Document:

Description of Dolby Annual Incentive Plan

 Exhibit 10.7 
  
 DESCRIPTION OF THE DOLBY ANNUAL
INCENTIVE PLAN 
  
 In order to provide incentive to exceed the Company’s projected profit and performance targets, the Company has adopted the Dolby Annual Incentive Plan (the “Plan”). The Plan has two components: (1) a profit sharing
component, which provides for payout only if the Company’s overall profit goals are met, and (2) a performance reward component, which provides for payout based on both the Company’s and the individual employee’s performance targets.

  
 All employees, including the Company’s
executive officers, are eligible for the profit sharing component. Only certain professional, management and executive employees of the Company, including the Company’s executive officers, are eligible for the performance reward component. The
Compensation Committee of the Company’s Board of Directors determines the specific performance targets for the Company’s executive officers on an annual basis, which are based upon various factors including level of responsibility,
individual performance, contributions to the Company’s business and the Company’s general financial performance. 
  
 The awards under both components of the Plan are defined as a percentage of base salary. The percentage of base salary for the profit
sharing award is the same for each employee. The percentage of base salary for the performance reward varies by position. 
  
 The Plan is not embodied in a formal written document. The Compensation Committee has authority to make changes to the Plan, prior to any
payout, and may terminate the Plan at any time.License Agreement effective January 1, 1992

  
 Exhibit 10.13

  
 CONFIDENTIAL TREATMENT REQUESTED BY DOLBY LABORATORIES,
INC. 
  
 GTE920318 
  
 LICENSE AGREEMENT 
  
 THIS AGREEMENT, made, entered into, and effective as of January 1, 1992, by
and between GTE LABORATORIES INCORPORATED, a Delaware corporation, having a place of business at 40 Sylvan Road, Waltham, Massachusetts 02254, (hereinafter referred to as “GTEL”), and DOLBY LABORATORIES LICENSING CORPORATION, a New York
corporation, having a place of business at 100 Potrero Avenue, San Francisco, California 94103-4813 (hereinafter referred to as “LICENSEE”). 
  
 WHEREAS, GTEL is the owner of the patents and patent applications listed in Schedule A and has the right to grant licenses thereunder; and 
  
 WHEREAS, LICENSEE desires to obtain, and GTEL is willing to grant, a license
under the terms and conditions of this Agreement to practice the inventions covered by such patents and patent applications; 
  
 NOW, THEREFORE, in consideration of the foregoing premises and the covenants and promises contained herein, the parties hereto agree as follows:

  
 ARTICLE I 
  
 DEFINITIONS 
  
 For the purposes of this Agreement the following definitions shall apply:

  
 A. “Licensed Patents” shall mean the patents and
patent applications listed in Schedule A attached hereto and made a part 

  

 CONFIDENTIAL TREATMENT REQUESTED BY DOLBY LABORATORIES, INC. 
  
 GTE920318 
  

 
hereof; any divisions, continuations, continuations-in-part, and substitutes of or for such patent applications; any patents issuing on such patent
applications; any reissues, reexaminations, and extensions thereof; and any patent in another country equivalent to any of such patents. 
  
 B. “Licensed Product” shall mean any product that comes within the scope of any unexpired claim of any of the Licensed Patents. 
  
 C. “Professional Licensed Product” shall mean a Licensed Product
manufactured by LICENSEE or an Affiliated Company of LICENSEE. 
  
 D. “Consumer Licensed Product” shall mean a Licensed Product manufactured by a sublicensee for use as a home entertainment audio and/or video product. 
  
 E. “Channel” shall mean, with respect to a Licensed Product, a single signal processing unit for processing a
signal on a single track. 
  
 F. “ASET” shall mean an
adaptive subbands excited transform algorithm for digital compression of voice signals to rates below standard telephony rates (currently accepted as 64 kbps). 
  

G. “Subsidiary” shall mean a corporation, company, partnership, or other entity more than fifty percent (50%) of whose outstanding shares or
securities (representing the right to vote for the election of directors or other managing authority) are at any time during the term of this Agreement owned or controlled, directly or indirectly, by another corporation, company, 

  

 -2- 

 CONFIDENTIAL TREATMENT REQUESTED BY DOLBY LABORATORIES, INC. 
  
 GTE920318 
  

 
partnership, or other entity, which has management control, or the right by contract to participate in management control, thereof. 
  
 H. “Affiliated Companies of GTEL” shall mean GTE Corporation and
all Subsidiaries thereof, including Subsidiaries of Subsidiaries. 
  
 I. “Affiliated Companies of LICENSEE” shall mean Dolby Laboratories Inc. and all Subsidiaries thereof, including Subsidiaries of Subsidiaries. 
  
 J. “Effective Date” shall mean the date first written above. 
  
 K. “Calendar Quarter” shall mean a period of three (3) consecutive
months commencing with January 1, April 1, July 1, or October 1. 
  
 L. “Calendar Year” shall mean a period of twelve (12) consecutive months commencing on January 1 of such year. 
  
 ARTICLE II 
  
 LICENSE GRANTS 
  
 A. GTEL hereby grants and agrees to grant to LICENSEE and Affiliated Companies of LICENSEE, and LICENSEE accepts and agrees to accept from GTEL, subject to the terms and conditions of this Agreement, nonexclusive
(except as provided in Paragraph B of this Article), worldwide, royalty-bearing, nonassignable, and nonsublicensable (except as is permitted under Paragraph C of this Article) rights and licenses under the Licensed Patents to make, have made, use,
sell, lease, rent, or otherwise dispose of Licensed Products during the term of this Agreement. 
  

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 CONFIDENTIAL TREATMENT REQUESTED BY DOLBY LABORATORIES, INC. 
  
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 B. GTEL will not grant a license to an existing or prospective sublicensee of LICENSEE under the
Licensed Patents to make, have made, use, sell, lease, rent, or otherwise dispose of Consumer Licensed Products; provided, however, this commitment by GTEL not to grant a license to another licensee shall not apply: (i) when the license to another
licensee includes licenses under both technology and patents generally known as ASET; (ii) when the license to another licensee is a cross-license that includes patents on technologies in one or more relatively broad technical fields including that
encompassed by the Licensed Patents; or (iii) to any activities of GTEL or any Affiliated Company of GTEL including, but not limited to, making, having made, selling, renting, leasing, or otherwise disposing of any telecommunications, cellular and
other mobile communications, or satellite communications product or service. 
  
 C. LICENSEE shall have the right to grant sublicenses under and within the scope of this Agreement as part of the normal licensing activities of LICENSEE. Such sublicenses shall be generally consistent with the form
attached hereto as Exhibit 1. LICENSEE shall notify GTEL of any such sublicense agreement in the next royalty report after the signing thereof. Any sublicense hereunder shall be subject to all of the terms of this Agreement except that a sublicensee
shall not be permitted to grant further sublicenses under this Paragraph. LICENSEE shall be and remain responsible for the performance of LICENSEE’S sublicensees hereunder including making payments to GTEL of all royalties and submitting to
GTEL royalty reports as are required herein. 
  

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 CONFIDENTIAL TREATMENT REQUESTED BY DOLBY LABORATORIES, INC. 
  
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 D. The licenses granted hereunder shall extend to customers of LICENSEE, Affiliated Companies of
LICENSEE, or sublicensees only to the extent that LICENSEE has paid royalties hereunder with respect to the Licensed Products sold, leased, rented, or otherwise disposed of to such customers. 
  
 ARTICLE III 
  
 ROYALTIES, REPORTS, AND PAYMENTS 
  
 A. In consideration of the rights and licenses granted herein by GTEL,
LICENSEE shall pay to GTEL, as an initial payment, the nonrefundable sum of Forty Thousand Dollars ($40,000.00). Such initial payment shall be in addition to, and separate from, any other payments between the parties and shall be due and payable
upon the signing of this Agreement. 
  
 B. As additional
consideration for the rights and licenses granted herein by GTEL, LICENSEE shall pay to GTEL, during the term of this Agreement: 
  
 (1) A royalty of [***] per Channel with respect to each Licensed Product made, made for, used, sold, leased, rented, or otherwise disposed
of by LICENSEE or any Affiliated Company of LICENSEE; and 
  
 (2) [***] of the revenue received or receivable by LICENSEE with respect to any sublicense granted hereunder sublicensing one or more of the Licensed Patents. 
  
 C. In the event that the royalty due for any Calendar Year during the term of
this Agreement calculated in accordance with the 

  

 ***Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and
Exchange Commission. Omitted portions have been filed separately with the Commission. 
  
 -5- 

 CONFIDENTIAL TREATMENT REQUESTED BY DOLBY LABORATORIES, INC. 
  
 GTE920318 
  

 
preceding Paragraph B of this Article is less than Ten Thousand Dollars ($10,000.00) (hereinafter called the “Minimum Royalty”), LICENSEE shall pay
with respect to such Calendar Year an amount equal to the Minimum Royalty. Such Minimum Royalty shall be in lieu of any expressed or implied duty to exploit the Licensed Products that may otherwise be imposed on LICENSEE. 
  
 D. LICENSEE shall make and deliver to GTEL written quarterly royalty reports
within thirty (30) days after the end of each Calendar Quarter during the term of this Agreement stating in each such royalty report: (i) the number and description, including the number of Channels, of Licensed Products used, sold, leased, rented,
or otherwise disposed of by LICENSEE and Affiliated Companies of LICENSEE during the preceding Calendar Quarter upon which royalties are payable as provided in this Agreement; and (ii) the total revenue received from each sublicensee hereunder and
the calculation of the proportionate share of such revenue payable to GTEL. 
  
 (1) The first such royalty report shall be due after the first full Calendar Quarter after the Effective Date hereof and shall include all such Licensed Products used, sold, leased, rented, or otherwise disposed of by
LICENSEE and Affiliated Companies of LICENSEE prior to the date of such royalty report. 
  
 (2) For the purposes of this Paragraph, a Licensed Product shall be considered used, sold, leased, rented, or otherwise disposed of when
such Licensed Product is transferred and/or billed to a customer of LICENSEE or of an Affiliated Company of LICENSEE, 

  

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 CONFIDENTIAL TREATMENT REQUESTED BY DOLBY LABORATORIES, INC. 
  
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or placed in use by LICENSEE or an Affiliated Company of LICENSEE under circumstances intended to derive revenue from such use. 
  
 (3) If the total royalty for the four Calendar Quarters for
any Calendar Year commending) with the Calendar Year 1992 is less that the Minimum Royalty for that Calendar Year, LICENSEE shall calculate the royalty due for the fourth Calendar Quarter of such Calendar Year by subtracting from the Minimum Royalty
the total royalty previously paid in the first three Calendar Quarters of such Calendar Year. The remaining amount after such subtraction shall be the total royalty due for such fourth Calendar Quarter. 
  
 E. LICENSEE shall also make and deliver to GTEL a written final royalty
report within thirty (30) days after the date of any termination of this Agreement, stating in such final royalty report: (i) the number of and description, including the number of Channels, of all Licensed Products made, made for, used, sold,
leased, rented, or otherwise disposed of by LICENSEE and all Affiliated Companies of LICENSEE and upon which royalties are payable hereunder but which were not previously reported to GTEL; and (ii) the total revenue receivable by LICENSEE from each
sublicensee) hereunder with respect to all Calendar Quarters, or any portion of a Calendar Quarter, prior to such termination and the calculation of the proportionate share of such revenue payable to GTEL. LICENSEE shall submit a supplemental final
royalty report not later than six (6) months after the date the final royalty is due reporting all additional revenue reported or required to be reported and paid by all sublicensees (whether or not such 

  

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 CONFIDENTIAL TREATMENT REQUESTED BY DOLBY LABORATORIES, INC. 
  
 GTE920318 
  

 
additional revenue has been actually received by LICENSEE) hereunder with respect to all Calendar Quarters, or any portion of a Calendar Quarter, prior to
such termination. 
  
 F. Simultaneously with the delivery to GTEL
of each royalty report hereunder, including the final royalty report and supplemental final royalty report, LICENSEE shall pay to GTEL, in the currency of the United States of America, the royalties due and reportable for the period covered by such
royalty report. Such payment shall be by a check drawn on a United States bank unless GTEL gives written permission for or requests another form of payment. If no royalties are due, LICENSEE shall submit to GTEL a royalty report to that effect. Each
royalty report submitted hereunder shall be certified as accurate by an officer or authorized representative of LICENSEE. 
  
 G. LICENSEE shall pay to GTEL interest at an annual rate two percent (2%) greater than the current rate on six-month Treasury Bills issued by the United
States Government from the due date to the date of payment upon any and all amounts of royalty that are overdue and payable hereunder. Any fraction of a month shall be considered as a whole month for the purpose of calculating the interest due.

  
 ARTICLE IV 
  
 KEEPING AND AUDITING OF RECORDS 
  
 A. LICENSEE shall keep accurate records, and shall cause Affiliated Companies
of LICENSEE to keep accurate records, showing the manufacture, manufacture for, use, sale, lease, rental, or 

  

 -8- 

 CONFIDENTIAL TREATMENT REQUESTED BY DOLBY LABORATORIES, INC. 
  
 GTE920318 
  

 
other disposition of Licensed Products under the rights and licenses granted herein, and revenue derived from and reported by sublicensees hereunder, in
sufficient detail to enable the royalties payable by LICENSEE hereunder to be determined. LICENSEE shall permit its books and records, and the books and records of Affiliated Companies of LICENSEE, to be examined from time to time to the extent
necessary to verify the royalty reports submitted to GTEL by LICENSEE. Such examinations shall be at the option and expense of GTEL by any auditor appointed by GTEL and acceptable to LICENSEE or, at the option and expense of LICENSEE, by a certified
public accountant appointed by GTEL. 
  
 B. LICENSEE shall inform
GTEL promptly after the execution of this Agreement as to the specific nomenclature and type designations under which LICENSEE and Affiliated Companies of LICENSEE manufacture, have manufactured, use, sell, lease, rent, or otherwise dispose of
Licensed Products under the rights and licenses granted herein, and further shall inform GTEL of any change or new designations which may thereafter be made or adopted for Licensed Products. In rendering invoices or bills for Licensed Products sold
under the rights and licenses granted herein, LICENSEE and Affiliated Companies of LICENSEE shall invariably use the nomenclature and type designations so furnished to GTEL. 
  
 ARTICLE V 
  
 TERM AND TERMINATION 
  
 A. The term of this Agreement shall commence on the Effective Date hereof and shall end, unless earlier terminated in accordance with the provisions
hereof, upon the expiration of the last of the Licensed Patents to expire. 
  

 -9- 

 CONFIDENTIAL TREATMENT REQUESTED BY DOLBY LABORATORIES, INC. 
  
 GTE920318 
  

 B. If all of the claims of a Licensed Patent are held invalid by a court or similar agency of
competent jurisdiction in a legal proceeding from which no appeal or further appeal can be or is taken by GTEL, or if all of the claims of a Licensed Patent are finally rejected by the United States Patent and Trademark Office in a reexamination or
reissue proceeding or a similar or equivalent proceeding in another country from which no appeal or further appeal can be or is taken by GTEL, or if a Licensed Patent is revoked in an opposition proceeding from which no appeal or further appeal can
be or is taken by GTEL, the right and license granted hereunder with respect to such Licensed Patent shall terminate. 
  
 C. If subsequent to the date of execution of this Agreement LICENSEE or an Affiliated Company of LICENSEE asserts the invalidity of any claim of a
Licensed Patent, and if such assertion of invalidity is coupled with or followed by: (i) withholding, notice of intention to withhold, or denial of obligation to pay royalties otherwise payable under this Agreement; or (ii) initiation of, or
participation in, a suit challenging or denying the validity or infringement of such claim; then GTEL may, at its option, conclusively presume that such assertion of invalidity constitutes, as of the earliest date of such withholding, notice of
intention to withhold, denial of obligation to pay, or initiation of or participation in a suit, LICENSEE’S termination of this Agreement or of 

  

 -10- 

 CONFIDENTIAL TREATMENT REQUESTED BY DOLBY LABORATORIES, INC. 
  
 GTE920318 
  

 
the right and license to LICENSEE and Affiliated Companies of LICENSEE with respect to such claim. 
  
 D. If LICENSEE shall at any time default in the payment of any royalty or the
making of any report hereunder, or shall commit any material breach of any covenant contained herein, or shall make any materially false report and shall fail to remedy any such default, material breach, or report within sixty (60) days after
written notice thereof by GTEL, GTEL may, at its option, terminate this Agreement and the rights and licenses granted herein by giving written notice of such termination to LICENSEE. 
  
 E. If at any time during the term of this Agreement, and before it has completed its obligations under this Agreement, a
party to this Agreement files a petition in bankruptcy or for reorganization under any law relating to bankruptcy or insolvency, or is adjudicated bankrupt or insolvent, or enters into any compromise with its creditors, or makes an assignment for
the benefit of its creditors, or if a receiver is appointed for such party, or if a party avails itself of any other statutory right for relief from its creditors, or if a party begins any proceeding for the liquidation or closing of its business or
for the termination of its corporate charter, the other party may, by giving written notice, forthwith terminate this Agreement and the rights and licenses granted herein. 
  
 F. The following rights and obligations survive any termination of this Agreement to the degree necessary to permit complete
fulfillment or discharge thereof: 
  
 (1)
LICENSEE’S obligation to supply a final royalty report and supplemental final royalty report as provided in this Agreement; 
  

 -11- 

 CONFIDENTIAL TREATMENT REQUESTED BY DOLBY LABORATORIES, INC. 
  
 GTE920318 
  

 (2) GTEL’s right to receive or recover, and LICENSEE’S obligation to pay,
royalties accrued or accruable for payment at the time of such termination; 
  
 (3) The obligation of LICENSEE and Affiliated Companies of LICENSEE to maintain records and GTEL’s right to conduct a final audit as provided in this Agreement; 
  
 (4) Licenses to use, or to continue to use, Licensed
Products with respect to which LICENSEE has paid to GTEL royalties as provided in this Agreement; 
  
 (5) Any cause of action or claim of either party accrued, or to accrue, because of any breach or default by the other party; and

  
 (6) The provisions of Article VI. 

 
 G. Upon termination of this Agreement, except for termination under
Paragraph A of this Article upon the expiration of the last of the Licensed Patents to expire, and except as is expressly provided in Paragraph F of this Article, the rights and licenses under unexpired Licensed Patents shall forthwith terminate. In
the event of termination of this Agreement for any reason, neither LICENSEE nor any Affiliated Company of LICENSEE shall be entitled to a refund of any royalties previously paid. 
  

 -12- 

 CONFIDENTIAL TREATMENT REQUESTED BY DOLBY LABORATORIES, INC. 
  
 GTE920318 
  

 H. Subject to Paragraph F of this Article, LICENSEE’S obligation to pay royalties shall
terminate with respect to a Licensed Patent upon the expiration of such Licensed Patent. 
  
 ARTICLE VI 
  
 WARRANTIES

  
 A. Each of the parties hereto represents and warrants that
it has the right to enter into this Agreement and to fulfill its obligations hereunder. GTEL further represents and warrants that it owns the Licensed Patents or otherwise has the right to grant the rights and licenses granted by this Agreement and
that it has had no notice as of the Effective Date of any legal proceedings pending or instituted concerning the validity of any of the Licensed Patents. 
  
 B. Nothing contained in this Agreement shall be construed as: 
  
 (1) Restricting the right of LICENSEE or any Affiliated Company of LICENSEE to make, have made, use, sell, lease, rent, or otherwise
dispose of any particular product or products not herein licensed; 
  
 (2) An admission by LICENSEE or an Affiliated Company of LICENSEE of, or a warranty or representation by GTEL, as to the validity and/or scope of any of the Licensed Patents; 
  
 (3) Conferring any license or other right with respect to
any trademark, service mark, trade or brand name, the corporate name of GTEL or of an Affiliated Company of GTEL, the GTE name or logo, any other name or mark, or any contraction, abbreviation, or simulation of the foregoing; 
  

 -13- 

 CONFIDENTIAL TREATMENT REQUESTED BY DOLBY LABORATORIES, INC. 
  
 GTE920318 
  

 (4) Conferring a right to use in advertising, publicity, or otherwise any trademark
or trade name of GTEL or of an Affiliated Company of GTEL; 
  
 (5) A warranty or representation that anything made, made for, used, sold, leased, rented, or otherwise disposed of under any right or license granted in this Agreement is or will be free from infringement of any
intellectual property right of any third party including any patent, copyright registration, mask work registration, or trademark registration issued or to be issued by any country; 
  
 (6) A warranty or representation of the performance of Licensed Products, that Licensed Products or the use
thereof will achieve any specific result, or that LICENSEE, Affiliated Companies of LICENSEE, or customers thereof will achieve any specific result through the practice of use of any invention disclosed or claimed in any of the Licensed Patents;

  
 (7) Requiring either party to disclose to the
other party any trade secrets, confidential or proprietary information, know-how, technical information, inventions, or improvements now known to such party or hereafter conceived, developed, or acquired by such party; 
  
 (8) A requirement that GTEL file any patent application,
obtain any patent, or maintain any patent in force; 
  
 (9) Precluding the export or sale for export from any country of Licensed Products on which royalties shall have been paid as provided herein; or 
  

 -14- 

 CONFIDENTIAL TREATMENT REQUESTED BY DOLBY LABORATORIES, INC. 
  
 GTE920318 
  

 (10) Granting by implication, estoppel, or otherwise, any license or right under any
patent of GTEL, or of an Affiliated Company of GTEL, other than the Licensed Patents. 
  
 C. In the event that LICENSEE identifies any alleged potential or actual infringement of a Licensed Patent, LICENSEE shall notify GTEL of such potential or actual infringement and the parties shall confer on what, if
any, action will be taken with respect thereto. Such conferring by the parties shall include due consideration of LICENSEE’S obligation to sublicensees in accordance with Exhibit 1, responsibility for costs of any such action, and credit for
any recovery of damages from an infringer; provided, however, nothing herein shall be interpreted as requiring GTEL to institute any suit or action or as authorizing LICENSEE or any Affiliated Company of LICENSEE to institute any suit or action in
the name of GTEL without the written permission of GTEL. 
  
 D.
Neither party shall be liable to the other party for: 
  
 (1) Any special, indirect, incidental, or consequential damages, including loss of profits, arising from or related to the performance or nonperformance of this Agreement including, without limitation, damages arising from loss of revenue
or profits, failure to realize savings or other benefits, damage to equipment, or claims against either party by any third party even if the other party has been advised of the possibility of such damages; 
  
 (2) Damages (regardless of their nature) for any delay or
failure by either party to perform any obligation under this Agreement due to any cause beyond the reasonable control of such party. 
  

 -15- 

 CONFIDENTIAL TREATMENT REQUESTED BY DOLBY LABORATORIES, INC. 
  
 GTE920318 
  

  
 ARTICLE VII

  
 GENERAL PROVISIONS 
  
 A. This Agreement and the relationships between the parties shall be governed
in all respects by the laws of the Commonwealth of Massachusetts without regard to the conflicts of law provisions thereof, except that questions affecting the construction and effect of any patent shall be determined by the Patent Laws of the
United States of America or the patent laws of the country that issued the patent as the case may be. 
  
 B. Neither LICENSEE nor any Affiliated Company of LICENSEE shall, without the prior written consent of GTEL, assign or transfer this Agreement nor any of
the responsibilities, duties, or rights hereunder to any institution, individual, firm, corporation, or association. 
  
 C. This Agreement shall be binding upon and shall inure to the benefit of the parties and their respective successors and permitted assigns. 

 
 D. Any notice under this License Agreement shall be deemed to have been
sufficiently given when, if given to GTEL, it is addressed to the Director of Finance and Administration, GTE Laboratories Incorporated, 40 Sylvan Road, Waltham, Massachusetts 02254, and, if given to LICENSEE, it is addressed to the President, Dolby
Laboratories Licensing Corporation, 100 Potrero Avenue, San Francisco, California 94103-4813 and in each case sent by 

  

 -16- 

 CONFIDENTIAL TREATMENT REQUESTED BY DOLBY LABORATORIES, INC. 
  
 GTE920318 
  

 
certified mail. The date of mailing shall be deemed to be the date on which such notice has been given, provided notice by telex, facsimile, or equivalent
transmittal is sent simultaneously therewith. Otherwise such notice shall be deemed as given as of the date of receipt by the addressee thereof. Each party shall give prompt written notice to the other party of any change in its address or corporate
name and, after notice of any change has been given, any notice to such party by the other party shall be addressed in accordance with that change. 
  
 E. The rights and remedies reserved in this Agreement by a party upon breach by the other party are cumulative and in addition to all other rights and
remedies provided in equity or at law. Waiver by either party of any breach of, or failure to comply by, the other party with a provision of this Agreement shall not be construed as, or constitute, a continuing waiver of such provision, or a waiver
of any other breach or failure to comply with any other provision of this Agreement. In the event any provision of this Agreement shall be held unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force
and effect unless such unenforceable provision shall materially affect the essence of the Agreement and the party benefiting from said unenforceable provision does not waive its rights to benefit therefrom. 
  
 F. The headings in this Agreement have been inserted for convenience of
reference only and shall not control or affect the meaning or construction of any of the terms and provisions hereof. 
  

 -17- 

 CONFIDENTIAL TREATMENT REQUESTED BY DOLBY LABORATORIES, INC. 
  

 G. This Agreement and all of the provisions and covenants contained herein are subject to all laws,
rules, and regulations of the Government of the United States of America which are or may be pertinent thereto. 
  
 H. This Agreement sets forth the entire agreement and understanding between the parties as to the subject matter of the Agreement and merges all prior
discussions between them, and neither of the parties shall be bound by any conditions, definitions, warranties, or representations with respect to the subject matter of this Agreement, other than as expressly provided in this Agreement or as duly
set forth on or subsequent to the date hereof in writing and signed by a proper and duly authorized officer of the party to be bound thereby. 
  
 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in their names by their duly authorized officers or representatives as of
the Effective Date hereof. 
  

									
	 DOLBY LABORATORIES LICENSING CORPORATION
	 	 	 	 GTE LABORATORIES INCORPORATED

					
	By	 	/s/    EDUARD A. SCHUMMER        	 	 	 	By	 	/s/    FRANK L. STROUSE        
	 Name
	 	Eduard A. Schummer	 	 	 	 	 	Frank L. Strouse
	 Title
	 	Vice President	 	 	 	 	 	Director Financing and Administration
	 Date
	 	 2 April 1992
	 	 	 	 Date
	 	 3/27/92

  

 CONFIDENTIAL TREATMENT REQUESTED BY DOLBY LABORATORIES, INC. 
  

  
 SCHEDULE A

  

	1.	U.S. Patents and Applications 

  

							
	Patent No.

	  	Issued

	  	Inventors

	  	 Title

	4,790,016	  	12/6/88	  	B. Mazor
D. E. Veeneman	  	 Adaptive Method and Apparatus for Coding Speech

				
	4,914,701	  	4/3/90	  	I. B. Zibman	  	 Method and Apparatus for Encoding Speech

				
	Application No.

	  	Filed

	  	Inventors

	  	 Title

	07/597,438	  	10/15/90	  	B. Mazor	  	 Dynamic Bit Allocation Subband Excited Transform Coding Method and Apparatus

	
	2.      Canadian Patents and Applications
				
	Patent No.

	  	Issued

	  	Inventors

	  	 Title

	1,239,701	  	7/26/88	  	I. B. Zibman	  	 Method and Apparatus for Encoding speech

				
	Application No.

	  	Filed

	  	Inventors

	  	 Title

	519,978-6	  	10/7/86	  	B. Mazor
D. E. Veeneman	  	 Adaptive Method and Apparatus for Coding Speech

				
	(Docket 90-
3-827)	  	10/9/91	  	B. Mazor	  	 Dynamic Bit Allocation Subband Excited Transform Coding Method and Apparatus

	
	3.      European Applications
				
	Application No.

	  	Filed

	  	Inventors

	  	 Title

	86 900 480.4
(BE, DE, FR,
GB, IT)	  	12/11/85
(PCT)	  	I. B. Zibman
B. Mazor
D. E. Veeneman	  	 Adaptive Method and Apparatus for Coding Speech

				
	91 117 397.9
(BE, DE, FR,
GB, IT)	  	11/10/91	  	B. Mazor	  	 Dynamic Bit Allocation Subband Excited Transform Coding Method and Apparatus

  

 CONFIDENTIAL TREATMENT REQUESTED BY DOLBY LABORATORIES, INC. 
  

  
 

 
  
 EXHIBIT 1 
  
 L3C 
  
 B-TYPE AND C-TYPE NOISE REDUCTION SYSTEMS LICENSE AGREEMENT 
  
 CONSUMER AUDIO HARDWARE 
  

									
	AN AGREEMENT BY AND BETWEEN	 	 	 	 	 	 
				
	 Dolby Laboratories Licensing Corporation
 (hereinafter called “LICENSOR”)
 of 100 Potrero Avenue
 San Francisco, CA 94103-4813
	 	 	 	 and
	 	  
	 	 	 	 	 	(hereinafter called “LICENSEE”)
	 	 	 	 of
	 	  
	 	 	 	 	 	  
	 	 	 	 	 	  
				
	SIGNATURES:	 	 	 	 	 	  
			
	On behalf of LICENSOR	 	 	 	 On behalf of LICENSEE

					
	By	 	  	 	 	 	 By
	 	  
					
	Place	 	  	 	 	 	 Place
	 	  
					
	Date	 	  	 	 	 	 Date
	 	  

  

					
	 In the presence of:
	 	 	 	In the presence of:
			
	  	 	 	 	  

  

					
			
	 Effective Date of Agreement __________________________
	 	 	 	Initial Payment: $10,000

  

					
	 

  
 Signal Processing and Noise

Reduction Systems
	 	 100 Potrero Avenue
 San Francisco, California
94103-4813
 Telephone 415-558-0200
 Telex
34409
 Facsimile 415-863-1373
	 	 346 Clapham Road
 London SW9 9AP

Telephone 071-720-1111
 Telex 919109
 Facsimile 071-720-4118

  

	
	Dolby and the double-D symbol are trademarks of Dolby Laboratories Licensing Corporation

  

 CONFIDENTIAL TREATMENT REQUESTED BY DOLBY LABORATORIES, INC. 
  

 DOLBY B-TYPE AND C-TYPE NOISE REDUCTION SYSTEMS LICENSE AGREEMENT 
  
 CONSUMER AUDIO HARDWARE 
  
 INDEX 
  

			
	 	  	Preamble
		
	I.	  	DEFINITIONS: 1.01 B-type and C-type Specifications; 1.02 Licensed Device; 1.03 Improvements; 1.04 Licensed Product; 1.05 Know-How; 1.06 The Market; 1.07 Patent Rights; 1.08 LICENSOR; 1.09
LICENSEE; 1.10 The Licensed Trademark and Licensed Logo; 1.11 LICENSEE’S Trade Name and Trademarks; 1.12 Other Trademark Purchaser; 1.13 The “Effective Date”
		
	II.	  	LICENSES GRANTED: 2.01 Licenses Granted to LICENSEE; 2.02 Limitation of Licenses Granted; 2.03 Furnishing of Know-How, 2.04 Patent Markings; 2,05 Use of Licensed Trademark and Licensed Logo;
2.06 Acknowledgment of License; 2.07 Other-Trademark Purchasers; 2.08 Improvements; 2.09 Improvements Pool; 2.10 Confidential Information
		
	III.	  	PAYMENTS: 3.01 Initial Payment; 3.02 Royalties: 3.03 Manufacture of Licensed Products by Another Licensee; 3.04 Royalty Applicability; 3.05 Royalty Payments and Statements; 3.06 Reduction of
Royalties; 3.07 Sales by LICENSOR; 3.08 Revision of Terms
		
	IV.	  	BOOKS, RECORDS AND RIGHT OF INSPECTION: 4.01 Books and Records; 4.02 Rights of Inspecting Books and Records
		
	V.	  	STANDARDS OF MANUFACTURE AND QUALITY: 5.01 Standardization and Quality: 5.02 Right to Inspect Quality; 5.03 Method for Resolving Quality Disputes
		
	VI.	  	PATENT AND TRADEMARK ENFORCEMENT: 6.01 Trademark Enforcement; 6.02 Patent Enforcement; 6.03 Non-Aggression
		
	VII.	  	DURATION AND TERMINATION: 7.01 Expiration of Agreement; 7.02 Default, Bankruptcy, etc.; 7.03 LICENSEE’s Right to Complete Orders Taken; 7.04 Termination Without
Prejudice
		
	VIII.	  	STABILITY OF AGREEMENT: 8.01 Modification to be In Writing. No Waiver
		
	IX.	  	LIMITATION OF RIGHTS AND AUTHORITY: 9.01 Limitation of Rights; 9.02 Limitation of Authority; 9.03 Public Announcements
		
	X.	  	LIMITATION OF ASSIGNMENT BY LICENSEE
		
	XI.	  	COMPLIANCE WITH U.S. EXPORT CONTROL REGULATIONS
		
	XII.	  	ADDRESS OF PARTIES FOR ALL COMMUNICATIONS
		
	XIII.	  	APPLICABLE LAW
		
	XIV.	  	COMPLETE AGREEMENT
		
	 	  	Appendix A - Scheduled Patents
		
	 	  	Appendix B - B-type Dolby System
		
	 	  	Appendix C - C-type Dolby System

  

 CONFIDENTIAL TREATMENT REQUESTED BY DOLBY LABORATORIES, INC. 
  

 DOLBY B-TYPE AND C-TYPE NOISE REDUCTION SYSTEMS 
  
 LICENSE AGREEMENT - CONSUMER AUDIO HARDWARE 
  
 WHEREAS, LICENSOR Is engaged In the field of audio note reduction systems and
has developed a noise reduction system useful for audio tape recording and playback, and for the transmission and reception of FM (Frequency Modulation) Broadcasts, hereinafter referred to as the “Dolby System”; and 
  
 WHEREAS, LICENSOR’S System has acquired a reputation for excellence and
LICENSOR’S Trademarks have acquired a valuable goodwill; and 
  
 WHEREAS, LICENSOR has acquired and will acquire substantial “Know-How”. as hereinafter defined relating to the techniques of audio noise reduction; and 
  
 WHEREAS, LICENSOR represents and warrants that It has rights to grant licenses under certain patents and patent
applications; and 
  
 WHEREAS, LICENSEE believes It can develop a
substantial demand for LICENSOR’S System under a non-exclusive manufacturing and selling license using LICENSOR’S Trademarks, Know-How, patents, and patent applications: 
  

 CONFIDENTIAL TREATMENT REQUESTED BY DOLBY LABORATORIES, INC. 
  

 NOW, THEREFORE, in consideration of the sum of one dollar ($1.00) each to the other in hand paid, and
other good and valuable consideration and mutual promises of the performance of the undertakings herein, it is agreed by and between the parties hereto as follows: 
  
 ARTICLE I 
  
 DEFINITIONS 
  
 Section 1.01 - “B-type and C-type Specifications” 
  
 (1) “B-type Specifications” shall mean the specifications for the B-type Dolby System, comprising the claims and
teachings of the Patent Rights and the B-type operating parameters as specified In Appendix B entitled “B-type Dolby System” and as produced by the circuit examples given therein. 
  
 (2) “C-type Specifications” shall mean the specifications for the
C-type Dolby System, comprising the claims and teachings of the Patent Rights and the C-type operating parameters as specified in Appendix C entitled “C-type Dolby System” and as produced by the circuit examples given therein. 

 
 Section 1.02 - “Licensed Device” shall mean a noise
reduction processor circuit having (1) B-type specifications, or (2) C-type specifications, or (3) non-simultaneous B-type and C-type specifications (by means of a switched operating mode), whether made in discrete component, integrated circuit, or
other forms, such processor circuit being capable of encoding only (compressing) or decoding only (expanding) or of non-simultaneous encoding and decoding (by means of a switched operating mode) In one signal channel. 
  
 Section 1.03 - “Improvements” shall mean Improvements upon
the Licensed Device which are made or acquired by either party, but only to the extent that such Improvements come within the scope of one or more claims In the Patent Rights. 
  
 Section 1.04 - “Licensed Product” shall mean a ready-to-use consumer (home entertainment) electronic audio
product containing one or more Licensed Devices. Licensed Products shall be designed specifically for the home entertainment market but such products may be sold In other sectors of the audio equipment market which would find acceptable and use In
unaltered form, any of the Licensed Products. Licensed Products may include tape decks (including video tape recorders—sound track), amplifiers, receivers, separate noise reduction units, and the like. Licensed Products may be designed to be
integral with consumer (home entertainment) tape decks or FM tuning facilities or they may be designed for external connection to consumer (home entertainment) tape decks or FM tuners, in which case the Licensed Product may not contain more than two
audio channels. The noise reduction portions of Licensed Products shall have noise reduction for consumer tape recording and FM radio reception as their exclusive purpose and function. 
  

 2 

 CONFIDENTIAL TREATMENT REQUESTED BY DOLBY LABORATORIES, INC. 
  

 In order to prevent confusion in the industry or of the public, the following restrictions shall
apply. Licensed Products shall be designed in such a way that the noise reduction portions thereof constitute or shall be used as parts of fully complementary noise reduction systems so that no overall effect on frequency response or signal dynamics
occurs. In the above connection, Licensed Products may include products with noise reduction portions thereof which are designed only for the decoding of B-type and/or C-type prerecorded tapes or the decoding of FM Broadcasts encoded with the B-type
characteristics but shall not Include any such products using Licensed Devices explicitly for creating special effects or for reducing noise in signal sources which are not B-type or C-type encoded. All advertising, publicity, descriptions, and
Instructions relating to Licensed Products shall be done in a way which makes the above distinctions and purposes clear. 
  
 Licensed Products shall not be designed, presented or advertised in any way which contributes to confusion of the B-type consumer tape and FM noise
reduction standard and the C-type consumer tape noise reduction standard with other standards which may be required for discs or other possible signal storage or transmission media. 
  
 The Licensed Products shall not be made, used, sold, or otherwise presented, in any way which might result In conflict with
LICENSOR’s A-type professional noise reduction system. In this connection, unless otherwise from time to time agreed upon by the parties, the following restrictions shall apply. The Licensed Product shall not be designed for rack mounting nor
shall their signal input and output circuits be of the balanced type. The Licensed Products shall, for line input and output connections and for tape recorder input and output connections, use only connectors known as RCA phono-type connectors and
DIN consumer type connectors. The Licensed Products shall not be made with holes or fixtures for use with connectors other than those specified above or holes or fixtures for mounting line input and output transformers. The LICENSEE shall not make
or offer for sale any accessory equipment or adaptors intended to adapt the Licensed Products for rack mounting, or for use with signal connectors other than those specified above, or for use with line input and output transformers. If the Licensed
Product is a tape deck one or more of the following characteristics, at least one of which shaft be designed in a way which cannot readily be altered, shall be designed Into all Licensed Products: 
  
 (1) A maximum tape speed of seven and one-half (71/2) inches per second;
or 
  
 (2) a reel diameter of nine (9) inches or less;
or 
  

 3 

 CONFIDENTIAL TREATMENT REQUESTED BY DOLBY LABORATORIES, INC. 
  

 (3) a track configuration which for mono or stereo signal, but not necessarily for quadraphonic
signals, includes more than one program on the recording medium. 
  
 Section 1.05 - “Know-How” shall mean all proprietary information, trade secrets, skills, experience, recorded or unrecorded, accumulated by LICENSOR, from time to time prior to and during the term of this Agreement,
relating to the Licensed Products and all designs, drawings, reports, memoranda, blue-prints, specifications and the like, prepared by LICENSOR, insofar as the same relate to, and are useful for, the development, design, manufacture, sale or use of
Licensed Products. 
  
 Section 1.06 - “The
Market” shall mean the home entertainment sector of the audio equipment market and other sectors of the audio equipment market which would find acceptable, and use in unaltered form, any of the Licensed Products, 
  
 Section 1.07 - “Patent Rights” shall mean the patents,
patent applications, and Utility Models and design patents as specified In Appendix A entitled “The Scheduled Patents”, appended to and made a part of this Agreement, together with all such other patents covering Licensed Devices as
LICENSOR may own or gain rights to license. 
  
 Section 1.08 -
“LICENSOR” shall mean the said Dolby Laboratories Licensing Corporation, and its successors and assigns. 
  
 Section 1.09 - “LICENSEE” shall mean the licensee as specified on the title page of this Agreement and any subsidiary thereof of whose
ordinary voting shares more than 50% are held by the Licensee. 
  
 Section 1.10 - The “Licensed Trademark” shall mean the word “Dolby” or a combination of words containing the word “Dolby” other than the LICENSOR’s trade name “Dolby Laboratories”. The
“Licensed Logo” shall mean the device [SYMBOL] which is also referred to as the “Double D” symbol. 
  
 Section 1.11 - “LICENSEE’s Trade Name and Trademarks” shall mean any trade name or trademark used and owned by the LICENSEE.

  
 Section 1.12 - “Other-Trademark Purchaser”
shall mean any customer of LICENSEE who, with LICENSEE’s knowledge, intends to resell, use or lease the Licensed Products under a trademark other than the LICENSEE’s Trade Name and Trademarks. 
  
 Section 1.13 - The “Effective Date” of this Agreement shall
be the date of execution hereof, subject to governmental validation If required. 
  

 4 

 CONFIDENTIAL TREATMENT REQUESTED BY DOLBY LABORATORIES, INC. 
  

 ARTICLE II 
  
 LICENSES GRANTED 
  
 Section 2.01 - Licenses Granted to LICENSEE 
  
 The LICENSOR hereby grants to the LICENSEE: 
  
 (1) A personal, non-transferable, indivisible and non-exclusive license throughout the world under the Patents Rights, subject to the payment of royalties
as provided herein, to make or have made for it Licensed Products, and to use, lease and sell the same within the Market. 
  
 (2) A personal, non-transferable, indivisible and non-exclusive license throughout the world, without payment of any further royalties so long as the
above-mentioned patent royalties are applicable, to use the Know-How, the Licensed Trademark, and Licensed Logo in connection with the design, manufacture, identification, advertising, offering for sale and sale of the Licensed Products within the
Market. 
  
 The above licenses shall be granted as of the
Effective Date of this Agreement, or if this Agreement shall require validation by any governmental organization, or otherwise, then such license shall be effective as of the date of validation thereof. Where such validation procedure Is necessary
LICENSEE and LICENSOR shall collaborate to complete the validation procedure with all reasonable speed. 
  
 Section 2.02 - Limitation of Licenses Granted 
  
 (1) No license is granted under this Agreement with respect to Licensed Devices other than as integral parts of Licensed Products, nor is any license
granted to make, use, lease, or sell Licensed Products outside the Market. 
  
 (2) No right to grant sublicenses is granted under this Agreement. 
  
 Section 2.03 - Furnishing of Know-How 
  
 Subject to any restrictions under the export control regulations of the United States or any other applicable restrictions, the LICENSOR will promptly
after the execution of this Agreement or after governmental validation thereof, if required, furnish to the LICENSEE: 
  
 (1) copies of ail documents and things comprising the Know-How; 
  

(2) when requested by LICENSEE, reasonable consultant services by LICENSOR’s staff regarding design considerations and general advice relating to
the Licensed Products and the sale and use thereof, for all of which the LICENSEE will reimburse the LICENSOR for travel and reasonable per diem expenses. 
  

 5 

 CONFIDENTIAL TREATMENT REQUESTED BY DOLBY LABORATORIES, INC. 
  

 Section 2.04 - Patent Markings 
  
 If requested by the LICENSOR, the LICENSEE shall mark on an exposed surface, such as the bottom, of all Licensed Products
made hereunder appropriate patent markings Identifying LICENSOR as owner of the pertinent patents and/or patent applications. The content, form, and language used In such markings shall be in accordance with the laws and practices of the country
where such markings are used. 
  
 Section 2.05 - Use of
Licensed Trademark and Licensed Logo 
  
 Because of the
complementary (encode - decode) nature of the Dolby System, the parties hereto are agreed that for avoidance of public confusion and for the ensurance of interchangeability of signal sources and equipment, standardization is essential in the
manufacture and also the identification of signal sources and equipment utilizing the Dolby System. It is agreed that such standardization is not only in the interest of the parties hereto, but of other manufacturers of Dolby System equipment, of
manufacturers of Dolby encoded recordings, of broadcasters of Dolby encoded signals, of the consumer electronics and recorded music industry in general, and of the consuming public. LICENSEE has the right to use the Licensed Trademark for the above
identification purposes, in which case LICENSEE shall also optionally have the privilege of using the same for publicity and promotional purposes. The rights and obligations concerning the use of the Licensed Trademark shall be as follows:

  
 (1) The LICENSEE shall have the right to mark the Licensed
Product on the fascia or noise reduction system control panel thereof in at least one of the following ways: 
  
 (a) the mark “Dolby System” standing independently 
  
 (b) the marks “Dolby System” or “Dolby NR” on or near at least one of the switches,
controls, or indicators. 
  
 The Licensed Trademark or the
Licensed Logo may not be used on or In reference to any products other than Licensed Products. In no circumstances may the word Dolby be used alone or in any way which might imply generic identification of the noise reduction function with the word
Dolby. 
  
 (2) In any descriptive, instructional, advertising, or
promotional material or media relating to the Licensed Products, the Licensee shall have the right to use the Licensed Logo, the Licensed Trademark, and expressions which include the Licensed Trademark (e.g. “Dolby B-type NR circuit”,
“Dolby C-type recording”, etc.) with reference to Licensed Products and their use. All such usages of the Licensed Trademark are subject to approval by the LICENSOR. 
  

 6 

 CONFIDENTIAL TREATMENT REQUESTED BY DOLBY LABORATORIES, INC. 
  

 (3) The Licensed Trademark and Licensed Logo may not be used in direct combination with other trade
names, trademarks or symbols. Moreover, the trade names, trademarks, or symbols of one party may not be used in any way which may suggest that one party is a division, affiliate, or subsidiary of the other party or that the relationship between the
two parties is anything other than licensor-licensee. Whenever the word “Dolby” is used, the letter D shaft be uppercase. The word “Dolby” shall be used only as an adjective referring to a noise reduction product or function,
never as a noun or In any other usage which may contribute to a generic meaning thereof. 
  
 (4) The validity and exclusive ownership d the Licensed Trademark and Licensed Logo by the LICENSOR are acknowledged by LICENSEE. The ownership of the Licensed Trademark and Licensed Logo shall be indicated whenever
used in any manner by LICENSEE as follows: “The word ‘Dolby’ is a trademark of Dolby Laboratories Licensing Corporation”, “The ‘Double-D’ symbol Is a trademark of Dolby Laboratories Licensing Corporation”, or
“The word ‘Dolby’ and the ‘Double-D’ symbol are trademarks of Dolby Laboratories Licensing Corporation. “On Licensed Products such words shall be used on an exposed surface, such as the bottom. Unless otherwise from
time to time agreed between the parties such acknowledgment shall also be used on all descriptive, instructional, advertising, or promotional material in which the Licensed Trademark and/or the Licensed Logo are used. The LICENSEE agrees not to use
the Licensed Trademark or the Licensed Logo in any way which might endanger the LICENSOR’S rights in and ownership of the Licensed Trademark or the Licensed Logo. LICENSEE further agrees that It will not file any application for registration of
the Licensed Trademark or the Licensed Logo in any country and that it will not use or file any application for registration in any country of any mark, symbol or phrase, in any language, which Is similar to or confusing with the Licensed Trademark
or Licensed Logo. The LICENSOR will advise the LICENSEE of the grant of registration of such trademarks and the parties will comply with all applicable laws and practices of the territories wherein such marks are used and/or registered relating to
marking with notice of registration and the recording of LICENSEE as a registered or licensed user of such trademarks. 
  
 (5) The expense of obtaining and maintaining Licensed Trademark and Licensed Logo registrations shall be borne by LICENSOR. The expense of registering or
recording the LICENSEE as a registered user or otherwise complying with the laws of any country pertaining to such registration or the recording of 

  

 7 

 CONFIDENTIAL TREATMENT REQUESTED BY DOLBY LABORATORIES, INC. 
  

 
trademark agreements shall be borne by LICENSEE. LICENSEE shall advise LICENSOR of all countries where Licensed Products are sold, leased, or used.

  
 (6) (a) In connection win the above-mentioned identification
purposes, the generic terms B-type noise reduction and C-type noise reduction should be used. 
  
 (b) Notwithstanding 2.05 (1a) and 2.05 (1b) above, the LICENSEE is referred to the Sections entitled “Trademark Usage” In the Licensee Information Manual referred to in Appendices B and C hereof for
additional forms of acceptable trademark usage. 
  
 Section
2.06 - Acknowledgment of License 
  
 On all Licensed Products
LICENSEE shall acknowledge that the Licensed Products are manufactured under license from LICENSOR. Unless otherwise from time to time agreed between the parties, one of the following notices shall be used by LICENSEE on an exposed surface, such as
the bottom, of all Licensed Products: “Noise reduction system manufactured under license from Dolby Laboratories Licensing Corporation”, “Manufactured under license from Dolby Laboratories Licensing Corporation”, or “Under
license from Dolby Laboratories Licensing Corporation.” One of such notices shall also be used in all instruction and servicing manuals unless such acknowledgment is clearly and unambiguously given in the course of any textual descriptions or
explanations. 
  
 Section 2.07 - Other-Trademark Purchasers

  
 To the extent only that technical standardization,
equipment or signal source interchangeability, and product identification are affected, the following conditions shall apply if LICENSEE sells or leases Licensed Products on a mass basis to an Other-Trademark Purchaser who does not hold a license
with terms and conditions substantially similar to this Agreement. LICENSEE shall inform LICENSOR of the name, place of business, trademarks, and trade names of the Other-Trademark Purchaser before such Other-Trademark Purchaser sells, leases, or
uses Licensed Products. LICENSEE shall obtain agreement from such Other-Trademark Purchaser not to modify, install, use, lease, sell, provide written material for or about, advertise, or promote Licensed Products in any way which is in conflict with
any provision of this Agreement. It shall be the responsibility of the LICENSEE to inform the Other-Trademark Purchaser of the provisions of this Agreement, to notify such Other-Trademark Purchaser that the provisions of this Agreement shall be
applicable, through LICENSEE, in the same way as if the Licensed Products were sold by LICENSEE under LICENSEE’S Trade Names and Trademarks, to ensure by all reasonable means that such provisions are 

  

 8 

 CONFIDENTIAL TREATMENT REQUESTED BY DOLBY LABORATORIES, INC. 
  

 
adhered to and, if requested by LICENSOR, to provide to the LICENSOR samples on a loan basis of the Other-Trademark Purchaser’s embodiment of the
Licensed Products, as well as copies of such Other-Trademark Purchaser’s advertising, public announcements, literature, instruction manuals, and the like. 
  

Section 2.08 - Improvements 
  
 If the LICENSOR has heretofore brought about or shall hereafter during the term of this Agreement bring about any improvements, including improvements
brought about by LICENSOR’S vendors or subcontractors to which LICENSOR may become entitled, the LICENSOR shall promptly offer to disclose such improvements to the LICENSEE and if such improvements reasonably appear to be patentable, LICENSOR
shall file patent applications thereon in the name and at the expense of the LICENSOR and such applications and any patents issuing thereon shall be included in the Patent Rights. 
  
 The LICENSEE agrees not to divulge to any third parties any information concerning such improvements or such patent
application which has been disclosed to it by LICENSOR unless such information (a) was known to the LICENSEE prior to its receipt from the LICENSOR; (b) becomes known to the LICENSEE from sources other than directly or indirectly from LICENSOR; or
(c) becomes a matter of public knowledge other than by breach of this Agreement by LICENSEE. The above obligations of the LICENSEE shall in any event cease three (3) years from the date on which such information has been acquired from the LICENSOR.

  
 With the restriction that improvements shall specifically be
defined as only those improvements which already come within the scope of one or more claims of the Patent Rights, end furthermore only those improvements which are directly useful for the making and use of Licensed Devices and Licensed Products
which are the subject of this Agreement, if the LICENSEE has heretofore brought about or shall hereafter during the term of this Agreement bring about any improvements, including improvements brought about by LICENSEE’S vendors or
subcontractors to which LICENSEE may become entitled, excepting improvements brought about by another licensee holding a B-type and C-type noise reduction systems license, the LICENSEE shall promptly offer to disclose such improvements to the
LICENSOR in confidence and if such improvements reasonably appear to be patentable LICENSOR shall file and prosecute patent applications thereon in LICENSEE’S name, the expense of which shall be borne by the LICENSOR, for the securing and
maintaining of patent protection in such countries of the world as agreed between LICENSOR and LICENSEE and such application and any patents issuing thereon shall be included in the Patent Rights. 
  

 9 

 CONFIDENTIAL TREATMENT REQUESTED BY DOLBY LABORATORIES, INC. 
  

 If either LICENSOR or LICENSEE, as a first party. shall inform the other party that it has decided
not to file such patent application in any country or shall fail, within sixty (60) days after written inquiry by the other party on the patent status of an improvement, to file such patent applications as specified above or to prosecute such
pending applications under the above provisions, the other party shall have the right to do so at its own expense and the said first party shall promptly assign to said other party its entire right, title and interest in and to such patent
applications. Said first party, on the other party’s request, shall sign or cause to be executed all lawful documents and perform all lawful acts to effectuate fully such assignments to the other party. 
  
 Section 2.09 - Improvements Pool 
  
 Within eighteen months of the disclosure by the LICENSEE to the LICENSOR of
any improvement under the terms of 2.08 above or within twelve months of the commencement of production incorporating the improvements, whichever occurs first, LICENSOR shall receive from LICENSEE a non-exclusive, royalty-free license, together with
the right to grant sublicenses to other licensees holding B-type and C-type noise reduction systems licenses, under each of said patent applications and any patents issuing thereon. 
  
 If the LICENSOR receives, from another B-type and C-type noise reduction systems licensee, a non-exclusive, royalty-free
license, together with a right to grant sublicenses, of the type described above under patent applications and/or patents issuing thereon covering improvements. LICENSOR shall immediately inform LICENSEE of such improvements and shall include such
patent applications and/or patents issuing thereon in the Patent Rights. 
  
 Section 2.10 - Confidential information 
  
 LICENSEE shall use all Know-How obtained heretofore or hereafter from LICENSOR for the sole purpose of manufacturing and selling Licensed Products under this Agreement, and shall not divulge such Know-How or any
portion thereof to third parties, nor use in an unauthorized way nor divulge to third parties any confidential information or trade secrets acquired from the LICENSOR, unless said confidential information or trade secrets (a) were known to LICENSEE
prior to its receipt of said information or trade secrets from LICENSOR; (b) becomes known to LICENSEE from sources other than either directly or indirectly from LICENSOR; (c) becomes a matter of public knowledge other than by breach of this
Agreement by LICENSEE; or (d) must be disclosed by LICENSEE to its customers in order to allow said 

  

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 CONFIDENTIAL TREATMENT REQUESTED BY DOLBY LABORATORIES, INC. 
  

 
customers to properly use Licensed Products acquired from LICENSEE. The above obligations of LICENSEE shall in any event cease three (3) years from the date
on which such confidential information or trade secrets have been acquired from the LICENSOR. 
  
 LICENSOR hereby agrees that throughout the term of this Agreement it shall not divulge to third parties, nor use in an unauthorized way confidential information or trade secrets belonging to LICENSEE unless said
confidential information or trade secrets (a) were known to LICENSOR prior to its receipt of said information or trade secrets from LICENSEE; (b) becomes known to LICENSOR from sources other than either directly or indirectly from LICENSEE; or (c)
becomes a matter of public knowledge other than by breach of this Agreement by LICENSOR. The above obligations of LICENSOR shall in any event cease three (3) years from the date on which such confidential information or trade secrets have been
acquired from the LICENSEE. 
  
 ARTICLE III 
  
 PAYMENTS 
  
 Section 3.01 - Initial Payment 
  
 LICENSEE shall promptly upon execution by both parties of this Agreement, or after governmental validation thereof, if
required, pay LICENSOR the sum specified on the title page and shall pay all local fees, taxes, duties, or charges of any kind and shall not deduct them from the royalties due unless such deductions may be offset against LICENSOR’S own tax
liabilities. 
  
 Section 3.02 - Royalties 
  
 Subject to the provisions of Section 3.05, the LICENSEE shall pay to the
LICENSOR royalties on Licensed Devices manufactured by or for LICENSEE and incorporated in Licensed Products which are used, sold, leased, or otherwise disposed of by LICENSEE, except for Licensed Devices incorporated in Licensed Products returned
to LICENSEE by customers of LICENSEE on which a credit has been allowed by LICENSEE to said customers. The royalty payable shall be based on the number of Licensed Devices, hereinbefore defined, contained in Licensed Products, which are used, sold,
leased or otherwise disposed of by LICENSEE in successive calendar quarters from the effective date hereof, according to the amount of royalty specified below: 
  

			
	 Number of Licensed Devices
Disposed of in Quarter

	  	 Royalty Payable

	 Up to 10,000
	  	 50 cents per device

	 On those from 10,001 to 50,000
	  	 25 cents per device

	 On those form 50,001 to 250,000
	  	 10 cents per device

	 On those from 250,001 to 1,000,000
	  	 8.5 cents per device

	 On those above 1,000,000
	  	 7.5 cents per device

  
 (a)
The above royalties shall be reduced by 25% to reflect permanent incorporation of the “New Technology Incentive” into this Agreement. 
  

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 CONFIDENTIAL TREATMENT REQUESTED BY DOLBY LABORATORIES, INC. 
  

 (b) Each Licensed Device in a playback-only product shall count as three quarters of
a Licensed Device for royalty calculation purposes. 
  
 (c) Each Licensed Device in a two-channel simultaneous encode/decode three-head tape recorder shall be counted as three-quarters of a Licensed Device for royalty calculation purposes. 
  
 In the first month of each calendar year the rate at which royalties are to
be calculated for the succeeding year shall be adjusted to change in accordance with the change of the U.S. City Average Index of the U.S. Consumer Price Index released by the U.S. Department of Labor, Bureau of Labor Statistics, of the U.S.
Government, such adjustments to have the same proportion to the royalty amounts specified above as the said Consumer Price Index (base of 1957-59 = 100) for the month preceding each adjustment has to the said Consumer Price Index for the month of
June 1971. LICENSOR will, during the first quarter of each calendar year, inform LICENSEE of the amount of adjustment to be made to royalties due in that year. 
  

Section 3.03 - Manufacture of Licensed Products by Another Licensee 
  
 If LICENSEE purchases Licensed Products from or has Licensed Products made for it by another party holding a Licensed
Product license then LICENSEE shall have no royalty obligation under this Agreement, but all other rights and obligations shall be the same as if such other licensee were a non-licensed subcontractor. 
  
 Section 3.04 - Royalty Applicability 
  
 A Licensed Product shall be considered sold under Section 3.02 when invoiced,
or if not invoiced, delivered to another by LICENSEE or otherwise disposed of or put into use by the LICENSEE, except for consignment shipments, which will be considered sold when the payment for such shipments is agreed upon between LICENSEE and
customer. 
  

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 CONFIDENTIAL TREATMENT REQUESTED BY DOLBY LABORATORIES, INC. 
  

 Section 3.05 - Royalty Payments and Statements 
  
 Excepting Licensed Products manufactured for it by another licensee, the
LICENSEE shall render statements and royalty payments as follows: 
  
 (1) The LICENSEE shall make quarterly statements on or before the 30th day of January. April, July and October of each year showing the quantity of each type of Licensed Product sold by LICENSEE during the preceding calendar quarter, the
number of Licensed Devices in each type of Licensed Product; and the applicable royalties due. 
  
 (2) The LICENSEE shall accompany such statements with the payment in U.S. dollars of all sums due LICENSOR and shall pay all local fees, taxes, duties, or charges of any kind and shall not deduct them from the
royalties due unless such deductions may be offset against LICENSOR’s own tax liabilities. 
  
 LICENSEE shall pay interest to LICENSOR upon any and ail amounts of payments that are at any time overdue and payable to LICENSOR at the rate of six
percent (6%) per annum from the date when such payments are due and payable as provided herein to the date of payment. 
  
 Section 3.06 - Reduction of Royalties 
  
 (1) Made or sold in country with patent 
  
 Subject to Section 7.02 royalties shall continue to be paid during the life of this Agreement at the rates specified above in Section 3.02 with respect to
making, having made, using, leasing, or selling Licensed Products in each country of the world so long as the Patent Rights include any pending applications or any unexpired patents containing a claim covering the Licensed Devices in such countries
where Licensed Products are either made, used, leased or sold. 
  
 (2) Made in country without patent, sold in country with patent 
  
 For Licensed Products which are made in a country in which no pending applications relating to Licensed Devices and no unexpired patent containing a claim not invalidated under Section 6.02 hereof covering Licensed
Devices exists but which am used, leased, or sold in a country in which a pending application or an unexpired patent containing a claim covering the Licensed Devices exists, the royalty rate shall be at the rates corresponding to such latter country
as specified in Section 3.02. 
  
 (3) Made and sold in country
without patent 
  
 if a Licensed Product is made in the same
country in which it is used, leased or sold and no pending applications relating to Licensed Devices and no unexpired patent containing a claim not invalidated under 

  

 13 

 CONFIDENTIAL TREATMENT REQUESTED BY DOLBY LABORATORIES, INC. 
  

 
Section 6.02 hereof covering Licensed Devices exists in such country, royalties for the use of the Know-How, Licensed Trademark, and Licensed Logo shall be
payable at one-half the rates specified in Section 3.02 relating to royalties arising in such country only. If a Scheduled Patent has ever existed in such country and so long as no such pending application and no such unexpired patent exists in such
country, LICENSEE shall have the option to discontinue its license to use the Know-How, Licensed Trademark, and Licensed Logo in such country, and to notify LICENSOR in writing thereof. 
  
 (4) Made in country without patent, sold in country without patent 
  
 If a Licensed Product is made in a different country from that in which it is
used, leased or sold and if no pending patent application relating to Licensed Devices and no unexpired patent containing a claim not invalidated under Section 6.02 hereof covering Licensed Devices exists in either such country, royalties for the
use of the Know-How, Licensed Trademark, and Licensed Logo shall, except as modified by the provisions of Section 3.06 (2) above, be payable at one-half the rate specified in Section 3.02 relating to royalties arising in such countries only. If a
Scheduled Patent has ever existed in such country and so long as no such pending patent application and no such unexpired patent exists in either such country, LICENSEE shall have the option to discontinue its license to use the Know-How. Licensed
Trademark, and Licensed Logo in either such country, and to notify LICENSOR to writing thereof. 
  
 Section 3.07 - Sales by LICENSOR 
  
 If LICENSOR sells Licensed Devices on a non-exclusive basis to another party for use in the Market, it shall so notify LICENSEE and, if LICENSEE so
requests, sell Licensed Devices to LICENSEE on terms and conditions no less favorable than those granted to such other party. 
  
 Section 3.08 - Revision of Terms 
  
 If LICENSOR hereafter grants to another party a license to make Licensed Products for sale in the Market at a royalty rate which is lower than that
granted to LICENSEE, LICENSOR shall so notify LICENSEE, and LICENSOR, at its own option, either shall grant such lower royalty rate to LICENSEE on a retroactive basis to the date of such other license or shall inform LICENSEE of any special
conditions related to such other license which justify said lower royalty rate. In the event LICENSEE believes that such special conditions are insufficient to make the present Agreement equitable to LICENSEE then LICENSEE may inform LICENSOR of its
belief in writing and the reasons for such belief, whereupon the LICENSEE and LICENSOR shall bargain in good faith with the view toward revising this Agreement so as to make its terms reasonably equivalent to those granted to such other party. In
the event LICENSEE and 

  

 14 

 CONFIDENTIAL TREATMENT REQUESTED BY DOLBY LABORATORIES, INC. 
  

 
LICENSOR cannot, within ninety (90) days after LICENSOR has received said written notice from LICENSEE, resolve this situation, then the parties hereto shall
within thirty (30) days following the end of such ninety (90) day period submit in good faith the problem for resolution to a group of three disinterested persons, one chosen by LICENSEE, one chosen by LICENSOR and the third to be chosen jointly by
the first two persons. The majority opinion of this group shall be binding upon the parties hereto. The expense of such submission shall be borne equally by the parties. 
  
 ARTICLE IV 
  
 BOOKS, RECORDS AND RIGHT OF INSPECTION 
  
 Section 4.01 - Books and Records 
  
 The LICENSEE shall keep complete books and records of all sales, leases, uses, returns, or other disposals by LICENSEE of Licensed Products. 

 
 Section 4.02 - Rights of Inspecting Books and Records 

 
 The LICENSOR shall have the right, through a professionally registered
accountant at LICENSOR’S expense, to inspect, examine and make abstracts of the said books and records insofar as may be necessary to verify the accuracy of the same and of the statements provided for herein but such inspection and examination
shall be made during business hours upon reasonable notice and not more often than once per calendar year. 
  
 LICENSOR agrees not to divulge to third parties any confidential information obtained from the books and records of LICENSEE as a result of such
inspection unless such information (a) was known to LICENSOR prior to its acquisition by LICENSOR as a result of such inspection; (b) becomes known to LICENSOR from sources other than directly or indirectly from LICENSEE; or (c) becomes a matter of
public knowledge other than by breach of this Agreement by LICENSOR. 
  
 ARTICLE V 
  
 STANDARDS OF MANUFACTURE AND QUALITY

  
 Section 5.01 - Standardization and Quality

  
 During the term of this Agreement LICENSEE shaft abide by the
B-type and C-type Specifications hereto appended and as modified from time to time by LICENSOR or by LICENSEE with the written 

  

 15 

 CONFIDENTIAL TREATMENT REQUESTED BY DOLBY LABORATORIES, INC. 
  

 
approval of LICENSOR. LICENSEE shall abide by reasonable standards of quality. Such quality standards shall apply to Licensed Devices and to aspects of the
Licensed Products not directly relating to the Licensed Devices but which nevertheless influence or reflect upon the quality or performance of the Licensed Devices, such as frequency response, distortion, hum level, and the like. The LICENSEE shall
with respect to al Licensed Products conform to any reasonable quality standards requirements as specified by the LICENSOR within a period of ninety (90) days of such specification in writing. 
  
 Section 5.02 - Right to Inspect Quality 
  
 If requested by LICENSOR, LICENSEE shall provide LICENSOR with reasonable
information concerning Licensed Products. Any such information which is not publicly available shall be used by the LICENSOR only for the purpose of advising the LICENSEE and for the purpose of determining whether the terms and conditions of this
Agreement and the quality standards of the LICENSOR are being met. The LICENSEE will, upon request, provide on a loan basis to the LICENSOR a reasonable number of samples of Licensed Products for testing, together with instruction and service
manuals. In the event that LICENSOR shall complain that any Licensed Product does not comply with LICENSOR’S quality standards, excepting newly specified standards falling within the ninety (90) day time limit of Section 5.01, it shall promptly
so notify LICENSEE whereupon LICENSEE shall within ninety (90) days suspend the lease, sale or other disposal of the same until the matter is resolved, unless the procedures outlined in Section 5.03, below, have been initiated but not completed.

  
 Section 5.03 - Method for Resolving Quality Disputes

  
 If LICENSEE shall contest either the reasonableness of quality
standard specified by LICENSOR in accordance with Section 5.01 or LICENSOR’s complaint with respect to the compliance of any Licensed Product with LICENSOR’s quality standards made in accordance with Section 5.02, then the quality standard
or the accused Licensed Product shall be submitted jointly by LICENSOR and LICENSEE to a group of three qualified and disinterested persons, one chosen by LICENSEE, one chosen by LICENSOR, and a third to be chosen by the first two persons. The
majority opinion of this group shall be binding upon the patties hereto. The expense of such examination shall be borne equally by the parties. 
  

 16 

 CONFIDENTIAL TREATMENT REQUESTED BY DOLBY LABORATORIES, INC. 
  

 ARTICLE VI 
  
 PATENT AND TRADEMARK ENFORCEMENT 
  
 Section 6.01 - Trademark Enforcement 
  
 The LICENSOR will use its best efforts at its own expense to terminate any infringement of the Licensed Trademark. The LICENSEE will cooperate with the
LICENSOR and will furnish without charge, except out-of-pocket expenses, such evidence, documents and testimony as will be required therein. 
  
 Section 6.02 - Patent Enforcement 
  
 LICENSEE shall immediately inform the LICENSOR of any infringements, potential or actual, which may come to its attention, of the Patent Rights in the
Market. It shall be the primary responsibility of LICENSOR at its own expense to terminate any infringements of any of the Patent Rights. In the event that, after being requested to take steps to terminate any case of alleged infringement, the
LICENSOR shall have failed either to terminate same or to have brought suit to such end within a reasonable time, not to exceed six (6) months, after such request, or having brought suit shall have failed for an unreasonable time to vigorously
prosecute the same, then and thereafter, the LICENSEE shall have the right at its own expense to take such steps, to bring such suit, or to prosecute a suit already brought. In any suit brought under this Section the prosecuting party shall have the
right to join the other as a party thereto and the non-prosecuting party shall have the right to be represented at its own expense by counsel of its own choosing. The party prosecuting any such suit shall be entitled to control the same and to
retain all monetary damages awarded therein. 
  
 Section 6.03 -
Non-Aggression 
  
 Unless such agreement is not permitted
under the law of any country, or by the precedence practice of the European Commission, LICENSEE shall not at any time, directly or indirectly, oppose the grant of, nor dispute the validity of, nor cooperate in any suit against any patent or claim
included in the Patent Rights. 
  
 In good faith LICENSOR has
provided LICENSEE the rights and privileges contained in this Agreement. However, nothing contained in this Agreement shall be construed as (a) a warranty or representation by LICENSOR as to the validity or scope of any patent included in The Patent
Rights; (b) a warranty or representation that any Licensed Product manufactured, used, leased, or sold and/or otherwise disposed of or put into use by LICENSEE will be free from infringement of patents of third 

  

 17 

 CONFIDENTIAL TREATMENT REQUESTED BY DOLBY LABORATORIES, INC. 
  

 
parties; or (c) an agreement to defend LICENSEE against actions or suits of any nature brought by any third parties. 
  
 ARTICLE VII 
  
 DURATION AND TERMINATION 
  
 Section 7.01 - Expiration of Agreement 
  
 Subject to the provisions of Sections 3.06 and 7.02, all rights and obligations under this Agreement shall expire in each
country upon the expiration date of the last-to-expire patent under the Scheduled Patents in such country. The Agreement shall expire in all countries of the world on the expiry date of the last of the Scheduled Patents to expire. 
  
 Section 7.02 - Default, Bankruptcy, etc. 
  
 This Agreement and license shall full cease and terminate and all rights
hereby granted to LICENSEE shall revest in LICENSOR: 
  
 (1) At
the option of either party in the event that the LICENSOR or the LICENSEE shall fail to comply with any of its obligations to be performed hereunder by giving sixty (60) days advance notice in writing of such termination to such other party,
provided however, that if the party in default shall within the sixty (60) day period remedy the failure or default upon which such notice is based then such notice shall not become effective and this Agreement and License shall continue in full
force and effect. 
  
 (2) Except as provided in Article X
hereunder, automatically, in the event that (a) LICENSEE shall suffer or permit this Agreement and License to pass to any other person by operation of law; (b) any proceeding under the Bankruptcy Laws shall be instituted by or against the LICENSEE
whether or not resulting in adjudication; or (c) any receiver or trustee shall be appointed for the assets of the LICENSEE under any provisions of the insolvency or Bankruptcy Laws of the LICENSEE’s country or state. 
  
 Section 7.03 - LICENSEE’s Right to Complete Orders Taken

  
 After any termination of this License short of its full term
other than because of LICENSEE’s default, the latter shall be entitled to fill orders for Licensed Products already received and to make or have made for it and to sell Licensed Products for which commitments to vendors have been made at the
time of such termination, subject to payment of applicable royalties thereon. 
  

 18 

 CONFIDENTIAL TREATMENT REQUESTED BY DOLBY LABORATORIES, INC. 
  

 Section 7.04 - Termination Without Prejudice 
  
 Any termination of the License hereby granted shall be without prejudice as
to any obligation of either party to the other accrued prior to or at such termination. Applicable royalties shall be payable under Article III with respect to sales of all Licensed Products which were manufactured or in the course of manufacture
prior to such termination or for which LICENSEE had accepted orders prior to such termination. 
  
 ARTICLE VIII 
  
 STABILITY OF AGREEMENT

  
 Section 8.01 - Modification to be in Writing, No
Waiver 
  
 No provision of this Agreement shall be deemed
modified by any acts of LICENSOR, its agents or employees or by failure to object to any acts of LICENSEE which may be inconsistent herewith, or otherwise, except by a subsequent agreement in writing signed by both parties. No waiver of a breach
committed by either in one instance shall constitute a waiver or a license to commit or continue breaches in other or like instances. 
  
 ARTICLE IX 
  
 LIMITATIONS OF RIGHTS AND AUTHORITY 
  
 Section 9.01 - Limitation of Rights 
  
 No right or title whatsoever in the Patent Rights, Know-How, Licensed Trademark, or Licensed Logo is granted by the LICENSOR to the LICENSEE or shall be
taken or assumed by the LICENSEE except as is specifically laid down in this Agreement. 
  
 Section 9.02 - Limitation of Authority 
  
 Nether party shall in any respect whatsoever be taken to be the agent or representative of the other party and neither party shall have any authority to assume any obligation for or to commit the other party in
anyway. 
  
 Section 9.03 - Public Announcements 

 
 Neither party shall at any time heretofore or hereafter publicly state or
imply that the terms and conditions specified herein or that the relationships between LICENSOR and LICENSEE are in any way 

  

 19 

 CONFIDENTIAL TREATMENT REQUESTED BY DOLBY LABORATORIES, INC. 
  

 
different from those specifically laid down in this Agreement. If requested by one party, the other party shall promptly supply the first party with copies
of all public statements and of all publicity and promotional material relating to this Agreement and to Licensed Products. 
  
 ARTICLE X 
  
 LIMITATION OF ASSIGNMENT BY LICENSEE 
  
 The rights, duties and privileges of LICENSEE hereunder shall not be transferred or assigned by it either in part or in whole without prior written consent of LICENSOR. However, LICENSEE shall have the right to
transfer its rights, duties and privileges under this Agreement in connection with its merger and consolidation with another firm or the sale of to entire business to another person or firm, provided that such person or firm shall first have agreed
with the LICENSOR to perform the transferring party’s obligations and duties hereunder. 
  
 ARTICLE XI 
  
 COMPLIANCE WITH U.S.
EXPORT CONTROL REGULATIONS 
  
 LICENSOR will endeavor to
determine the United States Department of Commerce Export Administration Commodity Control List classification numbers of Licensed Products and technical data included in the Know-How and will advise LICENSEE of its determinations. LICENSOR will
endeavor to obtain such license or other approval as may be required by the United States Government or any agency thereof for LICENSOR’S export to LICENSEE of technical data under this Agreement. LICENSEE will provide LICENSOR with necessary
cooperation for obtaining such license or approval. If the export of such technical data to LICENSEE requires a written letter of assurance from LICENSEE, LICENSEE agrees to execute the same. LICENSEE agrees not to export any technical data acquired
from LICENSOR under this Agreement, nor the direct product thereof, either directly or indirectly, to any country to which the United States Government or any agency thereof at the time of export requires (1) an export license or other government
approval or (2) a written letter of assurance, without (a) first obtaining such license or approval or written letter of assurance or (b) first obtaining written approval for such export from LICENSOR. LICENSOR will provide LICENSEE with necessary
cooperation for obtaining such license or approval. 
  

 20 

 CONFIDENTIAL TREATMENT REQUESTED BY DOLBY LABORATORIES, INC. 
  

 Nothing in this Agreement shall be construed as requiring LICENSOR to export from the United States,
directly or indirectly, any technical data or any commodities to any country to which the United States Government or any agency thereof at the time of export requires (1) an export license or other government approval or (2) a written latter of
assurance, without first obtaining such license or approval or written letter of assurance. 
  
 ARTICLE XII 
  
 ADDRESS OF PARTIES FOR ALL COMMUNICATIONS 
  
 The
addressee of the parties hereto, for all purposes specified in this Agreement shall be as stated on the title page of this Agreement. All notices provided for herein shall be directed to the respective parties by certified mail by the fastest
available method to the said addresses; provided, however, that either party shall have the right to change its such address by so notifying the other party. Payments provided for in this Agreement shall be made by the fastest normal postal method.

  
 ARTICLE XIII 
  
 APPLICABLE LAW 
  
 This Agreement shall be deemed to constitute a contract made under the laws
of the State of New York and for all purposes shall be construed in accordance with the laws of such State. If this Agreement is translated, the English text shall be controlling. 
  
 ARTICLE XIV 
  
 COMPLETE AGREEMENT 
  
 This agreement constitutes the entire Agreement between the parties relating to the subject matter hereof and supersedes all prior negotiations. No
representations or warranties shall be deemed to have been made by either party in connection with this transaction unless expressly herein set forth. 
  
 Should any portion of this Agreement be declared null and void by operation of law, or otherwise, in any country, the remainder of this Agreement shall
remain in full force and effect. 
  
 IN WITNESS WHEREOF, a duly
authorized officer of the said LICENSOR has signed this instrument in the presence of a witness and the said LICENSEE has caused the same to be executed by an officer duly authorized, in duplicate copies on the title page hereof. 
  

 21 

 CONFIDENTIAL TREATMENT REQUESTED BY DOLBY LABORATORIES, INC. 
  

  
 January 1986 

 
 APPENDIX A - SCHEDULED PATENTS 
  
 The Scheduled Patents shall mean the following patents:

  
 B-TYPE PATENTS 
  

					
	 Country

	 	 Patent Number

	 	 Expiration Date

	Argentina	 	202591	 	June 24, 1985
	Australia	 	421,417	 	April 18, 1983
	Australia	 	427,812	 	October 24, 1985
	Austria	 	273,235	 	November 15, 1986
	Austria	 	294,920	 	April 15, 1989
	Belgium	 	712,376	 	August 11, 1986
	Belgium	 	740,914	 	October 28, 1989
	Bolivia	 	3605-B	 	October 20, 1985
	Canada	 	824,223	 	September 30, 1986
	Canada	 	896,741	 	March 28, 1989
	Denmark	 	140270	 	May 29, 1987
	Denmark	 	143150	 	October 31, 1989
	France	 	14.89418	 	August 11, 1986
	France	 	69.37702	 	November 3, 1989
	Germany	 	14 87 276	 	August 11, 1984
	Hong Kong	 	93/1971	 	July 25, 1982
	Hong Kong	 	531/74	 	October 20, 1989
	Italy	 	890,373	 	October 30, 1984
	Japan	 	737974	 	August 11, 1986
	Japan	 	736781	 	August 11, 1986
	Japan	 	811620	 	August 11, 1986
	Japan	 	839863	 	August 11, 1986
	Japan	 	873216	 	November 1, 1989
	Korea	 	18679	 	October 16, 1986
	Korea	 	18676	 	October 16, 1986
	Malaysia	 	201/74	 	October 20, 1989
	Netherlands	 	147 297	 	September 1, 1986
	Netherlands	 	163 078	 	October 31, 1989
	Norway	 	127,166	 	October 31, 1986
	Singapore	 	4/1971	 	July 25, 1982
	Singapore	 	384/1974	 	October 20, 1989
	South Africa	 	69/7364	 	October 20, 1985
	Spain	 	430.984	 	April 21, 1986
	Sweden	 	346,189	 	October 30, 1986
	Switzerland	 	467,560	 	August 9, 1986
	Switzerland	 	508,312	 	November 3, 1989
	United Kingdom	 	1,120,541	 	July 25, 1982
	United Kingdom	 	1,279,634	 	October 20, 1989
	United States of America	 	3,846,719	 	November 5, 1991
	United States of America	 	Re. 28,426	 	December 28, 1988

  

 CONFIDENTIAL TREATMENT REQUESTED BY DOLBY LABORATORIES, INC. 
  

  
 February 1990 

 
 APPENDIX B “B-TYPE DOLBY SYSTEM” 
  
 The B-type operating parameters referred to in Section 1.01 “B-type Specifications”
are defined in the “General Information” volume of Licensee Information Manuals provided by Licensor. 
  

 CONFIDENTIAL TREATMENT REQUESTED BY DOLBY LABORATORIES, INC. 
  

  
 March 1991 
  
 C-TYPE SCHEDULED PATENTS 
  
 All of the above B-type patients and, in addition, the
following patents and applications: 
  
 C-TYPE PATENTS

  

			
	 Country

	  	 Patent Number

	Australia	  	546,641
	Australia	  	544,888
	Australia	  	545,125
	Austria	  	372,796
	Austria	  	386,304
	Austria	  	386,911
	Belgium	  	889,426
	Belgium	  	889,427
	Belgium	  	889,428
	Brazil	  	8.104.156
	Brazil	  	8.104.157
	Brazil	  	8.104.158
	Canada	  	1,201,388
	Canada	  	1,219,809
	Canada	  	1,219,810
	Denmark	  	156356
	Finland	  	74368
	Finland	  	76456
	Finland	  	79428
	France	  	81 12589
	France	  	81 12590
	France	  	81 12591
	Germany	  	DE 31 25 789
	Hong Kong	  	282/85
	Hong Kong	  	283/85
	Hong Kong	  	284/85
	Italy	  	1,137,985
	Italy	  	1,137,986
	Italy	  	1,137,987
	Korea	  	19113
	Korea	  	19114
	Korea	  	25295
	Korea	  	25296
	Malaya	  	1147/85
	Malaya	  	1148/85
	Malaya	  	1149/85
	Norway	  	157 398
	Norway	  	157 399
	Norway	  	157 400
	Singapore	  	42/85
	Singapore	  	43/85
	Singapore	  	45/85

  

 CONFIDENTIAL TREATMENT REQUESTED BY DOLBY LABORATORIES, INC. 
  

  
 March 1991 
  
 C-TYPE PATENTS (continued) 
  

			
	 Country

	  	 Patent Number

	South Africa	  	81/4423
	South Africa	  	81/4429
	South Africa	  	81/4433
	Spain	  	503.493
	Spain	  	503.496
	Spain	  	503.497
	Sweden	  	81 04061-0
	Sweden	  	81 04062-8
	Sweden	  	81 04063-6
	Switzerland	  	654,703
	Switzerland	  	660,653
	Switzerland	  	662,684
	Taiwan	  	17053
	Taiwan	  	17054
	Taiwan	  	17055
	United Kingdom	  	2,079,112
	United Kingdom	  	2,079,113
	United Kingdom	  	2,079,114
	United States of America	  	4,490,691

  
 C-TYPE PATENT
APPLICATIONS 
  

			
	 Country

	  	 Patent Number

	Denmark	  	2828/81
	Denmark	  	2829/81
	Germany	  	P 31 25 788.7
	Germany	  	P 31 25 790.9
	Japan	  	56-102188
	Japan	  	56-102189
	Japan	  	56-102190
	Japan	  	62-270490
	Japan	  	62-270491
	Netherlands	  	81 03122
	Netherlands	  	81 03123
	Netherlands	  	81 03124
	United States of America	  	642,943

  

 CONFIDENTIAL TREATMENT REQUESTED BY DOLBY LABORATORIES, INC. 
  

  
 March 1991 
  
 APPENDIX C “C-TYPE DOLBY SYSTEM” 
  
 The C-type operating parameters referred to in Section 1.01 “B-type and C-type
Specifications” are defined in the “General Information” volume of Licensee Information Manuals provided by Licensor. 
  

 CONFIDENTIAL TREATMENT REQUESTED BY DOLBY LABORATORIES, INC. 
  
 GTE920318 
  

  
 AMENDMENT NO. 1 TO
LICENSE AGREEMENT 
  
 AMENDMENT, effective October 1, 1992, to
an Agreement between GTE LABORATORIES INCORPORATED (hereinafter referred to as “GTEL”) and DOLBY LABORATORIES LICENSING CORPORATION (hereinafter referred to as “LICENSEE”) which Agreement, date coded GTE920318, has an effective
date of January 1, 1992. 
  
 The parties to the said Agreement
further agree as follows: 
  

	 	1.	Add the following new paragraph to the end of Article I: 

  
 M. “Master Soundtrack Licensed Product” shall mean a Licensed Product manufactured by a sublicensee that is used for the creation or the playback in movie theaters of a digital soundtrack for use in motion pictures. 
  

	 	2.	Amend Paragraph B of Article II by adding the words “or Master Soundtrack Licensed Products” after the words “Consumer Licensed Products.” Paragraph B, as
amended, reads: 

  
 B. GTEL will not grant a
license to an existing or prospective sublicensee of LICENSEE under the Licensed Patents to make, have made, use, sell, lease, rent, or otherwise dispose of Consumer Licensed Products or Master Soundtrack Licensed Products; provided, however, this
commitment by GTEL not to grant a license to another licensee 

  

 CONFIDENTIAL TREATMENT REQUESTED BY DOLBY LABORATORIES, INC. 
  

 
shall not apply: (i) when the license to another licensee includes licenses under both technology and patents generally known as ASET, (ii) when the license
to another licensee is a cross-license that includes patents on technologies in one or more relatively broad technical fields including that encompassed by the Licensed Patents; or (iii) to any activities of GTEL or any Affiliated Company of GTEL
including, but not limited to, making, having made, selling, renting, leasing, or otherwise disposing of any telecommunications, cellular and other mobile communications, or satellite communications product or service. 
  

	 	3.	In all other respects the provisions of the said Agreement shall remain the same. 

  

									
	 DOLBY LABORATORIES LICENSING CORPORATION
	 	 	 	 GTE LABORATORIES INCORPORATED

					
	By	 	/s/    ED A. SCHUMMER        	 	 	 	By	 	/s/    FRANK L. STROUSE        
	 Name
	 	Ed A. Schummer	 	 	 	 	 	Frank L. Strouse
	 Title
	 	Title Vice President	 	 	 	 	 	Director Financing and Administration
	 Date
	 	 25 November 1992
	 	 	 	 Date
	 	 11/17/92

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