Aachen, GERMANY and SAN DIEGO, Calif. -June 13, 2006 -
DivX, Inc., the digital entertainment company that created the DivX media format, today announced that it has licensed DivX video technology to TMPG Inc., a wholly owned subsidiary of Pegasys., Inc for use in the new high-quality video encoder TMPGEnc 4.0 Xpress.

With over 180 million software product downloads worldwide, DivX is a digital media format that enables video to be compressed so that it uses only a fraction of the amount of data required by a standard-length DVD for playback on PCs and millions of consumer electronics devices. The DivX Pro Codec includes six optimized encoding modes that are designed to allow you to balance visual quality and performance for virtually any application from live capture to video mastering. Improved high-performance modes also allow the codec to create significantly higher quality video from live feeds, including for PC-based digital video recorders, real-time video capture applications, and rapid-encoding environments.

The new version of TMPGEnc is twice as powerful as previous versions and includes a plethora of new functions and advancements, such as frame level cut editing, over 19 Audio/Video filters, slideshow creation, subtitle support, and support for many popular formats, including DivX. TMPGEnc 4.0 XPress is scheduled for release on June 13 at a cost of U.S. $99.95.

With over 180 million software product downloads worldwide, DivX is a digital media format that enables video to be compressed so that it uses only a fraction of the amount of data required by a standard-length DVD for playback on PCs and millions of consumer electronics devices. The DivX Pro Codec includes six optimized encoding modes that are designed to allow you to balance visual quality and performance for virtually any application from live capture to video mastering. Improved high-performance modes also allow the codec to create significantly higher quality video from live feeds, including for PC-based digital video recorders, real-time video capture applications, and rapid-encoding environments.

“TMPGEnc 4.0 XPress is our flagship product, and we are proud to bring our users an even more powerful and versatile software encoder. TMPG strives to bring our users cutting-edge tools for keeping up with the ever-changing video industry,” said Kimi Matsuki, CEO of TMPG, Inc. “TMPG is pleased to become associated with DivX. With this relationship, we can guarantee our users full support of DivX’s popular high-quality file types with TMPGEnc 4.0 XPress”

“With native support of DivX, TMPGEnc 4.0 Xpress gives consumers the freedom and ability to import and output almost any video file and encode it to the latest high-quality DivX format,” said Bill Holmes, vice president of consumer electronics at DivX, Inc. “We are pleased to offer TMPG customers the ability to create DivX files that are compatible with a broad range of consumer electronics devices, from DVD players to portable media players.”

About TMPG, Inc.
TMPG, Inc. makes digital video easy. Headquartered in Gardena, California, the company was established early in 2003, built on a solid foundation of technology developed by its parent company, Pegasys Inc. The company's two flagship products, the TMPGEnc video encoder series and the new TMPGEnc DVD Author, anchor a strong line of retail and OEM digital video editing and encoding products for home and professional users. The recognized leaders in developing quality video encoding tools for MPEG applications, TMPG Inc.'s encoding technology is also incorporated into numerous commercial and professional video editing and DVD-creation software products. Applications developed by its parent, PEGASYS, have been bundled with quality products from top worldwide manufacturers, including Sony Japan and Pioneer Australia. For more information about TMPG, Inc. and its products, visit the company's website at www.tmpg-inc.com.

About DivX, Inc.
DivX creates products and services designed to improve the experience of media. Our first product offering was a video compression-decompression software library, or codec, which has been actively sought out and downloaded over 180 million times in the last four years, including over 50 million times during the last twelve months. We have since built on the success of our codec with other consumer software, including the DivX Player application. We distribute this software from our website, DivX.com, which averaged over five million unique visitors per month during the first quarter of 2006. We also license our technologies to consumer hardware device manufacturers and certify their products to ensure the interoperable support of DivX-encoded content. Over 35 million DivX Certified hardware devices have been shipped worldwide, including approximately 8.5 million devices reported to us by our customers during the fourth quarter of 2005. In addition to technology licensing to consumer hardware device manufacturers, we currently generate revenue from software licensing, advertising and content distribution. For more information, visitt www.divx.com.