Document:

<PAGE>

                                                                    EXHIBIT 10.6

CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS. OMITTED INFORMATION HAS BEEN REPLACED BY [*].

                    Dolby Laboratories Licensing Corporation

                     DIGITAL AUDIO SYSTEM LICENSE AGREEMENT

                           AN AGREEMENT BY AND BETWEEN
                           ---------------------------

--------------------------------------------------------------------------------
Dolby Laboratories Licensing Corporation         InterVideo, Inc.
(hereinafter called "LICENSOR")                  (hereinafter called "LICENSEE")
of 100 Potrero Avenue                            of 440 Mission Court, Suite 260
San Francisco, CA 94103-4813                     Fremont, CA 94539
United Stated of America                         United States of America
--------------------------------------------------------------------------------

Facisimile telephone number of LICENSOR for transmission of quarterly royalty
reports (Section 4.05): (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: [*]
         ABA Number: [*]

Identification of bank with respect to whose prime rate interest is calculated
on overdue royalties (Section 4.05): Wells Fargo Bank

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

SIGNATURE:
---------

On behalf of LICENSOR                        On behalf of LICENSEE

Signature: /s/ Lun S. Cheung                 Signature: /s/ Joe Monastiero
           ---------------------------                  ------------------------

Name:      Lun S. Cheung                     Name:      Joe Monastiero
           ---------------------------                  ------------------------

Title:     Intellectual Property Manager     Title:     VP
           -----------------------------                ------------------------

Place:     San Francisco, CA 94103           Place:     Fremont, CA
           -----------------------------                ------------------------

Date:      4 March 1999                      Date:      11/2/98
           -----------------------------                ------------------------

Witnessed By:                                Witnessed By:

   /s/ [ILLEGIBLE]                             /s/ [ILLEGIBLE]
----------------------------------------     -----------------------------------

Effective Date of Agreement:  4 March 1999          Initial Payment: [*]
                             -----------------

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                           Page
<S>                                                                                        <C>
ARTICLE I DEFINITIONS.....................................................................  2

     Section 1.01 - "LICENSOR"............................................................  2
     Section 1.02 - "LICENSEE"............................................................  2
     Section 1.03 - "Application".........................................................  2
     Section 1.04 - "Patent"..............................................................  2
     Section 1.05 - "Related Application".................................................  2
     Section 1.06 - "Related Patent"......................................................  2
     Section 1.07 - "Scheduled Patents"...................................................  3
     Section 1.08 - "Dolby Digital AC-3 Audio System Specifications"......................  3
     Section 1.09 - "Licensed Trademark"..................................................  3
     Section 1.10 - "Licensed Device".....................................................  3
     Section 1.11 - "Licensed Product"....................................................  3
     Section 1.12 - "Patent Rights".......................................................  4
     Section 1.13 - "Know-How"............................................................  4
     Section 1.14 - "Confidential Information"............................................  4
     Section 1.15 - "Non-Patent Country"..................................................  4
     Section 1.16 - "LICENSEE's Trade Name and Trademarks"................................  4
     Section 1.17 - "Other-Trademark Purchaser"...........................................  4
     Section 1.18 - "Licensed Copyrighted Works"..........................................  4
     Section 1.19 - "Consumer Price Index"................................................  5
     Section 1.20 - "Effective Date"......................................................  5
     Section 1.21 - "Virtual Dolby Digital"...............................................  5

ARTICLE II LICENSES GRANTED...............................................................  5

     Section 2.01 - Licenses Granted to LICENSEE..........................................  5
     Section 2.02 - Limitation of Licenses Granted........................................  5

ARTICLE III OTHER OBLIGATIONS OF THE LICENSOR AND LICENSEE................................  6

     Section 3.01 - Use of Licensed Trademark.............................................  6
     Section 3.02 - Ownership of the Licensed Trademarks..................................  8
     Section 3.03 - Maintenance of Trademark Rights.......................................  9
     Section 3.04 - Patent, Trademark and Copyright Enforcement...........................  9
     Section 3.05 - Other-Trademark Purchasers............................................  9
     Section 3.06 - Patent Marking........................................................ 10
     Section 3.07 - Copyright Notice...................................................... 10
     Section 3.08 - Furnishing of Licensed Copyrighted Works: Use of Licensed
             Copyrighted Works............................................................ 10
     Section 3.09 - License Notice........................................................ 11
     Section 3.10 - Furnishing of Know-How................................................ 11
     Section 3.11 - Use of Know-How and Confidential Information.......................... 11
</TABLE>

                                                                             -i-

<PAGE>

                               TABLE OF CONTENTS
                                  (continued)

<TABLE>
<CAPTION>
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<S>                                                                                      <C>
ARTICLE IV PAYMENTS..................................................................... 12

     Section 4.01 - Initial Payment..................................................... 12
     Section 4.02 - Royalties........................................................... 12
     Section 4.03 - Section Deleted..................................................... 13
     Section 4.04 - Royalty Applicability............................................... 13
     Section 4.05 - Royalty Payments and Statements..................................... 13
     Section 4.06 - Royalties in Non-Patent Count....................................... 14
     Section 4.07 - Books and Records................................................... 15
     Section 4.08 - Rights of Inspecting Books and Records.............................. 15

ARTICLE V STANDARDS OF MANUFACTURE AND QUALITY.......................................... 15

     Section 5.01 - Standardization and Quality......................................... 15
     Section 5.02 - Right to Inspect Quality............................................ 16

ARTICLE VI TERMINATION AND EFFECT OF TERMINATION........................................ 16

     Section 6.01 - Expiration of Agreement............................................. 16
     Section 6.02 - Termination for Cause............................................... 16
     Section 6.03 - Option to Terminate in a Non-Patent Count........................... 16
     Section 6.04 - Effect of Termination............................................... 17

ARTICLE VII LIMITATIONS OF RIGHTS AND AUTHORITY......................................... 18

     Section 7.01 - Limitation of Rights................................................ 18
     Section 7.02 - Limitation of Authority............................................. 18
     Section 7.03 - Disclaimer of Warranties and Liability: Hold Harmless............... 18
     Section 7.04 - Limitation of Assignment by LICENSEE................................ 19
     Section 7.05 - Compliance with U.S. Export Control Regulations..................... 19

ARTICLE VIII MISCELLANEOUS PROVISIONS................................................... 19

     Section 8.01 - Language of Agreement: Language of Notices.......................... 19
     Section 8.02 - Stability of Agreement.............................................. 20
     Section 8.03 - Public Announcements................................................ 20
     Section 8.04 - Address of LICENSOR and LICENSEE for all Other Communications....... 20
     Section 8.05 - Applicable Law...................................................... 20
     Section 8.06 - Choice of Forum: Attorneys' Fees.................................... 20
     Section 8.07 - Construction of Agreement........................................... 21
     Section 8.08 - Captions............................................................ 21
     Section 8.09 - Singular and Plural................................................. 21
     Section 8.10 - Complete Agreement.................................................. 21
     Section 8.11 - Severability........................................................ 21
</TABLE>

                                                                            -ii-

<PAGE>

                               TABLE OF CONTENTS
                                  (continued)

<TABLE>
<CAPTION>
                                                                            Page
         <S>                                                                <C>
         Section 8.12 - Company Representation and Warrant................. 21
         Section 8.13 - Execution.......................................... 21
</TABLE>

                                                                           -iii-

<PAGE>

                     DIGITAL AUDIO SYSTEM LICENSE AGREEMENT

     WHEREAS, LICENSOR is engaged in the field of audio noise reduction and
analog and digital signal processing systems and has developed noise reduction
systems useful for audio tape recording, surround sound systems for home
entertainment and for other applications;

     WHEREAS, LICENSOR's audio 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 audio systems and marked with
LICENSOR's trademarks; and

     WHEREAS, LICENSOR has defined the operating parameters and configuration of
a class of products called, "Virtual" products; and

     WHEREAS, LICENSOR's Virtual product category and its manufacture are the
subject of substantial know-how owned by LICENSOR;

     WHEREAS, LICENSOR's Dolby Digital AC-3 audio system and its manufacture
embody inventive subject matter which are the subject of international patent
and patent applications owned or licensable by LICENSOR,

     WHEREAS, the manufacture and sale of LICENSOR's Dolby Digital AC-3 audio
system requires the reproduction of copyrighted works owned or licensable by
LICENSOR;

     WHEREAS, LICENSOR represents and warrants that it has rights to grant
licenses under such know-how, patents and patent applications and copyrighted
works and under its trademarks;

     WHEREAS, LICENSEE is engaged in the manufacture and sale of products for
the home electronics market; and

     WHEREAS, LICENSEE believes it can develop substantial demand for equipment
to decode audio signals using LICENSOR's Dolby Digital AC-3 audio system;

     WHEREAS, LICENSEE desires a non-exclusive license to manufacture and sell
decoders using LICENSOR's Dolby Digital AC-3 audio system under LICENSOR's
trademarks, know-how, copyrighted works, patents and patent applications; 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:

<PAGE>

                                   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 by such corporation, but only so
long as such control exists.

     Section 1.03 - "Application" means an application for the protection of an
                     -----------
invention or an industrial design; references to an "Application" shall be
construed as references to applications for patents for inventions, inventors'
certificates, utility certificates, utility models, patents or certificates of
addition, inventors' certificates of addition, utility certificates of addition,
design patents, and industrial design registrations.

     Section 1.04 - "Patent" means patents for inventions, inventors'
                     ------
certificates, utility certificates, utility models, patents or certificates of
addition, inventors' certificates of addition, utility certificates of addition,
design patents, and industrial design registrations.

     Section 1.05 - "Related Application" means an Application, whether
                     -------------------
international or in the same or another country or region, which

        (1) is substantially the same as (e.g., it does not include any new
matter in the sense of the United States Patent Law) an Application or Patent
listed in Appendix A, entitled "Scheduled Patents," which is attached hereto and
forms an integral part of this Agreement (for example, without limiting the
foregoing, a continuation Application, a corresponding Application, an
Application to reissue, or a refiled Application), or

        (2) is substantially only a portion of (e.g., it contains less than an
Application or Patent listed in Appendix A and, it does not include any new
matter in the sense of the United States Patent Law) an Application or Patent
listed in Appendix A (for example, a divisional Application, or a corresponding
or refiled Application in the nature of a divisional Application).

     Section 1.06 - "Related Patent" means:
                     --------------

        (1)  a Patent granted on an Application listed in Appendix A,

        (2)  a Patent granted on a Related Application,

        (3)  a reissue of a Patent of Sections 1.06(1) or 1.06(2), and

        (4)  a reexamination certificate of a Patent of Sections 1.06 (1),
             1.06(2), or 1.06(3).

                                                                             -2-

<PAGE>

     Section 1.07 - "Scheduled Patents" means the Applications and Patents
                     -----------------
listed in Appendix A together with Related Applications and Related Patents.

     Applications and Patents which contain not only common subject matter but
also additional subject matter going beyond the disclosure of Applications and
Patents of this Section (for example, without limiting the foregoing, a
continuation-in-part Application, or a corresponding or refiled Application in
the nature of a continuation-in-part Application) shall be deemed to be
Scheduled Patents only with respect to that portion of their subject matter
common to the Applications and Patents of this Section.

     Section 1.08 - "Dolby Digital AC-3 Audio System Specifications" means the
                     ----------------------------------------------
specifications for the Dolby Digital AC-3 audio system, comprising the claims
and teachings of the Scheduled Patents, the Dolby Digital AC-3 audio system
operating parameters as specified in Appendix B entitled "Dolby Digital AC-3
Audio System," the Dolby Digital LICENSEE Information Manual referred to in
Appendix C, the Licensed Copyrighted Works and the Know-How. Appendices B and C
are attached hereto and form an integral part of this Agreement.

     Section 1.09 - "Licensed Trademark" means one or more of the following: (a)
                     ------------------
the word mark "Dolby", (b) the device mark [logo] which is also referred to as
the `Double-D' symbol and (c) the term "AC-3".

     Section 1.10 - "Licensed Device" means a digital audio circuit having Dolby
                     ---------------
Digital AC-3 Audio System Specifications, whether made in discrete component,
integrated circuit, or other forms, for decoding a digital bitstream into one or
more audio channels. A circuit counts as one "Licensed Device" for each full
frequency range audio channel it provides.

     Section 1.11 - "Licensed Product" means a complete ready to use consumer
                     ----------------
entertainment product, such as a mufti-channel A/V receiver, DVD player, or
personal computer (PC), or a complete, ready-to-install PC audio subsystem
which:

        (1) contains one or more Licensed Devices, and

        (2) is intended or designed for use in decoding an AC-3 digital audio
bitstream.

     Every Licensed Product containing three or more Licensed Devices must also
contain a Dolby Consumer Surround Decoder with Directional Enhancement licensed
under a separate agreement, except that the Licensed Consumer Surround Decoder
and the Directional Enhancement Circuit in such Licensed Product shall be
royalty-free, so long as applicable royalties under Sections 4.01 and 4.02 under
this Agreement are payable.

     The only exception to this provision are outboard decoders without
independent volume controls intended to be used exclusively in conjunction with
audio-visual receivers or amplifiers that already contain said Consumer Surround
Decoder and Directional Enhancement circuits. A Licensed Product is not a
semiconductor chip, a partially assembled product, a product in kit form, or a
knocked-down or semi-knocked-down product.

                                                                             -3-

<PAGE>

     Section 1.12 - "Patent Rights" means:
                     -------------

        (1) the Scheduled Patents; and

        (2) such Patents and Applications directed to Licensed Products that
LICENSOR may own or gain rights to license during the term of this Agreement and
which LICENSOR may agree to include in the Patent Rights without payment of
additional compensation by LICENSEE.

     The Patent Rights do not include such other Applications and Patents as
LICENSOR does not agree to include in the Patent Rights without payment of
additional compensation by LICENSEE.

     Section 1.13 - "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 Devices and 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 1.14 - "Confidential Information" means technical and non-technical
                     ------------------------
proprietary information of LICENSOR or LICENSEE, including, without limiting the
foregoing, marketing information, product plans, business plans, royalty, and
sales information so long as such information is disclosed to the other party a)
in written or other tangible form which is clearly marked as being confidential
or proprietary or b) orally or in any other manner and is indicated as
confidential at the time of disclosure and thereafter summarized in writing
within thirty (30) days after such disclosure.

     Section 1.15 - "Non-Patent Country" means a country in which there do not
                     ------------------
exist, with respect to a Licensed Product, any Scheduled Patents including any
pending Application or unexpired Patent, which, but for the licenses herein
granted, are (or in the case of an Application, would be if it were an issued
Patent) infringed by the manufacture, and/or use, lease or sale of such Licensed
Product.

     Section 1.16 - "LICENSEE's Trade Name and Trademarks" means any trade name
                     ------------------------------------
or trademark used and owned by LICENSEE.

     Section 1.17 - "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 1.18 - "Licensed Copyrighted Works" means all copyrighted works
                     --------------------------
owned by LICENSOR or owned by others and which LICENSOR has the right to
sublicense, relating to the Dolby Digital AC-3 audio system and the reproduction
of which are required in order for

                                                                             -4-

<PAGE>

LICENSEE to make or have made for it Licensed Products, and to use, lease and
sell the same. Licensed Copyrighted Works exclude mask works fixed in a
semiconductor chip product.

     Section 1.19 - 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 1.20 - 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.

     Section 1.21 - "Virtual Dolby Digital" means the configuration,
                     ---------------------
specifications, and operating parameters for the Virtual Dolby Digital audio
system, as specified in the Dolby Digital LICENSEE Information Manual referred
to in Appendix C.

                                   ARTICLE II

                                LICENSES GRANTED

     Section 2.01 - Licenses Granted to LICENSEE
                    ----------------------------

     LICENSOR hereby grants to LICENSEE:

          (1) a personal, non-transferable, indivisible, and non-exclusive
license throughout the world under the Patent Rights, subject to the conditions
set forth and LICENSEE's performance of its obligations, including paying
royalties due, to make or have made for it Licensed Products, and to use, lease,
import and sell the same;

          (2) a personal, non-transferable, indivisible, and non-exclusive
license throughout the world to use the Know-How and to reproduce the Licensed
Copyrighted Works in connection with the design, manufacture, and sale of the
Licensed Products and to use the Licensed Trademarks on the 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, including the payment of royalties; and

          (3) a personal, non-transferable, indivisible, non-exclusive, and
royally-free license throughout the world under the Patent Rights and to use the
Know-How and to reproduce the Licensed Copyrighted Works in connection with the
manufacture, use, lease and sale of spare parts solely for the repair of
Licensed Products manufactured by LICENSEE under this Agreement.

     Section 2.02 - Limitation of Licenses Granted
                    ------------------------------

     Notwithstanding the licenses granted under Section 2.01:

                                                                             -5-

<PAGE>

          (1) no license is granted to lease, sell, transfer, or otherwise
dispose of any part of a Licensed Product, including, without limiting the
foregoing, a semiconductor chip specially adapted for use in a Licensed Product,
which part (a) is a material part of an invention which is the subject of a
Scheduled Patent and which part is not a staple article or commodity of commerce
suitable for substantial noninfringing use or (b) is not a spare part solely for
the repair of a Licensed Product manufactured by LICENSEE under this Agreement;

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

          (3) no license is granted under this Agreement with respect to any of
LICENSOR's other licensed technologies;

          (4) 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;

          (5) 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;

          (6) 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;

          (7) no license is granted to copy, prepare, make, or have made
derivative works based on the Licensed Copyrighted Works; and

          (8) no right to grant sublicenses is granted under this Agreement.

                                  ARTICLE III

                 OTHER OBLIGATIONS OF THE LICENSOR AND LICENSEE

     Section 3.01 - Use of Licensed Trademark
                    -------------------------

     The Licensed Trademarks have acquired a reputation for high quality among
professionals and consumers around the world. The performance capability of the
Dolby Digital AC-3 audio system is such that LICENSOR is willing to allow the
use of the Licensed Trademarks on certain 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. Detailed regulations current at the time
of execution of this Agreement and additional to those set forth in this

                                                                             -6-

<PAGE>

Agreement are set forth in the Section entitled "Trademark Usage" in the Dolby
Digital LICENSEE Information Manual of Appendix C which is attached hereto and
forms an integral part of this Agreement. LICENSEE shall comply with the
requirements of the body of this Agreement and those of the Dolby Digital
LICENSEE Information Manual of Appendix C 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:

          (1) LICENSEE shall prominently mark the Licensed Product on an exposed
surface thereof in the following way:

                                     [logo]

     or:

                                    Virtual
                                     [logo]

     Alternatively, if the Licensed Product is a PC or PC subsystem, the mark
may appear as part of an opening screen or in an "about" window of the
application software controlling the Licensed Product.

          (2) The mark specified in subsection (1) of this Section 3.01, may
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 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, even if such product is a Licensed Product.

          (4) In every use of a Licensed Trademark, except on the exposed 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 "(R)" (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 (4) 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",

                                                                             -7-

<PAGE>

or "`Dolby' and the `Double-D' symbol are trademarks of Dolby Laboratories" On
Licensed Products such words shall be used on an exposed surface when space
permits. 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 decoder", "Dolby Digital audio circuit",
"Dolby Digital (AC-3) 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 R will not file any application for
registration of the Licensed Trademarks or "Dolby Laboratories" in any country,
region, or under any arrangement or treaty.

                                                                             -8-

<PAGE>

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. Upon request by either
party, 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 - Patent, Trademark and Copyright Enforcement
                    -------------------------------------------

     LICENSEE shall immediately inform LICENSOR of all infringements, potential
or actual, which may come to its attention, of the Patent Rights, Licensed
Trademarks or Licensed Copyrighted Works. 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
                    --------------------------

     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 copies of such Other-Trademark
Purchaser's advertising, public announcements, literature, instruction manuals,
and the like. It shall be LICENSEE's responsibility to inform said
Other-Trademark Purchaser that any use of any of LICENSOR's trademark(s) on or
in conjunction with the Other-Trademark Purchaser's own products can only be
done under a separate license from LICENSOR.

                                                                             -9-

<PAGE>

     Section 3.06 - Patent Marking
                    --------------

     LICENSEE shall mark each Licensed Product in the form, manner and location
specified by LICENSOR, with one or more patent numbers of Patents in such
countries under which a license is granted under this Agreement.

     Section 3.07 - Copyright Notice
                    ----------------

          (1) Where Applied LICENSEE shall apply the copyright notice specified
              -------------
in subsection 3.07(2) of this Section 3.07 to Licensed Products and all media
embodying the Licensed Copyrighted Works.

          (2) Form of Notice LICENSEE shall apply the following copyright notice
              --------------
as required in subsection 3.07(l) 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 1992-1996 by Dolby
Laboratories, Inc. All rights reserved.

     Section 3.08 - Furnishing of Licensed Copyrighted Works: Use 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
Licensed Copyrighted Works in the form of object code (machine readable code).
Alternatively, LICENSEE may obtain such Licensed Copyrighted Works in
conjunction with its purchase of integrated circuits or other Licensed
Implementations. LICENSEE agrees to use such programs only for the purpose of
programming general purpose DSP devices, read only memories (ROMs), random
access memories (RAMs), or the like, forming an integral part of Licensed
Products and constituting spare parts solely for the repair of a Licensed
Products. LICENSEE agrees (1) it will not otherwise reproduce Licensed
Copyrighted Works, in whole or in part, (2) it will not prepare derivative works
from Copyrighted Works, and (3) it will not disclose the Licensed Copyrighted
Works, in whole or in part. LICENSEE further agrees that it will not decompile
or otherwise reverse engineer the object code constituting the Licensed
Copyrighted Works, or any portion thereof.

     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,
except those incorporated into Licensed Products.

                                                                             -10

<PAGE>

     Section 3.09 - License Notice
                    --------------

     On all Licensed Products, LICENSEE shall acknowledge that the Licensed
Products are manufactured under license from LICENSOR. Unless otherwise from
time to time agreed between the parties, 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 unless such
acknowledgment is clearly and unambiguously given in the course of any textual
descriptions or explanations.

     Section 3.10 - Furnishing of 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) 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 them expenses.

     Section 3.11 - Use of Know-How and Confidential Information
                    --------------------------------------------

          (1) By LICENSEE
              -----------

     LICENSEE shall use all Know-How and Confidential 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 Confidential Information in an unauthorized way, and shall not divulge such
Know-How or Confidential Information or any portion thereof to third parties,
unless such Know-How or Confidential 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; (c) becomes
public knowledge other than by breach of this Agreement by LICENSEE or by
another licensee of LICENSOR; or (d) is independently developed by LICENSEE.

     Upon termination of this Agreement, with respect to Know-How or
Confidential 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.

          (2) By LICENSOR
              -----------

     LICENSOR hereby agrees that throughout the term of this Agreement it shall
not divulge to third parties, nor use in any unauthorized way Confidential
Information belonging to LICENSEE,

                                                                            -11-

<PAGE>

unless such information (a) was known to LICENSOR prior to its obtaining the
same from LICENSEE; (b) becomes known to LICENSOR from sources other than either
directly or indirectly from LICENSEE, or (c) becomes public knowledge other than
by breach of this Agreement by LICENSOR; or (d) is independently developed by
LICENSOR. The obligations of this subsection 3.11(2) shall cease three (3) years
from the date on which such Know-How or Confidential Information are acquired by
LICENSOR from LICENSEE under this Agreement.

                                   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.

     Section 4.02 - Royalties
     ------------------------

          (1) 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, according to the amount of royalty specified below:

[*]

          (2) For every Licensed Device incorporated in a Licensed Product that
is used, sold, leased or otherwise disposed of by LICENSEE in a country that is
not a Non-Patent Country LICENSEE shall pay [*] up to a maximum of three
Licensed Devices per Licensed Product.

          (3) In addition, the following royalty shall apply to Licensed
Products featuring Virtual Dolby Digital: (a) one Licensed Device for each
Licensed Product utilizing more than two channel decoding to create the
virtualized output channels if the Licensed Product provides only two

                                                                            -12-

<PAGE>

audio channels; and (b) one Licensed Device for each Licensed Product containing
LICENSOR's "Virtualizer" technology.

     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
                    -------------------------------

     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

                                                                            -13-

<PAGE>

     (c)  contain such other information and be in such form as LICENSOR or its
outside auditors may prescribe. If LICENSEE claims less than full product
royalty (under Section 4.06) or no royalty due (under Section 6.03), LICENSEE
shall specify the country in which such Licensed Products were made, the country
in which such Licensed Products were sold, and the identity of the purchasers of
such Licensed Products.

          (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 officer's
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 effect from time to
time at the bank identified on the cover page of this Agreement, 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 - Royalties in Non-Patent Count
                    -----------------------------

     If a Licensed Product is manufactured in a Non- Patent Country and used,
sold, leased or otherwise disposed of in a Non-Patent Country, be it the same or
a different Non-Patent Country, royalties for the manufacture, use, sale, lease
or other disposal of the Licensed Products in such Non-Patent Country or
Countries under the Know-How, Licensed Copyrighted Works, and the Licensed
Trademarks license shall be payable at the rates specified in Section 4.02;
however, the additional royalty of [*] on each Licensed Device of such
Licensed Product specified in Section 4.02 shall be waived. This provision shall
not apply and full royalties shall be payable under Section 4.02:

          (1) when Licensed Products are manufactured in any country which is
not a Non-Patent Country or are used, sold, leased or otherwise disposed of in
any country which is not a Non-Patent Country, be it the same country as the
country of manufacture or a different country; or

          (2) when LICENSEE knows or has reason to know that the Licensed
Products manufactured in a Non-Patent Country and used, sold, leased or
otherwise disposed of in a Non-Patent Country are destined for use by consumers
or for sale, lease or other disposal to consumers in

                                                                            -14-

<PAGE>

a country which is not a Non- Patent Country and LICENSOR deems such sale to be
for the purpose of defeating the royalty provisions of this agreement.

     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 for a period of
three (3) years from such sales, leases, uses or other disposals.

     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 Confidential 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 by LICENSOR 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 AC-3 Audio System Specifications,
hereto appended in Appendix B and as modified from time to time by LICENSOR.
LICENSEE shall abide by reasonable standards of quality and workmanship. Such
quality standards shall apply to Licensed Devices and to aspects of Licensed
Products not directly relating to the Licensed Devices but which nevertheless
influence or reflect upon the audio quality or performance of the Licensed
Devices as perceived by the end user. LICENSEE shall with respect to all
Licensed Products bearing the Licensed Trademarks conform to any reasonable
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 AC-3 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.

                                                                            -15-

<PAGE>

     Section 5.02 - Right to Inspect Quality
                    ------------------------

     LICENSEE shall provide LICENSOR with such non-confidential 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 (at
least one from each product family) of Licensed Products for testing, together
with instruction and service manuals. If transmissions necessary to test
Licensed Products under field operating conditions are not receivable at
LICENSOR's San Francisco test facility, LICENSEE shall make available to
LICENSOR, upon receipt of reasonable notice from LICENSOR, reasonable facilities
for testing Licensed Products. 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 in all countries of
the world upon the expiration of the last-to-expire Patent under the Scheduled
Patents. The Agreement is not extended by Patents in the Patent Rights that are
not Scheduled Patents.

     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 sixty (60) days
advance notice in writing, effective on dispatch of such notice, of such
termination, giving reasons therefore to LICENSEE, provided however, that, if
LICENSEE, within the sixty (60) 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 sixty 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 - Option to Terminate in a Non-Patent Count
                    -----------------------------------------

     Subject to the provisions of Section 6.04, unless this Agreement already
has been terminated in accordance with the provisions of Section 6.01 or Section
6.02, LICENSEE shall have the option to terminate its license under this
Agreement with respect to a Non-Patent Country at any time after three years
from the Effective Date of this Agreement. Said option to terminate with respect
to such

                                                                            -16-

<PAGE>

country shall be effective when LICENSOR receives LICENSEE's written notice of
its exercise of such option and shall be prospective only and not retroactive.

     Section 6.04 - Effect of Termination
                    ---------------------

     Upon termination of the Agreement, as provided in Sections 6.01 or 6.02, or
upon termination of the license under this Agreement with respect to a
Non-Patent Country in accordance with the option set forth in Section 6.03, with
respect to such country only, 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 (9) 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 either party accrued or to accrue
because of any breach or default by the other party;

          (5) LICENSEE's obligations with respect to Know-How and Confidential
Information under Section 3.11 (1) and LICENSOR's obligations with respect to
Confidential Information under Sections 3.11(2) and 4.08;

          (6) LICENSEE's obligations to cooperate with LICENSOR with respect to
Patent, Trademark, and Copyright enforcement under Section 3.04, with respect to
matters arising before termination;

          (7) LICENSEE's obligation to return to LICENSOR all documents and
things furnished to LICENSEE, and copies thereof, under the provisions of
Section 3.11;

          (8) LICENSEE's and LICENSOR's obligations regarding public
announcements under Section 8.03; and

          (9) 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

                                                                            -17-

<PAGE>

thereon and subject to said Licensed Products meeting LICENSOR's quality
standards, provided that LICENSEE promptly advises LICENSOR of such commitments
upon termination; and

            (10) LICENSEE's right to use the Know-How and to reproduce the
Licensed Copyrighted Works in connection with the manufacture, use, lease, and
sale of spare parts solely for the repair of Licensed Products as provided in
 Section 2.01(3).

     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 Patent Rights, 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. LICENSOR represents that it has done diligent U.S.
patentability searches in the field of digital audio and that it is unaware of
any patents of third parties which would be infringed by the practice of its
AC-3 digital audio technology which is the subject of this Agreement. LICENSOR
represents that the Licensed Know-How and Licensed Copyrighted Works were either
developed by LICENSOR or by a third party from whom LICENSOR has obtained the
right to license. However, nothing contained in this Agreement shall be
construed as (1) a warranty or representation by LICENSOR as to the validity or
scope of any Patent included in The Patent Rights; (2) a warranty or
representation that the Dolby Digital AC-3 Audio System technology, Patent
Rights, Know-How, Licensed Copyrighted Works, 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 (3) 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,

                                                                            -18-

<PAGE>

lease, or sale of Licensed Devices, Licensed Products and parts thereof, and
LICENSEE agrees to assume all liability and responsibility for all such damage
and injury, to the extent that such liability and responsibility of LICENSEE
have been finally determined in any court of competent jurisdiction.

     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 Devices, Licensed Products, or
parts thereof, or out of any allegedly unauthorized use of any trademark,
service mark, Patent, copyright, process, idea, method, or device (excepting
Licensed Trademarks, Patent Rights, Know-How, Confidential Information, and
Licensed Copyrighted Works) 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 VIII

                            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.

                                                                            -19-

<PAGE>

     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 AC-3 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 AC-3 Audio System
Specifications, Licensed Devices, Licensed Products, Licensed Trademarks, and
Know-How.

     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.

                                                                            -20-

<PAGE>

     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 relating to the subject matter hereof 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 Warrant
                    ----------------------------------

     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

                                                                            -21-

<PAGE>

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.

                                                                            -22-

<PAGE>

                         APPENDIX A - SCHEDULED PATENTS

The Scheduled Patents shall mean the following patents and patent applications:

                                     PATENTS

                                   Count           Patent Number
                         -------------------   -------------------
                         Australia             631,404
                         Australia             644,170
                         Australia             649,786
                         Australia             653,582
                         Australia             655,053
                         Australia             655,535
                         Australia             674,357
                         Australia             677,688
                         Australia             677,856
                         Austria               0 524 264
                         Austria               0 519 055
                         Austria               0 560 413
                         Austria               0 664 943
                         Austria               0 709 004
                         Austria               0 709 005
                         Austria               0 709 006
                         Austria               0 716 787
                         Austria               0 520 068
                         Austria               0 514 949
                         Belgium               0 208 712
                         Belgium               0 481 374
                         Belgium               0 524 264
                         Belgium               0 519 055
                         Belgium               0 560 413
                         Belgium               0 664 943
                         Belgium               0 709 004
                         Belgium               0 709 005
                         Belgium               0 709 006
                         Belgium               0 716 787
                         Belgium               0 520 068
                         Belgium               0 514 949
                         Canada                1,239,701
                         Canada                1,301,337
                         Canada                2,026,213
                         Denmark               0 208 712
                         Denmark               0 481 374
                         Denmark               0 524 264

<PAGE>

                                   Count           Patent Number
                         -------------------   -------------------
                         Denmark                0 519 055
                         Denmark                0 560 413
                         Denmark                0 587 733
                         Denmark                0 664 943
                         Denmark                0 709 004
                         Denmark                0 709 005
                         Denmark                0 709 006
                         Denmark                0 716 787
                         Denmark                0 520 068
                         Denmark                0 514 949
                         France                 0 208 712
                         France                 0 481 374
                         France                 0 455 738
                         France                 0 524 264
                         France                 0 519 055
                         France                 0 560 413
                         France                 0 587 733
                         France                 0 664 943
                         France                 0 709 004
                         France                 0 709 005
                         France                 0 709 006
                         France                 0 716 787
                         France                 0 520 068
                         France                 0 514 949
                         Germany                3587251
                         Germany                69125909
                         Germany                69214523.0
                         Germany                69221616.2
                         Germany                69311569.6
                         Germany                69401512.1
                         Germany                69401514.8
                         Germany                69401959.3
                         Germany                69401517.2
                         Germany                69006011.4
                         Germany                69107841.6
                         Germany                69210689.8
                         Germany                69031737.9
                         Greece                 0 524 264
                         Italy                  0 208 712
                         Italy                  0 481 374
                         Italy                  0 524 264
                         Italy                  0 519 055
                         Italy                  0 664 943

                                                                          -2-

<PAGE>

                               Count                 Patent Number
                    -------------------------- ------------------------
                    Italy                              0 709 004
                    Italy                              0 709 005
                    Italy                              0 709 006
                    Italy                              0 716 787
                    Italy                              0 520 068
                    Italy                              0 514 949
                    Netherlands                        0 519 055
                    Netherlands                        0 560 413
                    Netherlands                        0 587 733
                    Netherlands                        0 664 943
                    Netherlands                        0 709 004
                    Netherlands                        0 709 005
                    Netherlands                        0 709 006
                    Netherlands                        0 716 787
                    Netherlands                        0 455 738
                    Netherlands                        0 524 264
                    Netherlands                        0 520 068
                    Netherlands                        0 514 949
                    Singapore                          P9692379-2
                    Singapore                          P9692369-3
                    Spain                              0 524 264
                    Spain                              0 519 055
                    Spain                              0 560 413
                    Spain                              0 664 943
                    Spain                              0 709 004
                    Spain                              0 709 005
                    Spain                              0 709 006
                    Spain                              0 716 787
                    Spain                              0 520 068
                    Spain                              0 514 949
                    Sweden                             0 519 055
                    Sweden                             0 560 413
                    Sweden                             0 664 943
                    Sweden                             0 709 004
                    Sweden                             0 709 005
                    Sweden                             0 709 006
                    Sweden                             0 716 787
                    Sweden                             0 524 264
                    Sweden                             0 520 068
                    Sweden                             0 514 949
                    Switzerland/Liechtenstein          0 524 264
                    Switzerland/Liechtenstein          0 716 787
                    Switzerland/Liechtenstein          0 519 055

                                                                             -3-

<PAGE>

                              Count                  Patent Number
                    -------------------------  --------------------------
                    Switzerland/Liechtenstein          0 560 413
                    Switzerland/Liechtenstein          0 664 943
                    Switzerland/Liechtenstein          0 709 004
                    Switzerland/Liechtenstein          0 709 005
                    Switzerland/Liechtenstein          0 709 006
                    Switzerland/Liechtenstein          0 520 068
                    Switzerland/Liechtenstein          0 514 949
                    Taiwan                             52,047
                    Taiwan                             53,726
                    Taiwan                             56,006
                    Taiwan                             60,430
                    United Kingdom                     0 208 712
                    United Kingdom                     0 481 374
                    United Kingdom                     0 455 738
                    United Kingdom                     0 524 264
                    United Kingdom                     0 519 055
                    United Kingdom                     0 560 413
                    United Kingdom                     0 587 733
                    United Kingdom                     0 664 943
                    United Kingdom                     0 709 004
                    United Kingdom                     0 709 005
                    United Kingdom                     0 709 006
                    United Kingdom                     0 716 787
                    United Kingdom                     0 520 068
                    United Kingdom                     0 514 949
                    United States of America           4,790,016
                    United States of America           4,914,701
                    United States of America           5,235,671
                    United States of America           5,109,417
                    United States of America           5,274,740
                    United States of America           5,291,557
                    United States of America           5,297,236
                    United States of America           5,357,594
                    United States of America           5,394,473
                    United States of America           5,479,562
                    United States of America           5,752,225
                    United States of America           5,583,962
                    United States of America           5,581,653
                    United States of America           5,632,003
                    United States of America           5,623,577
                    United States of America           5,633,981

                                                                             -4-

<PAGE>

                               PATENT APPLICATIONS
                               -------------------

                         Country             Application Number
                         ------------------  ------------------
                         Australia           73642/94
                         Australia           76765/94
                         Australia           11305/95
                         Austria             94107838.8
                         Belgium             94107838.8
                         Canada              2,053,064-2
                         Canada              2,059,141
                         Canada              2,077,662
                         Canada              2,077,668
                         Canada              2103051
                         Canada              2,140,678
                         Canada              2,142,092
                         Canada              2,164,964
                         Canada              2,165,450
                         Canada              2,166,551
                         Canada              2,167,527
                         China               91 102167.1
                         Denmark             94107838.8
                         France              94107838.8
                         Germany             94107838.8
                         Italy               94107838.8
                         Japan               2-503825
                         Japan               3-508357
                         Japan               4-504474
                         Japan               4-503836
                         Japan               5-500680
                         Japan               6-510170
                         Japan               7-504717
                         Japan               7-508213
                         Japan               7-504753
                         Japan               7-504747
                         Korea               90-702194
                         Korea               92-702394
                         Korea               92-702095
                         Korea               92-702096
                         Korea               95-700769
                         Netherlands         94107838.8
                         Singapore           9608277-1
                         Singapore           9608335-7
                         Singapore           9608307-6

<PAGE>

                                  Country                Application Number
                        ---------------------------      ------------------
                        Singapore                      9608275-5
                        Singapore                      9608135-1
                        Singapore                      9603970-6
                        Singapore                      9608577-4
                        Singapore                      9608674-9
                        Singapore                      9608134-4
                        Singapore                      9608676-4
                        Singapore                      9608675-6
                        Singapore                      9608341-5
                        Singapore                      9608307-6
                        Spain                          94107838.8
                        Sweden                         94107838.8
                        Switzerland/Liechtenstein      94107838.8
                        United Kingdom                 94107838.8

                                                                             -2-

<PAGE>

                            THE DOLBY VIRTUAL PATENTS
                            -------------------------

                               PATENT APPLICATIONS
                               -------------------

                      Count                Application Number
                -------------------------- --------------------
                PCT*                       98/03882
                United States of America   08/819,582

___________________

   *   Filed in these countries: Australia, Austria, Belgium, Canada, Denmark,
France, Germany, Italy, Japan, Korea, Netherlands, Singapore, Spain, Sweden,
Switzerland/Liechtenstein, United Kingdom

<PAGE>

                 APPENDIX B - "DOLBY DIGITAL AC-3 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.

<PAGE>

             APPENDIX C - DOLBY DIGITAL LICENSEE INFORMATION MANUAL

<PAGE>

                                   [Dolby Logo]

                                   Dolby Laboratories Inc.
                                   Dolby Laboratories Licensing Corporation
                                   Signal Processing and Noise Reduction Systems

                                   100 Potrero Avenue
                                   San Francisco, California 94103-4813
                                   Telephone 415-558-0200
                                   Facsimile 415-863-1373
28 March 2000

InterVideo, Inc.
440 Mission Court, Suite 260
Fremont, CA 94539
United States of America

                          Side Letter: Dolby Headphone

Gentlemen:

     Re:  License Agreement entitled "DIGITAL AUDIO SYSTEM LICENSE AGREEMENT"
          (L3D-AC3V) between InterVideo, Inc. and Dolby Laboratories Licensing
          Corporation, effective March 4, 1999.

     We have pleasure in extending the rights granted under the above-mentioned
License Agreement to include, additional patents, know-how, and copyrighted
works that cover our Dolby Headphone audio system. This Dolby Headphone Side
Letter makes the necessary changes to the wording of the License Agreement,
Coupled with the License Agreement, it forms an integral understanding regarding
Dolby Headphone, and is not intended to affect the terms of use for other
technologies. If there is any conflict between the wording of this Dolby
Headphone Side Letter and that of the above-mentioned Agreement (with respect to
the Dolby Headphone audio system), the wording of the Side Letter will be
regarded as controlling.

     1.   Add to the Index page:

     Section 1.22 - "Dolby Headphone System Specifications."

     Appendix D - Table of Contents for the Product Development Kit: Dolby
Headphone.

     2.   Add to the Preamble (Page 1) after the eleventh "WHEREAS," clause:

     WHEREAS, LICENSOR'S approved Dolby Headphone audio system (hereafter,
"Dolby Headphone") and its manufacture embody Inventive subject matter which are
the subject of international patent and patent applications licensable by
LICENSOR;

     WHEREAS, the manufacture and sale of LICENSOR'S Dolby Headphone audio
system requires the reproduction of copyrighted works licensable by LICENSOR;

<PAGE>

Intervideo, Inc.                                                   28 March 2000
                                                                          Page 2

     WHEREAS, LICENSOR represents and warrants that it has rights to grant
licenses under such know-how, patents and patent applications and copyrighted
works and under its trademarks;

     WHEREAS, LICENSEE is engaged in the manufacture and sale of products for
the home electronics market; and

     WHEREAS, LICENSEE believes it can develop substantial demand for equipment
to decode audio signals using LICENSOR's Dolby Headphone audio system;

     WHEREAS, LICENSEE desires a non-exclusive license to manufacture and sell
decoders using LICENSOR's Dolby Headphone audio system under LICENSOR's
trademarks, know-how, copyrighted works, patents and patent applications; and

     3.   Add to the end of Section 1.09 - "Licensed Trademark," the following:
"and (d) the word mark "Dolby Headphone," and (e) the device mark [Dolby Logo
with headphones].

     4.   Replace the first sentence of Section 1.10 - "Licensed Device," with
the following: "Licensed Device means a digital audio circuit having (a) Dolby
Digital AC-3 Audio System Specifications, or (b) Dolby Headphone System
Specifications, whether made in discrete component, integrated circuit, or other
forms, for decoding a digital bitstream into one or more audio channels
(hereafter sometimes referred to as a "Dolby Digital Licensed Device," or a
"Dolby Headphone Licensed Device," respectively).

     5.   Modify Section 1.11(2) - "Licensed Product," so that the first
paragraph phrase "intended or designed for use in decoding an AC-3 digital audio
bitstream," reads "intended or designed for use in decoding (a) a Dolby Digital
AC-3 digital audio bitstream, and/or (b) a Dolby Headphone bitstream, (hereafter
sometimes referred to as a "Dolby Digital Licensed Product" or a "Dolby
Headphone Licensed Product," respectively)." In addition, modify the
second-paragraph phrase "Every Licensed Product containing three or more
Licensed Devices must," so that it reads, "Every Licensed Product containing
three or more Dolby Digital Licensed Devices must..."

     6.   Modify Section 1.19 - "Licensed Copyrighted Works," so that the phrase
"relating to the Dolby Digital AC-3 audio system," reads "relating to the Dolby
Digital AC-3 audio system or to the Dolby Headphone audio system."

     7.   Add Section 1.22 - "Dolby Headphone System Specifications."

     Section 1.22 - "Dolby Headphone System Specifications" means the
specifications for the Dolby Headphone audio system, comprising the claims and
teachings of the relevant Scheduled Patents, and the Dolby Headphone system
operating parameters as specified in the Dolby Headphone Product Development Kit
(the table of contents of which is attached hereto at Appendix D, entitled,
"Table of Contents for the Product Development Kit: Dolby Headphone," and which
may be updated from time to time by LICENSOR), and the relevant Licensed
Copyrighted Works and Know-How.

     Appendix D is attached hereto and forms an integral part of this Agreement.

<PAGE>

Intervideo, Inc.                                                   28 March 2000
                                                                          Page 3

     8.   Modify Section 2.02 - Limitation of Licenses Granted, to include the
following additional subsection: "(9) no license is granted hereunder to make,
have made for, use in, or import or sell Licensed Products into professional
(non-consumer) market segments."

     9.   Modify Section 3.01 - Use of Licensed Trademarks:

     So that the second sentence phrase, "The performance capability of the
Dolby Digital AC-3 audio system." reads, "The performance capability of the
Dolby Digital AC-3 and Dolby Headphone audio systems;" and so that the end of
Subsection (1) contains additionally: "and/or [Dolby Logo with headphones]"; and
so that the end of the first sentence of Subsection (8) contains additionally:
"Dolby, `the `Double-D' symbol and `[Dolby Logo with headphones]' are trademarks
of Dolby Laboratories."

     10.  Replace Section 3.07(2) - Form of Notice with the following:

     LICENSEE shall apply the following relevant copyright notices as required
in subsection 3.07(1) of this Section 3.07:

          (a)  For Dolby Digital Licensed Products: 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.

          (b)  For Dolby Headphone Licensed Products: 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 1998-1999 by Dolby Laboratories. All rights
               reserved.

          (c)  For Licensed Products which are both Dolby Digital Licensed
               Products and Dolby Headphone Licensed Products: This product
               contains 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 and 1998-1999 by
               Dolby Laboratories. All rights reserved.

     11.  Modify Section 4.02 - Royalties as follows:

     Add the following after the first paragraph: "In addition, a royalty of two
Licensed Devices shall apply to each Dolby Headphone Licensed Product."

     Modify the paragraph which begins: "For every Licensed Device incorporated
in a Licensed Product," as follows: "For every Licensed Device incorporated in a
Licensed Product that is used, sold, leased or otherwise disposed of by LICENSEE
in a country that is not a Non-Patent Country, LICENSEE shall pay

<PAGE>

Intervideo, Inc.                                                   28 March 2000
                                                                          Page 4

[*] With respect to Dolby Digital Licensed Devices, a maximum of three shall
apply per Dolby Digital Licensed Product; but Dolby Headphone Licensed Devices
shall not count toward such maximum."

     12.  Add the following after the first sentence of the first paragraph of
Section 4.06 - Royalties in Non-Patent Country:

     "(For the avoidance of doubt, the designation of a particular jurisdiction
as a Non-Patent Country with respect to a particular royalty payable, shall be
determined by the part of the Schedule of Patents relevant to such royalty
payable. For example, the additional Scheduled Patents added by the Dolby
Headphone Side Letter are relevant to the designation of a jurisdiction as a
Non-Patent Country only with respect to Dolby Headphone royalties payable.)"

     13.  Modify Section 6.01 - Standardization and Quality as follows:

     Add to end of the first sentence, of the first paragraph: "...and by the
Dolby Headphone System Specifications."

     Modify the second paragraph to read: "Licensed Products shall not be
designed, presented or advertised in any way which contributes to confusion of
the Dolby Digital AC-3 audio system, or of the Dolby Headphone 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."

     14.  Modify the second two sentences of Section 8.03 - Public Announcements
so that they read: "LICENSEE shall not at any time publicly state or imply that
any unlicensed products use either the Dolby Digital AC-3 Audio System
Specifications or the Dolby Headphone 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 AC-3 Audio System Specifications, Dolby Headphone
System Specifications, Licensed Devices, Licensed Products, Licensed Trademarks,
and Know-How."

     15.  Add to APPENDIX A - SCHEDULE OF PATENTS the following:

                                 DOLBY HEADPHONE

                                     PATENTS
                                     -------

Country                                               Patent Number
-------                                               -------------

Australia                                             689439
United States of America                              5,502,747

<PAGE>

Intervideo, Inc.                                                   28 March 2000
                                                                          Page 5

                               PATENT APPLICATIONS
                               -------------------

Country                                                 Patent Number
-------                                                 -------------

Canada                                                  2139511
EPO*                                                    93914555.3
Japan                                                   502761/94
PCT**                                                   AU96/00769
PCT***                                                  AU98/00002

     *Designating these countries: Belgium, Denmark, France, Germany, Italy,
Netherlands, Sweden, United Kingdom

     **Designating these countries: Belgium, Denmark, France, Germany, Italy,
Netherlands, Sweden, United Kingdom, Japan, Korea, United States of America

     ***Designating these countries: Australia, Austria, Belgium, Canada, China,
Denmark, France, Germany, India, Italy, Japan, Korea, Netherlands, Singapore,
Spain, Sweden, Switzerland/Liechtenstein, United Kingdom, United States of
America

     16.  Add to the end of the Agreement: "APPENDIX D - TABLE OF CONTENTS FOR
THE PRODUCT DEVELOPMENT KIT: DOLBY HEADPHONE"

     1.   DOLBY HEADPHONE

          1.1.   Dolby Headphone Licensing Manual
                 --------------------------------
                 999/12691, Draft version, Aug. 89
                 This document describes the product specifications and
                 functional requirements for the use of Dolby Headphone
                 technology within a range of typical consumer products as well
                 as trademark usage.

          1.2.   Test Material*
                 -------------

                 1.2.1.  Test signals*
                         ------------
                         Under development
                         Test signals to verify that the Dolby Headphone
                         algorithm has been properly implemented.

                 1.2.2.  Test program*
                         ------------
                         dhcheck.exe
                         Under development
                         This is a Win32 executable for analysis of the measured
                         system responses.

<PAGE>

Intervideo, Inc.                                                   28 March 2000
                                                                          Page 6

Yours sincerely,

DOLBY LABORATORIES LICENSING CORPORATION

/s/ D. Mac Leckrone
D. Mac Leckrone
Sr. Manager, Agreements & Contracts

                                   Read and Agreed on behalf of InterVideo, Inc.

                                   Signature: /s/ Joe Monastiero
                                             ----------------------------------
                                   Name:    Joe Monastiero
                                         --------------------------------------
                                   Title:   VP
                                         --------------------------------------
                                   Date:    April 10, 2000
                                         --------------------------------------<PAGE>

                                                                    Exhibit 10.7

CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS. OMITTED INFORMATION HAS BEEN REPLACED BY [*].

                                   Version 1.1

                              CSS LICENSE AGREEMENT

     This CSS LICENSE AGREEMENT (the "License Agreement"), including the related
CSS PROCEDURAL AND TECHNICAL SPECIFICATIONS (together, the "Specifications") and
the Exhibits and Attachments to the License Agreement and Specifications
(collectively, this "Agreement"), is made and entered into by and between: (i)
the DVD Copy Control Association, Inc., a Delaware nonprofit corporation, having
offices located at 225B Cochrane Circle, Morgan Hill, CA 95037 ("Licensor"); and
(ii) InterVideo, Inc., a California corporation having offices located at 47350
Fremont Blvd., Fremont, CA 94538 ("Licensee"). This Agreement shall be effective
as of the date of the later signature below ("Effective Date").

                                    RECITALS

     A. Matsushita Electric Industrial Co., Ltd. ("MEI") and Toshiba Corporation
("Toshiba") have developed a Content Scramble System (as defined below) to
provide reasonable security for content on DVD Discs and thereby, together with
the terms and conditions of this Agreement, to provide protection for such
copyrighted content against unauthorized consumer copying, and have filed patent
applications with respect to the Content Scramble System.

     B. MEI and Toshiba have licensed the Content Scramble System to Licensor
for purposes of further licensing the system and administering such licenses in
relation to the protection of content utilizing the DVD Video Specification for
content encoded on DVD Discs.

     C. Licensor desires to license the Content Scramble System to Licensee, and
Licensee desires to license the Content Scramble System from Licensor, subject
to the terms and conditions set forth in this Agreement:

                                    AGREEMENT

     1. DEFINITIONS. In addition to the other capitalized terms used in this
Agreement and in addition to the terms defined in the CSS Procedural
Specifications (which terms shall have the same meanings set forth in the
Procedural Specifications), the following terms shall have the following
meanings:

        1.1 "Absolutely Necessary Claim" shall mean any claim(s) of patent(s) or
             --------------------------
patent application(s) which are infringed by the manufacture, import, use or
sale of CSS Compliant Products because: (i) those portions of the CSS
Specifications which are required to implement CSS are read on by such claim(s);
or (ii) such CSS Compliant Products, solely because of the requirement to
implement the portions of the CSS Specifications which are required to implement
CSS, cannot be manufactured, used, distributed, offered to be sold, sold,
imported, or otherwise transferred without infringing such claim(s).

<PAGE>

          1.2 "Affiliate" shall mean any corporation, partnership or other
               ---------
entity that, directly or indirectly, owns, is owned by, or is under common
ownership with, Licensee, for so long as such ownership exists. For purposes of
the foregoing, "own" "owned" or "ownership" shall mean holding ownership of, or
the right to vote, more than fifty percent (50%) of the voting stock or
ownership interest entitled to elect a board of directors or a comparable
managing authority.

          1.3 "Associate Licensee" shall mean any third party that enters into
               ------------------
an agreement, containing substantially the same terms as those set out in one or
both of the documents entitled "Assembler Associate License" and "Reseller
Associate License."

          1.4 "Associate Licensee Reseller" shall mean an Associate Licensee
               ---------------------------
entering into a Reseller Associate License for the purpose of being authorized
to purchase and resell Schedule 1 and Schedule 2 Products, subject to the
redistribution requirements of the Reseller Associate License.

          1.5 "By-Laws" shall mean the document, or specified section thereof,
               -------
entitled "By-Laws DVD Copy Control Association, Inc.," as amended from time to
time.

          1.6 "Confidential Information" shall mean Proprietary Information that
               ------------------------
is either marked "confidential," when disclosed in tangible form or designated
as "confidential" when disclosed orally (or otherwise in intangible form) and
confirmed in writing within thirty (30) days after such disclosure.

          1.7 "Controlled Company" shall mean (i) any Affiliate, or (ii) any
               ------------------
other entity that controls, is controlled by, or is under common control with
another entity. For purposes of this Section, "control" means possession, direct
or indirect, of the power to direct or cause the direction of the management and
policies of an entity with respect to the matters set out in this Agreement,
whether through the possession of voting power or by contract encompassing such
matters. In determining whether an entity is included in (ii) above, where (x) a
Licensee's control does not extend to directing the commencement or termination
of legal actions as described herein or (y) where causing such entity to take a
particular action would constitute a breach of Licensee's fiduciary obligations
to such entity, "control" is deemed not to be present.

          1.8 "CSS" or "Content Scramble System" shall mean the Content Scramble
               ----     -----------------------
System developed by MEI and Toshiba which is designed to provide reasonable
protection for content encoded onto DVD Discs using the DVD Video Specification,
as such system has been licensed by MEI and Toshiba to Licensor and as more
fully described in the CSS Specifications, as amended in accordance with
Sections 4.2 and 10.7 of this License Agreement. CSS does not include any
technology referenced by or used with the CSS Specifications such as MPEG
technology, DVD technology (including, but not limited to, DVD disc structure),
data compression and decompression, embedded data technology, watermarking, nor
any other independent technology mandated or permitted in connection with any
amendments to the CSS Specifications.

          1.9 "CSS Complaint Products" shall mean DVD Products which are
               ----------------------
compliant with the CSS Specifications in accordance with Section 4.2 of this
License Agreement.

                                                                             -2-

<PAGE>

          1.10 "CSS Interim License Agreement" shall mean an agreement
                -----------------------------
(including all documents incorporated therein by reference) entered into by
either MEI as the licensor of CSS and thereafter assigned to Licensor by MEI or
DVD CCA in its role as interim licensor of CSS.

          1.11 "CSS Agreement" shall mean an agreement between Licensor and
                -------------
another party that contains the same terms as this Agreement (including this
License Agreement and all documents incorporated herein by reference), or terms
that have been modified consistent with Sections 4.2 and 10.7 of this License
Agreement.

          1.12 "CSS Licensee" shall mean any third party that enters into a CSS
                ------------
Agreement with Licensor that is valid and in effect. A third party that has a
CSS Interim License Agreement that is valid and in effect shall be included
within the meaning of "CSS Licensee."

          1.13 "CSS Specifications" shall mean the documentation relating to CSS
                ------------------
entitled "CSS Specifications" (including the Procedural Specifications and the
Technical Specifications) that Licensor makes available to Licensee, as such
documentation may be revised from time to time consistent with Sections 4.2 and
10.7 hereof. Except where otherwise specifically stated, all references to "CSS
Specifications" shall be deemed to include all or any portion of the
documentation referenced in the preceding sentence.

          1.14 "Disc IP" shall mean any copyright, trade secret, or other
                -------
intellectual property inherent in the CSS Specifications pertaining to CSS, or
any patent claim(s) (including but not limited to any Absolutely Necessary
Claims or Relatively Necessary Claims) that are infringed by any implementation
of CSS in any DVD Disc.

          1.15 "DVD Products" shall mean the following products if they
                ------------
incorporate any portion of CSS: DVD Players, DVD Drives, Descramblers,
Authenticators, Scramblers, CSS Decryption Modules (implemented in Hardware as
CSS Decryption Hardware and/or in software as CSS Decryption Software), CSS Disc
Formatters, DVD Discs, Special Purpose DVD Players, Special Purpose DVD Drives,
Verification Products and Integrated Products.

          1.16 "DVD Video Specification" shall mean the DVD Specifications for
                -----------------------
Read-Only Disc, Version 1.0 (August 1996), as that document may be amended from
time to time.

          1.17 "Highly Confidential Information" shall mean Proprietary
                -------------------------------
Information that constitutes or discloses: (i) the algorithms used for
scrambling, descrambling, authentication and key recovery; (ii) master, disc,
title or authentication keys; or (iii) information developed by MEI and/or
Licensor for testing product compliance with CSS where such information makes
use of or reveals information described in (i) or (ii). Such information shall
be marked, if disclosed in written form, or designated, if disclosed in
electronic form, as "Highly Confidential" when disclosed to Licensee.

          1.18 "Licensed Rights" shall mean all Absolutely Necessary Claims, all
                ---------------
Relatively Necessary Claims, copyrights, trade secret rights, and other
proprietary rights in any jurisdiction, and in all applications and
registrations therefor, in and to CSS (including the Proprietary Information),
that Licensor (during the term of this Agreement) owns or has the right to grant
licenses of the scope

                                                                             -3-

<PAGE>

granted herein without the agreement of, or requirement for payment (or
provision of other consideration) to any person or entity.

          1.19 "Motion Picture Company" shall mean any person which (a)
                ----------------------
designates itself as a Motion Picture Company on its Membership Application, and
(b) is engaged in the production and distribution of theatrical motion pictures
in the United States on a substantial scale, as evidenced by production, box
office receipts and number of releases annually.

          1.20 "Ombudsman" shall mean that individual designated by Licensor to
                ---------
perform this function.

          1.21 "Proprietary Information" shall mean any and all information
                -----------------------
relating to CSS made available to Licensee directly by MEI, Licensor, or any
other CSS Licensee, or revealed to Licensee pursuant to Section 5.3 prior hereto
or during the term of this Agreement, including, without limitation, CSS
Specifications, Software, Hardware, documentation, designs, flow charts,
technical data, outlines, blueprints, notes, drawings, prototypes, templates,
systems, manuals, know-how, processes, and methods of operation.

          1.22 "Protected" shall mean a configuration in which a data stream or
                ---------
signal is not output except (1) via encrypted, scrambled, or otherwise secure
link or method authorized hereunder either through a device's or component's
authorized output or to the next component or device which in turn has an
authorized output; or (2) directed as uncompressed video data to a graphics
subsystem via an internal computer path in a manner consistent with Section 6.2
the CSS Procedural Specifications. For purposes of this definition, authorized
outputs and methods hereunder are those compliant with the requirements
contained in Section 6.2 of the CSS Procedural Specifications, including any
upgrades or modifications thereto adopted in accordance with Sections 4.2 and
10.7 of this License Agreement. By way of example and not limitation, the
following CSS Compliant Products, if so configured, would be considered to be
Protected:

               (a) CSS Decryption Hardware incorporating MPEG decoding and any
or all of the following outputs:

                   (i)   NTSC with appropriate AGC and Colorstripe;

                   (ii)  Computer Monitor SVGA (or other computer monitor RGB);
or

                   (iii) Uncompressed digital video directed via an internal
computer path to a computer graphic subsystem for display.

               (b) CSS Decryption Software incorporating MPEG decoding and
supporting the output described in subsection (a)(iii).

               (c) A CSS Decryption Module which implements the interrogation or
identification functions referenced in Section 6.2.11.4 of the CSS Procedural
Specifications; and

                                                                             -4-

<PAGE>

                    (d) A DVD Player which meets the requirements of Section
6.2.1 of the CSS Procedural Specifications.

               1.23 "Relatively Necessary Claim" shall mean, any claim(s) of
                     --------------------------
patent(s) or patent application(s), that: (i) are not Absolutely Necessary
Claims; and (ii) with respect to which the implementation of all or any portions
of the CSS Specifications pertaining to CSS involves a design-around to such
patent claim(s) which would have a commercially significant effect on
performance, manufacturability or manufacturing cost, although the cost of
designing-around itself shall not be taken into account. Relatively Necessary
Claims shall not include claims which if licensed by Licensor to Licensee or by
Licensee to another CSS Licensee would require a payment of royalties or other
fees by Licensor or Licensee, as appropriate, to unaffiliated third parties.

               1.24 "Reseller" shall mean a CSS Licensee or Associate Licensee
                     --------
Reseller that purchases Schedule 1 or Schedule 2 Products from a CSS Licensee
for the purpose of reselling such products without modification and only to a
CSS Licensee or an Associate Licensee authorized to receive such products.

               1.25 "Restricted Schedule 1 Product" shall mean a CSS Compliant
                     -----------------------------
Product licensed hereunder which is a Verification Product.

               1.26 "Schedule 1 Product" shall mean a CSS Compliant Product
                     ------------------
which:

                    (a) is not a Schedule 2 or 3 Product, or

                    (b) is

                         (i)   an Authenticator, or

                         (ii)  a Descrambler, or

                         (iii) a CSS Decryption Module or partial implementation
thereof, or

                         (iv)  any other device which has an output which is not
permitted in a Schedule 2 or 3 Product, or

                    (c) is a CSS Disc Formatter.

               1.27 "Schedule 2 Product" shall mean a DVD Product that is a CSS
                     --------------------
Compliant Product except that such product is not Protected and which outputs
descrambled CSS Video Data only in decompressed form.

               1.28 "Schedule 3 Product" shall mean (a) a CSS Compliant Product
                      -----------------
which outputs CSS Data only in a Protected manner or (b) a DVD Disc.

                                                                             -5-

<PAGE>

     2. LICENSES GRANTED.

          2.1  Nonexclusive License. Subject to the terms and conditions of this
               --------------------
Agreement, Licensor grants to Licensee a worldwide, royalty-free, non-exclusive,
nontransferable right, under the Licensed Rights:

          (a)  to use and implement CSS to develop, design, manufacture and use
DVD Products that are in the Membership Categories selected by Licensee and to
practice any methods necessary for the manufacture or use of such DVD Products;
and

          (b)  according to Licensee's Membership Categories, to receive DVD
Products in accordance with this Agreement and to distribute, offer to sell,
sell, import and otherwise transfer DVD Products made in accordance with this
Agreement, such distribution, offer to sell, sale, importation or other transfer
of CSS Compliant Products to be allowable only as follows:

               (i)   Restricted Schedule 1 Products only to CSS Licensees in the
DVD Disc Replicator Membership category;

               (ii)  Schedule I Products only to CSS Licensees or to Associate
Licensee Resellers;

               (iii) Schedule 2 Products only to CSS Licensees or to Associate
Licensees;

               (iv)  Schedule 3 Products to any person or entity; or

               (v)   Special Purpose DVD Players or Special Purpose DVD Drives
only to purchasers that are required by contract with Licensee (x) to use the
Special Purpose DVD Players or Special Purpose DVD Drives, as the case may be,
for the purpose of the authorized playback of content originally encrypted on
DVD Discs using CSS where such DVD Discs are designated as Region 8 discs and
where such playback is intended to be in the commercial setting in which the
viewer of the movie does not own the Special Purpose DVD Player or Special
Purpose DVD Drive, whether or not such viewing is considered a public
performance, or non-public performance, of the movie (e.g., airline, cruise
ship, hotel or similarl applications); and (y) to sell or otherwise dispose of
or distribute any such Special Purpose DVD Players or Special Purpose DVD Drives
to another party only in circumstances in which such other party is legally
prohibited from using such Special Purpose DVD Players or Special Purpose DVD
Drives, as the case may be, other than in the use described in (x), above.
Licensee further agrees that with respect to any such contract, it will either
provide for third party beneficiary rights for Motion Picture Companies or will
itself take all reasonable efforts necessary to enforce the provisions of such
contracts as described in (x) and (y), above. Records of sales of Special
Purpose DVD Players and Special Purpose DVD Drives must be separately maintained
by Licensee, and the names and addresses of each purchaser of Special Purpose
DVD Players and Special Purpose DVD Drives shall be provided by Licensee to
Licensor upon request by Licensor. Copies of contracts for such sales must be
available for inspection by Licensor, at least with respect to the provisions
relevant to the requirements of this subparagraph. With respect to any sales of
Special Purpose DVD Players or Special Purpose DVD

                                                                             -6-

<PAGE>

Drives made prior to the effective date of this Agreement, Licensee agrees (a)
that any such sale will be subject to the recordkeeping and reporting
requirements of this subparagraph, (b) that it will submit to Licensor, within
30 days of the effective date of this Agreement, a specific certification from
Licensee that, to the best of Licensee's knowledge and belief, each purchaser
intends to use the Special Purpose DVD Players and/or Special Purpose DVD Drives
solely for the purpose described in this subparagraph; and (c) that Licensee
will make all commercially reasonable efforts to amend the contract for such
sale(s) to incorporate the restrictions required for such contracts entered
after the effective date of this Agreement; and

               (c)  to provide prototype or sample DVD Products incorporating
CSS to prospective customers or retained test companies in situations that are
not covered by Section 2.1(b), in each case solely for evaluation in
contemplation of a purchase of such products or performance of specified testing
of such products, as applicable, and to provide related technical information
necessary for the evaluation or testing purposes, as applicable, provided,
however, that: (i) Licensee shall not provide to any such customers or test
companies any CSS Highly Confidential Information; and (ii) any disclosure of
CSS Confidential Information shall be made only pursuant to a written agreement
providing at least equivalent protections as are provided in this Agreement; but

               (d)  not to distribute, offer to sell, sell, import or otherwise
transfer any DVD Products that Licensee makes or receives under this Agreement
or that it made or received under an CSS Interim License Agreement that it
entered into, except in accordance with Sections 2.1(b) and (c) above.

          2.2  Copyright License. Subject to the terms and conditions of this
               -----------------
Agreement, including without limitation the confidentiality provisions of
Section 5.2 and the prohibition on copying Highly Confidential Information
contained in Section 5.2(b)(iii), for any copyrightable information included in
the CSS Specifications and other documentation, including Proprietary
Information, provided by Licensor in connection with this Agreement, Licensor
grants Licensee a worldwide, royalty-free, non-exclusive, nontransferable
copyright license to use and reproduce the CSS Specifications and such other
documentation for internal purposes solely in connection with the implementation
of CSS and marketing of CSS Compliant Products as permitted under Section 2.1
hereof.

          2.3  Right to Have Designated or Have Made. Licensee shall have the
               -------------------------------------
right under the licenses granted herein to have third parties design and/or make
CSS Compliant Products or subparts thereof for the sole account of Licensee, but
only if said CSS Compliant Products or subparts thereof:

               (a)  are to be sold, used, leased or otherwise disposed of, by or
for Licensee under the trademark, tradename, or other commercial indicia

                    (i)  of Licensee or

                    (ii) of a person or entity to which Licensee is authorized
by this Agreement to sell

                                                                             -7-

<PAGE>

                         (1) the CSS Compliant Product that is the subject of
the "have designed," and/or "have made" agreement or

                         (2) an Integrated Product that is a CSS Compliant
Product made using such CSS Compliant Product, and

               (b)  are designed and/or made by such third parties using design
specifications or manufacturing drawings supplied by or for Licensee.

Such third parties shall be required to be CSS Licensees if such design and/or
manufacture requires disclosure to such third parties of (1) Confidential
Information; or (2) other information or materials from which Confidential
Information could reasonably be derived. Further, such parties shall be required
to be CSS Licensees if such design and/or manufacture requires disclosure to
such third parties of (1) Highly Confidential Information; or (2) other
information or materials from which Highly Confidential Information could
reasonably be derived. Licensee agrees and acknowledges that the fact that it
has contracted with a third party pursuant to this provision does not relieve
Licensee of any of its obligations under this Agreement and that Section 5.5 of
this License Agreement includes obligations applicable to its relationship with
third parties engaged pursuant to this provision. Licensee agrees that, with
respect to third parties that are not CSS Licenses, Licensee will contractually
obligate such third party to adhere to the same reverse engineering prohibitions
and limitations as are contained in Section 5.3 of this Agreement. Such third
parties shall receive no license, sublicense, or implied license with respect to
CSS, and the duration of the "have designed" or "have made" rights granted under
this provision shall not extend beyond the term of this Agreement, including any
termination thereof pursuant to Section 6.2.

          2.4  Sublicenses to Affiliates. Subject to the requirements of the
               -------------------------
following subsections (a) and (b), Licensee shall have the right to sublicense
the rights granted to Licensee hereunder to any of its Affiliates ("Permitted
Sublicensees").

               (a)  Licensee shall have the right to sublicense to any of its
Permitted Sublicensees at Licensee's sole discretion, any of Licensee's rights
under Sections 2.1, 2.2 and 2.3, provided that: (i) Licensee notifies Licensor
of the identity of each Permitted Sublicensee receiving a sublicense and the
type of Confidential Information or Highly Confidential Information provided to
such Permitted Sublicensee; (ii) each such Permitted Sublicensee receiving a
sublicense shall abide by the terms of this Agreement with the same rights (but
without the right to grant any further sublicense) and the same obligations and
prohibitions as Licensee, including without limitation, the non-assertion and
patent license offer provisions of Section 5.1 hereof; (iii) such sublicense
coterminates with this Agreement, or terminates at any time such Permitted
Sublicensee ceases to qualify as an Affiliate or whenever Licensee determines
that an Affiliate is no longer engaged in activities requiring a sublicense,
provided that Licensee shall notify Licensor whenever Licensee terminates any
sublicense previously granted; (iv) such Permitted Sublicensees receiving a
sublicense shall execute and deliver to Licensor a written acknowledgment and
agreement, in the form provided for in Exhibit "A" hereto, that the Permitted
Sublicensee has read and agrees to abide by the terms of this Agreement; and (v)
Licensee may sublicense only those rights for the Membership Categories to which
Licensee currently belongs; provided that in the case of a Permitted Sublicensee
that is an Affiliate that is owned directly or indirectly by Licensee ("Owned

                                                                             -8-

<PAGE>

Affiliate"), Licensee agrees that any failure to comply with clause (iv) of this
Section 2.4(a) shall be remedied by either or both of the following: (1)
Licensee shall consent to a judgment for specific performance of the obligation
for each Owned Affiliate to execute and deliver such acknowledgment and
agreement, and (2) Licensee shall cause any Owned Affiliate not to defend
against any enforcement action by Licensor or by an Eligible Licensee pursuant
to Section 9.5 on the ground that this Agreement does not apply to such Owned
Affiliate or that any obligation imposed by the Agreement is not applicable to
Controlled Affiliate, and provided further that Licensor and any CSS Licensee
seeking to enforce the obligation imposed by clause (iv) of this Section 2.4(a)
agree that these will be the sole remedies for any failure to obtain the
executed acknowledgment and agreement from such a Owned Affiliate.

               (b) Licensee shall be responsible for its Permitted Sublicensees'
compliance with the terms and conditions of this Agreement, and Licensee and
each of its Permitted Sublicensees shall be jointly and severally liable for any
noncompliance by such Permitted Sublicensee with the terms and conditions of
this Agreement.

          2.5  No Sublicense or Implied License. Except as set forth in Section
               --------------------------------
2.4, Licensee shall not have any right to sublicense any rights granted
hereunder and no products or services provided by Licensee shall give rise to
any implied licenses to third parties, provided that there shall be no
limitation or restriction on the use, resale or other transfer or distribution
of CSS Compliant Products that are Schedule 3 Products. Licensee acknowledges
and agrees that the licenses granted herein are the only licenses granted to
Licensee, and that no other licenses are granted, expressly, by implication or
by estoppel, now or in the future. As between Licensor and Licensee, all rights
not expressly granted to Licensee under this Agreement in and to CSS and the
Proprietary Information are reserved and retained by Licensor.

     3.   MEMBERSHIP CATEGORIES AND ADMINISTRATION FEE.

          3.1  Selection of Membership Categories. Upon the execution of this
               ----------------------------------
Agreement, and upon each annual renewal of its membership, Licensee shall select
one or more Membership Categories. Licensee may from time to time add or delete
Membership Categories upon providing Licensor prior written notice and payment
of the Administration Fee (as defined below) for each additional Membership
Category in accordance with Section 3.2 hereof.

          3.2  Administration Fee. Concurrent with Licensee's selection of the
               ------------------
Membership Categories pursuant to Section 3.1, Licensee shall pay Licensor a
nonrefundable sum for each Membership Category selected by Licensee (the
"Administration Fee"), which fee shall be used to offset the costs associated
with Licensor's administration of CSS. The amount of the Administration Fee
shall be determined from time to time by Licensor and set forth on a fee
schedule that shall be made available to Licensee at the time of Licensee's
selection of Membership Categories and at the time of Licensee's annual renewal.
Licensee understands and acknowledges that: (1) the Administration Fee is
payable on an annual basis and that failure to make timely payment of such
Administration Fee is a breach of this Agreement, (2) payment of the
Administration Fee shall entitle Licensee to Non-Voting Membership in DVD CCA,
with such rights and privileges as are associated with such membership pursuant
to the By-Laws, and (3) that Licensee shall not be entitled to any refund in
connection with any deletion of Membership Categories during the term of

                                                                             -9-

<PAGE>

this Agreement or upon or after termination of this Agreement. Licensee is not
required to accept the Non-Voting Membership referenced in (2), above and may
resign such membership at any time, provided that Licensee shall remain liable
for Administration Fees pursuant to this Section 3.2.

     4.  CSS SPECIFICATIONS.
         ------------------

          4.1  Delivery of CSS Specifications. Upon Licensee's selection of one
               ------------------------------
or more Membership Categories in accordance with Article 3 and the payment of
the appropriate Administration Fee(s), Licensor shall distribute to Licensee the
portions of Proprietary Information and/or CSS Specifications appropriate to its
Membership Category or Categories that Licensee has not previously received from
MEI. In the event Licensee deletes any Membership Categories or does not select
all of the Membership Categories with respect to which it has previously
received proprietary information and/or CSS Specifications from MEI, Licensee
shall within thirty (30) days thereafter return or destroy, providing a written
certification of such destruction, such portions of Proprietary Information
and/or CSS Specifications relevant to the Membership Categories it has deleted
or not selected.

          4.2  Compliance with CSS Specifications.
               ----------------------------------

               4.2.1 General. Licensee shall comply with the CSS Specifications,
                     -------
as may be amended by Licensor from time to time in accordance with the By-Laws.
Each DVD Product shall comply with the version of the CSS Specifications which
is in effect at the time such DVD Product is manufactured, taking into account
specific effective date provisions in amendments to the CSS Specifications.

               4.2.2 Compliance with Changes to CSS Specifications. With respect
                     ---------------------------------------------
to any changes to the CSS Specifications made after the Effective Date of this
Agreement, the following rules shall apply. Changes to the CSS Specifications
shall be made in accordance with procedures set forth in the By-Laws. All
changes shall be notified to all CSS Licensees and shall provide Licensee with
sufficient information to incorporate any necessary changes into the design and
manufacture of DVD Products to ensure that such products continue to be CSS
Compliant Products. All changes shall be applied on a non-discriminatory basis
among all CSS Licensees. Licensor shall specify in its notice either the
specific date by which the changes shall be implemented in affected products or
the specific basis on which Licensee must itself determine that compliance with
a change is required. In general, Licensor will follow the following time
periods in requiring that changes to the CSS Specifications be implemented in
affected products, provided that nothing in the following provisions shall be
interpreted so as to alter any time limitations set forth in the CSS Procedural
Specifications in effect as of the Effective Date of this Agreement.

               4.2.2.1 Licensor may make changes to clarify or amplify elements
of the CSS Specifications in order to preserve essential functions of the CSS
Specifications ("Emergency Changes"). Licensee shall implement an Emergency
Change as soon as reasonably possible, taking into account the danger to Content
Providers being addressed by the Emergency Change. In general, Licensee will be
expected to implement an Emergency Change not later than sixty (60) days from
receipt of the notice of the Emergency Change if such Emergency Change does not
require a material change in product design or manufacturing process.

                                                                            -10-

<PAGE>

                    4.2.2.2 In general, unless otherwise specified in relation
to a particular change, Licensee shall implement all changes that are not
Emergency Changes within eighteen (18) months of the date on which Licensor
notifies Licensee of a change in the CSS Specifications. Licensor may request
that Licensee agree to implement a specific change in less time than the
eighteen (18) months normally provided, and Licensee agrees not to unreasonably
withhold consent to such a request. Licensee may request that the normal
eighteen (18) month time period be extended with respect to a specific change in
the CSS Specifications, and Licensor agrees not to unreasonably withhold its
consent to such request.

          4.3  Audio Data Covered by this Agreement. The CSS Specifications
               ------------------------------------
govern audio material only to the extent that such material is CSS Audio Data.
All other audio data are outside the scope of this Agreement.

     5.   ADDITIONAL LICENSEE OBLIGATIONS.

          5.1  Access to Intellectual Property.
               -------------------------------

               (a)  Absolutely Necessary Claim. Licensee shall not, and shall
                    --------------------------
cause each of its Controlled Companies not to, assert any Absolutely Necessary
Claim(s) reading on the portions of the CSS Specifications pertaining to CSS
against Licensor or any CSS Licensee (including its Permitted Sublicensees) or
vendor, distributor, purchaser or other person in the chain of distribution for
the manufacture, use, distribution, offer to sell, sale, import, or other
transfer of a CSS Compliant Product which was made under license from Licensor
or under a CSS Interim License Agreement entered into by Licensee, provided that
this Section 5.1(a) only applies to those aspects of such CSS Compliant Product
which are required and used for compliance with the portion of the CSS
Specifications pertaining to CSS and which cannot be implemented without
infringing (but for this covenant) the Absolutely Necessary Claim(s); and,
further provided, that this covenant shall not apply in favor of any entity and
any of its Controlled Companies, if such entity or any of its Controlled
Companies, is asserting an Absolutely Necessary Claim against Licensee (of any
of its Permitted Sublicensees).

               (b)  Disc Immunity. Licensee shall not, and shall cause each of
                    -------------
its Controlled Companies not to, assert any claim(s) based on Disc IP against
any CSS Licensee which is a Content Provider, Authoring Studio, or DVD Disc
Replicator or vendor, distributor, purchaser or other person in the chain of
distribution for the manufacture, use, distribution, offer to sell, sale,
import, or other transfer of a DVD Disc that: (i) is a CSS Compliant Product;
and (ii) was made under license from Licensor or under a CSS Interim License
Agreement entered into by Licensee, provided that (1) this Section 5.1(b) only
applies to those aspects of such DVD Discs which are present for the purpose of
complying with the portions of the CSS Specifications pertaining to CSS; and (2)
this Section 5.1 shall only apply to DVD Discs, and shall not apply to any
apparatus for the manufacture thereof.

               (c)  Termination of Suits.
                    --------------------

                    (i) If Licensee or any of its Controlled Companies asserts
any Absolutely Necessary Claim(s) or Disc IP claim(s) in violation of Section
5.1(a) or (b), Licensee

                                                                            -11-

<PAGE>

shall terminate or cause to be terminated such assertion of claim, provided that
this obligation shall not arise with respect to any assertion by a Controlled
Company alleged to be in violation of such section unless Licensee has received
a written notice of such assertion.

                    (ii)  In the case of an entity which is not a Controlled
Company but in which Licensee or any of its Controlled Companies holds any
voting security or any other ownership interest (a "Partially Owned Company"),
Licensee shall not knowingly vote, and shall cause each Controlled Company not
to knowingly vote, any voting security or ownership interest in any such
Partially Owned Company in favor of asserting any claim which Licensee would be
prohibited from asserting hereunder, provided that this paragraph (ii) shall not
apply where such action conflicts with Licensee's or Such Controlled Company's
fiduciary duty. Licensee agrees to use reasonable efforts to vote, and use
reasonable efforts to cause each Controlled Company to vote, all voting
securities and ownership interests in each Partially Owned Company to terminate
any such claim(s).

     The termination of any such claim(s) under Absolutely Necessary Claim(s) or
Disc IP claim(s), as the case may be, shall relieve Licensee of all liability
for any failure to comply with its obligations pursuant to this Section 5.1(c).

               (d)  Patent License Offer. Upon request by a CSS Licensee,
                    --------------------
Licensee shall offer, and shall cause its Controlled Companies to offer, a
patent license for any of its/their claims for which Relatively Necessary
Claim(s) exist, provided that such license may be limited to Relatively
Necessary Claim(s) that are within the scope of the other CSS Licensee's license
from Licensor. Such license shall be made available on reasonable and
nondiscriminatory terms to any CSS Licensee in good standing and/or its
Permitted Sublicensees with respect to a CSS Compliant Product that is or was
made under license from Licensor or under a CSS Interim License Agreement
entered into by Licensee. To the extent that a Relatively Necessary Claim that
would otherwise be governed by this Section 5.1(d) is subject to the Disc
Immunity governed by Section 5.1(b), such Relatively Necessary Claim shall be
governed by Section 5.1(b) rather than this Section 5.1(d).

               (e)  Applicability.
                    -------------

                    (i)   The provisions of this Section 5.1 regarding
Absolutely Necessary Claims, Disc IP, and Relatively Necessary Claims shall be
limited to CSS as such system was described in the CSS Specifications on the
date this Agreement is entered and does not include any amendments to the CSS
Specification that are made after the date of this Agreement, unless Licensee
has agreed in writing that the provisions of this Section 5.1 shall apply to
such amendment.

                    (ii)  Subject to the terms of Section 6.2 hereof, the
covenant set forth in Section 5.1 shall remain in effect for the life of any
patent issued throughout the world with a first priority date prior to or during
the term of the license granted to Licensee under Article 2.

                    (iii) Any executed patent license entered into pursuant to
Section 5.1(d) shall survive the termination of this Agreement in accordance
with its terms.

                                                                            -12-

<PAGE>

                    (iv) Notwithstanding the termination of this Agreement, the
obligation to offer a patent license under Section 5.1(d) shall continue after
such termination with respect to CSS Compliant Products that were made prior to,
or are in production as of, the date of such termination for a license period
ending concurrently with the applicable permitted period of distribution set
forth in Section 6.2(a) or (b), as the case may be.

          5.2  Confidentiality.
               ---------------

               (a)  Residuals. Licensor acknowledges that Licensee may, as a
                    ---------
result of receipt of or exposure to Confidential Information and/or Highly
Confidential Information, increase or enhance the knowledge and experience
retained in the unaided memories of each of its directors or employees.
Notwithstanding anything to the contrary in this Agreement, Licensee and its
directors and employees may use and disclose such knowledge and experience in
their respective businesses, provided that the Licensee, or any of its directors
or employees, has not (a) intentionally memorized the Confidential Information
or Highly Confidential Information so as to reduce it to an intangible form for
the purpose of creating a residual or using the same; (b) avoided its obligation
to maintain the confidentiality of Confidential Information or Highly
Confidential Information merely by having a person commit such information to
memory so as to reduce it to an intangible form; or (c) deliberately and
knowingly utilized Confidential Information or Highly Confidential Information
in its business, provided further that Licensee shall not use Confidential
Information or Highly Confidential Information or any mentally-retained
recollections thereof to circumvent or copy the methods disclosed in Proprietary
Information, Confidential Information, or Highly Confidential Information or to
circumvent any obligations under this Agreement. Licensor shall have neither any
rights in any business endeavors of Licensee that may use such knowledge and
experience nor any right to compensation, other than as may be provided for
breach of this Agreement, related to any such use of such knowledge and
experience.

               (b)  Highly Confidential Information. Licensee and its Permitted
                    -------------------------------
Sublicensees shall maintain the confidentiality of Highly Confidential
Information in the following manner:

                    (i)  Licensee and its Permitted Sublicensees shall each
employ procedures for safeguarding Highly Confidential Information at least as
rigorous as Licensee and its Permitted Sublicensees, respectively, would employ
for its own most highly confidential information, such procedures to include, at
a minimum:

                         (1)  maintaining on Licensee's and/or Permitted
Sublicensees' premises a secure location in which any and all Highly
Confidential Information shall be stored, where such a location may include
electronic storage provided that any such electronic storage must meet at least
the following minimum security requirements. Such electronic storage must
provide a technical means of providing security that is:

                              (x)  at least equivalent to the security provided
by a common key form of encryption with a key length of at least 40 bits;

                                                                            -13-

<PAGE>

                              (y) not subject to known security breaches that
effectively negate its use for secure storage of Highly Confidential
Information; and

                              (z)

                                   (A) proprietary to Licensee and, with respect
to any elements of such technical means used for secure storage of Highly
Confidential Information that must be maintained as confidential in order for
the security to be effective, protected by Licensee at the same level of
protection as required for trade secrets; or

                                   (B) subject, with respect to any elements of
such technical means used for secure storage of Highly Confidential Information
that must be maintained as confidential in order for the security to be
effective, to a legally binding requirement that such element or elements be
maintained as confidential at the time such encryption system is employed to
provide secure storage of Highly Confidential Information.

                         (2)  that any Highly Confidential Information stored in
such a location shall be accessible only by Authorized Employees (as defined
below);

                         (3)  that

                              (x)  where Highly Confidential Information is
stored in a location that is physically secure, Authorized Employees visiting
such location shall sign in and out each time that they visit such location; and

                              (y)  where Highly Confidential Information is
stored securely in an electronic form, Authorized Employees having access to
such Highly Confidential Information in unsecure form shall sign in and out each
time that they have such access; and

                         (4)  when Highly Confidential Information is not in
use, such information shall be stored in a locked safe at such secure location
or shall be stored electronically using technical protection that meets the
requirements of (1), above.

                    (ii) Licensee may disseminate Highly Confidential
Information only to the strictest minimum possible number of full-time employees
of Licensee or its Permitted Sublicensees: (1) who have an absolute need to know
such Highly Confidential Information in order to enable Licensee or its
Permitted Sublicensees to implement CSS in compliance with the CSS
Specifications; (2) who are bound in writing by obligations of confidentiality
sufficient to protect the Highly Confidential Information in accordance with the
terms of this Agreement; and (3) who, prior to the disclosure of such Highly
Confidential Information, have: (x) been identified in writing by Licensee to
Licensor; and (y) read and executed the acknowledgment attached as Exhibit "B"
hereto (a copy of such executed acknowledgment to be sent to Licensor) (each an
"Authorized Employee"). For Authorized Employees who signed an acknowledgement
containing the same terms as Exhibit B pursuant to a CSS Interim License
Agreement entered into by Licensee, such prior acknowledgements are deemed to be
sufficient for purposes of this provision. Licensee and its Permitted
Sublicensees shall at all times cause Authorized Employees to strictly abide by
their obligations hereunder and shall use the same efforts to enforce the
confidentiality obligations of each

                                                                            -14-

<PAGE>

Authorized Employee after the termination of his/her employment as Licensee uses
to enforce with respect to Licensee's own similarly confidential information,
provided that Licensee shall not use less than reasonable efforts in such
enforcement. Licensee and its Permitted Sublicensees shall make reasonable
efforts to assist Licensor in relation to any claim, action, suit, proceeding,
or litigation with respect to the access of the former employee to Confidential
Information and Highly Confidential Information provided under this Section 5.2.
Notwithstanding any contrary provision, Licensee shall not disseminate any CSS
Keys to more than three (3) Authorized Employees ("Key Employees") for each
Membership Category to which Licensee is licensed and is entitled to disclosure
of CSS Keys from Licensor, unless Licensee has notified Licensor in advance of
its intention to increase the number of Key Employees to an additional increment
of up to three (3) such employees. Licensee may make such notifications of
additional increments of Key Employees without limit, but in doing so shall
abide by the terms of clauses (1), (2), and (3), above. Licensee may substitute
another employee for a Key Employee only in the event of death, permanent or
long-term disability or resignation or termination of employment of an existing
Key Employee or reassignment of an existing Key Employee to a substantially
different business unit that is not involved in the development, manufacture, or
sale of CSS Compliant Products. Licensee shall inform Licensor in writing prior
to the substitution or addition of any Key Employee. Licensee may also disclose
Highly Confidential Information to an employee of another CSS Licensee where
such other CSS Licensee is authorized to possess such Highly Confidential
Information and where the employee to whom disclosure is made is an Authorized
Employee and, where CSS Keys are to be disclosed, a Key Employee, for such other
CSS Licensee. Prior to any disclosure pursuant to the preceding sentence,
Licensee must assure itself that such other CSS Licensee is, in fact, authorized
to possess the Highly Confidential Information to be disclosed, that the
employee to whom such disclosure is to be made is entitled to possess the Highly
Confidential Information to be disclosed, and that the method to be used to
disclose Highly Confidential Information is as secure as the methods used by
Licensor to disclose the same information to CSS Licensees.

                    (iii) Licensee shall not make any copies of any document
containing Highly Confidential Information. Licensee may request Licensor to
provide Licensee with additional copies of such documents. Licensor may, in its
sole discretion, fulfill any such request, provided that Licensor shall not
unreasonably refuse to provide requested additional copies.

               (c)  Confidential Information. Licensee may disclose Confidential
                    ------------------------
Information only to (i) full-time employees and individuals retained as
independent contractors subject to confidentiality obligations equivalent to
those applicable to full-time employees of Licensee and/or its Permitted
Sublicensees, in each case, who have a reasonable need-to-know and are bound in
writing by obligations of confidentiality sufficient to protect the Confidential
Information in accordance with the terms of this Agreement, (ii) other CSS
Licensees provided that Licensee may disclose to such parties only information
that such parties are entitled to receive under their CSS License; or (iii)
Licensee's attorneys, auditors or other agents who owe Licensee a duty of
confidentiality as a result of a fiduciary relationship. Licensee and/or its
Permitted Sublicensees shall use the same degree of care, but no less than a
reasonable degree of care, to avoid unauthorized disclosure or use of
Confidential Information as such party employs with respect to its comparably
important confidential information. Licensee may discuss or disclose
Confidential Information with other CSS Licensees, provided such CSS Licensees
are licensed to receive the same type of Confidential Information and are
obligated in writing to treat the Confidential Information as if

                                                                            -15-

<PAGE>

received directly from Licensor. Licensee may disclose to potential customers or
suppliers the fact that Licensee has obtained a license to CSS from Licensor,
and show a certificate to such effect provided by Licensor to Licensee. Upon
Licensee's written request to Licensor, Licensor shall maintain the fact that
such Licensee is a CSS Licensee confidential during the period prior to
Licensee's public announcement of its DVD Product intentions or its actual
marketing of a DVD Product, whichever is earlier. Except as provided in the
immediately preceding sentence, Licensor shall have the right to disclose to
third parties the fact that Licensee has a license to CSS and the Membership
Categories to which such license is applicable.

                    (d) Contact Person and Provision of CSS Information.
                        -----------------------------------------------
Licensee shall designate a single Authorized Employee who shall receive all
Confidential Information and Highly Confidential Information (the "Licensee
Contact") disclosed by Licensor and may designate a single alternative
Authorized Employee ("Alternate Licensee Contact") who shall be entitled to
receive such Confidential or Highly Confidential Information in the event that
Licensee Contact is absent at the time such information is to be provided.
Licensee may also designate additional employees ("Additional Licensee
Contacts") where Licensee has a legitimate business need to have Confidential
Information and/or Highly Confidential Information provided to locations other
than where the Licensee Contact is located. The Licensee Contact and any
Alternate Licensee Contact shall be the same person(s) as designated under a CSS
Interim License Agreement entered into by Licensee or those persons designated
by Licensee on Exhibit "D" hereto. Prior to the provision of any Highly
Confidential Information to the Licensee Contact, Alternate Licensee Contact or
Additional Licensee Contact, such Licensee Contact, Alternate Licensee Contact,
or Additional Licensee Contact shall have complied with all of his/her
obligations under Section 5.2(b) hereof.

                    (e) No Publication. Except as, and only to the extent,
                        --------------
otherwise expressly provided in Sections 2.2 and 5.2, Licensee shall not
publish, disseminate or otherwise disclose or make available Confidential
Information or Highly Confidential Information received hereunder to any person,
firm or corporation without prior written consent of Licensor.

                    (f) Notification of Unauthorized Use or Disclosure. Licensee
                        ----------------------------------------------
shall notify Licensor in writing immediately upon discovery of any unauthorized
use or disclosure of Confidential Information or Highly Confidential
Information, and will cooperate with Licensor in every reasonable way to regain
possession of Confidential Information and Highly Confidential Information and
prevent its further unauthorized use of disclosure.

                    (g) Disclosure Required by Law. In the event Licensee or a
                        --------------------------
Permitted Sublicensee is required by law, regulation or order of a court or
other authority of competent jurisdiction to disclose Confidential Information
or Highly Confidential Information, (1) Licensee shall take reasonable steps to
notify Licensor prior to disclosure, or (2), where notice to Licensor prior to
disclosure is not reasonably possible, Licensee shall take reasonable steps to
challenge or restrict the scope of such required disclosure and notify Licensor
as soon as possible thereafter. In either case, Licensee shall take reasonable
steps to seek to maintain the confidentiality of the information required to be
disclosed and to cooperate with Licensor in any effort undertaken by Licensor to
challenge or restrict the scope of such required disclosure.

                                                                            -16-

<PAGE>

                    (h)  Confidentiality Exceptions. Provided that the
                         --------------------------
applicability of any one or more of the following exceptions shall have no
effect on Licensee's other obligations under this Agreement, the confidentiality
restrictions contained in Sections 5.2(a), (b) and (c) herein shall not apply
to, or shall be modified in accordance with the provisions set forth below with
respect to, Confidential Information or Highly Confidential Information that
Licensee can demonstrate:

                         (i)   is Confidential Information which is or becomes
generally known to the public through no breach of Licensee's obligations owed
to Licensor hereunder;

                         (ii)  is Highly Confidential Information which is or
becomes generally known to the public through no breach of Licensee's
obligations owed to Licensor hereunder unless such Highly Confidential
Information is the subject of one or more injunctions prohibiting its public
availability, provided that at least one such injunction has been obtained not
later than one (1) year of the date on which the Highly Confidential Information
became generally known to the public and further provided that at least one
proceeding seeking an injunction was initiated by Licensor not later than one
hundred twenty (120) days following the date on which the Highly Confidential
Information became generally known to the public; further provided, however,
that if such proceeding is not initiated within 120 days, or, in the case where
such proceeding is initiated within 120 days but such injunction has not been
obtained by Licensor within one (1) year, any Highly Confidential Information
that is or becomes generally known to the public shall be treated as
Confidential Information subject to the confidentiality obligations in Sections
5.2(a) and (c) applicable to Confidential Information, and such information
shall no longer be subject to the special obligations applicable to Highly
Confidential Information in Section 5.2(b), beginning (x) in the event no
proceeding is filed within one hundred twenty (120) days and without regard to
whether an injunction is thereafter obtained, on the date that is one hundred
twenty-one (121) days after such Highly Confidential Information has become
generally known to the public, or (y) in the event that a proceeding is filed
within one hundred twenty (120) days but no injunction is obtained within one
(1) year, on the date that is one (1) year after such Highly Confidential
Information has become generally known to the public;

                         (iii) is Highly Confidential Information which is or
becomes generally known to the public through no breach of Licensee's
obligations owed to Licensor hereunder and is used in DVD Products that are
widely sold in significant commercial markets and that make use of the revealed
Highly Confidential Information in such a way that such DVD Products are not
compliant with Section 6.2.4 or Section 6.2.5, as applicable, of the Procedural
Specifications;

                         (iv)  is or has been developed by Licensee's employees
(whether independently or jointly with others) without having access (whether
directly or through any intermediaries) to any such Confidential Information or
Highly Confidential Information (or any translation, derivation or abstractions
of Confidential Information or Highly Confidential Information) and without any
breach of Licensee's obligations to Licensor, provided that the confidentiality
restrictions shall continue to apply to CSS Keys provided to Licensee; or

                         (v)   is or has been disclosed to Licensee by a third
party which had developed (whether independently or jointly with others) such
information without any access

                                                                            -17-

<PAGE>

(whether directly or through any intermediaries) to any Confidential Information
or Highly Confidential Information and without any breach of any such third
party's obligations to Licensor, provided that this clause (vii) shall not
excuse Licensee from maintaining as confidential the fact that such information
is CSS-related and, to the extent Licensee uses the information in its CSS
implementation(s), the information itself.

               (i) Confidentiality Period. The confidentiality obligations set
                   ----------------------
forth in this Section 5.2 shall be in effect during the term of this Agreement
and shall continue thereafter until (1) with respect to Confidential
Information, the later of (i) 5 years after the termination of this Agreement
and (ii) the date on which Licensor or any successor licensor of CSS ceases to
license CSS; and (2) with respect to Highly Confidential Information, the later
of (i) three (3) years after the last commercial use of CSS by Licensor or any
CSS Licensee; and (ii) the expiration of the last copyright that protects any
CSS-encrypted scrambled content which then exists in any country adhering to the
Agreement on Trade Related Aspects of Intellectual Property Rights of the World
Trade Organization dated April 15, 1994.

               (j) Prior Agreements. The obligations of this Section 5.2 shall
                   ----------------
apply to any and all disclosures of Confidential Information or Highly
Confidential Information to Licensee prior to the execution of this Agreement.
This Agreement shall supersede any inconsistent provisions contained in any CSS
confidentiality agreement between the parties hereto, including any CSS
nondisclosure agreement between Licensee and either MEI or Licensor and any CSS
Interim License Agreement entered into by Licensee.

               (k) Licensor Confidentiality Obligations. To the extent that
                   ------------------------------------
Licensee provides any information to Licensor that Licensee designates as
confidential or highly confidential, including but not limited to any such
information disclosed in the context of the activities of the Ombudsman,
Licensor shall treat that information with equivalent levels of care as if the
information were Confidential or Highly Confidential Information. Any breach of
such obligation by Licensor shall be subject to monetary damages in the amount
of actual damages proven to the satisfaction of a court of competent
jurisdiction and shall, in any event, not exceed [*] dollars.

               5.3 Reverse Engineering. Licensee shall under no circumstances
                   -------------------
reverse engineer, decompile, disassemble or otherwise determine the operation of
CSS Specifications, including, without limitation, any encryption/decryption or
scrambling/descrambling algorithm or logic of CSS, except that Licensee may, to
the minimum extent necessary for the purposes of testing, debugging, integration
or tuning of Licensee's own CSS Compliant Product to ensure that it works in its
intended operational environment with other CSS Compliant Products (the
"Analysis Purpose"), conduct performance or electrical analyses with respect to
the operation of other CSS Compliant Products that form part of such intended
operational environment ("Analysis"), subject to the following conditions:

                   (a) Licensee shall not perform any Analysis, in whole or in
part, for the purpose of deriving or discovering CSS Specifications that have
not been made available and licensed by Licensor to Licensee hereunder (the
"Derived Information").

                                                                            -18-

<PAGE>

          (b) To the extent Licensee obtains Derived Information that is or
should have been identified by Licensee as being part of the CSS Specifications,
whether Licensee's obtaining of such information is inadvertent or otherwise,
Licensee shall immediately notify Licensor, and upon the instruction of
Licensor, Licensee shall within ten (10) days thereafter turn over to Licensor
or destroy any portion of Derived Information that is not solely necessary for
the Analysis Purpose and cease any use of the same for any other purpose.

          (c) Subject to Section 5.3(b) above, the Derived Information: (i)
shall only be used for the Analysis Purpose and for no other purposes; and (ii)
shall be treated as confidential in the manner corresponding to the same type of
information as specified in Section 5.2.

          (d) Nothing herein shall be construed as an inducement for Licensee to
reverse engineer any products of any CSS Licensee or third party.

          (e) For purposes of this Section 5.3: (i) "testing" shall mean a
process of evaluating Licensee's CSS Compliant Product to ensure proper
operation; (ii) "debugging" shall mean a process of finding the cause of an
error in a Licensee's CSS Compliant Product, or another CSS Compliant Product,
to the extent Licensee is seeking to ensure that such other product works with
one or more of Licensee's products, but not analysis for the purpose of exposing
possible design features; (iii) "integration" shall mean a process of evaluating
the performance of Licensee's CSS Compliant Product in combination with other
CSS Compliant Products to ensure that they properly operate together, and (iv)
"tuning" shall mean a process of evaluating and improving Licensee's CSS
Compliant Products to work more efficiently with other CSS Compliant Products.

     5.4  Export. Licensee will comply with all applicable rules and regulations
          ------
of the United States, Japan and other countries and jurisdictions relating to
the export or re-export of commodities, software and technical data insofar as
they relate to the activities under this Agreement, and shall obtain an approval
required under such rules and regulations whenever it is necessary for such
export or re-export. Licensee agrees that commodities, software and technical
data provided under this Agreement may be subject to restrictions under the
export control laws and regulations of the United States, Japan and other
countries and jurisdictions, as applicable, including but not limited to the
U.S. Export Administration Act and the U.S. Export Administration Regulations
and the Japanese Foreign Exchange and Foreign Trade Law, and shall obtain any
approval required under such laws and regulations whenever it is necessary for
such export or re-export.

     5.5  Controls Against Theft. Licensee agrees to maintain reasonable
          ----------------------
controls against theft or misappropriation with respect to Schedule 1 and
Schedule 2 Products. This obligation shall be considered to be fulfilled, for
example, if Licensee utilizes controls at least equivalent to the controls that
it maintains for other of its similarly sensitive products or components.
Licensee understands and acknowledges that the obligation imposed by this
Section 5.5 requires that it maintain such reasonable controls with respect to
any Schedule 1 or Schedule 2 Products provided to a party that it may engage
pursuant to Section 2.3 of this License Agreement.

                                                                            -19-

<PAGE>

          5.6  Good Faith.
               ----------

               (a)  Licensee agrees to the extent that future versions of the
By-Laws provide authority for Licensee to vote, object or otherwise express its
views pursuant to the procedures with respect to proposed changes in the
Specifications, it will do so in good faith.

               (b)  Licensee agrees that in the event it is or shall become a
member of a body established as the Content Protection Advisory Committee
("CPAC") of Licensor as that committee or any like or successor committee or
group may be provided for in a future version of the ByLaws, Licensee shall (1)
comply with the requirements of paragraph (a), above, with respect to its
participation on CPAC as well as otherwise; and (2) work intensively and in good
faith, exercising all reasonable and positive efforts, in cooperation with other
CPAC members, in the process by which the technologies described in Section
6.2.13 of the Procedural Specifications are solicited, developed and/or
evaluated and in the process by which related amendments to the CSS
Specifications are drafted to implement such technologies as are agreed to be
adopted.

     6.   TERM/TERMINATION.

          6.1  Termination. This Agreement shall be effective upon the Effective
               -----------
Date and shall continue until terminated in accordance with any of the following
events:

               (a)  Breach Due to Failure to Pay Fees Owed. If Licensee breaches
                    --------------------------------------
this Agreement by failing to pay in a timely fashion the fees owed pursuant to
Section 3.2 of this License Agreement, Licensor may terminate this Agreement,
provided that Licensor may not terminate this Agreement for any such non-payment
until Licensor has provided Licensee with notice and at least ninety (90) days
from the date of such notice to cure the non-payment.

               (b)  Other Breach.
                    ------------

                    (i)  If a party hereto materially defaults on any of its
obligations under this Agreement (the "Defaulting Party"), the other party
hereto (the "Non-Defaulting Party") shall have the right to seek termination or
enforcement of this Agreement, or suspension of any licenses or other rights
granted under this Agreement, as a temporary, preliminary, or final remedy to be
imposed. If such remedy is imposed, the Non-Defaulting Party shall provide for
reasonable cure opportunities, including notice and other procedures, in
accordance with the relevant order of the court.

                    (ii) In addition to seeking termination or suspension of
this Agreement as provided in (i), above, Licensor may, through action by its
Board of Directors, suspend the licenses or other rights provided under this
Agreement in the following circumstances: (x) if Licensee has failed to pay the
fees owed pursuant to Section 3.2 of this License Agreement after having
received notice of its failure to pay such fees and having failed to cure such
nonpayment within ninety (90) days following such notice, or (y) Licensor's
Board of Directors determines that the court enforcement process to obtain
suspension of the licenses or rights provided hereunder will delay such
suspension in a manner that will cause serious harm to the integrity or security
of the protection of content provided by CSS or otherwise pursuant to this
Agreement. Any suspension of

                                                                            -20-

<PAGE>

licenses or rights pursuant to (y) shall be permitted only if Licensor has
initiated an enforcement action as provided in paragraph (i) of this Section
6.1(b) or an Eligible Licensee has initiated a Beneficiary Claim as provided in
Section 9 (either Licensor's enforcement action or a Beneficiary Claim hereafter
referred to as "Enforcement Claim" for purposes of this Section 6) and so long
as Licensor or an Eligible Licensee is actively pursuing the imposition of
temporary relief in an Enforcement Claim. Once a ruling issued in such
enforcement action or Beneficiary Claim, the suspension imposed pursuant to this
provision shall be of no further force and effect and the effective date of the
termination if any, of the licenses granted to Licensee hereunder shall be
decided in connection with an enforcement action pursuant to which termination
of the licenses is ordered by the court. If the ruling denies the temporary
relief sought, the suspension imposed pursuant to this provision is void ab
                                                                         --
initio.
------

                    (c) Failure to Manufacture or Distribute CSS Compliant
                        --------------------------------------------------
Products. If neither Licensee nor at least one of its Permitted Sublicensees has
--------
exercised the rights granted under Article 2 to manufacture or commercially
distribute CSS Compliant Products: (i) within the first twelve (12)-month period
commencing on the execution of this Agreement, or (ii) during any consecutive
twelve (12)-month period thereafter during the term of this Agreement, then
Licensee shall, if and when requested to do so by Licensor, elect to (1)
recertify its, or one of its Permitted Sublicensee's, present intention to
manufacture or commercially distribute CSS Compliant Products within a twelve
(12)-month period following such recertification, (2) return all Confidential
Information and Highly Confidential Information provided to it under this
Agreement and request that its license status be put into a dormant state until
such time as it notifies Licensor that it wishes to return to active status
based on a certification of its, or one of its Permitted Sublicensee's,
then-current intention to manufacture or commercially distribute CSS Compliant
Products within twelve (12) months of such certification, or (3) terminate this
Agreement. If Licensee fails to exercise one of these options within sixty (60)
days of Licensor's request that it do so, then Licensor may terminate this
Agreement upon thirty (30) days prior written notice to Licensee. For the
purposes of this provision, Licensee shall be deemed to have failed to exercise
the rights granted under Article 2 to manufacture or commercially distribute CSS
Compliant Products only if neither Licensee nor one of its Permitted
Sublicensees, nor a CSS Licensee for which Licensee has designed or manufactured
a CSS Compliant Product, shall have manufactured or commercially distributed a
CSS Compliant Product during the relevant time period.

                    (d) Termination by Licensee. Licensee shall have the right
                        -----------------------
to terminate this Agreement at any time upon ninety (90) days prior written
notice to Licensor.

                    (e) Termination Upon Termination of the License from MEI and
                        --------------------------------------------------------
Toshiba. This Agreement shall terminate upon the termination of the license from
-------
MEI and Toshiba to Licensor.

                    (f) Bankruptcy. Either party shall have the right to
                        ----------
terminate this Agreement in the event (i) a petition in bankruptcy or for
reorganization is filed by or against the other party under any bankruptcy laws;
(ii) the other party makes an assignment for the benefit of creditors; or (iii)
a receiver, trustee, liquidator or custodian is appointed for all or a
substantial part of the other party's property, and the order of appointment is
not vacated within thirty (30) days.

                                                                            -21-

<PAGE>

          6.2  Effect of Termination.
               ---------------------

               (a) Termination Due to Licensee's Breach or Failure to
                   --------------------------------------------------
Manufacture or Distribute CSS Compliant Products. If this Agreement is
------------------------------------------------
terminated pursuant to Section 6.1(a) or (b)(i) as a result of Licensee's breach
or Licensor terminates this Agreement pursuant to Section 6.1(c), all licenses
granted by Licensor to Licensee shall terminate, provided, however, that the
license to distribute, offer to sell, sell, import, and otherwise transfer CSS
Compliant Products, subject to the conditions of Section 2.1(d), shall terminate
ninety (90) days after the effective date of the termination of this Agreement,
or upon such earlier date as may be provided by the remedy imposed pursuant to
an Enforcement Claim. In the event that any of the licenses or other rights
provided under this Agreement are suspended pursuant to Section 6.1(b)(ii) and
such suspension is subsequently converted to a termination, the 90-day period
shall run from the date of the suspension with respect to any products produced
or acquired for which the suspended license or right was necessary for such
production or acquisition. If Licensor terminates this Agreement pursuant to
Section 6.1(a), (b)(i), or (c), the covenant not to sue granted by Licensee
under Section 5.1 shall terminate, provided, however, with respect to CSS
Compliant Products that have been produced or are in production as of the
effective date of Licensor's termination of this Agreement, then CSS Licensees,
and their Permitted Sublicensees, for one (1) year after the effective date of
Licensor's termination, shall have the right, subject to the conditions of
Section 2.1(d), to distribute such CSS Compliant Products. Notwithstanding any
of the foregoing, the covenant not to sue granted in Sections 5.1(b) and Section
5.1(c) with respect to Disc IP shall survive any termination of this Agreement.

               (b) Termination by Licensee or Due to Licensor's Breach. If this
                   ---------------------------------------------------
Agreement is terminated pursuant to Section 6.1(b)(i) as a result of Licensor's
material breach, the covenant not to sue granted by Licensee under Section
5.1(a) shall terminate upon the effective date of such termination with respect
to any CSS Compliant Products not already produced or in production as of such
date and, with respect to products already produced or in production as of the
effective date of such termination, such covenant shall terminate ninety (90)
days after the effective date of the termination. If this Agreement is
terminated by Licensee pursuant to Section 6.l(b)(i), (c), or (d), all licenses
granted by Licensor to Licensee shall terminate, provided, however, that the
license to distribute, offer to sell, sell, import and otherwise transfer CSS
Compliant Products shall terminate upon the final date allowed for distribution
of all CSS Compliant Products set forth in this Section 6.2(b), and the covenant
not to sue granted by Licensee under Section 5.1 shall terminate, provided,
however, that CSS Licensees, and their Permitted Sublicensees, for a period of
one (1) year after such termination, shall have the right, subject to the
conditions of Section 2.1(d), to distribute all CSS Compliant Products that have
been produced or are in production as of the date of such termination.
Notwithstanding the foregoing, the covenant not to sue in Sections 5.1(b) and
5.1(c) with respect to Disc IP shall survive any termination of this Agreement.

               (c) No Refund. If this Agreement is terminated, Licensee shall
                   ---------
have no right to receive a refund of any sums paid as Administration Fees
pursuant to Section 3.2.

          6.3  Return of Materials. Within thirty (30) days after termination of
               -------------------
this Agreement, or such lesser time as may be provided by the remedy imposed
pursuant to an Enforcement Claim, Licensee shall either: (i) return all
Confidential Information and Highly

                                                                            -22-

<PAGE>

Confidential Information to Licensor; or (ii) destroy all Confidential
Information and Highly Confidential Information in its possession and certify
such destruction in writing to Licensor.

          6.4 Survival. The terms of Sections 5.1 (subject to Sections 6.2(a)
              --------
and (b)), 5.2, 5.3, 5.4, 6.2, and 6.3, this Section 6.4 and Articles 7, 8, 9 and
10, and so much of Article 1 as may be necessary to define any terms used in
such Sections or Articles, shall survive the termination of this Agreement.

     7.  OWNERSHIP. All Proprietary Information and media containing Proprietary
Information as provided by Licensor to Licensee shall remain the property of
Licensor or its licensors. Except as provided in Article 2, this Agreement does
not give Licensee any license or other right to the Proprietary Information.

     8.   DISCLAIMER AND LIMITATION OF LIABILITY.

          8.1 Disclaimer. ALL PROPRIETARY INFORMATION IS PROVIDED "AS IS."
              ----------
LICENSOR MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS, IMPLIED, STATUTORY OR
OTHERWISE, AND EXPRESSLY DISCLAIMS IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE, AND ANY EQUIVALENTS UNDER THE LAWS OF ANY
JURISDICTION THAT MIGHT ARISE FROM THE PROPRIETARY INFORMATION OR LICENSEE'S
IMPLEMENTATION, ATTEMPTED IMPLEMENTATION, OR USE OF SUCH INFORMATION OR CSS.
LICENSOR FURTHER DISCLAIMS ANY WARRANTY THAT CSS AND/OR THE CONTENTS OF THE
PROPRIETARY INFORMATION, OR ANY PRODUCT IMPLEMENTING CSS OR SUCH PROPRIETARY
INFORMATION, IN WHOLE OR IN PART, WILL BE FREE FROM INFRINGEMENT OF ANY THIRD
PARTY INTELLECTUAL PROPERTY OR PROPRIETARY RIGHTS.

          8.2 Limitation of Liability. NEITHER MEI, TOSHIBA, OR ANY DIRECTOR,
              -----------------------
OFFICER, OR EMPLOYEE OF MEI, TOSHIBA, NOR, EXCEPT AS PROVIDED IN SECTION 5.2(k)
OF THIS LICENSE AGREEMENT, LICENSOR OR ANY DIRECTOR, OFFICER, OR EMPLOYEE OF
LICENSOR ACTING IN HIS OR HER CAPACITY AS A DIRECTOR, OFFICER, OR EMPLOYEE OF
LICENSOR (COLLECTIVELY, THE "AFFECTED PARTIES") SHALL BE LIABLE TO LICENSEE FOR
ANY DIRECT, INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES
ARISING OUT OF ANY CAUSE OF ACTION RELATING TO THIS AGREEMENT, OR BASED ON
MAKING, USING, SELLING OR IMPORTING ANY PRODUCTS OF LICENSEE THAT IMPLEMENT
PROPRIETARY INFORMATION OR CSS, WHETHER UNDER THEORY OF CONTRACT, TORT,
INDEMNITY, PRODUCT LIABILITY OR OTHERWISE. TO THE EXTENT THAT ANY COURT OF
COMPETENT JURISDICTION RENDERS JUDGMENT AGAINST THE AFFECTED PARTIES,
NOTWITHSTANDING THE ABOVE LIMITATION, THE AFFECTED PARTIES' TOTAL LIABILITY TO
LICENSEE IN CONNECTION WITH THIS AGREEMENT OR CSS SHALL IN NO EVENT EXCEED THE
AMOUNTS OF MONEY RECEIVED BY THE AFFECTED PARTIES FROM LICENSEE UNDER THIS
AGREEMENT DURING THE MOST RECENT FIVE (5)-YEAR PERIOD IMMEDIATELY PRIOR TO THE
DATE OF SUCH JUDGMENT. THIS LIMITATION OF LIABILITY SHALL APPLY TO MEI AND
TOSHIBA

                                                                            -23-

<PAGE>

SOLELY IN THEIR CAPACITIES AS CO-DEVELOPERS AND LICENSORS OF CSS TO LICENSOR.

     9.   REMEDIES.

          9.1 Indemnification. Licensee shall indemnify and hold Licensor and
              ---------------
its officers, directors and employees, and, in their roles as developers of CSS
and licensors of CSS to Licensor, MEI and Toshiba and their respective officers,
directors and employees, harmless from and against any and all claims, actions,
suits, proceedings or litigation and any losses, deficiencies, damages,
liabilities, costs and expenses including without limitation, reasonable
attorneys' fees and all related costs and expenses, to be paid or otherwise
incurred in connection with the defense of any claim, action, suit, proceeding
or litigation ("Claims") which result from: (i) any breach of any covenant,
agreement, representation or warranty herein by Licensee, its employees, former
employees who had access to Confidential Information or Highly Confidential
Information pursuant to this Agreement, provided that Licensee's indemnity with
respect to acts of former employees shall be limited to circumstances in which
Licensee has failed to comply with its obligations as to former employees
pursuant to Section 5.2(b)(ii) hereof; (ii) Licensee's manufacture, sale or use
of any DVD Products, provided, that such indemnity shall not extend to: (a) any
Claim that the CSS Specifications infringe the intellectual property rights of
any third parties, or (b) any Claim or any portions thereof that is attributable
to compliance with the CSS Specifications themselves; and/or (iii) Licensee's
activities under Section 5.3.

          9.2 Equitable Relief. Licensee and Licensor recognize and agree that
              ----------------
due to the unique nature of certain provisions hereof and the lasting effect of
and harm from a breach of such provisions, including making available the means
for widespread unauthorized copying of copyrighted content intended to be
protected using CSS, in the event that Licensee breaches its obligations under
Sections 2.1, 2.3, 2.4, 2.5, 4.2, 5, 9.5 or 10 hereof, money damages alone will
not adequately compensate an injured party, including an injured Eligible
Licensee pursuant to Section 9.5, and that injury to such party will be
irreparable. Licensee and Licensor therefore agree that, in addition to all
other remedies available to the injured party at law, in equity, by agreement or
otherwise, the injured party, including an Eligible Licensee pursuant to Section
9.5, upon showing to the relevant court's satisfaction that applicable factors
other than the fact that harm will be irreparable and that monetary damages are
not sufficient to remedy the injury have been fulfilled, will be entitled to
specific performance or other temporary, preliminary, or permanent injunctive
relief including corrective actions appropriate to the circumstances for the
enforcement of any such obligation (whether or not there have been commercial
sales of products subject to the requested relief).

          9.3 Specific Remedies. Licensee acknowledges that, due to the critical
              -----------------
importance of maintaining the integrity of CSS and the inability to calculate
the damage to CSS users, in the event of any material breach of Section 5.2,
Licensor, in addition to any other remedies in equity, but in lieu of any and
all other claims for monetary damages, may recover liquidated damages for each
material breach from Licensee in the amount of [*] U.S. dollars $[*],
provided that the parties agree that Licensee may request and the court may
grant such request that this amount be reduced to take account of the fact that
Licensee brought the breach to Licensor's attention in a timely and reasonable
manner. For purposes of the preceding sentence, a breach shall

                                                                            -24-

<PAGE>

be "material" only if it has resulted in or would be likely to result in
commercially significant harm to other CSS Licensees or threat to the integrity
or security of CSS. For purposes of this Section 9.3, a series of substantially
related events shall constitute a single material breach. In addition, the
following is a non exclusive list of circumstances in which liquidated damages
pursuant to this Section 9.3 shall not be available for any breach of Section
5.2: (1) if no Confidential Information or Highly Confidential Information was
released to a third party not permitted hereunder to have such information or
could reasonably have been expected to have been released to such third party as
a result of the breach; (2) if Licensee maintains an internal program to assure
compliance with Section 5.2 (including a program to assure maintenance of
confidentiality of information for purposes in addition to compliance with this
Agreement), the breach was inadvertent or otherwise unintentional, and the
breach did not have a material adverse effect on the integrity or security of
CSS; (3) if Licensee brought the breach to Licensor's attention in a timely
manner as required by this Agreement and such breach did not have a material
adverse effect on the integrity or security of CSS; or (4) if Licensor
improperly marked or failed to mark information as Confidential Information or
Highly Confidential Information or failed to otherwise disclose that such
information was Confidential Information or Highly Confidential Information and
such information is the subject of the alleged breach.

          9.4 Damage Limitation. Notwithstanding any other provision of this
              -----------------
Agreement, Licensee's cumulative liability to Licensor (including MEI and
Toshiba) and all other CSS Licensees for any breach, or combination of breaches,
or any of its other obligations under this Agreement shall not exceed [*] U.S.
Dollars $[*], unless the revenue derived from Licensee's products, sold by
Licensee, and developed and manufactured using CSS or Confidential Information
or Highly Confidential Information, is less than [*] U.S. dollars $[*], in which
case Licensee's liability shall not exceed such lesser amount; provided,
however, that if only a portion of one or more of Licensee's products is
developed and manufactured using CSS or Confidential Information or Highly
Confidential Information, then the proportion of such portion relative to the
entirety of such Licensee products shall be used in calculating the revenue
derived from such products for purposes of this Section 9.4 (e.g., 5K circuits
out of 100K circuits equals 5%); and provided further, however, that such amount
shall in no event, except as provided in Section 9.3, be less than $[*].

          9.5 Third Party Beneficiary Right. The parties hereto acknowledge and
              -----------------------------
agree that the compliance of Licensee, other CSS Licensees, and Associate
Licensees with the terms of the licenses granted by this Agreement or the
Associate License, as applicable, is essential to maintain the integrity and
security of the Content Scramble System and to protect prerecorded motion
pictures contained on DVD Discs. As part of the consideration of the licenses
granted herein, Licensee, for itself and its Permitted Sublicensees, hereby
confers a third-party beneficiary right upon certain CSS Licensees ("Eligible
Licensees") that fall into one of two classes: (i) Motion Picture Companies
("Eligible Content Providers") or (ii) manufacturers of CSS Compliant Products
other than DVD Discs ("Eligible Implementers"), in order to enforce certain of
Licensee's obligations, subject to the following conditions:

              (a) Either an Eligible Content Provider who has commercially
released one or more prerecorded motion pictures on DVD Disc that utilizes CSS
or an Eligible Implementer which has commercially released one or more CSS
Compliant Products other than DVD Discs shall

                                                                            -25-

<PAGE>

be entitled to initiate or institute a claim or action ("Beneficiary Claim") to
enforce only those obligations of Licensee specified as follows (collectively,
the "Eligible Obligations"):

                    (i)  for any Beneficiary Claim initiated by Eligible Content
Providers, Licensee's obligations under Section 2.1 [Nonexclusive License], 2.3
[Right to Have Made], 2.4 [Sublicenses], 2.5 [No Sublicense or Implied
Licenses], 4.2 [Compliance with Specifications], 5.1 [Access to Intellectual
Property], 5.2 [Confidentiality], 5.3 [Reverse Engineering], 5.5 [Controls
Against Theft], 9.2 [Equitable Relief], 9.5(d) [Settlement Restrictions] and
Section 10 [Miscellaneous] and including any equivalent provisions contained in
any Associate License; and

                    (ii) for any Beneficiary Claim initiated by Eligible
Implementers, Licensee's obligations under Section 4.2 [Compliance with
Specifications] solely as such obligations pertain to Section 5.4
[Non-alteration of the Secured Disc Key Set] and Section 6.3 [Motion Picture
Scrambling] of the CSS Procedural Specifications, Section 5.1 [Access to
Intellectual Property], Section 5.5 [Controls Against Theft], and Section 9.5(d)
[Settlement Restrictions].

     Each Eligible Licensee which has not initiated the Beneficiary Claim but
which is either an Eligible Content Owner, in the case of Beneficiary Claim
initiated by an Eligible Content Owner, or an Eligible Implementor, in the case
of a Beneficiary Claim initiated by an Eligible Implementor, shall be eligible
to join such Beneficiary Claim.

     Subject to Section 9.6, the remedies available for any Beneficiary Claim
shall not include damages, but shall include: (i) equitable relief provided
under Section 9.2, provided that such relief shall be limited to temporary
and/or preliminary relief until such time as the Eligible Licensee bringing the
Beneficiary Claim has completed a process of seeking to reach a reasonable
settlement of such claim using the efforts of the Ombudsman; and (ii)
reimbursement for actual and reasonable costs mitigation of the harm caused by
Licensee's breach, provided that such reimbursement shall be no more than
$[*] for all Eligible Licensees cumulatively joining in any particular
Beneficiary Claim. In addition, the prevailing party in relation to the
contractual claims in any action brought under this Section shall be entitled to
an award of its reasonable attorney's fees and related costs (including expert's
fees and costs) incurred in relation to such contractual claims in an amount to
be fixed either pursuant to stipulation between the parties involved or by the
court, provided that in fixing the amount of such an award, the court may
determine in its discretion to make no award of attorney's fees in given case
and, in any event, shall be limited to an award of no more than $[*], except
that the court may award up to $[*] in any case in which the court determines
that one of the following circumstances exists: (1) the breach was material and
willful or malicious, and resulted in the exposure of an Eligible Content
Provider's content unauthorized copying, in the case of a Beneficiary Claim
brought by such Eligible Content Provider where such Eligible Content Provider
is the prevailing party as described above, (2) the breach was material and
willful or malicious, and resulted in consumers being unable to use CSS
Compliant Products manufactured or distributed by the Eligible Implementor to
view content that would normally be viewable using such CSS Compliant Products,
in the case of a Beneficiary Claim brought by such Eligible Implementor where
such Eligible Implementor is the prevailing party as described above or (3) the
Beneficiary Claim was frivolous or brought in bad faith, in the event the
Defendant Licensee is the prevailing party as

                                                                            -26-

<PAGE>

described above. The amount of any award of attorney's fees and related costs
shall be made part of any judgment or award rendered.

               (b) Prior to initiating or instituting any Beneficiary Claim
against a Licensee ("Defendant Licensee"), an Eligible Licensee ("Plaintiff
Licensee") shall provide Licensor notice and consultation reasonable under the
circumstances regarding a proposed Beneficiary Claim; provided that such
consultation with Licensor shall not affect an Eligible Licensee's complete
discretion in initiating such a Beneficiary Claim. Such Eligible Licensee shall
further provide Licensor with notice of actual filing of a Beneficiary Claim and
upon Licensor's request, any copies of material documents to be filed in
Plaintiff Licensee's initiation or pursuit of such Beneficiary Claim. Licensor
shall cooperate reasonably with such Eligible Licensee in providing appropriate
and necessary information in connection with the Beneficiary Claim to the extent
that such cooperation is consistent with the preservation of the integrity and
security of CSS and to the extent such cooperation does not involve release of
information provided to Licensor by another CSS Licensee that such CSS Licensee
has designated to Licensor to be its confidential and proprietary information.
Documents provided to Licensor under this Section 9.5(b) shall not include any
documents filed or to be filed under seal in connection with such Beneficiary
Claim. The failure to provide such documents shall not, however, be a defense
against any Beneficiary Claim or grounds for a request to delay the granting of
any temporary or preliminary relief sought.

               (c) Licensor shall provide Eligible Content Providers or Eligible
Implementors, as the case may be, with prompt notice of a Plaintiff Licensee's
Beneficiary Claim against a Defendant Licensee ("Claim Notice") in accordance
with Section 10.6. Within sixty (60) days of the date of mailing of a Claim
Notice, all such Eligible Licensees shall elect whether to join in such
Beneficiary Claim, and the failure of any such Eligible Licensee to join in such
Beneficiary Claim within such sixty (60) day period shall be deemed a waiver of
such Eligible Licensee's third party beneficiary right under this Section 9.5
with respect to all Beneficiary Claims against such Defendant Licensee arising
out of the alleged breach by such Defendant Licensee raised in such Beneficiary
Claims. Plaintiff Licensee shall support, and Defendant Licensee shall not
oppose, any motion to intervene by such Eligible Licensees or Licensor electing
to join such Beneficiary Claim within such sixty (60) day period. Neither an
Eligible Licensee's failure to notify or consult with Licensor or provide copies
to Licensor as required by Section 9.5(b), nor Licensor's failure to give notice
under this Section 9.5(c) shall be a defense against any Beneficiary Claim or
grounds for a request to delay the granting of any preliminary relief requested.

               (d) Eligible Licensees shall have no right to, and Licensee
agrees that it will not, enter into any settlement that (i) amends any material
term of this Agreement or of the Associate License; (ii) has a material adverse
effect on the integrity and/or security of CSS; or (iii) impacts any of the
rights in and to CSS held by Licensor, MEI, or Toshiba or to any intellectual
property rights embodied therein unless Licensor, MEI, and/or Toshiba, as the
case may be, shall have provided prior written consent thereto.

               (e) NOTWITHSTANDING SECTION 10.4(b), LICENSEE AGREES THAT ALL
BENEFICIARY CLAIMS INSTITUTED UNDER THIS SECTION 9.5 SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, U.S.A.
EXCLUDING THAT BODY OF LAW RELATING TO CONFLICTS

                                                                            -27-

<PAGE>

OF LAW PRINCIPLES, AND SHALL BE CONDUCTED IN FEDERAL AND STATE COURTS LOCATED IN
LOS ANGELES, SANTA CLARA OR SAN FRANCISCO COUNTIES IN THE STATE OF CALIFORNIA,
U.S.A. WITH RESPECT TO ANY DISPUTE CONCERNING COMPLIANCE WITH THIS AGREEMENT,
LICENSEE HEREBY IRREVOCABLY CONSENTS TO (i) THE EXCLUSIVE JURISDICTION AND VENUE
IN THE FEDERAL AND STATE COURTS LOCATED IN LOS ANGELES, SANTA CLARA OR SAN
FRANCISCO COUNTIES IN THE STATE OF CALIFORNIA, U.S.A; AND (ii) THE SERVICE OF
PROCESS OF SAID COURTS IN ANY MATTER ARISING OUT OF A DISPUTE OVER COMPLIANCE
WITH THIS AGREEMENT BY PERSONAL DELIVERY OR BY MAILING OF PROCESS BY REGISTERED
OR CERTIFIED MAIL, POSTAGE PREPAID, AT THE ADDRESSES AS SPECIFIED IN THIS
AGREEMENT OR TO THE AGENT REQUIRED BY SECTION 10.4(d). LICENSEE WAIVES ANY
OBJECTION TO THE JURISDICTION, PROCESS, AND VENUE OF ANY SUCH COURT, AND TO THE
EFFECTIVENESS, EXECUTION, AND ENFORCEMENT OF ANY ORDER OR JUDGMENT (INCLUDING,
BUT NOT LIMITED TO, A DEFAULT JUDGMENT) OF SUCH COURT PERTAINING TO THIS
AGREEMENT, TO THE MAXIMUM EXTENT PERMITTED BY THE LAW OF THE PLACE WHERE
ENFORCEMENT OR EXECUTION OF ANY SUCH ORDER OR JUDGMENT MAY BE SOUGHT AND BY THE
LAW OF ANY PLACE WHOSE LAW MIGHT BE CLAIMED TO BE APPLICABLE REGARDING THE
EFFECTIVENESS, ENFORCEMENT, OR EXECUTION OF SUCH ORDER OR JUDGMENT, INCLUDING
PLACES OUTSIDE OF THE STATE OF CALIFORNIA, THE STATE OF DELAWARE, AND OF THE
UNITED STATES. HOWEVER, IN THE CASE OF LICENSEES THAT ARE DEFENDANTS THAT ARE
INCORPORATED IN THE UNITED STATES AND HAVE SUBSTANTIAL ASSETS IN THE UNITED
STATES, ENFORCEMENT OR EXECUTION OF ANY SUCH ORDER OR JUDGMENT AGAINST SUCH
DEFENDANTS MAY BE SOUGHT ONLY IN COURTS OF THE UNITED STATES.

          9.6  Nothing contained in Section 8.3, Section 9.2 or Section 9.5 is
intended to limit remedies or relief available pursuant to statutory or other
claims that a CSS Licensee may have under separate legal authority not contained
in this Agreement.

     10. MISCELLANEOUS.

          10.1 Entire Agreement. This Agreement, the exhibits hereto constitute
               ----------------
the entire agreement between the parties related to the subject matter of this
Agreement hereto and supersede all oral or written agreements on this subject
matter entered prior to this Agreement. Subject to Section 10.7, this Agreement
may not be modified except by written agreement dated subsequent to the date of
this Agreement and signed by both parties.

          10.2 Assignment. Licensee shall not assign or otherwise transfer any
               ----------
of its rights or obligations under this Agreement without the prior written
consent of Licensor, provided, however, that Licensee may assign this Agreement
in connection with a merger, sale or reorganization pursuant to which Licensee
merges into, or transfers all or substantially all of the assets or stock
(including this Agreement) of Licensee or of the business unit or units that are
utilizing CSS in its business activities to the assignee, provided that the
assignee agrees in writing to be bound by the terms and conditions of this
Agreement and provides all information required by the Licensor of CSS Licensees
pursuant to this agreement. Licensor shall have the right to assign this

                                                                            -28-

<PAGE>

License Agreement in connection with a merger into, or transfer of all or
substantially all of Licensor's assets or stock (including this Agreement) to
the assignee, provided that the assignee agrees in writing to assume all of
Licensor's obligations under this Agreement.

          10.3 Presumptions. In construing the terms of this Agreement, no
               ------------
presumption shall operate in either party's favor as a result of its counsel's
role in drafting the terms or provisions hereof.

          10.4 Governing Law; Enforcement; Jurisdiction.
               ----------------------------------------

               (a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF CALIFORNIA, U.S.A. EXCLUDING THAT BODY
OF LAW RELATING TO CONFLICTS OF LAW PRINCIPLES.

               (b) IN CONNECTION WITH ANY DISPUTES BETWEEN THE PARTIES HERETO
ARISING OUT OF OR RELATING TO THIS AGREEMENT, EACH PARTY HERETO IRREVOCABLY
CONSENTS TO THE EXCLUSIVE JURISDICTION AND VENUE IN THE FEDERAL AND STATE COURTS
LOCATED IN THE COUNTY OF SANTA CLARA, CALIFORNIA, AND (ii) THE SERVICE OF
PROCESS OF SAID COURTS IN ANY MATTER RELATING TO THIS AGREEMENT BY PERSONAL
DELIVERY OR BY MAILING OF PROCESS BY CERTIFIED MAIL, POSTAGE PREPAID, AT THE
ADDRESSES SPECIFIED IN THIS AGREEMENT, OR TO THE AGENT TO BE APPOINTED PURSUANT
TO (c), BELOW,

               (c) LICENSEE SHALL APPOINT AN AGENT IN THE STATE OF CALIFORNIA
FOR ACCEPTANCE OF SERVICE OF PROCESS PROVIDED FOR UNDER THIS AGREEMENT AND SHALL
NOTIFY LICENSOR OF THE IDENTITY AND ADDRESS OF SUCH AGENT WITHIN THIRTY (30)
DAYS AFTER THE EFFECTIVE DATE;

               (d) LICENSEE WAIVES ANY OBJECTIONS TO THE JURISDICTION, PROCESS,
AND VENUE OF ANY SUCH COURTS, AND TO THE EFFECTIVENESS EXECUTION, AND
ENFORCEMENT OF ANY ORDER OR JUDGMENT (INCLUDING, BUT NOT LIMITED TO, A DEFAULT
JUDGMENT) OF SUCH COURTS PERTAINING TO THIS AGREEMENT, TO THE MAXIMUM EXTENT
PERMITTED BY THE LAW OF THE PLACE WHERE ENFORCEMENT OR EXECUTION OF ANY SUCH
ORDER, JUDGMENT OR DECISION MAY BE SOUGHT AND BY THE LAW OF ANY PLACE WHOSE LAW
MIGHT BE CLAIMED TO BE APPLICABLE REGARDING THE EFFECTIVENESS, ENFORCEMENT, OR
EXECUTION OF SUCH ORDER, JUDGMENT, OR DECISION, INCLUDING PLACES OUTSIDE OF THE
STATE OF CALIFORNIA, STATE OF DELAWARE, AND THE UNITED STATES. HOWEVER, IN THE
CASE OF LICENSEES THAT ARE INCORPORATE IN THE UNITED STATES AND HAVE SUBSTANTIAL
ASSETS IN THE UNITED STATES, ENFORCEMENT OR EXECUTION OF ANY SUCH ORDER OR
JUDGMENT, AGAINST SUCH DEFENDANT, MAY BE SOUGHT ONLY IN THE COURTS OF THE UNITED
STATES.

          10.5 Severability; Waiver. Subject to Section 10.7, should any clause,
               --------------------
sentence, or paragraph of this Agreement judicially be declared to be invalid,
unenforceable, or void, such

                                                                            -29-

<PAGE>

decision shall not have the effect of invalidating or voiding the remainder of
this Agreement. The parties agree that the part or parts of this Agreement so
held to be invalid, unenforceable, or void shall be reformed without further
action by the parties hereto and only to the extent necessary to make such part
or parts valid and enforceable. Subject to Section 10.7, a waiver by either of
the parties hereto of any of the covenants to be performed by the other party or
any breach thereof shall not be effective unless made in writing and signed by
the waiving party and shall not be construed to be a waiver of any succeeding
breach thereof or of any covenant herein contained.

          10.6 Notice. All notices to be provided pursuant to this Agreement
               ------
shall be given in writing and shall be effective when either served by personal
delivery or upon receipt via certified mail, return receipt requested, postage
prepaid, overnight courier service or sent by facsimile transmission with hard
copy confirmation sent by certified mail, as above, in each case to the party at
the addresses listed below or at such other addresses as may be specificd by
notice given in accordance with this section.

                           If to Licensor:

                                    DVD Copy Control Association
                                    225 B Cochrane Circle
                                    Morgan Hill, CA 95037
                                    Attn: John Hoy
                                    Fax: +1-408-779-9291

                           If to Licensee:

                                    InterVideo, Inc.
                                    47350 Fremont Blvd.
                                    Fremont, CA 94538
                                    Attn: General Counsel
                                    Fax: 510-651-8808

          10.7 Amendment. No agreement pertaining to CSS similar to this
               ---------
Agreement or to either of the form Associate Licenses hereto between Licensor
and any CSS Licensee or Associate Licensee may be entered into on terms other
than those contained in this Agreement or the Associate License, as applicable,
to the extent that any modified terms would have a material adverse effect on
the integrity or security of CSS or the protections provided to Eligible
Licensees pursuant to Section 9.5 hereof (including any of the Sections
referenced therein) or in the Associate License, and no agreement between
Licensor and any CSS Licensee or Associate Licensee having terms contained
herein or the Associate License, as applicable may be modified or its terms
waived if such modification or waiver would have a material adverse effect on
the integrity or security of CSS or the protections provided to Eligible
Licensees pursuant to Section 9.5 hereof (including any of the Sections
referenced therein) or in the Associate License.

          10.8 Licensee List. Unless the Licensor's Board of Directors
               -------------
determines otherwise, Licensor will provide Licensee, upon Licensee's request, a
list of all other CSS Licensees, Associate Licensees, and Permitted Sublicensees
of which Licensor has received notice pursuant to

                                                                            -30-

<PAGE>

Section 2.4(a), above, except that such list shall not include any CSS Licensee
that (i) has not announced its intention to manufacture or sell, or has not sold
or offered for sale, CSS Compliant Products and (ii) has notified Licensor in
writing that it desires confidentiality until such time as it publicly announces
its intention to manufacture or sell, or has sold or offered for sale, CSS
Compliant Products.

          10.9 Headings and Captions. Section headings and captions are used in
               ---------------------
this Agreement for convenience only, and shall not be deemed to constitute a
part of or to affect the construction of this Agreement.

                                                                            -31-

<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the
dates written below.

Licensor:                                  Licensee:

     /s/ John Hoy                               /s/ Joe Monastiero
-----------------------------------        -------------------------------------
Signature                                  Signature

    John Hoy                                    Joe Monastiero
-----------------------------------        -------------------------------------
Printed Name                               Printed Name

    President                                   VP Worldwide Sales/Marketing
-----------------------------------        -------------------------------------
Title                                      Title

    12/22/00                                    12/21/00
-----------------------------------        -------------------------------------
Date                                       Date

                                                                            -32-

<PAGE>

                                  Exhibit List

A.   Permitted Sublicensee Acknowledgment and Agreement

B.   Acknowledgment by Authorized Employees

C.   CSS Membership Categories and Fee Schedule

D.   Contact Person and Alternate Contact Person

<PAGE>

                                   EXHIBIT "A"
                                       TO
                              CSS LICENSE AGREEMENT
                      PERMITTED SUBLICENSEE ACKNOWLEDGMENT
                                  AND AGREEMENT

______________________________________, a ____________________ corporation
having a place of business at ____________________________________________
("Sublicensee"), hereby acknowledges and agrees that:

          (i)   it is an Affiliate of ____________ ("Licensee"), as "Affiliate"
is defined in Section 1.2 of the CSS License Agreement (the "License Agreement")
executed on ____________ between Licensee and the CSS Entity ("Licensor");

          (ii)  it has received a sublicense from Licensee (the "Sublicense")
pursuant to Section 2.4 of the License Agreement;

          (iii) it has read and understood the License Agreement and agrees to
abide by its terms with the same rights (but without the right to grant a
sublicense) and the same obligations as Licensee, including, without limitation,
the covenant not to sue and patent license offer provisions of Section 5.1
thereof;

          (iv)  the Sublicense coterminates with the License Agreement and also
terminates at such time that Sublicensee ceases to qualify as an "Affiliate";

          (v)   in the event Sublicensee fails to abide by the terms of the
License Agreement, Licensor and/or Eligible Licensees (as third party
beneficiaries) shall, in their respective sole discretion, be entitled to bring
an action at law or in equity against Sublicensee to enforce the terms of the
License Agreement.

     IN WITNESS WHEREOF, Sublicensee has executed this Acknowledgment and
Agreement as of the date written below.

Signed: _____________________________________________

Name: _______________________________________________

Title: ______________________________________________

Date: _______________________________________________

<PAGE>

                                   EXHIBIT "B"
                                       TO
                              CSS LICENSE AGREEMENT
                     ACKNOWLEDGMENT BY AUTHORIZED EMPLOYEES

     I, ______________________, a full-time employee of
_____________________________, a ______________________ ("Licensee"),
acknowledge that I have been designated by Licensee as an "Authorized Employee"
to receive on behalf of Licensee access to Confidential Information and Highly
Confidential Information of the CSS Entity ("Licensor") which Licensee is
obligated to maintain strictly confidential under the terms of the CSS License
Agreement between Licensor and Licensee. With respect to Highly Confidential
Information, I acknowledge that the CSS License Agreement requires Licensee to
employ procedures for safeguarding Highly Confidential Information which
procedures include, at a minimum: (i) Licensee and its Permitted Sublicensees
shall each employ procedures for safeguarding Highly Confidential Information at
least as rigorous as Licensee and its Permitted Sublicensees, respectively,
would employ for its own most highly confidential information, such procedures
to include, at a minimum: (1) maintaining on Licensee's and/or Permitted
Sublicensees' premises a secure location in which any and all Highly
Confidential Information shall be stored, where such a location may include
electronic storage that provides at least as much security as the CSS system
itself provides; (2) that any Highly Confidential Information stored in such a
location shall be accessible only by Authorized Employees (as defined below);
(3) that (x) where Highly Confidential Information is stored in a location that
is physically secure, Authorized Employees visiting such location shall sign in
and out each time that they visit such location; and (y) where Highly
Confidential Information is stored securely in an electronic form, Authorized
Employees having access to such Highly Confidential Information in unsecure form
shall sign in and out each time that they have such access; and (4) when Highly
Confidential Information is not in use, such information shall be stored in a
locked safe at such secure location or shall be stored electronically in a form
that provides at least as much security as the CSS system itself provides. I
further acknowledge that the CSS License Agreement defines Highly Confidential
Information to be (i) the algorithms used for scrambling, descrambling,
authentication and key recovery; (ii) master, disc, title or authentication
keys; or (iii) information developed by or for Licensor for testing product
compliance with CSS where such information makes use of or reveals information
described in (i) or (ii).

     I further acknowledge that I have signed a prior written agreement with
Licensee pursuant to which I have agreed to maintain the confidentiality of
third party confidential information received by Licensee. I acknowledge that I
am bound by such agreement to adhere to procedures established by Licensee to
maintain the confidentiality of Confidential Information and Highly Confidential
Information during my employment and after my employment with Licensee.

     By signing below, I attest that I have read and understood this
acknowledgment.

Signed: _____________________________________________

Name: _______________________________________________

Date: _______________________________________________

cc: CSS Entity

<PAGE>

                                  EXHIBIT"C" TO
                              CSS LICENSE AGREEMENT

                            CSS MEMBERSHIP CATEGORIES
                                       AND
                                  FEE SCHEDULE

I.       CSS Membership Categories:

The CSS license has annual DVD Copy Control Association administrative fee of
------ [*] US dollars ([*] US dollars for Associate License)/1/ for each
Membership Category of license selected.

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------
                                                                                        Requested license categories
<S>                                            <C>                                      <C>
 .        "Reseller"                            [Associate License]                                    [_]
 .        "Assembler"                           [Associate License]                                    [_]

 .        "Content Provider"                                                                           [_]
 .        "Authoring Studio"                                                                           [_]
 .        DVD Disc Replicator"                                                                         [_]

 .        "CSS Disc Formatter Manufacturer"                                                            [_]
 .        "DVD Player Manufacturer"                                                                    [_]
 .        "DVD Drive Manufacturer"                                                                     [X]
 .        "CSS Decryption Module Manufacturer"                                                         [X]
 .        "Descrambler Manufacturer"                                                                   [_]
 .        "Authenticator Module for DVD Drive"                                                         [X]
 .        "Authenticator Module for CSS Decryption Module"                                             [_]
 .        "Integrated Products Manufacturer"                                                           [_]
 .        "Verification Product Manufacturer"

II.      Technical Specifications Titles:

---------------------------------------------------------------------------------------------------------------------------
</TABLE>

The cost of each CSS Technical Specification (Confidential Information) is
            ----
[*]US dollars per copy per Technical Specification Title.
                ---      ---

NOTE: To obtain a Specification from DVD CCA, licensee (or potential licensee)
must have a fully executed CSS License and provided its DVD Format Book serial
number to DVD CCA.

<TABLE>
<CAPTION>
                                                                   Specification        Number of Copies
                                                                   Requested
-----------------------------------------------------------------------------------------------------------
<S>                                                                <C>                  <C>
Specifications of DVD Content Scramble System for:
209. - "CSS Disc Formatter"                                             [_]                    [_]
309. - "DVD Player"                                                     [_]                    [_]
409. - "DVD Drive"                                                      [_]                    [_]
509. - "CSS Decryption Module Manufacturer"                             [_]                    [_]
609. - "Descrambler"                                                    [_]                    [_]
709. - "Authenticator Module for DVD Drive"                             [_]                    [_]
809. - "Authenticator Module for CSS Descryption Module"                [_]                    [_]
</TABLE>

----------
   /1/   Fee is subject to periodic review and change

<PAGE>

                                   EXHIBIT "D"
                                       TO
                              CSS LICENSE AGREEMENT

________________________________________________________________________________
                                 CONTACT PERSON

Name:  ______________________________________________

Title: ______________________________________________

Company:  ___________________________________________

Division:  __________________________________________

Address:  ___________________________________________

_____________________________________________________

_____________________________________________________

_____________________________________________________

Telephone Number:  __________________________________

Facsimile Number:  __________________________________

Email address:  _____________________________________

________________________________________________________________________________
                            ALTERNATE CONTACT PERSON

Name:  ______________________________________________

Title: ______________________________________________

Company:  ___________________________________________

Division:  __________________________________________

Address:  ___________________________________________

_____________________________________________________

_____________________________________________________

_____________________________________________________

Telephone Number:  __________________________________

Facsimile Number:  __________________________________

Email address:  _____________________________________

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00033-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00033-of-00352.parquet"}]]