EXHIBIT 10.20
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DVD FORMAT AND LOGO LICENSE
This FORMAT AND LOGO LICENSE is made between Toshiba Corporation
("Licensor"), a corporation of Japan, having its principal place of business at
1-1, Shibaura 1-chome, Minato-ku, Tokyo 105-8001, Japan, and Future Media
Productions, Inc. ("Licensee"), a corporation of U.S.A., having its principal
place of business at 25136 Anza Drive Valencia, California 91536 U.S.A., and is
effective as of the later of the two signature dates below (the "Effective
Date").
WHEREAS, certain members of the DVD Forum as specified in each DVD Format
Book ("Format Owners") have developed the DVD specifications pertaining to one
or more DVD products, and have obtained know-how, trade secret and technical
information and copyrights embodied therein;
WHEREAS, the Format Owners have appointed Licensor as a licensing agent for
the DVD specifications;
WHEREAS, the Logo Owner (as defined below) of the trademark rights,
copyrights and other rights in and to the Logos (as defined below) has appointed
Licensor as agent for licensing the Logos;
WHEREAS, Licensee has obtained one or more DVD Format Book(s) (hereinafter
defined) for such DVD specifications from Licensor for evaluation purposes only
pursuant to a non-disclosure agreement that has been duly executed between
Licensor and Licensee and that is attached hereto and incorporated herein by
reference (the "NDA");
WHEREAS, Licensor and Licensee wish to enter into this Agreement which sets
forth the terms and conditions under which Licensor grants to Licensee certain
rights with respect to the DVD Format Books and Logos (each as defined below).
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties agree as follows:
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1. Definitions
-----------
For purposes hereof, the following capitalized terms shall have the
respective meanings provided below and additional capitalized terms shall have
the respective meanings provided in Schedule A:
1.1 "Agreement" shall mean this DVD Format and Logo License, including all
schedules attached hereto, and any and all amendments to the Agreement and/or
such schedules.
1.2 "Affiliate" shall mean, with respect to either party hereto, any
corporation, firm, partnership, proprietorship, or other form of business
entity, in whatever country organized or resident, directly or indirectly
controlled by such party, and that is listed in Schedule C. For the purpose of
this definition, "control" shall mean more than 50% ownership, directly or
indirectly, or the equivalent power to direct or cause the direction of the
management or policies of such entity, directly or indirectly. Licensee may add
any Affiliate(s) of Licensee to Schedule C at any time with a prior written
notice to Licensor.
1.3 "DVD Format Books" shall mean the format books set forth in Schedule
A-1 containing DVD specifications pertaining to one or more DVD Products,
including any supplements, revisions, or updates made thereto from time to time;
provided, however, that each new version of a DVD Format Book shall be
considered a separate DVD Format Book, where "new version" shall mean new
specifications for a DVD format as represented by the change of the first digit
of the version number.
1.4 "DVD Graphic Standards Manual" shall mean the DVD Graphic Standards
Manual which sets forth the standards for using the Logos, as it may be revised
from time to time by Licensor.
1.5 "DVD Product" shall mean each DVD Product set forth on Schedule A-2.
1.6 "DVD Product Category" shall mean the categories of DVD Products set
forth on Schedule A-3.
1.7 "Logos" shall mean the DVD logos as set forth in the DVD Graphic
Standards Manual, which maybe revised from time to time by the Logo Owner.
1.8 "Logo Owner" shall mean the owner of the trademark rights, copyrights
and other rights in and to the Logos and shall include the current owner of such
rights, Time Warner Entertainment Company, L.P. ("TWE"), and any successor
of such rights pursuant to an assignment and/or transfer of such rights.
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1.9 "Schedule A" shall mean Schedule A attached to this Agreement, as such
schedule may be amended from time to time by Licensor.
1.10 "Schedule B" shall mean Schedule B attached to this Agreement, as such
schedule may be amended from time to time by Licensor.
1.11 "Schedule C" shall mean Schedule C attached to this Agreement, as such
schedule may be amended from time to time by Licensor.
1.12 "Schedule D" shall mean Schedule D attached to this Agreement, as such
schedule may be amended from time to time by Licensor.
2. DVD Format License
------------------
2.1 Upon the terms and conditions and with the limitations and exceptions
hereafter set forth, Licensor hereby grants to Licensee and its Affiliates
specified in Schedule C a non-exclusive license, on a worldwide basis during
the term hereof, to use the DVD Format Books identified on Schedule A-1 as being
licensed to Licensee, including the technical information, know-how and trade
secrets contained therein, solely in connection with Licensee's development,
manufacture (including having manufactured on a subcontract basis), sale, use or
other disposition of the DVD Products included in the DVD Product Category(ies)
identified on Schedule A-3 as being licensed to Licensee. Within thirty (30)
days after the Effective Date, Licensee shall select such DVD Format Book(s) and
DVD Product Category(ies) that are licensed to Licensee and its Affiliates under
this Agreement by checking the applicable column(s) in Schedule A-1. During the
term of this Agreement, Licensee may add such DVD Format Book(s) and DVD
Product Category(ies) that Licensee has not selected before and may be licensed
to Licensee and its Affiliates under this Agreement by (a) providing Licensor
with a revised Schedule A-1, with Licensee's selection of additional DVD Format
Book(s) and/or DVD Product Category(ies), and (b) making additional payment(s)
in accordance with Article 5.1. In the event that Licensee has the DVD Products
manufactured by a third party on a subcontract basis pursuant to this Section,
Licensee shall be responsible for such third party's compliance with the terms
and conditions of this Agreement, including compliance with the DVD Format Books
and confidentiality obligations.
2.2 Reserved for future addition of SID Code related provisions
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2.3 Licensor shall have made available to Licensee under the NDA for use
by Licensee and its Affiliates upon payment by Licensee of US$5,000, a copy of
the then current version of a DVD Format Book, which may not be copied by anyone
in whole or in part without prior written consent of Licensor. Licensee may
receive additional copies of any DVD Format Book that has been made available to
Licensee for an additional fee of $500 or other amount to be specified by
Licensor per copy under the NDA.
2.4 Licensee acknowledges that the right to use the DVD Format Books
licensed hereunder does not extend to its use in connection with any product
that does not comply with such DVD Format Books or that is incompatible with
products that comply with such DVD Format Books.
2.5 IT IS EXPRESSLY UNDERSTOOD THAT THE RIGHTS AND LICENSES GRANTED
PURSUANT TO THIS AGREEMENT DO NOT EXTEND TO ANY PRESENT OR FUTURE PATENT RIGHT
WHATSOEVER.]
3. DVD Logo License
----------------
3.1 Upon the terms and conditions and with the limitations and exceptions
hereafter set forth, Licensor hereby grants to Licensee and its Affiliates a
non-exclusive license to use the Logos solely on DVD Products that are within
the Category I Products or Category II Products, and packing materials, and in
related advertising and other sales and marketing literature, including
catalogues or brochures, and user manuals for such DVD Products, in the form and
manner specified in the DVD Graphic Standards Manual on a worldwide basis during
the term hereof. if Licensee manufactures and/or assembles computers that
incorporate DVD Drives as defined in Schedule A-2 and/or DVD Decoders as defined
in Schedule A-2 bearing the Logos, Licensee shall not be required to enter into
a license to use the Logos; provided, that (i) Licensee's sole use of the
Logos is the inclusion in such computers of DVD Drives and/or DVD Decoders
bearing the Logos; (ii) the manufacturer of such DVD Drives and/or DVD Decoders
has duly obtained a license to use the Logos on such DVD Drives and/or DVD
Decoders; (iii) such DVD Drives and/or DVD Decoders have been independently
verified by one of the laboratories listed on Schedule B-1 pursuant to the
procedures set forth in Article 4; and (iv) such DVD Drives and/or DVD
Decoders have not been materially altered; provided, further, that if Licensee
manufactures and/or assembles computers and affixes the Logos on the computers
as a whole system product, then Licensee shall be required to obtain a license
for the Logos pursuant to this Article 3.
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3.2 Licensee and its Affiliates are strictly prohibited from using the
Logos in any other form than that which is specifically set forth in the DVD
Graphic Standards Manual.
3.3 Licensee and its Affiliates shall ensure that there is imprinted
legibly and irremovably on all materials and things on or with which the Logos
appear in any form, the legends and notices required by the DVD Graphic
Standards Manual.
3.4 Licensee and its Affiliates shall not co-join, superimpose or combine
any other logo, trademark, trade name or other designation with the Logos.
Licensee shall not use the Logos in a manner which impairs the right in the
Logos.
3.5 Licensee and its Affiliates shall ensure that distributors' and
retailers' usage of the Logos in advertising, promotional materials, catalogues
or brochures offering Licensee's and its Affiliates' DVD Products for sale shall
comply with the DVD Graphic Standards Manual and Articles 3.2, 3.3, 3.4 and 4.1
of this Agreement.
3.6 Notwithstanding the foregoing, if Licensee develops, manufactures,
sells, uses or otherwise disposes of DVD Products that are within the Category
III Products, the license of the Logos and the rights and obligations of the
Licensee regarding such license set forth in this Article 3 shall not apply with
respect to such DVD Products.
4. Verification
------------
4.1 Licensee and its Affiliates (if Licensee has been granted the License
to use the Logos) agree that all products bearing or marketed under the Logos
shall be of high quality and shall conform to the applicable DVD Format Book and
such additional standards, specifications, instructions and other quality
controls regarding use of the Logos as may be communicated in writing by
Licensor from time to time, and that all uses of the Logos shall fully comply
with the DVD Graphic Standards Manual. Licensee and its Affiliates further agree
that in case the Licensee or any of its Affiliates sells any DVD Products that
are within the Category I Products or Category II Products, on an OEM basis to
third parties, the Licensee or any such Affiliate shall cause, and bear
responsibility for causing, such third parties to comply with the requirements
that all products bearing or marketed under the Logos and sold by the third
parties shall be of high quality and conform to the applicable DVD Format Book,
and that all uses of the Logos by the third parties shall comply with the DVD
Graphic Standards Manual.
4.2 Licensee and its Affiliates hereby agree that it will not manufacture,
sell, market, promote or distribute a DVD Product within the Category I Products
or Category II Products and bearing or marketed under the Logos other than in
full compliance with the
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applicable DVD Format Book and the procedures set forth below and in Schedules
B-3, B-4 and B-5.
4.3 If Final Failure (defined in Schedule B-3) is declared for a DVD
Product, Licensor shall have the right to terminate the rights relating to the
Logos granted to such Licensee under this Agreement with respect to the DVD
Product that has been declared the Final Failure, upon thirty (30) days' prior
written notice to Licensee.
4.4 If at any time during the term hereof, Licensor determines, in its
sole reasonable judgment and in cooperation with a Class A Verification
Laboratory listed in Schedule B-1, that Licensee or any of its Affiliates may be
manufacturing, selling, marketing, promoting or distributing a DVD Product
within the Category I Products or Category II Products and bearing or marketed
under Logos, which is not in full compliance with the applicable DVD Format
Book, at the request of Licensor, such Licensee shall follow procedures set
forth in Schedule B-5.
4.5 If Final Failure II (defined in Schedule B-5) is declared for a DVD
Product, Licensor shall have the right to terminate the rights relating to
the Logos granted to such Licensee under this Agreement with respect to the DVD
Product that has been declared the Final Failure II, upon thirty (30) days'
prior written notice to Licensee.
4.6 The right of termination set forth in Articles 4.3 and 4.5 above shall
not be exclusive of any other remedies or means of redress to which the Licensor
may be lawfully entitled, and all such remedies shall be cumulative. Upon
termination pursuant to Articles 4.3 or 4.5, all rights of Licensee granted
hereunder, relating to the Logos with respect to the DVD Product that failed to
meet the verification standards, shall cease and the termination procedures set
forth in Section 9.2 below shall apply to such termination.
4.7 For purposes of this Agreement, samples to be submitted pursuant to
this Article 4 shall be selected in a manner acceptable to the verification
laboratory to which they are submitted.
4.8 NO NOTICE OR STATEMENT OF ANY KIND SENT BY ANY LABORATORY LISTED ON
SCHEDULE B-1 OR BY LICENSOR, SHALL BE CONSTRUED AS A REPRESENTATION OR WARRANTY
OF ANY KIND WITH RESPECT TO THE DVD PRODUCT IDENTIFIED IN SUCH NOTICE OR
STATEMENT, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE OR INTERCHANGEABILITY WITH OTHER DVD
PRODUCTS.
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5. Fees
5.1 In consideration of the license granted hereunder, upon the terms and
conditions and with the limitations set forth herein, Licensee agrees to pay to
Licensor, within thirty (30) days after the Effective Date, the license fee set
forth on Schedule A for each DVD Format Book licensed to Licensee in each DVD
Product Category selected by Licensee, as identified on Schedule A-1; provided,
however, that Licensee may be entitled to a discount in the amount of $5,000
which Licensee had paid to Licensor under the NDA from the total license fee
payable hereunder. The license fee shall not be returnable or refundable in any
event. In the event that Licensee adds DVD Format Book(s) and DVD Product
Category(ies) in accordance with the provision of Article 2.1, Licensee agrees
to pay to Licensor, concurrently with such addition, the license fee set forth
on Schedule A-1 for each DVD Format Book newly licensed to Licensee in each DVD
Product Category newly selected by Licensee, as identified on Schedule A-1.
5.2 Licensee agrees to pay to the verification laboratory to which
Licensee submits a DVD Product for verification each time a sample DVD Product
and a test result are submitted to a verification laboratory pursuant to
Schedules B-3 or B-4 (regardless of the number of times a DVD Product is
submitted to a verification laboratory) the fees as charged by the verification
laboratory on a per-submission basis, promptly upon the receipt of an invoice
from the verification laboratory, provided that such fee shall not exceed the
amount as specified in Schedule B-2. The transportation fees for such submission
and return of Licensee's DVD Product sample or test results shall be borne by
Licensee.
5.3 All payments made by Licensee to Licensor or verification laboratories
under this Agreement shall be made without any deduction for any taxes, except
any income taxes that may be owed by Licensor that are required to be withheld
under any law of any jurisdiction outside Japan on any payments by Licensee to
Licensor under this Agreement, which taxes shall be withheld by Licensee to the
extent required by law and actually paid to the appropriate taxing authority.
Licensee shall provide written notice to Licensor before payment is made in
reasonable time to allow Licensor to object. Licensee shall within one month
following payment of any such taxes provide proof to Licensor of payment of such
taxes (including, but not limited to, official receipts in the name of Licensor
and photocopies of all forms filed by Licensee with the appropriate taxing
authorities) together with certified English translations of such
documentation (if not in the English language). Licensee shall indemnify
Licensor for any penalties and interest that may be payable as a result of
Licensee's failure to timely pay all taxes or other assessments of Licensor
that Licensee is obligated to withhold. All other taxes imposed on payments by
Licensee to Licensor or verification laboratories, including but not limited to
value added taxes, consumption taxes, and sales taxes, which may be imposed now
or in the future or under the laws of any applicable jurisdiction shall be
Licensee's sole responsibility and Licensee
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shall promptly transmit such taxes to the appropriate authorities as and when
they become due. Such taxes shall not affect Licensee's obligation to make
payments to Licensor or verification laboratories as required under this
Agreement.
6. Ownership of the DVD Format Books and Logos; Reservation of Rights
6.1 Licensee acknowledges that this Agreement does not transfer or convey
to Licensee ownership of or any rights in any of the DVD Format Books or the
Logos, except as expressly set forth herein. Licensee's use of the Logos (if
Licensee has been granted the license to use the Logos) shall inure solely to
the benefit of the Logo Owner, as owner of all rights in and to the Logos. Upon
termination of this Agreement, no monetary amounts shall be assigned as
attributable to any goodwill associated with such Licensee's use of the DVD
Format Books or the Logos.
6.2 Licensor hereby reserves all rights not herein expressly granted to
Licensee. Such reserved rights are the sole and exclusive property of the
Licensor and the Format Owners.
7. Confidentiality
7.1 Licensee agrees that Licensee and its Affiliates shall not disclose to
any third party information contained in the DVD Format Books licensed hereunder
and any other information provided by Licensor as confidential information
pursuant to the terms and conditions of the NDA. Licensee further agrees that
Licensee and its Affiliates shall use information contained in the DVD Format
Books licensed hereunder and any other information provided by Licensor as
confidential information pursuant to the terms and conditions of the NDA only
for the purpose of development, manufacture (including having manufactured),
sale, use and other disposition of the DVD Products included in the DVD Product
Category(ies) identified on Schedule A-3 and selected by Licensee.
8. Warranty and Disclaimer
8.1 LICENSOR, OTHER FORMAT OWNERS AND LOGO OWNER MAKE NO REPRESENTATION OR
WARRANTY AS TO THE VALUE OR UTILITY OF THE INFORMATION TO BE SUPPLIED TO
LICENSEE PURSUANT TO THIS AGREEMENT, SUCH AS BUT NOT LIMITED TO THE DVD FORMAT
BOOKS, THE DVD GRAPHICS STANDARDS MANUAL, AND TECHNICAL INFORMATION AND SUPPORT,
IF ANY, OR THE ABILITY OF LICENSEE TO MAKE USE THEREOF TO SECURE
INTERCHANGEABILITY WITH OTHER DVD PRODUCTS. LICENSOR,
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OTHER FORMAT OWNERS AND LOGO OWNER MAKE NO WARRANTY WHATSOEVER THAT THE USE OF
INFORMATION SUPPLIED BY LICENSOR DOES NOT INFRINGE OR WILL NOT CAUSE
INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHT OWNED OR CONTROLLED BY ANY
PERSON. LICENSEE UNDERSTANDS AND AGREES THAT THE LICENSOR, OTHER FORMAT OWNERS
AND LOGO OWNER MAKE NO WARRANTY WHATSOEVER THAT ANY MANUFACTURE, USE, SALE,
LEASE OR OTHER DISPOSAL OF LICENSED PRODUCTS WILL BE FREE FROM INFRINGEMENT OF
ANY THIRD-PARTY INTELLECTUAL PROPERTY RIGHTS. IT IS EXPLICITLY UNDERSTOOD BY
LICENSEE THAT LICENSOR AND OTHER FORMAT OWNERS CLAIM TO HAVE ISSUED OR
PROSPECTIVE PATENTS PERTINENT TO THE LICENSED PRODUCTS, WHICH PATENTS ARE NOT
LICENSED HEREUNDER. LICENSOR, OTHER FORMAT OWNERS AND LOGO OWNER MAKE NO
REPRESENTATION AND WARRANTY, EXPRESSED OR IMPLIED, STATUTORY OR OTHERWISE, AND
EXPRESSLY DISCLAIM IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE AND ANY EQUIVALENTS UNDER THE LAWS OF ANY JURISDICTION THAT
MIGHT ARISE FROM ANY ACTIVITIES OR INFORMATION DISCLOSURES RELATING TO THIS
AGREEMENT.
9. Term and Termination
9.1 This Agreement shall become effective as of the Effective Date and
shall continue in force until December 31, 2004. The parties hereby agree that
prior to such expiration (other than earlier termination of this Agreement
pursuant to the provisions herein), the parties shall negotiate in good faith to
renew the license granted hereunder as such renewal may be subject to further
terms and conditions, including payment of then determined license fees.
9.2 Immediately upon expiration or earlier termination of this Agreement,
Licensee shall return to Licensor or destroy at Licensor's instruction, all DVD
Format Books licensed to Licensee hereunder, the DVD Graphics Standards Manual
(if Licensee has been granted the License to use the Logos), and all copies of
the foregoing documents, upon the last date that this Agreement remains in force
and effect. Licensee acknowledges that, on the last day of the term of this
Agreement or its earlier termination, all rights of Licensee granted hereunder
shall cease.
9.3 Either party may terminate this Agreement at any time on thirty (30)
days' notice to the other party in the event that the latter shall materially
breach or fail to perform any material obligation under this Agreement and such
default is not remedied within thirty (30) days after notice is given specifying
the nature of the default. Such right of
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termination shall not be exclusive of any other remedies or means of redress to
which the non-defaulting party may be lawfully entitled, and all such remedies
shall be cumulative.
Licensee hereby agrees (if Licensee has been granted the license to
use the Logos) that the use of the Logos in any way not in compliance with the
DVD Graphic Standards Manual, as such manual may be modified from time to time,
or on any product or in any advertisement or sales literature concerning any
product, which product does not comply with the applicable DVD Format Book,
shall constitute a material breach of this Agreement and infringement of the
Logos.
9.4 In the event that any Event of Bankruptcy occurs, then Licensor may
give notice to Licensee terminating this Agreement and this Agreement shall be
terminated in accordance with the notice. An "Event of Bankruptcy" occurs if:
(i) a decree or order by a court having jurisdiction in the premises has been
entered adjudging Licensee a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, readjustment,
arrangement, composition, winding up or similar relief for Licensee under
any applicable statute, or a decree or order of a court having jurisdiction
in the premises for the appointment of a liquidator, receiver,
administrator, trustee or assignee in bankruptcy or insolvency or other
similar person or official of Licensee or of a substantial part of the
property, or for the winding up or liquidation of the affairs of Licensee
has been entered and remains unstayed; or if any substantial part of the
property of Licensee has been sequestered or attached and has not been
returned to the possession of Licensee or released from such attachment
within 14 days thereafter; whether any such act or event occurs in Japan,
or any foreign country, subdivision thereof, or any other jurisdiction; or
(ii) Licensee institutes proceedings to be adjudicated a voluntary bankrupt or
insolvent, consents to the filing of a bankruptcy or insolvency proceeding
against it, files a petition or answer or consent seeking reorganization,
readjustment, arrangement, composition, winding up, administration,
receivership, or similar relief under any applicable statute or consents to
the filing of any such petition or the entry of any such order, makes an
assignment for the benefit of creditors, is determined to be unable to pay
its debts or admits in writing its inability to pay its debts generally as
they become due, or voluntarily suspends transactions of a substantial
portion of its usual business; whether any such act or event occurs in
Japan, or any foreign country or subdivision thereof, or any other
jurisdiction.
9.5 The provisions set forth in Articles 6, 7, 8 and 9 shall survive the
termination or expiration of this Agreement.
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10. Miscellaneous
10.1 Licensee agrees that it will not bring any actions for unauthorized
use or infringement of any of the DVD Format Books or the Logos. Licensee will
notify Licensor immediately should it learn of any such potential unauthorized
use or infringement. Licensor shall have the option, at its own expense, to
assume the defense of any suit or action brought against Licensee that
challenges or concerns the validity of any right granted by Licensor hereunder.
10.2 The performance by Licensor of its obligations hereunder shall be
conditioned upon and subject to the receipt of all necessary export approvals
required by and all restrictions or conditions imposed by any relevant
government.
10.3 Licensor represents and warrants that it has the rights to enter
into this Agreement and to grant a license to Licensee pursuant to the terms
hereof on behalf of the Format Owners and Logo Owner.
10.4 This Agreement and the rights granted hereunder shall be personal to
Licensee and shall not be assigned, pledged, divided or otherwise encumbered in
any way. Licensee shall not have the right to sublicense any rights granted
hereunder. Licensor shall have the right to assign this Agreement, at any time
during the term thereof, to any other party which succeeds Licensor in its
function as the licensor of the DVD Format Books and the Logos, upon prior
written notice to Licensee.
10.5 Notices. Wherever provision is made in this Agreement for the giving
of any notice, such notice shall be in writing and shall be deemed to have been
duly given if mailed by airmail, postage prepaid, addressed to the party
entitled to receive the same or delivered personally to such party, or sent by
facsimile transmission or sent by courier,
if to Licensor, to:
Strategic Partnership & Licensing Division
Digital Media Equipment & Services Company
Toshiba Corporation
1-1, Shibaura 1-Chome
Minato-ku, Tokyo 105-8001 Japan
Attention: Hirohide Tagawa
Fax No.: +81-3-5444-9430
and if to the Licensee, to:
Vice President
Future Media Productions, Inc.
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Attention: David Moss
Fax No.: +1-661-294-5582
or to such other address, in any such case, as any party hereto shall have last
designated by notice to the other party. Notice shall be deemed to have been
given on the day that it is so delivered personally or sent by facsimile
transmission and the appropriate answer back or confirmation of successful
transmission is received or, if sent by courier, shall be deemed to have been
given two business days after delivery by the courier company, or if mailed, ten
business days following the date on which such notice was so mailed.
10.6 THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED ACCORDING TO THE LAWS
OF THE STATE OF NEW YORK, AS IF THIS AGREEMENT WERE WHOLLY EXECUTED AND WHOLLY
PERFORMED WITHIN SUCH STATE, AND WITHOUT REFERENCE TO THE CONFLICTS OF LAWS
PRINCIPLES THEREOF.
10.7 ALL DISPUTES BETWEEN THE PARTIES HERETO ARISING OUT OF OR IN
CONNECTION WITH THE INTERPRETATION OR EXECUTION OF THIS AGREEMENT,
LICENSOR'S LICENSING OF THE LOGOS OR THE DVD FORMAT BOOKS, OR
LICENSEE'S USE OF THE DVD FORMAT BOOKS AND THE LOGOS, SHALL BE FINALLY
SETTLED BY THE FEDERAL OR STATE COURTS LOCATED IN THE COUNTY OF NEW
YORK IN THE STATE OF NEW YORK; AND EACH PARTY TO THIS AGREEMENT
HEREBY: (i) IRREVOCABLY CONSENTS TO THE EXCLUSIVE JURISDICTION OF
SUCH COURTS FOR THE RESOLUTION OF SUCH DISPUTES; (ii) IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS OF SAID COURTS IN ANY SUCH DISPUTE
BY PERSONAL DELIVERY OR MAILING OF PROCESS BY REGISTERED OR CERTIFIED
MAIL, POSTAGE PREPAID, AT THE RESPECTIVE ADDRESS SET FORTH IN SECTION
10.5 ABOVE; (iii) IRREVOCABLY WAIVES ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN SUCH
COURTS OR TO THE CONVENIENCE OR INCONVENIENCE OF CONDUCTING OR
PURSUING ANY ACTION OR PROCEEDING IN ANY SUCH COURT; AND (iv)
IRREVOCABLY WAIVES ANY RIGHT TO A TRIAL BY JURY REGARDING THE
RESOLUTION OF ANY DISPUTES BETWEEN THE PARTIES HERETO ARISING OUT OF
OR IN CONNECTION WITH THIS AGREEMENT.
10.8 This Agreement shall inure to the benefit of the parties hereto and
each of their respective Affiliates, provided that (i) such Affiliates shall
comply with the terms of this Agreement, (ii) nothing herein shall relieve any
party of any of its obligations under the
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terms of this Agreement, and (iii) a party shall be responsible for the acts and
omissions of its Affiliates as if such acts and omissions had been the acts and
omissions of such party.
10.9 This Agreement sets forth the entire agreement and understanding
between the parties as to the subject matter hereof and merges all prior
discussions between them and neither of the parties shall be bound by any
conditions, definitions, warranties, waivers, releases or representations
(either expressed or implied) with respect to the subject matter of this
Agreement, other than expressly set forth herein (including the exhibits
hereto), or as duly set forth on or subsequent to the date hereof in writing
signed by a duly authorized representative of the party to be bound thereby.
10.10 This Agreement may be executed in counterparts (including facsimile
transmission) each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement by their duly
authorized representatives as of the Effective Date.
TOSHIBA CORPORATION FUTURE MEDIA PRODUCTIONS, INC.
/s/ Koji Hase /s/ Louis Weiss
- ----------------------------------- -----------------------------------
By (Sign) By (Sign)
Koji Hase Louis Weiss
- ----------------------------------- -----------------------------------
Name (Print) Name (Print)
Vice President
Strategic Partnership & Licensing
Division Chief Financial Officer
- ----------------------------------- -----------------------------------
Title Title
January 11, 2000 12/30/99
- ----------------------------------- -----------------------------------
Date Date
SCHEDULE A-1
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DVD Products, Corresponding DVD Format Books and License Fees
-------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
DVD Format Books* DVD Product License Fee Check if
Category Licensed
to
Licensee
- -------------------------------------------------------------------------------------------------------
DVD-Video Book I US$10,000 10000
------------------------------------------------------------------
(DVD Specifications for Read- II US$10,000
------------------------------------------------------------------
Only Disc III US$10,000
Part 3: Video (Version 1.1)
- -------------------------------------------------------------------------------------------------------
DVD-ROM Book I US$10,000
------------------------------------------------------------------
(DVD Specifications for Read- II US$10,000
------------------------------------------------------------------
Only Disc III US$10,000 10000
Part 1: Physical (Version 1.01)
Part 2: File System (Version 1.01)
- -------------------------------------------------------------------------------------------------------
DVD-R Book I US$10,000
------------------------------------------------------------------
(DVD Specifications for II US$10,000
------------------------------------------------------------------
Recordable Disc III US$10,000
Part 1: Physical (Version 1.0)
Part 2: File System (Version 1.0)
- -------------------------------------------------------------------------------------------------------
DVD-RAM Book I US$10,000
------------------------------------------------------------------
(DVD Specifications for II US$10,000
------------------------------------------------------------------
Rewritable Disc III US$10,000
Part 1: Physical (Version 1.0)
Part 2: File System (Version 1.0)
- -------------------------------------------------------------------------------------------------------
DVD-Audio Book I US$10,000
------------------------------------------------------------------
(DVD Specifications for Read-Only II US$10,000
------------------------------------------------------------------
Disc III US$10,000
Part 4: Audio(Version 1.0))
- -------------------------------------------------------------------------------------------------------
Total Fees** 15000
- -------------------------------------------------------------------------------------------------------
* A new version of a DVD Format Book as represented by the change of the first
digit of the version number shall be deemed a separate DVD Format Book, subject
to a separate license fee of $1O,000.
**US$5,000 may be discounted from the total fees.
SCHEDULE A-2
------------
DVD PRODUCTS:
- -------------
DVD Discs shall mean any disc comprised of information encoded in
digital form or enabled to write in digital form or case for DVD-RAM disc, and
which conforms to the corresponding DVD Format Book(s) licensed to Licensee
hereunder.
DVD Drive shall mean a device conforming to the corresponding DVD
Format Book that is specifically designed and manufactured for the reproduction
or recording of information on a DVD Disc and conversion of such information,
which is bit-encoded according to the corresponding DVD Format Book, into
electrical signals in accordance with the corresponding DVD Format Book(s)
licensed to Licensee hereunder, which electrical signals are directly capable
and intended to be used for reproduction or recording of video, text, audio and
data-related information through data handling or data processing apparatus.
DVD Player shall mean a playback device conforming to the
corresponding DVD Format Book that is specifically designed and manufactured for
the reproduction of information stored on a DVD Disc and conversion of such
information, which is bit-encoded according to the corresponding DVD Format
Book, into electrical signals in accordance with the corresponding DVD Format
Book(s) licensed to Licensee hereunder, which electrical signals are directly
capable and intended to be used for visual reproduction through standard
television receivers or television monitors and/or audio reproduction.
DVD Decoder shall mean a decoder implemented in hardware or software
capable of receiving and decoding transmissions from a DVD Drive over a computer
system bus and that conforms to the corresponding DVD Format Book(s) licensed to
Licensee hereunder.
Integrated Products shall mean any product that incorporates or
integrates DVD Drive, DVD Player or DVD Decoder.
Other DVD Products: any product other than DVD Players, DVD Drives,
DVD Discs, DVD Decoders, or Integrated Products, including, but not limited to,
authoring tools, integrated circuits and encoders, that use the information
included in the corresponding DVD Format Book(s).
SCHEDULE A-3
------------
DVD PRODUCT CATEGORIES
----------------------
Category I Products: DVD Discs.
Category II Products: DVD Players, DVD Drives, DVD Decoders and
Integrated Products.
Category III Products: Other DVD Products.
SCHEDULE B-1
------------
VERIFICATION LABORATORIES
-------------------------
Class A Verification Laboratories
Tokyo (Hitachi) Laboratory
Hitachi, Ltd.
DVD Format Verification Laboratory
Hitachi AtagoBldg., 15-12, Nishi Shinbashi 2-chome
Minato-ku, Tokyo 105- 8430, Japan
Tel: +81-3-3506-1616
Fax: +81-3-3506-1603
Tokyo (Pioneer) Laboratory
Pioneer Electronic Corporation
AV & Recording Development Center
4-2610, Hanazono, Tokorozawa
Saitama 359-8522, Japan
TEL: +81-42-942-1300
FAX: +81-42-943-0395
Tokyo (Sony) Laboratory
Sony Corporation
Shinagawa Intercity, Tower C
2-15-3, Konan, Minato-ku
Tokyo 108-6201 Japan
Fax: +81.3.5769.5890
Tokyo (Toshiba) Laboratory
Toshiba Corporation
Yanagi-cho 69, Saiwai-ku
Kawasaki 210-8501, Japan
FAX: +81-3-5444-9430
Osaka (Matsushita) Laboratory
Matsushita Electric Industrial Co., Ltd.
DVD Verification Laboratory
2-15 Matsuba-cho, Kadoma City
Osaka 571-8503, Japan
TEL: +81-6-6905-4195
FAX: +81-6-6909-5027
Europe (Philips) Laboratory
Royal Philips Electronics
Philips System Standards & Licensing
Licensing Support
P.O. Box 80002
5600 JB Eindhoven
The Netherlands
Fax: +31-40-2732113
http://www.licensing.philips.com
North America (WAMO) Laboratory
Warner Advance Media Operations
1400 E. Lackwanna Avenue
Olyphant, Pennsylvania 18448
U.S.A.
TEL: + 1-570-383-3291
FAX: + 1-570-383-7487
Asia (ITRI) Laboratory
Industrial Technology Research Institute
DVD Format Verification Laboratory
Bldg. 78, 195-8, Section 4, Chung Hsing Road,
Chutung, Hsinchu 310, Taiwan, R.O.C.
TEL: +886-3-5916786
FAX: +886-3-5917531
Class B Verification Laboratories
SCHEDULE B-2
------------
MAXIMUM VERIFICATION FEES
-------------------------
(1) $5,000 for a DVD Disc.
(2) $10,000 for a DVD Player or any product that incorporates a DVD Player;
(3) $5,000 for a DVD Drive or any product that incorporates a DVD Drive; and
(4) $5,000 for a DVD Decoder
SCHEDULE B-3
- ------------
1. At any time after the Effective Date but no later than sixty (60)
days after the initial commercial shipment of the First Production Model of
Category I Product or Category II Product as defined in the applicable Test
Specification attached hereto as Schedule B-6, Licensee or any of its Affiliates
shall test First Production Model using the verification tool and following the
instructions provided by a Class A Verification Laboratory listed on Schedule
B-1, to be selected at the option of the Licensee, and submit the results of
such test together with samples of such Model so tested to such Laboratory, and
concurrently send a notice of such submission to Licensor; provided, however
-------- -------
that if the DVD Drive or DVD Decoder is integrated into another product and the
Logo is placed anywhere on such integrated product other than on the DVD Drive
or DVD Decoder itself, such integrated product shall be tested. Reasonable
numbers of samples to be submitted shall be designated by such Class A
Verification Laboratory.
2. Before a DVD Product is submitted to a Class A Verification Licensee
and such Laboratory shall enter into a non-disclosure agreement the basic terms
and conditions of which are set forth in Schedule D attached hereto covering any
confidential information submitted by the Licensee.
3. After the receipt of the result of such test and such sample product,
(i) the Class A Verification Laboratory that received a test result and
samples of DVD Product shall inform such Licensee of the results of the
verification and concurrently send a copy of such correspondence to
Licensor, and the Class A Verification Laboratory may keep a reasonable
number of samples for Category I Products and Category II Products
submitted by such Licensee;
(ii) if the result of the verification is that such sample DVD Product does not
comply with the applicable DVD Format Book in the sole reasonable judgment
of such Class A Verification Laboratory, Licensor shall have the right to
request that such Licensee modify the non-compliant product so as to
comply, and submit sample(s) of such modified product to such Verification
Laboratory within thirty (30) days or a longer period specified by such
Verification Laboratory (Number of samples to be submitted shall be
designated by such Verification Laboratory). Upon request of Licensor,
Licensee shall promptly provide information necessary for Licensor to
trace the cause of such non-compliance with the applicable DVD Format
Book, including, without limitation, the names of authoring studios which
created the master discs for the non-compliant DVD Discs and third-party
suppliers of components for the non-compliant DVD Products; and
(iii) if, (a) as the result of the second verification, the sample product still
fails to comply with the applicable DVD Format Book in the sole reasonable
judgment of such Verification Laboratory, or (b) Licensee fails to submit
a modified product within such period set forth in the above paragraph
3(i), Licensor, in its sole discretion, shall have the right either to
request that such Licensee further modify the product
and submit such further modified product to the same Class A Verification
Laboratory, or declare and inform Licensee of a final failure of such DVD
Product to conform to the applicable DVD Format Book (" Final Failure").
SCHEDULE B-4
- ------------
1. During the term of this Agreement and no later than sixty (60) days
from the initial shipment of the Next Production Model of Category I Product or
Category II Product as defined in the applicable Test Specifications
(Schedule B-6), Licensee or its Affiliates shall (i) test such Second Production
Model at its own quality assurance division using the verification tools and in
accordance with procedures set forth in the Test Specifications or (ii) if
Licensee or its Affiliates does not have its own quality assurance division,
shall submit samples of such Second Production Model to a Class B Verification
Laboratory listed on Schedule B-1 for verification.
2. If Licensee verifies its Second Production Model at its own quality
assurance division, the following procedures shall apply.
(i) If, in its reasonable judgment, the result of the verification at its own
quality assurance division is that such Second Production Model does not
comply with the applicable DVD Format Book, Licensee shall modify the
non-compliant products so as to comply and verify such modified product.
(ii) If, in its reasonable judgment, the modified product still fails to
comply with the applicable DVD Format Book as the result of the second
verification, Licensee shall either further modify the non-compliant
modified products or determine not to ship such Second Production Model
with the Logos.
(iii) Licensee shall keep records of the verification conducted at its own
quality assurance division at least for two (2) years after the
discontinuation of production of the relevant model.
3. If Licensee submits samples of Second Production Model to a Class B
Verification Laboratory, the following procedures shall apply.
(i) Before a DVD Product is submitted to a Class B Verification Laboratory,
Licensee and such Laboratory shall enter into a non-disclosure agreement
the basic terms and conditions of which are set forth in Schedule D
attached hereto covering any confidential information submitted by the
Licensee.
(ii) After the receipt of such sample product,
(a) the Class B Verification Laboratory that received a sample DVD Product
shall inform such Licensee of the results of the verification, and the
Class B Verification Laboratory may keep a reasonable number of samples
for Category I Products and Category II Products submitted by such
Licensee;
(b) if, in the sole reasonable judgment of such Class B Verification
Laboratory, the result of the verification is that such sample DVD
Product does not comply with the applicable DVD Format Book, such
Verification Laboratory shall have the right to request that such
Licensee modify the non-compliant product so as to comply, and submit
sample(s) of such modified product to such Verification Laboratory within
thirty (30) days or a longer period specified by such Verification
Laboratory (Number of samples to be submitted shall be designated by such
Verification Laboratory). Upon request of Licensor, Licensee shall
promptly provide information necessary for Licensor to trace the cause of
such non-compliance with the applicable D\DVD Format Book, including,
without limitation, the names of authoring studios which created the
master discs for the non-compliant DVD Discs and third-party suppliers of
components for the non-compliant DVD Products; and
(c) if, in the sole reasonable judgment of such Verification Laboratory, the
sample product still fails to comply with the applicable DVD Format Book
as the result of the second verification, Licensee shall either submit
the modified product to the same Class B Verification Laboratory or
determine not to ship such Second Production Model with the Logos.
SCHEDULE B-5
1. Licensee shall immediately submit one sample of a DVD Product which
has been determined to be not in full compliance with the applicable DVD Format
Book pursuant to Article 4.4, to a Class A Verification Laboratory listed on
Schedule B-1 to be selected at the option of the Licensee and concurrently send
a notice of such submission to Licensor. After the receipt of such sample
product:
(i) The Class A Verification Laboratory that received a sample DVD Product
shall inform such Licensee of the results of the verification and
concurrently send a copy of such correspondence to Licensor;
(ii) if the result of the verification is that in the sole reasonable judgment
of such Class A Verification Laboratory such sample product does not
comply with the applicable DVD Format Book, Licensor shall have the right
to request that such Licensee modify the non-compliant product so as to
comply, and submit one sample of such modified product to such
Verification Laboratory within thirty (30) days or a longer period
specified by such Verification Laboratory. Upon request of Licensor,
Licensee shall promptly provide information necessary for Licensor to
trace the cause of such non-compliance with the applicable DVD Format
Book, including, without limitation, the names of authoring studios which
created the master discs for the non-compliant DVD Discs and third-party
suppliers of components for the non-compliant DVD Products; and
(iii) if, (a) as the result of the second verification in the sole reasonable
judgment of such Verification Laboratory the sample product still fails
to comply with the applicable DVD Format Book, or (b) Licensee fails to
submit a modified product within such period set forth in above
paragraph, Licensor, in its sole discretion, shall have the right either
to request that Licensee further modify the product and submit such
further modified product to the same Verification Laboratory, or declare
and inform Licensee of a final failure of such DVD Product to conform to
the applicable DVD Format Book ("Final Failure II").
(iv) Licensee shall pay to the Verification Laboratory to which Licensee
submitted the DVD Products a verification fee as charged by the
Verification Laboratory, promptly upon receipt of an invoice from the
Verification Laboratory, provided that Licensee shall not be required to
pay the verification fee to the Verification Laboratory for a DVD Product
which has been verified as compliant with the applicable DVD Format Book
pursuant to the procedures under this Schedule B-5.
Table of Test Specification, Corresponding DVD Specifications and Product
- -------------------------------------------------------------------------
Category
- --------
- ------------------------------------------------------------------------------------------------------------
DVD Format Books DVD Applicable Test Specifications
Product
Category
- ------------------------------------------------------------------------------------------------------------
DVD-Video Book I DVD-Video Disc Test Specification
----------------------------------------------------------------------------------
II DVD Video Player Test Specification
PC DVD Player & Component Test Specification
DVD Audio Player Test Specification
----------------------------------------------------------------------------------
III
- ------------------------------------------------------------------------------------------------------------
DVD-ROM Book I DVD-Video/Audio Disc Test Specification
----------------------------------------------------------------------------------
II DVD Video Player Test Specification
PC DVD Player & Component Test Specification
DVD Audio Player Test Specification
----------------------------------------------------------------------------------
III
- ------------------------------------------------------------------------------------------------------------
DVD-R Book I DVD-R Disc, 3.9GB Test Specification
----------------------------------------------------------------------------------
II DVD-R Drivel 3.9GB Test Specification
----------------------------------------------------------------------------------
III
- ------------------------------------------------------------------------------------------------------------
DVD-RAM Book I DVD-RAM Disc/ 2.6GB Test Specification
----------------------------------------------------------------------------------
II DVD-RAM Drive/2.6GB Test Specification
DVD Video Recording Test Specification
----------------------------------------------------------------------------------
III
- ------------------------------------------------------------------------------------------------------------
DVD-Audio Book I DVD-Audio Disc Test Specification
----------------------------------------------------------------------------------
II DVD Audio Player Test Specification
----------------------------------------------------------------------------------
III
- ------------------------------------------------------------------------------------------------------------
SCHEDULE C
- ----------
List of Licensee's Affiliates
-----------------------------
SCHEDULE D
Basic terms and conditions of the Non-Disclosure Agreement between
Licensee and verification laboratory
------------------------------------
1. Licensee and laboratory shall comply with the confidentiality obligations
for the following information:
(1) Laboratory:
a. Sample(s) of DVD products including technical information
relating to such sample(s) received from Licensee.
b. The result of verification performed by Licensee.
(2) Licensee:
a. The verification tool, including technical information relating
to such verification tool, provided by the laboratory.
b. The result of verification performed by laboratory.
2. The period of confidentiality obligations shall be at least three (3) years
after receipt of the other party's confidential information.
3. Licensee shall agree that the laboratory may disclose the result of the
verification performed by the laboratory to Licensor and other laboratories
specified in Schedule B-1, provided that Licensee's name and model numbers of
Licensee's sample products may not be disclosed to such other laboratories, and
provided further that Licensor and such other laboratories shall treat the
verification result confidential.
4. Licensee and Laboratory may use the other party's confidential information
only for the purpose of verifying Licensee's DVD products' conformance with the
applicable DVD Format Book.
5. The Non-Disclosure Agreement shall be effective as long as Licensee
manufactures DVD products, provided, however, that the confidential obligation
shall survive such termination or expiration of the Non-Disclosure Agreement.
6. Licensee and Laboratory shall comply with all applicable rules and
regulations of the United States, Japan and other countries and jurisdiction
relating to the export or re-export of confidential information.