Letter of Intent on Cooperation
Party A：Beijing STARCOM Co., Ltd.of China（hereafter referred to simply as：STARCOM）
Party B：A Korean business entity, Motion Picture Co., Ltd.（hereafter referred to simply as：MP）
Through friendly negotiations, both parties reached the following agreement on cooperation intent in Beijing, People's Republic of China on ,2002, on STARCOM's outright purcha and introduction of MP's high and new technology products, patents and related techniques of video compression, video transmission, etc., and on the technical and commercial operation to be carried out in China and other regions concerned in the world：
Article 1: Intent and Purpo of Cooperation：
1. STARCOM's outright purcha and introduction of MP's high and new technology pate
nts and related techniques；
2. STARCOM's carrying out of all kinds of commercial application by relying on MP's technology and support.
3. Authorization by MP to STARCOM for the exclusive ownership of MP's patented technology and commercial right of u of it in China and international regions concerned.
Article 2:Definition and Explanation
The agreement gives the following clear definitions to the expressions with special meanings, unless otherwi specified in the context：
1. Technological Introduction: it refers to the licen，copyright and documentation needed for outright purcha of patent and all the necessary techniques, including the jurisdiction of consultation and licensing with any Chine corporation.
2. Consultation: it refers to the technical backup and management support during the process of business dealing.
3. Consulting Fee: it refers to the money paid in advance for the technical rvice, or the money paid for the data for technical and commercial exchange.
Article 3：Technology
All the intellectual property rights and know-how possd by MP, and all the relevant techniques to be developed in future, are the contents of technology of the formal agreement：
1. digital system of video compression and decompression.
2. video flowing transmission technique.
3. Other related techniques exclusively possd by MP.
Article 4: Introduction of Technology and Compensation
1. STARCOM has the exclusive right to u MP's techniques for business conducts，and MP shall provide all the techniques and related data, and provide the source code of the techniques in the process of execution of the formal agreement;
2. MP and STARCOM shall discuss the division of associated costs, including the patent fee to be paid according to the output resulting from the technological introduction by STARCOM. If the consulting fee exclusively gained by STARCOM from introduction of such techniques has accumulated till US$ 1.5 million, or the total agreement payment is lower than that specified in Article 9, whichever is more, it should be shared by STARCOM and MP after another negotiation.
3.TARCOM shall monopolize the ownership and u of MP's technology in China to carry out its undertaking, and shall return 15% of the profit to MP as the transfer fee of the technical patent.
Article 5: Licensor's Jurisdiction
1. STARCOM shall have the exclusive right to negotiate on or sign a licen agreement with any Chine or international corporation wishing to u MP's technology to carry out commercial activities.
2. In the event that a Chine licene needs negotiation or related software development rvices，MP may offer a new agreement for such a single-purpo rvice.
Article 6: Formal Licen Agreement and Regional Restriction
A Chine corporate entity shall have the right to ll the products made by using the technology of MP, or further develop new products bad on the technology of MP. And, such products of high and new technology may also be sold to overas market beyond Mainland of China.
Article 7: Data Supply and Market Support
1. Data supply: MP shall provide data and technical training，offering all-out support to S
TARCOM for market development.
2. Market support: according to the requirement from STARCOM, MP shall provide technical demonstration and explanation during different exhibitions or product showing meetings in China, and the number of times for such activities should be not be fewer than 3 every year. STARCOM shall bear the associated costs of such supporting activities.
Article 8:Consulting Services
MP shall provide STARCOM with the information on the relevant techniques, products and systems in China, Korea and other regions;
1. In accordance with the requirement from STARCOM，MP shall provide a written report，introducing the new business development ideas and new product conceptions in Korea (including any high, new and leading edge techniques as considered appropriate by MP).
