NON-EXCLUSIVE PATENT LICENSE AGREEMENT
FOR
DISC PRODUCT MANUFACTURERS
This AGREEMENT is made effective this 1st day of June, 1996, by and
between DISCOVISION ASSOCIATES, a joint venture subject to the State of
California partnership law, having a place of business at 2355 Main Street,
Suite 200, Irvine, California 92714, United States of America (hereinafter
referred to as DVA) and FUTURE MEDIA PRODUCTIONS, a California corporation,
having a place of business at 25136 Anza Drive, Valencia, California 91355
(hereinafter referred to as LICENSEE), who agree as follows:
SECTION 1.0 RECITALS
1.1 DVA has the right to grant licenses under certain DVA-owned United
States and Canadian patents relating to the design, manufacture,
and sale of optical disc products such as compact discs and
CD-ROM discs.
1.2 DVA is prepared to grant non-exclusive licenses under such patents on
reasonable terms and conditions to financially sound and commercially
responsible applicants.
1.3 LICENSEE has produced and/or sold and intends to continue producing
and/or selling products which may embody patented inventions covered
by such DVA patents or which may be made using apparatus or methods
which may embody such patented inventions. These products are
manufactured by: (1) LICENSEE; (2) manufacturers licensed by DVA who
do not pay United States and Canadian royalty rates; (3)
manufacturers licensed by DVA who pay United States and Canadian
royalty rates; or (4) manufacturers not licensed by DVA. As
specified later in this Agreement, the amount of any royalty to be
paid by LICENSEE to DVA depends partly on the source of the product.
1.4 DVA is offering LICENSEE, as an option herein, a license under
individual ones of its patents, the availability of such license
under any one or more of DVA's patents being in no way conditioned on
the need for LICENSEE to take a license under any other DVA's
patents.
1.5 LICENSEE has determined that its business interests will be best served
by taking a license under the terms and conditions of this Agreement.
In so doing, LICENSEE understands that if less than all DVA patents
are licensed, then licenses under additional DVA patents may be
required before LICENSEE can make or sell optical disc products free
and clear of all claims of patent infringement by DVA. Information
regarding infringement of additional DVA patents may be obtained by
using the factory inspection provisions of Section 10.0 herein.
SECTION 2.0 DEFINITIONS
2.1 "Information Storage Medium" (Media) shall mean any record carrier
primarily designed to store and/or record any type of information.
2.2 "Disc(s)" shall mean any pre-recorded, non-recordable and non-erasable
Information Storage Medium in the shape of a disc and having
information recorded thereon in one or more information bearing
layers, which information is recoverable using optical detection
means.
2.3 "Digital Disc(s)" shall mean a Disc having pre-recorded thereon
digitally encoded information. Digital Discs shall be limited to
Discs commonly known as Compact Disc Digital Audio Discs or CD
Digital Audio Discs, Compact Disc Single Discs or CD Single Discs,
Compact Disc Read Only Memory Discs or CD-ROM Discs, Compact
Disc-Graphics Discs or CD-G Discs, Compact Disc-Interactive Discs or
CD-I Discs, and Pre-Recorded Mini Discs.
2.4 "Compact Disc Digital Audio Disc(s)" or "CD Digital Audio Disc(s)"
shall mean a Digital Disc having pre-recorded thereon audio
entertainment information. A CD Digital Audio Disc is defined herein
according to the definition in a specification entitled "Compact
Disc Digital Audio System Description" published by N.V. Philips
Consumer Electronics B.V. and Sony Corporation and commonly referred
to as the "Red Book." CD Digital Audio Discs shall mean Digital
Discs commonly known as compact discs (CD's).
2.5 "Compact Disc Single Disc(s)" or "CD Single Disc(s)" shall mean a CD
Digital Audio Disc, either three inches (3") or five inches (5") in
diameter, having pre-recorded thereon twenty (20) minutes or less of
audio entertainment information.
2.6 "Compact Disc Read Only Memory Disc(s)" or "CD-ROM Disc(s)" shall mean
a Digital Disc having pre-recorded thereon text files, data files,
image files, computer program files, and the like, primarily
intended for computer-related,
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database-related and/or multimedia-related usage. A CD-ROM Disc is
defined herein according to the definition in a specification
entitled "Compact Disc Read Only Memory (CD-ROM) System Description"
published by N.V. Philips Consumer Electronics B.V. and Sony
Corporation and commonly referred to as the "Yellow Book." CD-ROM
Discs include CD-ROM/XA discs.
2.7 "Compact Disc-Interactive Disc(s)" or "CD-I Disc(s)" shall mean a
Digital Disc having pre-recorded thereon audio, video and program
control data for interactive use with a human user by means of
computer apparatus. A CD-I Disc is defined herein according to the
definition in a specification entitled "Compact Disc Interactive
Media Full Functional Specification" published by N.V. Philips
Consumer Electronics B.V. and Sony Corporation and commonly referred
to as the "Green Book."
2.8 "Compact Disc-Graphics Disc(s)" or "CD-G Disc(s)" shall mean a Digital
Disc having pre-recorded thereon graphics information comprised of
discrete still pictures or graphic images having no user perceivable
motion.
2.9 "Pre-Recorded Mini Disc(s)" shall mean a Digital Disc having a diameter
of 65 millimeters or less, that is played back at constant linear
velocity, capable of storing not more the 150 megabytes of
information and defined in a specification published by Sony
Corporation and commonly referred to as the "Rainbow Book."
2.10 "Video Disc(s)" shall mean a Disc having pre-recorded thereon
information intended to produce visual images having user
perceivable motion. Video Discs shall include, but are not limited
to, Discs commonly known as laser discs (LD's), compact disc-video
(CD-V) discs, and digital video/versatile discs (DVD's) and
successors to DVD's.
2.11 "Licensed Product(s)" shall mean only Digital Discs as defined in this
Agreement.
2.12 "Master Disc(s)" shall mean any recordable Information Storage Medium
primarily designed for use in any process to eventually produce a
Disc by any transfer process whereby the information from all tracks
of a Master Disc is transferred substantially simultaneously to an
Information Storage Medium to form a Disc.
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2.13 "Mastering Apparatus" shall mean any instrumentality, or aggregate of
instrumentalities, primarily designed to produce a Master Disc.
2.14 "Matrix" shall mean any element which transfers information from a
Master Disc to an Information Storage Medium to form a Disc. Matrix
shall include, but is not limited to, elements commonly known as
fathers, mothers, and stampers.
2.15 "Matrixing Apparatus" shall mean any instrumentality, or aggregate of
instrumentalities, primarily designed to produce a Matrix having any
type of information recorded thereon corresponding to information on a
Master Disc.
2.16 "Replication Apparatus" shall mean any instrumentality, or aggregate of
instrumentalities, primarily designed to transfer any type of
information from a Matrix or a Master Disc to a multiplicity of
Information Storage Media and thereby to fabricate a multiplicity of
Discs having identical information recorded thereon.
2.17 "Manufacturing Apparatus" shall mean apparatus for use in the
fabrication of Discs, including apparatus used in performing quality
assurance procedures and/or testing of Discs. Manufacturing Apparatus
shall include, but is not limited to, any one or more of the following:
Mastering Apparatus; Master Disc; Matrixing Apparatus; Matrix; and
Replication Apparatus.
2.18 "Manufacturing Process(es)" shall mean any method or process, including
related apparatus, used in the fabrication of Discs, including process
steps directed to quality assurance procedures and/or testing of Discs.
2.19 "DVA Patent(s)" shall mean all United States and Canadian patents owned
by DVA as of the effective date of this Agreement, including utility
models and design patents, and any United States and Canadian patents,
including utility models and design patents, issuing from pending United
States and Canadian patent applications owned by DVA as of the effective
date of this Agreement, directed to Licensed Products and/or any
Manufacturing Apparatus and/or any Manufacturing Process, under which
patents and patent applications (as well as divisionals, continuations,
continuation-in-part applications, reissues, reexaminations and
extensions thereof) DVA has, as of the effective date of this Agreement,
the right to grant licenses to LICENSEE of the scope granted herein,
PROVIDED HOWEVER that such grant, or the exercise of rights under such
grant, will not result in the payment of royalties or other
consideration by DVA to third
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parties (except for payments to Affiliates of DVA and payments to third
parties for inventions made by said third parties while employed by DVA
or any of its Affiliates). United States and Canadian patents relating
to Licensed Products and/or their manufacture which have issued and are
licensable by DVA are set forth in Appendix A. DVA shall provide
LICENSEE on at least an annual basis an updated version of Appendix A
which includes any new patent to be added to Appendix A and which
indicates the expiration of a previously listed patent by the addition
of the letter "E" following the patent number.
2.20 "Licensed Patent(s)" shall mean those DVA-owned United States and
Canadian patents listed in Appendix B of this Agreement, these being
the DVA Patent(s) under which LICENSEE has agreed to take a license.
Any DVA Patent(s) listed in Appendix A may be added to Appendix B and
thereby become a Licensed Patent by written agreement of the parties.
2.21 "Transfer(s)" (Transferred) as used herein shall mean (i) sell and/or
sold, (ii) deliver(ed) to others (including for export) other than by
sale, regardless of the basis of compensation, if any, (for example, by
consignment, by gift or by transshipment through an intermediate country
or territory such as Switzerland, Hong Kong, et cetera) and/or (iii)
sell (sold) in combination with other products.
2.22 "Type Number" shall mean any combination of numbers, letters, and/or
words used to identify a particular type or model of Licensed Product.
2.23 "Affiliate(s)" shall mean any corporation, company, or other business
entity controlled by a party to this Agreement. For this purpose,
control means direct or indirect beneficial ownership of greater than
fifty percent (50%) of the voting securities or greater than fifty
percent (50%) interest in the income of such corporation, company, or
other business entity.
2.24 "Arm's Length Trade" shall mean a sale, lease or other commercial
transaction between unaffiliated parties having an adverse economic
interest. After completion of an Arm's Length Trade, a party thereto
will derive no further economic benefit from subsequent transactions by
another party thereto with respect to the goods involved in such Arm's
Length Trade.
2.25 "Manufacturer's Net Selling Price" shall mean the invoice price after
discounts actually allowed for a Licensed Product sold in Arm's Length
Trade by LICENSEE or its Affiliate, such price not to include: (1)
packaging costs incurred by LICENSEE for such Licensed Product; (2)
insurance fees and
Page 5 of 23
packing and transportation charges incurred by LICENSEE and invoiced
separately to a third party; (3) duties and sales taxes actually
incurred and paid by LICENSEE in connection with delivery of such
Licensed Product; (4) the cost of any copyright license fee paid by
LICENSEE in respect of information stored on the Licensed Product; and
(5) pre-mastering charges incurred by LICENSEE and necessary for the
manufacture of the Licensed Product, which pre-mastering charges are
invoiced separately to a third party. Manufacturer's Net Selling Price
shall include all mastering charges, including but not limited to
charges incurred for Manufacturing Apparatus used in the mastering
process, whether such mastering charges are incurred as the result of
LICENSEE's own Manufacturing Apparatus, or from mastering charges
invoiced separately to a third party, such as LICENSEE's purchase of a
stamper from a third party. In respect of a Licensed Product used or
leased by LICENSEE or its Affiliate or sold or Transferred in other
than Arm's Length Trade by LICENSEE or its Affiliate, the
Manufacturer's Net Selling Price shall be deemed to be equal to the
average Manufacturer's Net Selling Price as defined above for the
same or equivalent Licensed Product sold in Arm's Length Trade during
the then current accounting period. In the event there are no sales in
Arm's Length Trade during an accounting period, DVA and LICENSEE shall
attempt to agree upon an amount to be regarded as the Manufacturer's
Net Selling Price for such accounting period. If DVA and LICENSEE do
not so agree, then Manufacturer's Net Selling Price shall mean the
actual selling price to an ultimate consumer. If a Licensed Product is
not separately sold and is included with other apparatus, then the
Manufacturer's Net Selling Price of such Licensed Product shall be the
Manufacturer's Net Selling Price of the equivalent Licensed Product
which is separately sold, or, if no such equivalent Licensed Product
exists, shall be, at LICENSEE's option, either: (1) the price as
aforesaid of such other apparatus multiplied by the ratio of the
Manufacturing Cost of such Licensed Product to the Manufacturing Cost
of such other apparatus; or (2) one hundred and fifty percent (150%) of
the Manufacturer's Net Selling Price of that part of the apparatus that
constitutes the Licensed Product.
2.26 "Manufacturing Cost" shall mean total cost of direct materials, direct
and indirect factory labor and factory overhead determined in
accordance with sound accounting principles.
Page 6 of 23
SECTION 3.0 NON-EXCLUSIVE LICENSE GRANT
3.1 DVA grants to LICENSEE a non-exclusive, royalty bearing license under
the Licensed Patent(s):
3.1.1 to make, have made, use, rent, lease, sell and/or Transfer
Licensed Products in the United States of America and Canada and
their territories and possessions; and
3.1.2 to make, have made, use or have used Manufacturing Apparatus and
to use or have used Manufacturing Processes in the United States
of America and Canada and their territories and possessions to
manufacture Licensed Products for LICENSEE.
It is understood by LICENSEE that licenses under additional DVA
Patent(s) not listed in Appendix B may be required before LICENSEE can
make, use, rent, lease, sell and/or Transfer Licensed Products free and
clear of all claims of patent infringement by DVA. LICENSEE may obtain
from DVA a determination as to the applicability of any DVA Patent(s)
to LICENSEE's products by use of the factory inspection provisions of
Section 10.0 of this Agreement. In any event, DVA reserves the right to
bring a patent infringement action against LICENSEE with respect to any
DVA Patent(s) not listed in Appendix B.
3.2 No license is granted by DVA to LICENSEE in this Section 3.0, either
expressly or by implication, estoppel, or otherwise:
3.2.1 other than under the Licensed Patent(s) listed in Appendix B;
3.2.2 with respect to any products other than Licensed Products;
3.2.3 to rent, lease, sell and/or Transfer any Manufacturing Apparatus;
or
3.2.4 to rent, lease, sell and/or Transfer any Manufacturing Process or
process step thereof.
3.3 The license granted herein shall include a sublicense to LICENSEE's
Affiliates, identified in Appendix C, which are LICENSEE's Affiliates as
of the effective date of this Agreement. LICENSEE shall pay and account
to DVA for royalties hereunder with respect to the exercise by any
Affiliate of LICENSEE of the sublicense granted to it hereunder, and if
LICENSEE fails to make such payment or accounting, DVA reserves the right
to seek directly from such Affiliate any
PAGE 7 OF 23
royalties due and owing to DVA. Sublicenses will be granted to
additional Affiliates of LICENSEE during the term of this Agreement upon
receipt by DVA of written notices from LICENSEE setting forth the names
and addresses of such additional Affiliates to be covered by this
Agreement, provided each such notice is given before any sales of
Licensed Products by the Affiliate named therein. Each Affiliate
sublicensed under this Agreement shall be bound by the terms and
conditions of this Agreement as if it were named herein in the place of
LICENSEE. LICENSEE represents to DVA that it has the power to bind each
such Affiliate to the terms and conditions of this Agreement and agrees
to take whatever action is necessary to legally bind such Affiliates.
The sublicense granted to an Affiliate shall terminate on the date such
Affiliate ceases to be an Affiliate.
3.4 Except as set forth in Section 3.3, LICENSEE is expressly not granted
the right to sublicense third parties under this Agreement.
SECTION 4.0 RELEASE
4.1 Upon payment of the consideration set forth in Section 5.8, DVA
irrevocably releases LICENSEE and its Affiliates, identified in Appendix
C, which are LICENSEE's Affiliates as of the effective date of this
Agreement, from any and all claims of infringement of the Licensed
Patent(s), which claims have been made or which might be made at any
time, with respect to any Licensed Products used, rented, leased, sold,
or otherwise Transferred by or for LICENSEE or its sublicensed
Affiliates before the effective date of this Agreement, to the extent
such Licensed Products would have been licensed hereunder had they been
manufactured, used, rented, leased, sold, or otherwise Transferred after
the effective date of this Agreement. This release shall not apply to
any Licensed Product on which a royalty accrues after the effective date
of this Agreement. This release applies only to the Licensed Patent(s)
and does not apply to any other DVA Patent(s). LICENSEE may remain
liable for infringement of other DVA Patent(s).
4.2 LICENSEE expressly represents that its Affiliates identified in Appendix
C include all of LICENSEE's Affiliates as of the effective date of this
Agreement.
SECTION 5.0 ROYALTIES AND OTHER PAYMENTS
5.1 LICENSEE shall pay, as hereinafter provided, earned royalties to DVA
with respect to both of the following for:
Page 8 of 23
5.1.1 each Licensed Product for which LICENSEE is licensed hereunder in
the country of manufacture; and
5.1.2 each Licensed Product for which LICENSEE is licensed hereunder in
the country of use, rental, lease, sale or Transfer.
5.2 For each Licensed Product manufactured in the United States of America
or Canada or their territories or possessions, no more than one royalty
shall be due for such Licensed Product, regardless of the number of
countries in which the use, distribution and sale of such Licensed
Product occurs.
5.3 LICENSEE shall pay to DVA a royalty as set forth below in Section 5.4 or
as set forth below in Section 5.5. LICENSEE's election between the
royalty of Section 5.4 and the royalty of Section 5.5 shall be made in
writing to DVA for each type of Licensed Product on or before submission
of the royalty report for the first accounting period for which royalty
is to be paid for such type of Licensed Product. This election, once
made, cannot be changed except as provided herein. For any given
accounting period, LICENSEE shall pay the same royalty for each Licensed
Product of the same type.
If Section 5.4 is selected, and LICENSEE subsequently wishes to change
its royalty election, LICENSEE may change the royalty election by
notifying DVA in writing, on or before submission of the royalty report
for the next accounting period for which such royalties are to be paid,
of LICENSEE'S election to pay royalties pursuant to Section 5.5 herein,
and of the Licensed Patent(s) to be included in Appendix B. Appendix B
shall thereupon be amended to list the Licensed Patent(s) in accordance
with LICENSEE's written notification, LICENSEE shall be liable for
royalty payments pursuant to Section 5.4 up to the date of DVA's receipt
of written notice of LICENSEE's change of royalty election.
If LICENSEE is considering an election to pay royalties pursuant to
Section 5.5, LICENSEE may request a factory inspection in accordance
with Section 10.0. If Section 5.5 is selected, DVA reserves the right to
bring a patent infringement action against LICENSEE with respect to any
DVA Patent(s) not listed in Appendix B.
The royalty election may be changed from Section 5.5 to Section 5.4 by
written agreement of the parties.
page 9 of 23
5.4 As a first option, LICENSEE shall pay to DVA each of the following
royalties:
5.4.1 For each Licensed Product which is manufactured, used, rented,
leased, sold and/or Transferred by or for LICENSEE and/or its
Affiliates, LICENSEE shall pay to DVA a royalty for:
5.4.1.1 Digital Discs (except CD Single Discs): three cents
(U.S. $0.03) per information bearing layer; and
5.4.1.2 CD Single Discs: two cents (U.S. $0.02) per
information bearing layer.
5.4.1.3 With respect to each of the preceding Sections 5.4.1.1
and 5.4.1.2, LICENSEE shall have the option of paying a
royalty of three percent (3.0%) of the Manufacturer's
Net Selling Price.
5.5 As a second option, LICENSEE shall pay to DVA for each Licensed
Product which is manufactured, used, rented, leased, sold and/or
Transferred by or for LICENSEE and/or its Affiliates, a royalty equal
to the sum total of the individual patent royalty rates of Licensed
Patent(s) as a percentage of the Manufacturer's Net Selling Price of
such Licensed Product, such individual rates being set forth in
Appendix B.
5.6 No royalties shall be paid by LICENSEE for:
5.6.1 Licensed Products manufactured for LICENSEE by any other DVA
licensee, so long as the other DVA licensee has fully paid and
reported royalties to DVA on such Licensed Products and has
identified LICENSEE as the purchaser of such Licensed Products
in its royalty reports to DVA. If the other DVA licensee has
paid a partial royalty to DVA, then LICENSEE shall receive a
credit for that partial royalty.
5.6.2 Licensed Products manufactured by LICENSEE for any other DVA
licensee, so long as the other licensee has fully paid and
reported royalties to DVA on such Licensed Products, and
LICENSEE has identified such other DVA licensee as the
purchaser, and both LICENSEE and such other DVA licensee have
both identified the other in their respective royalty reports
due DVA reporting such transaction.
Page 10 of 23
If the other DVA licensee has paid a partial royalty to DVA,
then LICENSEE shall a receive credit for that partial royalty.
5.7 Lists of manufacturers that have a valid patent license agreement for
Licensed Products with DVA are listed in Appendix D-1 and D-2. These
lists will be updated annually. If LICENSEE purchases Licensed
Products from any manufacturer listed in Appendix D-2 (licensed
manufacturers not paying U.S. and Canadian royalty rates), and uses,
rents, leases, sells and/or Transfers such Licensed Products in the
United States of America or Canada or their territories or
possessions, then LICENSEE shall:
5.7.1 pay to DVA a royalty of two United States cents (U.S. $0.02)
per information bearing layer; or
5.7.2 submit the royalty report described in Section 6.6 to both DVA
and each such licensed manufacturer. If LICENSEE chooses this
option, DVA will demand, where appropriate, payment of the
owed royalties as specified in Section 5.7.1 from the licensed
manufacturer. If the licensed manufacturer does not pay these
royalties within sixty (60) days of DVA's demand, LICENSEE
must pay these royalties. The fact that DVA seeks payment from
the licensed manufacturer in no way absolves LICENSEE of
liability for these royalties.
5.8 LICENSEE agrees to pay DVA within sixty (60) days of the execution of
this Agreement, the sum of Twenty Thousand United States Dollars
($20,000) as additional consideration for the release granted LICENSEE
in Section 4.0. This sum is not refundable and is not creditable
toward royalties set forth in this Section 5.0. LICENSEE and its
Affiliates are jointly and severally liable for this payment, and if
LICENSEE fails to make this payment, then DVA reserves the right to
seek such payment from any or all of LICENSEE's Affiliates.
Section 6.0 ACCRUALS, RECORDS AND REPORTS
6.1 Royalties shall accrue when any Licensed Product with respect to which
royalty payments are required by Section 5.0 of this Agreement is sold
(as evidenced by bill or invoice), first rented, first leased, first
put into use or Transferred, whether or not payment is received by
LICENSEE. On sales or Transfers between LICENSEE and its Affiliate for
resale or for further Transfer, the royalty shall accrue at the time
of sale or Transfer to the Affiliate.
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6.2 LICENSEE shall pay royalties and other sums of money due hereunder in
United States dollars. All royalties for an accounting period computed
on invoiced amounts in currencies other than United States dollars
shall be converted directly into United States dollars, without
intermediate conversions to another currency, at the currency exchange
rate quoted by either the United States edition of the Wall Street
Journal or the head office of Citibank N.A. of New York, New York at
the close of banking on the last business day of such accounting
period.
6.3 An accounting period shall end on the last day of each March, June,
September and December during the term of this Agreement. The first
accounting period under this Agreement shall be for a period
commencing as of the effective date of this Agreement. Within sixty
(60) days after the end of each such period, LICENSEE shall furnish to
DVA the written reports containing the information specified in
Sections 6.4, 6.5 and 6.6 hereof and shall pay to DVA all owed
royalties accrued hereunder in favor of DVA to the end of each such
period. If LICENSEE chooses the option specified in Section 5.7.2,
LICENSEE shall also send the applicable licensed manufacturer a copy
of the royalty report specified in Section 6.6 within the same
sixty-day period.
6.4 With respect to Licensed Products LICENSEE manufactures or purchases
from a manufacturer not listed in either Appendix D-1 or D-2, LICENSEE
shall submit a royalty report including the following information:
6.4.1 identification by Type Number, brand name and/or label name,
Licensed Product type (for example, CD Digital Audio, CD-ROM,
etc.), Manufacturer's Net Selling Price, and quantity of each
Licensed Product type upon which royalty has accrued pursuant
to Section 6.1;
6.4.2 the name of the manufacturer, city and either state or country
of the manufacture and the countries in which LICENSEE sold
(as evidenced by bill or invoice), first rented, first leased,
first put into use or Transferred those Licensed Products; and
6.4.3 identification of the royalty basis used for each Licensed
Product type pursuant to the provisions of Section 5.0, the
amount of royalties due for each Licensed Product type, all
information required to show how such amount has been
calculated and the aggregate amount of all royalties due.
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In the event that Section 6.4.1. does not apply, LICENSEE shall so
state. In the event no royalties are due, LICENSEE's report shall so
state.
6.5 With respect to Licensed Products LICENSEE purchases from a licensed
manufacturer listed in Appendix D-1, LICENSEE shall submit a royalty
report including the following information:
6.5.1 identification by Type Number, brand name and/or label name,
Licensed Product type (for example, CD Digital Audio, CD-ROM,
etc.) Manufacturer's Net Selling Price, and quantity of each
Licensed Product type upon which royalty has accrued pursuant
to Section 6.1;
6.5.2 the name of the licensed manufacture, city and either state
or country of the manufacturer and the countries in which
LICENSEE sold (as evidenced by bill or invoice), first rented,
first leased, first put into use or Transferred those Licensed
Products;
6.5.3 identification of the royalty basis used for each Licensed
Product type pursuant to the provisions of Section 5.0, the
amount of royalties due for each Licensed Product type, all
information required to show how such amount has been
calculated and the aggregate amount of all royalties due; and
6.5.4 identification by Type Number, brand name and/or label name,
Licensed Product type (for example, CD Digital Audio, CD-ROM,
etc.), and quantity of each Licensed Product type which is
available for sale by LICENSEE during the applicable account
period which is exempt from royalty in accordance with Section
5.6.
In the event that either of Sections 6.5.1 and 6.5.4 do not apply,
LICENSEE shall so state as to each such Section. In the event no
royalties are due, LICENSEE's report shall so state.
6.6 With respect to Licensed Products LICENSEE purchases from a licensed,
manufacturer listed in Appendix D-2, LICENSEE shall submit a royalty
report for each such licensed manufacturer including the following
information:
6.6.1 identification by Type Number, brand name and/or label name,
Licensed Product type (for example, CD Digital Audio, CD-ROM,
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etc.), Manufacturer's Net Selling Price, and quantity of each
Licensed Product type purchased from the licensed manufacturer;
6.6.2 the name of the licensed manufacturer, city and country of the
manufacture, and the countries in which LICENSEE sold (as
evidenced by bill or invoice), first rented, first leased,
first put into use or Transferred those Licensed Products;
6.6.3 the total number of Licensed Products purchased from the
licensed manufacturer and the total number of information
bearing layers; and
6.6.4 the royalty rate specified in Section 5.7.1 (if applicable),
the amount, if any, of the royalty paid by LICENSEE, and the
total outstanding royalty owed DVA for Licensed Products
purchased from the licensed manufacturer.
6.7 LICENSEE's royalty reports shall be certified by an officer of LICENSEE
or by a designee of such officer to be correct to the best of LICENSEE's
knowledge and information.
6.8 LICENSEE shall keep separate records in sufficient detail to permit
the determination of royalties payable hereunder. At the request of
DVA, LICENSEE will permit an independent auditor and/or technical
consultant selected by DVA, or any other person or persons acceptable
to both DVA and LICENSEE, to examine during ordinary business hours
once in each calendar year such reports and other documents as may be
necessary to verify or determine royalties paid or payable under this
Agreement. Such auditor, technical consultant or other person(s) shall
be instructed to report to DVA only the amount of royalties due and
payable. If no request for examination of such records for any
particular accounting period has been made by DVA within five (5)
years after the end of said period, the right to examine such records
for said period, and the obligation to keep such records for said
period, shall terminate.
6.9 The fees and expenses of DVA's representatives performing any
examination of record under Section 6.8 shall be borne by DVA.
However, if an error in royalties of more than three percent (3.0%) if
the total royalties due is discovered for any year examined, then the
total fees and expenses of these representatives shall be borne by
LICENSEE.
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SECTION 7.0 INTEREST ON OVERDUE ROYALTIES AND OTHER PAYMENTS
7.1 LICENSEE shall be liable for interest at a rate of one and one-half
percent (1.5%) per month compounded monthly on any overdue royalty or
other payment set forth in Section 5.0 herein, commencing on the date
such royalty or other payment becomes due. If such interest rate
exceeds the maximum legal rate in the jurisdiction where a claim
therefor is being asserted, the interest rate shall be reduced to such
maximum legal rate.
SECTION 8.0 ASSIGNMENTS
8.1 LICENSEE shall not assign any of its rights or privileges hereunder
without the prior written consent of DVA, except to a successor in
ownership of all or substantially all the assets of LICENSEE, which
successor expressly assumes in writing the performance of all the
terms and conditions of this Agreement to be performed by LICENSEE as
if it were named herein in the place of LICENSEE. After any such
assignment, LICENSEE shall no longer be licensed hereunder.
SECTION 9.0 LICENSE TO DVA
9.1 LICENSEE grants to DVA and its Affiliates an irrevocable, worldwide,
non-exclusive, royalty-free license under LICENSEE's patents and
patent applications to make, have made, use, lease, sell or otherwise
Transfer products corresponding to the Licensed Products defined
herein, and to make, have made, use or have used Manufacturing
Apparatus in the manufacture of such products and to practice or have
practiced Manufacturing Processes in the manufacture of such products.
Said license to DVA and its Affiliates shall be effective as of the
date LICENSEE first pays royalties in accordance with Section 5.0
hereof. Said license shall be with respect to all of LICENSEE's
patents and patent applications, including utility models, design
patents, divisionals, reissues, extensions, continuations, and
reexaminations, under which patents and patent applications LICENSEE
now has or hereafter, during the term of this Agreement, obtains the
right to grant licenses to DVA of the scope granted herein.
9.2 The license as set forth in Section 9.1 shall not apply with respect
to any patent of LICENSEE, if such grant would result in the payment
of royalties by LICENSEE to third parties, except for payments to
Affiliates of LICENSEE and payments to third parties for inventions
made by said third parties while employed by LICENSEE or any of its
Affiliates.
SECTION 10.0 FACTORY INSPECTION
10.1 At LICENSEE's request, DVA will perform a factory inspection at
LICENSEE's Licensed Product manufacturing facility, or the Licensed
Product manufacturing
Page 15 of 23
facility of the manufacturer who supplies Licensed Products to
LICENSEE, and thereafter provide LICENSEE with claim charts indicating
which DVA Patent(s) listed in Appendix A apply to LICENSEE's products.
If LICENSEE is not the manufacturer, it is LICENSEE's responsibility to
obtain the authorization of the manufacturer for DVA to perform the
desired factory inspection. LICENSEE shall pay to DVA an inspection fee
of Fifty Thousand United States dollars (U.S. $50,000) for each Licensed
Product manufacturing facility to be inspected, said fee to be paid
prior to each inspection.
10.2 If LICENSEE notifies DVA that LICENSEE wishes to have the factory
inspection set forth in Section 10.1, then LICENSEE agrees to allow, or
to obtain authorization to allow, the representatives of DVA to inspect
the manufacturing facility as follows:
10.2.1 DVA's representatives shall be allowed to inspect those parts of
the manufacturing facility which are directly related to the
possible infringement of DVA Patent(s). The inspection shall be
made during reasonable business hours as soon as practically
possible after payment of the inspection fee by LICENSEE. DVA
and LICENSEE shall determine by mutual agreement the time,
duration and other detailed manner and schedule of such
inspection.
10.2.2 The employees at the manufacturing facility will be directed, to
the best of LICENSEE's ability, to answer all questions asked by
the DVA representatives and will allow the full and complete
inspection, copying, videotaping and photographing of all
documentation, machines, methods, and materials used in, at, or
with a part of the manufacturing facility which LICENSEE has the
right to disclose to others, as long as such questions and/or
such part of the facility is directly related to the possible
infringement. Any notes made by the DVA representatives and any
documents, photographs, and videotapes shall be stamped
"CONFIDENTIAL."
10.2.3 Any inspection of a Licensed Product manufacturing facility
shall be on a confidential basis, and information learned as a
result thereof shall be used for no purpose other than the
technical discussions set forth herein. DVA shall safeguard the
confidential information learned with standards at least as high
as those that it uses to safeguard its own confidential
information.
Page 16 of 23
10.2.4 DVA shall not divulge any information obtained or learned as a
result of such inspection to any other person or entity other
than LICENSEE, including but not limited to other DVA licensees.
This obligation shall not apply to information which is or
becomes publicly available through no fault of DVA or is
rightfully obtained without a bind of secrecy.
10.2.5 DVA shall use its best efforts to provide, within sixty (60)
days from the inspection of the Licensed Product manufacturing
facility, a report in writing to LICENSEE. The report shall
include those DVA Patent(s) which DVA believes are infringed by
such facility and shall be in the form of claim charts providing
the basis and reasons for the possible infringement of the DVA
Patent(s) in question.
DVA shall use its best efforts to include in the report all DVA
Patent(s) which DVA believes are infringed by such facility. It
is understood and agreed by LICENSEE that the exclusion of one
or more DVA Patents neither stops DVA from asserting a claim of
infringement against LICENSEE under such DVA Patent(s), nor
affects the rights of DVA in any way with respect to such DVA
Patent(s).
It is understood and agreed by LICENSEE that this report and
these claim charts are for settlement purposes only and cannot
and will not be used for any other purpose. LICENSEE agrees to
keep this report and these claim charts confidential and not to
disclose them to any other party.
10.3 LICENSEE can elect this inspection option once per calendar year. Any
inspection of a Licensed Product manufacturing facility after the first
inspection of such manufacturing facility shall be performed for a fee
to be determined and agreed upon between DVA and LICENSEE.
Section 11.0 TERM OF AGREEMENT; TERMINATION
11.1 Subject to Section 11.5 below, the term of this Agreement shall be from
the effective date hereof until the expiration of the last to expire of
the Licensed Patent(s), unless previously terminated as hereinafter
provided.
11.2 LICENSEE may terminate the license granted herein, but only in its
entirety, at any time by giving notice in writing to DVA. Such
termination shall be effective on the date such notice is received by
DVA.
Page 17 of 23
11.3 DVA shall have the right to terminate this Agreement in the event:
11.3.1 LICENSEE fails to make any payment when due under this Agreement
and such payment is not made within sixty (60) days of written
notice from DVA; or
11.3.2 LICENSEE defaults under any term of this Agreement, other than
a default involving the payment of money, which default is not
cured within thirty (30) days of written notice from DVA; or
11.3.3 LICENSEE becomes insolvent or admits in writing its inability
to pay its debts as they mature or makes an assignment for the
benefit of creditors; or
11.3.4 LICENSEE files a petition under any foreign or U.S. bankruptcy
law.
The rights and remedies set forth in this section are not exclusive and
are in addition to any other rights and remedies available to DVA under
this Agreement or at law or equity.
11.4 In the event this Agreement or the license granted hereunder
shall be terminated pursuant to this Section 11.0 or assigned
pursuant to Section 8.0, the corresponding sublicenses granted
to Affiliates of LICENSEE pursuant to Section 3.3 shall
likewise terminate, but no notices need be given by DVA to such
Affiliates.
11.5 Any expiration or termination of this Agreement pursuant to
this Section 11.0, or any termination of a sublicense pursuant
to Section 3.3, shall not relieve LICENSEE of any obligation or
liability accrued hereunder prior to such termination
(including, without limitation, the obligations set forth in
Sections 5.0, 6.0 and 7.0), or rescind or give rise to any
right to rescind anything done by LICENSEE or any payments made
or other consideration given to DVA hereunder prior to the time
such termination becomes effective, and such termination shall
not affect in any manner any rights of DVA arising under this
Agreement prior to such termination.
Page 18 of 23
SECTION 12.0 PAYMENTS, NOTICES AND OTHER COMMUNICATIONS
12.1 Any notice or other communication pursuant to this Agreement shall be
made by registered airmail (except that registered or certified mail
may be used where delivery is in the same country as mailing) and
shall be effective upon receipt by the addressee. Such notice or
communication shall be mailed to:
12.1.1 In the case of DVA:
Dennis Fischel
President
DISCOVISION ASSOCIATES
Post Office Box 19616
Irvine, California 92713
12.1.2 In the case of LICENSEE:
Alex Sandel
FUTURE MEDIA PRODUCTIONS
25136 Anza Drive
Valencia, California 91355
12.2 LICENSEE's royalty reports, as described in Section 6.0 of this
Agreement, shall be mailed via air mail to:
DISCOVISION ASSOCIATES
ATTN: Controller
Post Office Box 19616
Irvine, California 92713
Fax No.: (714) 660-1801
A summary of the report, which states the total royalty to be paid,
shall be sent by facsimile to DVA on, or before, the mailing of the
complete report.
12.3 All payments set forth in Section 5.0 of this Agreement shall be paid
via bank wire transfer to:
Federal Reserve Bank of San Francisco
For Credit to Sumitomo Bank of California
San Francisco - Head Office
ABA: 121002042
Page 19 of 23
For Further Credit to:
The Sumitomo Bank, Ltd., Los Angeles Branch
for Account of Discovision Associates
ABA: 122041594
ACCOUNT NUMBER: 046-133013-70
or by check payable to DVA and mailed via air mail directly to:
DISCOVISION ASSOCIATES
ATTN: Controller
Post Office Box 19616
Irvine, California 92713
SECTION 13.0 APPLICABLE LAW; VENUE; JURISDICTION
13.1 This Agreement shall be construed, and the legal relations between the
parties hereto shall be determined, in accordance with the laws of the
State of New York and, as applicable, the laws of the United States of
America.
13.2 Any dispute that arises under or relates to this Agreement shall, at
DVA's election, be prosecuted exclusively in the appropriate court
situated in the State of Delaware, United States of America. LICENSEE
consents to the venue and jurisdiction of such court for purposes of
any such dispute, and agrees that a judgment of such court shall be
enforceable in the jurisdiction in which LICENSEE is located.
SECTION 14.0 MISCELLANEOUS
14.1 Nothing contained in this Agreement shall be construed as:
14.1.1 requiring the filing of any patent application, the securing
of any patents or the maintenance of any patents; or
14.1.2 a warranty or representation by DVA as to the validity or
scope of any Licensed Patent; or
14.1.3 a warranty or representation that the manufacture, use,
rental, lease, sale or other Transfer of any Licensed Product
is free from infringement of any patents or other rights of
third parties; or
14.1.4 an obligation on the part of DVA to furnish any manufacturing
or technical information, or any information concerning other
licensees; or
Page 20 of 23
14.1.5 an obligation upon DVA to make any determination as to the
applicability of its patents to any of LICENSEE's products,
except as otherwise provided in Section 10.0; or
14.1.6 a license with respect to any act which would otherwise
constitute inducement of infringement or contributory
infringement under United States patent law or its equivalent
under any law foreign to the United States; or
14.1.7 conferring any right to use, in advertising, publicity, or
otherwise, any name, trade name, trademark, service mark,
symbol or any other identification or any contraction,
abbreviation or simulation thereof; or
14.1.8 conferring any rights by implication, estoppel or otherwise,
to or under copyrights with respect to any computer software
under any present system of statutory protection or one
hereinafter enacted in any country or countries, wherein the
copying of such computer software is a requisite of
infringement under such system; or
14.1.9 an obligation to bring or prosecute actions or suits against
third parties for infringement of any patent.
14.2 LICENSEE shall have the complete responsibility and shall use its
best efforts to obtain all necessary approvals and validations of
this Agreement, including all necessary approvals and validations for
any products made, used or sold hereunder.
14.3 LICENSEE will sell and deliver to DVA, F.O.B. LICENSEE's shipping
point, any Licensed Product ordered from LICENSEE by DVA and which is
available for sale by LICENSEE. LICENSEE will also sell and deliver to
DVA a copy of each manual (including, but not limited to, service, use
and other technical manuals) relevant to a Licensed Product which is
available for sale by LICENSEE, provided that, upon request by
LICENSEE, DVA first delivers to LICENSEE a letter agreeing to hold
such manual in confidence and to use it only for reverse engineering
purposes. Any such sales will be at the same prices charged to
LICENSEE's most favored customer.
14.4 The waiver by either party of a breach or default of any provision of
this Agreement by the other party shall not be construed as a waiver
of any succeeding breach of the same or any other provision, nor shall
any delay or omission on the part of either party to exercise or avail
itself of any right, power
Page 21 of 23
or privilege that it has or may have hereunder operate as a waiver of any
right, power or privilege of such party.
14.5 It is the intention of both parties to make this Agreement
binding only to the extent that it may be lawfully done under existing
applicable law as identified in Section 13.0. If any sentence, paragraph,
clause or combination of the same is in violation of any applicable law,
that portion which is in violation shall be severed from this Agreement
and the remainder of this Agreement shall remain binding upon the
parties hereto, except that no license is granted, expressly or by
implication, unless royalties are paid pursuant to Section 5.0.
14.6 Each party represents and warrants that it has the full right and
power to enter into this Agreement and that there are no outstanding
agreements, assignments, or encumbrances to which the representing party
is bound which may restrict, or prohibit entry into, or performance
under, this Agreement. DVA further represents and warrants that it has
the full power to grant the license and release set forth in Sections
3.0 and 4.0. Neither party makes any other representations or
warranties, express or implied, other than the representations set forth
in Sections 3.3 and 4.2 regarding Affiliates.
14.7 The headings of the several sections are inserted for convenience
of reference only and are not intended to affect the meaning or
interpretation of this Agreement.
14.8 The specifications referred to in various definitions in Section
2.0 of this Agreement (i.e., the Red Book, Green Book, Yellow Book and
Rainbow Book) are for clarity and the convenience of the parties in
determining the product(s) that the parties intend to be licensed under
this Agreement.
14.9 This Agreement may be executed in any number of copies, but all
of such counterparts together shall constitute one and the same
Agreement.
14.10 The parties hereto acknowledge that this instrument sets forth
the entire agreement and understanding of the parties hereto and shall
supersede all previous communications, representations and
understandings, either oral or written, between the parties relating to
the subject matter hereof, except prior written agreements signed by
both parties, and shall not be subject to any changes or modifications
except by the signing of a written instrument by or on behalf of both
parties hereto.
Page 22 of 23
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
signed as of the dates written below, to be effective as of the date first
above written.
DISCOVISION ASSOCIATES
/s/ Dennis Fischel
--------------------------------
By: Dennis Fischel
Witness: Title: President
[ILLEGIBLE] Date: Sept. 16, 1996
- -------------------------------- --------------------------------
FUTURE MEDIA PRODUCTIONS
EL:DHT:dh
Witness: /s/ Alex Sandel
--------------------------------
By: Alex Sandel
Title:
Date: 8-26-96
- -------------------------------- --------------------------------
Page 23 of 23
APPENDIX A
- -----------------------------------------------------------------------------------------------------------------------------------
INDIVIDUAL
PATENT
PATENT ROYALTY
COUNTRY NUMBER RATE TITLE
- -----------------------------------------------------------------------------------------------------------------------------------
UNITED STATES US 4,152,586 1.65% OPTICAL TRANSDUCER AND FOCUSING SYSTEM
(Cont.) US 4,161,752 2.00% HIGH DENSITY VIDEO DISC HAVING TWO PIT DEPTHS
US 4,161,753 2.00% VIDEO RECORDING DISK WITH INTERLACING OF DATA FOR FRAMES ON THE SAME TRACK
US 4,185,065 1.65% APPARATUS FOR REPLICATING CENTRALLY APERTURED VIDEO DISC RECORDS
US 4,100,880 1.65% DIGITAL METHOD AND APPARATUS FOR ROTATING AN INFORMATION STORAGE DISC
US 4,204,199 2.00% METHOD AND MEANS FOR ENCODING AND DECODING DIGITAL DATA
US 4,210,031 2.00% VIDEO PLAYER AND/OR RECORDER WITH HADAMARD TRANSFORM
US 4,211,617 2.00% PROCESS FOR PRODUCING A STAMPER FOR VIDEODISC PURPOSES
US 4,222,072 2.00% VIDEO PLAYER/RECORDER WITH NON-LINEAR MARK LENGTH MODULATION
US 4,225,873 2.00% RECORDING AND PLAYBACK SYSTEM
US 4,228,326 2.00% SYSTEM FOR RECORDING INFORMATION ON A ROTATABLE STORAGE DISC IN A SUBSTANTIALLY UNIFORM
RECORDING DENSITY
US 4,232,388 1.00% METHOD AND MEANS FOR ENCODING AND DECODING DIGITAL DATA
US 4,241,698 1.65% VACUUM EVAPORATION SYSTEM FOR THE DEPOSITION OF A THIN EVAPORATED LAYER HAVING A HIGH
DEGREE OF UNIFORMITY
US 4,252,327 2.00% VIDEO DISC PLAYER
US 4,256,374 0.75% WRITE AND READ OBJECTIVE LENS FOR HIGH DENSITY STORAGE
US 4,260,360 1.65% METHOD AND MEANS FOR REPLICATING CENTRALLY APERTURED VIDEO DISC RECORDS
US 4,264,911 2.00% OPTICAL RECORDING DISC AND RELATED METHOD OF MANUFACTURE
US 4,274,110 2.00% RECORDING DISC COVER AND PLAYER APPARATUS FOR REMOVING COVER
US 4,286,848 0.75% REPRODUCING OBJECTIVE LENS FOR VIDEODISCS
US 4,307,381 2.00% METHOD AND MEANS FOR ENCODING AND DECODING DIGITAL DATA
US 4,310,919 2.00% OPTICAL VIDEO DISC STRUCTURE
US 4,313,100 1.20% METHOD FOR MAKING A COMPOSITE VIDEO DISC
US 4,313,101 2.00% RECORDING MEDIUM HAVING A PILOT SIGNAL WITH AN ALIGNED PHASE ANGLE IN ADJACENT TRACKS
US 4,337,538 2.00% DRIVE ASSEMBLY FOR A VIDEO RECORDER-PLAYBACK MACHINE
US 4,330,614 2.00% SPINDLE ASSEMBLY FOR A VIDEO RECORDER-PLAYBACK MACHINE
US 4,340,353 1.65% NOT SPRUE VALUE ASSEMBLY FOR AN INJECTION MOLDING MACHINE
US 4,340,055 2.00% VIDEO DISC PLAYER
US 4,341,469 0.80% LASER SHADOWGRAPH
US 4,345,261 2.00% DIELECTRIC RECORDING MEDIUM
US 4,347,500 0.80% SPINDLE CLAMP ASSEMBLY FOR A VIDEO RECORDER-PLAYBACK MACHINE
- -----------------------------------------------------------------------------------------------------------------------------------
Page 4 of 7
APPENDIX A
- -----------------------------------------------------------------------------------------------------------------------------------
INDIVIDUAL
PATENT
PATENT ROYALTY
COUNTRY NUMBER RATE TITLE
- -----------------------------------------------------------------------------------------------------------------------------------
UNITED STATES US 4,347,619 2.00% DIGITAL FORMATTING SYSTEM
(cont.) US 4,353,767 2.00% METHOD OF MANUFACTURING AN OPTICAL READING DISC
US 4,357,633 2.00% FOCUS DETECTOR FOR AN OPTICAL DISC PLAYBACK SYSTEM
US 4,358,774 2.00% APPARATUS AND METHOD FOR CONTROLLING FOCUS IN A RECORDING MEDIUM
US 4,358,802 1.65% FLUID CUSHION TURNTABLE FOR VIDEO DISC PLAYER
US 4,367,545 2.00% VIDEO DISC PLAYER
US 4,388,957 0.75% WIDE APERTURE OBJECTIVE LENS
US 4,372,741 1.65% HOT SPRUE VALVE ASSEMBLY FOR AN INJECTION MOLDING MACHINE
US 4,374,638 1.65% APPARATUS FOR PRODUCING CENTRALLY APERTURED RECORD DISCS
US 4,391,578 2.00% HOT SPRUE VALVE ASSEMBLY FOR AN INJECTION MOLDING MACHINE
US 4,394,117 2.00% HOT SPRUE SLEEVE VALVE ASSEMBLY FOR AN INJECTION MOLDING MACHINE
US 4,397,805 2.00% METHOD FOR MAKING A VIDEO DISC
US 4,405,540 1.65% HOT SPRUE VALVE ASSEMBLY FOR AN INJECTION MOLDING MACHINE
US 4,412,743 1.00% OFF-AXIS LIGHT BEAM DEFECT DETECTOR
US 4,412,805 1.65% HOT SPRUE ASSEMBLY FOR AN INJECTION MOLDING MACHINE
US 4,415,138 2.00% ELASTOMERIC VIDEODISC MOLD OR INTERMEDIATE MEMBER
US 4,422,189 1.65% LENS ASSEMBLY FOR A VIDEO RECORDER-PLAYBACK MACHINE
US 4,422,904 2.00% METHOD FOR FORMING VIDEO DISCS
US 4,430,401 2.00% METHOD FOR PRODUCING A RECORDING DISC STAMPER
US 4,433,423 2.00% HIGH QUALITY DELTA MODULATOR
US 4,439,132 1.65% HOT SPRUE ASSEMBLY FOR AN INJECTION MOLDING MACHINE
US 4,441,179 2.00% OPTICAL VIDEO DISC STRUCTURE
US 4,445,144 0.60% METHOD FOR DETECTING ECCENTRICITY IN A VIDEO DISC AND IN A VIDEO DISC PLAYER
US 4,445,209 2.00% DITHERED FOCUSING SYSTEMS
US 4,450,486 2.00% SYSTEM FOR RECORDING CONTINUOUS-PLAY AND STOP-MOTION SIGNAL
US 4,451,013 2.00% VIDEO DISC READ BACK SCANNER
US 4,455,634 2.00% AUDIO/VIDEO QUALITY MONITORING SYSTEM
US 4,456,375 1.20% OPTICAL DISC MEASUREMENT BY REFRACTION
US 4,456,014 2.00% METHOD AND APPARATUS FOR STORING INFORMATION ON A STORAGE MEDIUM
US 4,465,977 1.65% ERRONEOUS PULSE SEQUENCE DETECTOR
- -----------------------------------------------------------------------------------------------------------------------------------
Page 5 of 7
APPENDIX A
- -----------------------------------------------------------------------------------------------------------------------------------
INDIVIDUAL
PATENT
PATENT ROYALTY
COUNTRY NUMBER RATE TITLE
- -----------------------------------------------------------------------------------------------------------------------------------
UNITED STATES US 4,466,934 1.65% HOT SPRUE VALVE ASSEMBLY FOR AN INJECTION MOLDING MACHINE
(cont.) US 4,467,467 2.00% VIDEO RECORDER-PLAYBACK MACHINE
US 4,477,890 1.20% MAPPING DISC DEFECT DETECTOR
US 4,479,146 2.00% VERTICAL CODE VERIFIER
US 4,488,279 2.00% VIDEO RECORDER-PLAYBACK MACHINE
US 4,998,011 1.65% FLAT PLAT FOCUS SENSING APPARATUS
US 4,499,502 2.00% COMPRESSED BANDWIDTH FREQUENCY MODULATION SIGNAL FORMAT APPARATUS AND METHOD
US 4,499,560 2.00% WRITING BEAM FOCUS MONITOR
US 4,500,464 2.00% PROCESS FOR MAKING A VIDEO RECORD DISC
US 4,504,939 2.00% STORAGE MEDIUM TRACK PITCH DETECTOR
US 4,510,536 2.00% SIGNAL CONDITIONING METHOD AND APPARATUS FOR FM CODE SIGNAL
US 4,519,004 2.00% EXTENDED PLAY VIDEODISC
US 4,524,444 2.00% ANALYZING THE SIGNAL TRANSFER CHARACTERISTICS OF A SIGNAL PROCESSING UNIT
US 4,635,648 1.65% METHOD AND MEANS FOR DRYING COATINGS ON HEAT SENSITIVE MATERIALS
US 4,668,000 2.00% STORAGE MEDIUM TRACK PITCH DETECTOR
US 4,583,210 2.00% METHOD AND APPARATUS FOR STORING AND RETRIEVING INFORMATION
US 4,598,324 2.00% AUDIO EVALUATION UNDER CONTROL OF VIDEO PICTURE FRAME NUMBER
US 4,611,318 2.00% METHOD AND APPARATUS FOR MONITORING THE STORAGE OF INFORMATION ON A STORAGE MEDIUM
US 4,616,753 2.00% VIDEO RECORD DISC AND PROCESS FOR MAKING SAME
US 4,023,837 2.00% AUDIO/VIDEO QUALITY MONITORING SYSTEM
US 4,646,084 2.00% STORAGE MEDIUM TRACK PITCH DETECTOR
US 4,706,133 2.00% METHOD AND APPARATUS FOR RECOVERING INFORMATION FROM A VIDEO DISC
US 4,759,007 2.00% STORAGE MEDIUM TRACK PITCH DETECTOR
US 4,764,915 2.00% METHOD AND APPARATUS FOR RECORDING A MULTIPLEXED SIGNAL ON A RECORD MEDIUM
US 4,796,098 2.00% BANDED AND INTERLEAVED VIDEO DISC FORMAT
US 4,797,752 2.00% BANDED AND INTERLEAVED VIDEO DISC FORMAT
US 4,810,223 2.00% VIDEO RECORD DISC
US 4,893,297 2.00% VIDEO RECORD DISC AND PROCESS FOR MAKING SAME
US 4,986,878 2.00% METHOD AND APPARATUS FOR SCANNING A RECORDING MEDIUM FOR DEFECTS
Page 6 of 7
APPENDIX A
- -----------------------------------------------------------------------------------------------------------------------------------
INDIVIDUAL
PATENT
PATENT ROYALTY
COUNTRY NUMBER RATE TITLE
- -----------------------------------------------------------------------------------------------------------------------------------
UNITED STATES US 5,001,568 2.00% SIGNAL EVALUATION BY ACCUMULATION AT ONE RATE AND RELEASING AND TESTING AT A SLOWER RATE
(cont.) US 5,003,526 2.00% SYSTEM FOR RECORDING DIGITAL INFORMATION IN A PULSE-LENGTH MODULATION FORMAT
US 5,018,020 2.00% RECORD DISC FOR STORING SEPARATE VIDEO AND AUDIO INFORMATION
US 5,084,852 2.00% SYSTEM FOR RECORDING DIGITAL INFORMATION IN A PULSE-LENGTH MODULATION FORMAT
US 5,126,990 2.00% A METHOD OF EVALUATING A STORAGE MEDIUM BY RECIRCULATING A TEST SAMPLE OF A SIGNAL
US 5,136,558 2.00% TWO AXIS ELECTROMAGNETIC ACTUATOR
US 5,155,633 1.65% ANAMORPHIC ACHROMATIC PRISM FOR OPTICAL DISC HEADS
US 5,177,640 1.65% TWO-AXIS MOVING COIL ACTUATOR
US 5,220,434 2.00% VIDEO RECORDING MEDIUM FOR STOP-MOTION PLAYBACK
US 5,245,174 2.00% FOCUS SENSING APPARATUS UTILIZING A REFLECTING SURFACE HAVING VARIABLE REFLECTIVITY
US 5,253,244 2.00% SYSTEM FOR RECORDING DIGITAL INFORMATION IN A PULSE-LENGTH MODULATION FORMAT
US 5,265,079 2.00% SEEK ACTUATOR FOR OPTICAL RECORDING
US 5,313,332 0.60% FLEXURE SUSPENSION FOR TWO AXIS ACTUATOR
US 5,321,000 2.00% SYSTEM FOR RECORDING DIGITAL INFORMATION IN A PULSE-LENGTH MODULATION FORMAT
US 5,331,622 2.00% COMPACT OPTICAL HEAD
US 5,349,175 2.00% FOCUS SENSING APPARATUS USING ELECTRICAL AGC TO ENHANCE DIFFERENTIAL FOCUS ERROR SIGNAL
US 5,373,490 2.00% SYSTEM FOR RECORDING DIGITAL INFORMATION IN A PULSE-LENGTH MODULATION FORMAT
US 5,375,116 2.00% SYSTEM FOR RECORDING DIGITAL INFORMATION IN A PULSE-LENGTH MODULATION FORMAT
US 5,448,545 2.00% SYSTEM FOR RECORDING DIGITAL INFORMATION IN A PULSE-LENGTH MODULATION FORMAT
US 5,459,709 2.00% SYSTEM FOR RECORDING DIGITAL INFORMATION IN A PULSE-LENGTH MODULATION FORMAT
US 5,470,390 2.00% SYSTEM FOR RECORDING DIGITAL INFORMATION IN A PULSE-LENGTH MODULATION FORMAT
US RE 32,431 2.00% METHOD AND APPARATUS FOR RECOVERING INFORMATION FROM A ROTATABLE STORAGE DISC
- -----------------------------------------------------------------------------------------------------------------------------------
Note: An "E" directly following the Patent Number indicates
that patent has expired.
APPENDIX B
UNITED STATES AND CANADIAN PATENTS LICENSED TO LICENSEE UNDER THIS AGREEMENT:
INDIVIDUAL
PATENT
PATENT NUMBER ROYALTY RATE
------------- ------------
APPENDIX B PATENTS SHALL BE ALL OF THE PATENTS LISTED IN APPENDIX A
APPENDIX B
Page 1 of 1
APPENDIX C
LICENSEE'S Affiliates as of the effective date of this Agreement are:
Company:
------------------------------
Address:
------------------------------
------------------------------
------------------------------
Company:
------------------------------
Address:
------------------------------
------------------------------
------------------------------
Company:
------------------------------
Address:
------------------------------
------------------------------
------------------------------
Company:
------------------------------
Address:
------------------------------
------------------------------
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Company:
------------------------------
Address:
------------------------------
------------------------------
------------------------------
APPENDIX C
Page 1 of 2
Company:
------------------------------
Address:
------------------------------
------------------------------
------------------------------
Company:
------------------------------
Address:
------------------------------
------------------------------
------------------------------
Company:
------------------------------
Address:
------------------------------
------------------------------
------------------------------
Company:
------------------------------
Address:
------------------------------
------------------------------
------------------------------
Company:
------------------------------
Address:
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APPENDIX C
Page 2 of 2
APPENDIX D-1
LICENSED DISC MANUFACTURERS WHO ARE PAYING UNITED STATES AND CANADIAN RATES:
National Tape & Disc Inc.
Allied Digital Technologies
(Hauppauge Record Mfg., Ltd.) Nimbus Manufacturing Inc.
Americ Disc Inc. Nippon Columbia Co., Ltd. (U.S.)
American MultiMedia, Inc. Optical Disc Corporation
ASR Recording Services Philips (N.V.) Gloeilampenfabrieken
Astraltech Americas, Inc. Pilz (U.S.)
Atlantic Recording Corporation Pioneer
Bertelsmann de Mexico P & O Compact Disc
Better Quality Cassettes, Inc. Producers Color/Technidisc
Cinram Ltd. Sanyo Laser Products
Denon Corporation (U.S.A) Sanyo Verbarim CD Company, L.L.C.
Digital Audio Disc Corporation (U.S.) Sonopress Inc. (U.S.)
Discovery Systems/Metatec Sonopress (Germany)
Distribution North America Sony Corporation (U.S.)
Eastern Standard Productions, Inc. Sony Music Entertainment
Eva-Tone, Inc. Time Warner Inc. (U.S.)
EMI Manufacturing (USA) U.S. Optical Disc
JVC America Warner Bros. Records Inc.
KAO Corporation Warner Communications Inc.
Kuraray Co., Ltd. WEA Manufacturing Inc.
Mitsubishi Plastics Industries Ltd. Zomax Optical Media
APPENDIX D-1
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APPENDIX D-2
LICENSED DISC MANUFACTURERS NOT PAYING UNITED STATES AND CANADIAN RATES:
Bertelsmann AG Pilz GmbH & Company
Compact Disc KG
Damont Audio Limited
Ritek Incorporation
EMI Compact Disc (Holland)
Sanyo Electric Co., Ltd.
EMI Manufacturing Australia
Seiko Epson
Fuji Photo Film Co., Ltd.
Show-Ads Omega Pty. Ltd.
Fujitsu Limited (Disctronics Technologies)
Hitachi Ltd. Sonopress (Germany)
Japan Optical Disc Corporation Sonopress (Mexico)
KAO Corporation Sonopress Pan Asia Ltd.
Matsushita Electric Industrial Co., Ltd. Sony Corporation (Japan)
Mayking Records Ltd. Sony DADC Austria AG
Memory-Tech Corporation TDK Corporation
Mitsubishi Electric Corporation Thorn EMI plc
Moulage Plastique de L'ouest (MPO) Toshiba Corporation
Nimbus Manufacturing (UK) Ltd. Toshiba-EMI Limited
Nippon Columbia Co., Ltd. (Japan) Toyo Recording Co., Ltd.
Optrom, Inc. Victor Company of Japan
APPENDIX D-2
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