF TERMINATION

    


    Section
      6.01 - Expiration of Agreement

    Unless
      this Agreement already has been terminated in accordance with the provisions
      of
      Section 6.02, this Agreement shall terminate five years from effective date
      or
      with the expiration of the last patent, whichever is first, and thereafter
      is
      renewable at LICENSEE’s request at terms and conditions in force at the time of
      renewal.

    Section
      6.02 - Termination for Cause

    At
      the
      option of LICENSOR, in the event that LICENSEE breaches any of its material
      obligations under this Agreement, subject to the conditions of Section 6.04,
      this Agreement shall terminate upon LICENSOR’s giving thirty (30) days advance
      notice in writing, effective on dispatch of such notice, of such termination,
      giving reasons therefor to LICENSEE, provided however, that, if LICENSEE, within
      the thirty (30) day period, remedies the failure or default upon which such
      notice is based, then such
      notice
      shall not become effective and this Agreement shall continue in full force
      and
      effect. Notwithstanding the thirty day cure period provided under the provisions
      of this Section 6.02, interest due under Section 4.05 
      shall
      remain payable and shall not waive, diminish, or otherwise affect any of
      LICENSOR’s rights pursuant to this Section 6.02.

    Section
      6.03 - Section Deleted

    Section
      6.04 - Effect of Termination

    Upon
      termination of the Agreement, as provided in Sections 6.01 or 6,02, all licenses
      granted by LICENSOR to LICENSEE under this Agreement shall terminate, all rights
      LICENSOR granted to LICENSEE shall revest in LICENSOR, and all other rights
      and
      obligations of LICENSOR and LICENSEE under this agreement shall terminate except
      that the following rights and obligations of LICENSOR and

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    


    LICENSEE
      shall survive to the extent necessary to permit their complete fulfillment
      and
      discharge, with the exception that subsection (8) shall not apply in case of
      termination under Section 6.01:

    (1)
      LICENSEE’s obligation to deliver a final royalty report and supplements thereto
      as required by Section 4.05;

    (2)
      LICENSOR’s right to receive and LICENSEE’s obligation to pay royalties, under
      Article IV, including interest on overdue royalties, accrued or accruable for
      payment at the time of termination and interest on overdue royalties accruing
      subsequent to termination;

    (3)
      LICENSEE’s obligation to maintain books and records and LICENSOR’s right to
      examine, audit, and copy as provided in Section 4.07;

    (4)
      any
      cause of action or claim of LICENSOR accrued or to accrue because of any breach
      or default by LICENSEE;

    (5)
      LICENSEE’s obligations with respect to Know-How and Sensitive Information under
Section
      3.11(1) and LICENSOR’s obligations with respect to Sensitive Information under
      Section 4.08;

    (6)
      LICENSEE’s obligations to.
      cooperate with LICENSOR with respect to Trademark enforcement under Section
      3.04, with respect to matters arising before termination;

    (7)
      LICENSEE’s and LICENSOR’s obligations regarding public announcements under
      Section 8.03; and

    (8)
      LICENSEE shall be entitled to fill orders for Licensed Products already received
      and to make or have made for it and to sell Licensed Products for which
      commitments to vendors have been made at the time of such termination, subject
      to payment of applicable royalties thereon and subject to said Licensed Products
      meeting LICENSOR’s quality standards, provided that LICENSEE promptly advises
      LICENSOR of such commitments upon termination.

    The
      portions of the Agreement specifically identified in the sub-parts of this
      Section shall be construed and interpreted in connection with such other
      portions of the Agreement as may be required to make them
      effective.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    


    ARTICLE
      VII

    LIMITATIONS
      OF RIGHTS AND AUTHORITY

    


    Section
      7.01 - Limitation of Rights

    No
      right
      or title whatsoever in the Know-How, Licensed Copyrighted Works, or the Licensed
      Trademarks is granted by LICENSOR to LICENSEE or shall be taken or assumed
      by
      LICENSEE except as is specifically laid down in this Agreement.

    Section
      7.02 - Limitation of Authority

    Neither
      party shall in any respect whatsoever be taken to be the agent or representative
      of the other party and neither party shall have any authority to assume any
      obligation for or to commit the other party in any way.

    Section
      7.03 - Disclaimer of Warranties and Liability; Hold Harmless

    LICENSOR
      has provided LICENSEE the rights and privileges contained in this Agreement
      in
      good faith. However, nothing contained in this Agreement shall be construed
      as
      (1) a warranty or representation by LICENSOR that the Dolby Digital Audio System
      technology, Know-How, Licensed Copyrighted Works, the Licensed Trademarks,
      or
      any Licensed Device, Licensed Product, or part thereof embodying any of them
      will be free from infringement of patents, copyrights, trademarks, service
      marks, or other proprietary rights of third parties; or (2) an agreement to
      defend LICENSEE against actions or suits of any nature brought by any third
      parties.

    LICENSOR
      disclaims all liability and responsibility for property damage, personal injury,
      and consequential damages, whether or not foreseeable, that may result from
      the
      manufacture, use, lease, or sale of Licensed Products and parts thereof, and
      LICENSEE agrees to assume all liability and responsibility for all such damage
      and injury.

    LICENSEE
      agrees to indemnify, defend, and hold LICENSOR harmless from and against all
      claims (including, without limitation, product liability claims), suits, losses
      and damages, including reasonable attorneys’ fees and any other expenses
      incurred in investigation and defense, arising out of LICENSEE’s manufacture,
      use, lease, or sale of Licensed Products, or out of any allegedly unauthorized
      use of any trademark, service mark, patent, copyright, process, idea, method,
      or
      device (excepting Licensed Trademarks) by LICENSEE or those acting under its
      apparent or actual authority.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    


    Section
      7.04 - Limitation of Assignment by LICENSEE

    The
      rights, duties and privileges of LICENSEE hereunder shall not be transferred
      or
      assigned by it either in part or in whole without prior written consent of
      LICENSOR. However, LICENSEE shall have the right to transfer its rights, duties
      and privileges under this Agreement in connection with its merger and
      consolidation with another firm or the sale of its entire business to another
      person or firm, provided that such person or firm shall first have agreed with
      LICENSOR to perform the transferring party’s obligations and duties
      hereunder.

    Section
      7.05 - Compliance with U.S. Export Control Regulations

    (1)
      LICENSEE agrees not to export any technical data acquired from LICENSOR under
      this Agreement, nor the direct product thereof, either directly or indirectly,
      to any country in contravention of United States law. 

    (2)
      Nothing in this Agreement shall be construed as requiring LICENSOR to export
      from the United States, directly or indirectly, any technical data or any
      commodities to any country in contravention of United States law.

    


    ARTICLE
      VIll

    MISCELLANEOUS
      PROVISIONS

    


    Section
      8.01 - Language of Agreement; Language of Notices

    The
      language of this Agreement is English. If translated into another language,
      this
      English version of the Agreement shall be controlling. Except as may be agreed
      by LICENSOR and LICENSEE, all notices, reports, consents, and approvals required
      or permitted to be given hereunder shall be written
      in
      the
      English language.

    Section
      8.02 - Stability of Agreement

    No
      provision of this Agreement shall be deemed modified by any acts of LICENSOR,
      its agents or employees or by failure
      to object
      to
      any acts of
      LICENSEE
      which may be inconsistent herewith, or otherwise, except by a subsequent
      agreement in writing signed by LICENSOR and LICENSEE. No waiver of
      a
breach
      committed by either party in one instance shall constitute a waiver or a license
      to commit or continue breaches in other or like instances.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    


    Section
      8.03 - Public Announcements

    Neither
      party shall at any time heretofore or hereafter publicly state or imply that
      the
      terms specified herein or the relationships between LICENSOR and LICENSEE are
      in
      any way different from those specifically laid down in this Agreement. LICENSEE
      shall not at any time publicly state or imply that any unlicensed products
      use
      the Dolby Digital Audio System Specifications. If requested by one party, the
      other party shall promptly supply the first party with copies of all public
      statements and of all publicity and promotional material relating to this
      Agreement, the Dolby Digital Audio System Specifications, or the Licensed
      Trademarks.

    Section
      8.04 - Address of LICENSOR and LICENSEE for all Other
      Communications

    Except
      as
      otherwise specified in this Agreement, all notices, reports, consents, and
      approvals required or permitted to be given hereunder shall be in writing,
      signed by an officer of LICENSEE or LICENSOR, respectively, and sent postage
      or
      shipping charges prepaid by certified or registered mail, return receipt
      requested showing to whom, when and where delivered, or by Express mail, or
      by a
      secure overnight or one-day delivery service that provides proof and date of
      delivery, or by facsimile, properly addressed or transmitted to LICENSEE or
      LICENSOR, respectively, at the address or facsimile number set forth on the
      cover page of this Agreement or to such other address or facsimile number
as
      may
      from
      time to time be designated by either party to the other in writing. Wire
      payments from LICENSEE to LICENSOR shall be made to the bank and account of
      LICENSOR as set forth on the cover page of
      this
      Agreement or to such other bank and account as LICENSOR may from time to time
      designate in writing to LICENSEE.

    Section
      8.05 - Applicable Law

    This
      Agreement shall be construed in accordance with the substantive laws, but not
      the choice of law rules, of the State of California.

    Section
      8.06 - Choice of Forum; Attorneys’ Fees

    To
      the
      full extent permitted by law, LICENSOR and LICENSEE agree that their choice
      of
      forum, in the event that any dispute arising under this Agreement is not
      resolved by mutual agreement, shall be the United States Courts in the State
      of
      California and the State Courts of the State of California.

    In
      the
      event that any action is brought for any breach or default of any of the terms
      of this Agreement,
      or otherwise in connection with this Agreement, the prevailing party shall
      be
      entitled to

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    


    recover
      from the other party all costs and expenses incurred in that action or any
      appeal therefrom, including without limitation, all attorneys’ fees and costs
      actually incurred.

    Section
      8.07 - Construction of Agreement

    This
      Agreement shall not be construed for or against any party based on any rule
      of
      construction concerning who prepared the Agreement or otherwise.

    Section
      8.08 - Captions

    Titles
      and captions in this Agreement are for
      convenient reference only and shall not be considered in construing the intent,
      meaning, or scope of the Agreement or any portion thereof.

    Section
      8.09 - Singular and Plural

    Throughout
      this Agreement, words in the singular shall be construed as including the plural
      and words in the plural shall be construed as including the
      singular.

    Section
      8.10 - Complete Agreement

    This
      Agreement contains the entire agreement and understanding between LICENSOR
      and
      LICENSEE and merges all prior or contemporaneous oral or written communication
      between them. Neither LICENSOR nor LICENSEE now is, or shall hereafter be,
      in
      any way bound by any prior, contemporaneous or subsequent oral or written
      communication except insofar as the same is expressly set forth in this
      Agreement or in a subsequent written agreement duly executed by both LICENSOR
      and LICENSEE.

    Section
      8.11 - Severability

    Should
      any portion of
      this
      Agreement be declared null and void by operation of law, or otherwise, the
      remainder of this Agreement shall remain in full force and effect.

    Section
      8.12 - Company Representation and Warranty

    LICENSEE
      represents and warrants to LICENSOR that it is not a party to any agreement,
      and
      is not subject to any statutory or other obligation or restriction, which might
      prevent or restrict it from performing all of its obligations and undertakings
      under this License Agreement, and that the execution and delivery of this
      Agreement and the performance by LICENSEE of its obligations hereunder have
      been
      authorized by all necessary action, corporate or otherwise.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    


    Section
      8.13 - Execution

    IN
      WITNESS WHEREOF, the said LICENSOR has caused this Agreement to be executed
      on
      the cover page of this Agreement, in the presence of a witness, by an officer
      duly authorized and the said LICENSEE has caused the same to be executed on
      the
      cover page of this Agreement, in the presence of a
      witness, by an officer
      duly authorized,
      in duplicate original copies, as of the date set forth on said cover
page.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    


    APPENDIX A
      - Appendix Deleted

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    


    APPENDIX
      B - “DOLBY DIGITAL AUDIO SYSTEM”

    Compliance
      with the algorithm description and operating parameters as specified in ATSC
      document A/52, the “Dolby Digital Licensee Information Manual”, the “Software
      Interface Protocol” issued by Dolby and any further reasonable specifications
      and requirements as DOLBY may issue from time to time.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    APPENDIX
      C - PRELIMINARY SPECIFICATIONS FOR DOLBY DIGITAL ENCODERS

    


    Dolby
      Digital audio system encoding equipment shall comply with the following audio
      specifications in production (when measured through a standard
      decoder):

    


    
      	
              Audio
                data rate for two channels:

            	
              192
                kb/sec

            
	 	 
	
              Frequency
                Response:

            	
              20
                Hz - 20 kHz ± 0.2 dB

            
	 	 
	
              Dynamic
                Range:

            	
              Greater
                than 85 dB

            
	 	 
	
              Distortion:

            	
              Less
                than 0.1 % at 1 kHz

            
	 	
              Less
                than 0.5%, 20 Hz - 20 kHz

            
	 	 
	
              Crosstalk:

            	
              Less
                than -80 dB

            
	 	 
	
              Level
                Stability:

            	
              Better
                than 0.2 dB

            


    

    


     

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    APPENDIX
      D - TABLE OF CONTENTS FOR THE SYSTEM DEVELOPMENT KIT 

    


    
      
        
          	 	 	
                  Licensee
                    Information Manuals

                
	 	 	 
	
                  x

                	
                  1.

                	
                  Licensee
                    Information Manual: Dolby Digital Professional Encoder:

                  This
                    document describes the requirements for products licensed with
                    the
                    Professional Encoder License, including DVD Authoring encoders
                    and
                    Broadcast encoders.

                
	 	 	 
	 	 	
                  Responsibilities
                    & Schedules

                
	 	 	 
	
                  x

                	
                  2.

                	
                  Schedule
                    of Qualified Implementors:

                
	 	 	
                  This
                    list includes the Licensees who are cleared to sell quantities
                    of Dolby
                    approved implementations.

                
	 	 	 
	 	 	
                  Documentation

                
	 	 	 
	
                  x

                	
                  3.

                	
                  Digital
                    Audio Compression Standard (AC-3), Errata Sheet:

                
	 	 	
                  This
                    document corrects several mistakes/ambiguities that were part
                    of the
                    original ATSC document A/52.

                
	 	 	 
	
                  x

                	
                  4.

                	
                  A
                    Guide To Dolby Technologies and Trademarks:

                
	 	 	
                  This
                    document provides general explanations of the various Dolby technologies
                    and examples of the proper trademark usage.

                
	 	 	 
	
                  x

                	
                  5.

                	
                  Dolby
                    Digital Professional Encoding Manual for Licensees:

                
	 	 	
                  This
                    manual describes the process of performing Dolby Digital professional
                    audio encoding for applications other than for film. It describes
                    the
                    features of the Dolby Digital system, professional encoders and
                    decoders,
                    consumer encoders and decoders.

                
	 	 	 
	
                  x

                	
                  6.

                	
                  Dolby
                    DSP Software Interface Protocol (SIP) for the Dolby Digital Professional
                    Encoder: 

                
	 	 	
                  The
                    SIP document defines interface requirements between top-level
                    system
                    software (the Executive code) and the Dolby Digital Encoder algorithm
                    subroutine. Proper use of the SIP will allow convenient software
                    updates
                    to the subroutine.

                
	 	 	 
	
                  x

                	
                  7.

                	
                  Dolby
                    Digital Encoder Manual Notice:

                
	 	 	
                  Explains
                    the importance of proper trademark usage and permission

                
	 	 	 
	
                  x

                	
                  8.

                	
                  Marking
                    Audio Features on DVD Software:

                
	 	 	
                  Provides
                    guidelines for using Dolby trademark and indicating formats on
                    DVD
                    disks

                
	 	 	 
	
                  x

                	
                  9.

                	
                  Use
                    of Dolby Trademarks on Audio and Video Media: 

                
	 	 	
                  Describes
                    an overview of the trademark licensing process

                
	 	 	 
	
                  x

                	
                  10.
                    

                	
                  Digital
                    Audio Compression Standard (AC-3):

                
	 	 	
                  ATSC
                    document A/52 is a description of the Dolby Digital (AC-3) algorithm
                    in
                    the format required by the ATSC (Advanced Television Systems
                    Committee).

                
	 	 	 
	 	 	
                  Logos

                
	 	 	 
	
                  x

                	
                  11.
                    

                	
                  Dolby
                    Logo Fonts and Character Map:

                
	 	 	
                  This
                    material includes current logos used on licensed hardware and
                    software.
                    The appropriate fonts may be used in all printed materials (i.e.,
                    manuals,
                    marketing literature). An .eps (encapsulated postscript) format
                    is
                    included for artwork purposes (i.e., equipment face panels).
                    The enclosed
                    Dolby Digital logo character map offers easy keyboard reference
                    for Dolby
                    fonts.

                


        

         

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        
          	 	 	 
	 	 	
                  Source
                    code

                
	 	 	 
	
                  x

                	
                  12.

                	
                  Dolby
                    Digital Professional Encoder API Source Code:

                
	 	 	
                  This
                    source code creates a DLL used to communicate directly with the
                    encoder
                    implementation from the GUI application.

                
	 	 	 
	 	 	 
	
                  x

                	
                  13.

                	
                  Dolby
                    Digital Professional Encoder Demonstration GUI Source
                    Code:

                
	 	 	
                  This
                    source code compiles under the Windows Development Environment
                    and
                    provides a graphical user interface for controlling the encoder
                    from a
                    Windows PC. It can be compiled to run as a stand-alone demonstration
                    application

                
	 	 	 


        

      

      
        	 	 	
                Testing
                  materials

              
	 	 	 
	
                x

              	
                14.

              	
                Encoder
                  Time-Code Test CD Audio:

              
	 	 	
                This
                  audio CD contains Linear Time-Code signals on the left channel,
                  and
                  precisely located signal beeps on the right channel. It can be
                  placed into
                  a common CD Player, and used to feed the time code Input of a system,
                  and
                  acc

              
	 	 	 
	
                x

              	
                15.

              	
                Test
                  Procedure for 2 Channel Real-Time Professional Dolby Digital
                  Encoders:

              
	 	 	
                Version
                  3.0, S00/12282/13405

              
	 	 	 
	
                x

              	
                16.

              	
                Test
                  Results for 2 Channel Real-Time Professional Dolby Digital
                  Encoders:

              
	 	 	
                Version
                  3.0, S00/12283/13406

              
	 	 	 
	
                x

              	
                17.

              	
                Reference
                  Audio Precision Test Templates for 2 channels:

              
	 	 	
                Standard
                  At2 files with reference measurements ready for
                  testing

              


      

    

    


    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    APPENDIX
      E - ROYALTY SCHEDULE

    


    
      	
              Number
                of Licensed Devices

            	 	 
	
              Disposed
                of in Quarter

            	 	
              Royalty
                Payable 

            
	 	 	 
	
              On
                those from 1 to 250 

            	 	
              $
                65.00 per device 

            
	
              On
                those from 251 to 500 

            	 	
              $
                40.00 per device 

            
	
              On
                those from 501 to 1,000 

            	 	
              $
                20.00 per device 

            
	
              On
                those above 1,000

            	 	
              $
                5.00 per device