The standard royalty rate applied to DVD Players sold from July 1, 2002, under the DVD-Video Player and DVD-ROM Player Patent License Agreement (“Agreement”) shall be revised to a fixed amount of USD 5.00 per DVD Player sold. The standard royalty rate applied to DVD Players sold prior to July 1, 2002, shall continue to be 3.5% of the Net Selling Price or USD 5.00, whichever is higher.

In addition, licensees who are in full compliance under the Agreement may participate, under strict conditions, in the “DVD-Video and DVD-ROM Player Compliance Reward Program”. This Reward Program will apply retroactively with effect from July 1, 2002.

Whereas the standard royalty under the Agreement remains USD 5.00 per DVD Player sold after July 1, 2002, Licensees qualifying for the Reward Program may apply an alternative royalty of USD 3.50 per DVD Player sold.

Information packages will be made available through our offices.