Technology Application Agreement - Macrovision Corp. and Victor Co. of Japan Ltd.


                       TECHNOLOGY APPLICATION AGREEMENT

     THIS TECHNOLOGY APPLICATION AGREEMENT ('Agreement') is made the 29th day 
of November, 1988, by and between MACROVISION CORPORATION, a California 
Corporation ('Macrovision'), having its principal place of business at 10201 
Torre Avenue, Suite 330, Cupertino, California 95014, and VICTOR COMPANY OF 
JAPAN, LIMITED, ('Rights Owner'), having its principal place of business at 
8-14, Nihonbashi-Honcho 4-Chome, Chuo-ku, Tokyo 103, Japan.

                                  RECITALS

   A.  Macrovision has all right, title and interest in and to certain patent 
applications and inventions relating to a certain video signal protection 
process which is defined as the 'Macrovision Anticopy Process' in Section 1.1 
hereof.

   B.  Rights Owner has the exclusive right to manufacture and sell 
prerecorded video cassettes of certain motion pictures and/or certain other 
videographic materials which are defined as the 'Pictures' in Section 1.3 
hereof.

   C.  The parties desire to enter into this Agreement for the application of 
the Macrovision Anticopy Process to prerecorded video cassettes of the 
Pictures manufactured and distributed within the Territory (as defined in 
Section 1.5 hereof).

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                                   AGREEMENT

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual 
convenants hereinafter set forth, the parties agree as follows:

   1.  DEFINITIONS

       For purposes of this Agreement, the following words and phrases shall 
have the following meanings:

   1.1 'Macrovision Anticopy Process' shall mean the process of modifying a 
video signal by the addition of a plurality of bipolar pulse pairs during 
selected lines of the vertical blanking interval, which process has been 
granted United States Patent Number 4,631,603 and is the subject of Japan 
Patent Application Number 86-087236 filed April 17, 1986.

   1.2 'Processor' shall mean the equipment including and containing the 
electrical circuitry required to apply the Macrovision Anticopy Process to 
the Cassettes.

   1.3 'Pictures' shall mean motion pictures and other videographic materials 
with respect to which Rights Owner holds the rights to manufacture and sell 
prerecorded video cassettes and/or video discs within the Territory.

   1.4 'Cassettes' shall mean prerecorded video cassettes of the Pictures.

   1.5 'Territory' shall mean the Country of Japan

   1.6 'Subsidiary' shall mean Victor Musical Industries, Inc., and/or any 
other company or companies which 'Rights Owner'


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owns outright or which owns more than 50% of the shares or other equity 
representing a right to elect or designate directors.

   2.  APPLICATION OF MACROVISION ANTICOPY PROCESS

       Subject to the terms and conditions of this Agreement, Macrovision 
hereby agrees to cause the Macrovision Anticopy Process to be applied (on a 
non-exclusive basis) within the Territory to Cassettes to be manufactured and 
sold by Rights Owner within the Territory. Rights Owner agrees to have the 
Macrovision Anticopy Process applied at its discretion to the prerecorded VHS 
and Beta video cassettes Rights Owner manufactures and distributes (or causes 
to be manufactured and distributed) within the Territory during the term of 
this Agreement. Application of the Macrovision Anticopy Process to the 
Cassettes shall be effected by one or more third party duplicators selected 
by Rights Owner to manufacture the Cassettes, provided that any such 
duplicator must have executed a Duplicator Agreement with Macrovision in form 
and substance satisfactory to Macrovision. Rights Owner shall not have any 
right to grant to anyone any rights in or to the Macrovision Anticopy 
Process. In the event that any legal action relating to the Macrovision 
Anticopy Process is brought against Macrovision or any threat thereof is 
made, Macrovision shall have the right to discontinue the application of the 
Macrovision Anticopy Process to Cassetts hereunder until such action or 

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threatened action is resolved to Macrovision's reasonable satisfaction.

   3.  MACROVISION ANTICOPY PROCESS APPLICATION FEE AND PAYMENT TERMS

   3.1 Rights Owner shall pay to Macrovision an amount of Twenty cents ($.20) 
per Cassette for the application of the Macrovision Anticopy Process. Such 
amount will be due and payable in legal United States currency. Rights Owner 
agrees to remit payment to Macrovision's principal place of business or its' 
designated U.S. banking agent within 30 days of the end of each calendar 
month. Any amount which is not timely paid, shall be increased by a late 
charge imposed at the rate of 18% per annum, from the due date of such 
payment until the date of actual payment. The Rights Owner shall provide 
Macrovision with an executed copy of Relief from Japanese Income Tax on 
Royalties as evidence that Macrovision Corporation has fulfilled its 10% tax 
obligation to the Government of Japan.

   3.2 In case Macrovision shall enter into an agreement with any third party 
or adjust the rate of Macrovision Anticopy Process Application Fee in an 
existing agreement in any way which will authorize such party to have the 
Macrovision Anticopy Process applied to the prerecorded VHS and Beta video 
cassettes under the same scope of the authorization as permitted herein at 
rates of Macrovision Anticopy Process Application Fee lower than those 
provided for in Article 3 hereof. Macrovision will

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promptly notify Rights Owner in writing of the permittance of such 
authorization or the adjustment of such rate of Macrovision Anticopy Process 
Fee and Rights Owner shall have the option, at any time within sixty (60) 
days after such notification, to enter into such a similar agreement with 
Macrovision, and to substitute the same in place of this Agreement.

     4.  PROTECTION NOTICE

     Rights Owner may place or cause to be placed in a prominent position on 
each Cassette, or on the packaging for each Cassette, to which the 
Macrovision Anticopy Process is applied a notice in form and substance agreed 
to by Macrovision stating that the Cassette is protected by an anticopying 
process and including a trademark or tradename applicable to such process. 
Rights Owner shall place or cause to be placed the patent number(s) for the 
Macrovision Anticopy Process on each Cassette, or on the packaging for each 
Cassette, to which the Macrovision Anticopy Process is applied.

     5.  QUALITY CONTROL

     Macrovision shall advise each third party duplicator to employ 
reasonable manufacturing and quality standards with respect to the 
application of the Macrovision Anticopy Process to the Cassettes. Rights 
Owner shall authorize the duplicator to perform regular quality control 
checks of Cassettes to determine the adequacy of the recorded signal and the


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playability of the Cassettes. In addition, as and when reasonably requested 
by Macrovision, Rights Owner shall furnish to Macrovision random samples of 
the Cassettes being manufactured and sold by Rights Owner at any given time.

      6.  WARRANTY AND DISCLAIMER OF WARRANTIES AND LIABILITY

      6.1 (A) Cassettes to which the Macrovision Anticopy Process is applied 
will not produce any significant distortion resulting from the application of 
the Macrovision Anticopy Process when played on substantially all 
combinations of makes and models of video cassette recorders and television 
sets.

          (B) Macrovision will, at its expense, replace any defective 
cassette in which the defect is shown to have been caused by the Macrovision 
Anticopy Process and is not the result of faulty manufacture or an effect 
caused by improperly maintained consumer VCR/TV equipment.

          (C) A duplicated copy made from a Cassette to which the Macrovision 
Anticopy Process has been applied will cause significant distortion when the 
copy is played on most combinations of consumer video cassette recorders and 
consumer television sets. However, there may be certain combinations of 
consumer video cassette recorders (on which the Cassette to which the 
Macrovision Anticopy Process has been applied is played, on which the copy 
is recorded, and on which the copy is played) and consumer television sets 
with respect to which the copy will not cause significant distortion when 
played.    

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Additionally, Rights Owner understands that technological changes in video 
cassette recorders or television sets could adversely affect the 
effectiveness of the Macrovision Anticopy Process.

          (D)  Macrovision shall not be responsible for correcting 
playability problems or any Cassettes unless Rights Owner notifies Macrovision 
in writing of such playability problems not later than ten (10) days after 
Rights Owner is first informed of the possibility of a playability problem 
for such Cassette.

          (E)  Macrovision indemnifies the Rights Owner against all liability 
arising from any and all patent infringement claims made against Rights Owner 
resulting from the use of the Macrovision Anticopy Process which was applied 
during the term of this Agreement.

     THE FOREGOING WARRANTIES ARE IN LIEU OF ALL OTHERS, EXPRESS OR IMPLIED, 
INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OR MERCHANTABILITY AND 
FITNESS FOR A PARTICULAR PURPOSE.

     6.2  Except as expressly provided in this Section 6, Macrovision shall 
not be liable for damages arising out of or resulting from the application of 
the Macrovision Anticopy Process to Cassettes, nor shall it be liable to 
Rights Owner for consequential damages under any circumstances. Rights Owner 
agrees to assume all financial obligations for Cassettes manufactured and 
sold by it and to indemnify and hold

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Macrovision harmless from and against any and all liabilities, costs, damages 
(including reasonable attorneys' fees and litigation costs, regardless of 
outcome) arising out of or relating to the manufacture, sale and use of 
Cassettes to which the Macrovision Anticopy Process is applied.

     6.3  Rights Owner agrees to give Macrovision prompt notice of every 
complaint, claim or lawsuit concerning Cassettes to which the Macrovision 
Anticopy Process is applied, and thereafter to keep Macrovision fully 
informed of the status thereof. Rights Owner agrees to keep a record of all 
complaints received with respect to Cassettes to which the Macrovision 
Anticopy Process is applied and to give Macrovision reasonable access to all 
such records.

     7.  TERM AND TERMINATION

     7.1 The Term of this Agreement commenced on NOVEMBER 29, 1988 and, 
subject to earlier termination as provided in this Section 7, this Agreement 
shall continue in full force and effect for a period of one (1) year from 
such date, and automatically renewed for one year unless there is a 
three-month prior notice in writing from either party for the termination or 
revision to the other.

     7.2 In the event of a material default by either party in the 
performance of its duties, obligations or undertakings under this Agreement, 
the other party shall have the right to give written notice to the defaulting 
party advising such party of

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the specific default involved and if within ten (10) days after such notice 
(or, if the default cannot reasonably be remedied within ten (10) days, 
within thirty (30) days after such notice), the defaulting party shall not 
have remedied such default, the other party shall have the right, in addition 
to any other rights and remedies it may have, to terminate this Agreement 
immediately upon written notice to the defaulting party.

     7.3 Upon any termination of this Agreement:

         (a) All rights granted to Rights Owner under this Agreement 
immediately shall revert to, and vest in, Macrovision and absolutely no 
interest whatsoever in any of such rights shall thereafter remain in Rights 
Owner or any of its successors; and 

         (b) The Macrovision Anticopy Process shall not be applied to any 
Cassettes after such termination. (However, Rights Owner shall have the right 
to sell any units of the Cassettes to which the Macrovision Anticopy Process 
is applied prior to termination of this Agreement and which are unsold at the 
time of such termination.)

     7.4 No termination of this Agreement shall in any manner whatsoever 
release, or be construed as releasing, Rights Owner from its obligations to 
make payments for application of the Macrovision Anticopy Process to 
Cassettes prior to such termination, or either party from any liability to 
the other arising out of or in connection with a party's breach of, or 

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failure to perform, any covenant, agreement, duty or obligation contained 
herein.

     8.  MAINTENANCE AND INSPECTION OF BOOKS AND RECORDS
     8.1 Rights Owner shall maintain books and records reflecting the number 
of Cassettes to which the Macrovision Anticopy Process is applied, the 
amounts paid and payable under this Agreement with respect to the Cassettes, 
and such other information as Macrovision may from time-to-time reasonably 
request with respect to the use of the Macrovision Anticopy Process.

     8.2 During normal business hours, Rights Owner shall make available to 
Macrovision for inspection, review, audit and copying any and all of its 
books and records which contain entries pertaining to the use of the 
Macrovision Anticopy Process, including such information as is required to be 
maintained pursuant to Section 8.1 hereof.

     8.3 If requested by Macrovision, Rights Owner shall require any third 
party duplicator to maintain books and records reflecting the number of 
Cassettes to which the Macrovision Anticopy Process is applied and such other 
information as Macrovision may from time-to-time reasonably request with 
respect to the use of the Macrovision Anticopy Process. Rights Owner shall 
authorize and direct duplicator to furnish to Macrovision monthly reports 
setting forth the number of Cassettes manufactured with respect to each 
Picture. Rights

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Owner agrees to authorize and direct each duplicator to permit Macrovision to 
inspect, review, audit, and copy any and all of the duplicator's books and 
records which contain entries pertaining to the use of the Macrovision 
Anticopy Process, on reasonable prior notice during normal business hours.

     8.4 Macrovision shall use all reasonable efforts to hold confidential 
all information obtained pursuant to this Section 8 and to confine knowledge 
and use of such information to the employees, consultants and agents of 
Macrovision who require knowledge and use thereof in the ordinary course and 
scope of their employment by Macrovision, except to the extent that broader 
disclosure of such information is necessary to the exercise and/or protection 
of any right or interest of Macrovision under this Agreement.

     9.  SUBSIDIARY

         Any Subsidiary shall be deemed to be a party hereof on condition 
that Rights Owner is held responsible for the performance by respective 
Subsidiary of each and every provision of this Agreement, mutatis mutandis.'

    10.  MISCELLANEOUS PROVISIONS

    10.1 GOVERNING LAW  This Agreement shall be governed by and interpreted 
in accordance with the laws of the United States and particularly the State 
of California, without regard to

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California's or any other jurisdiction's choice of law principles.

    10.2 ARBITRATION  Any controversy or claim arising out of or relating to 
this Agreement or the breach thereof should be settled by mutual agreement of 
the parties. If such mutual agreement should not be reached within a 
reasonable period of time, all disputes arising from or in connection with 
this Agreement shall be finally settled under the Commercial Arbitration 
Rules of the American Arbitration Association by three arbitrators appointed 
in accordance with the said rules. The place of arbitration shall be New 
York, New York, U.S.A.

    10.3 RIGHTS CUMULATIVE  Each and all of the various rights, powers and 
remedies of the parties shall be considered to be cumulative with and in 
addition to any other rights, powers and remedies which such parties may have 
at law or in equity in the event of breach of any of the terms of this 
Agreement. The exercise or partial exercise of any right, power or remedy 
shall neither constitute the exclusive election thereof nor the waiver of any 
other right, power or remedy available to such party.

    10.4 NOTICES  All notices, consents or demands of any kind which either 
party to this Agreement may be required or may desire to serve on the other 
party in connection with this Agreement shall be in writing and may be 
delivered by personal service or by registered or certified mail, return 
receipt requested, deposited in the United States mail with postage thereon 
fully prepaid, addressed to the party as follows:

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If to Macrovision:

     Macrovision Corporation
     10201 Torre Ave., Suite 330
     Cupertino, California 95014
     Attention:  Chief Operating Officer

     cc:  David W. Herbst, Esq.
          Holtzmann, Wise & Shepard
          600 Hansen Way, Suite 200
          Palo Alto, California

If to Rights Owner:

     Victor Company of Japan, Ltd.
     Patent Department
     8-14, Nihonbashi-Honcho 4-Chome
     Chuo-Ku, Tokyo 103, Japan
     Attention:  Mr. Hideo Suzuki, General Manager

     Service of any such notice or demand so made by mail shall be deemed 
complete on the date of actual delivery as shown by the addressee's registry 
or certification receipt or at the expiration of the third (3rd) business day 
after the date of mailing, whichever is earlier in time. Either party hereto 
may from time-to-time, by notice in writing served upon the other as 
aforesaid, designate a different mailing address or a different person to 
which such notices or demands are thereafter to be addressed or delivered.

    10.5 SEVERABILITY

         If any of the provisions of this Agreement are held to be void or 
unenforceable, the parties agree that such determination shall not result in 
the nullity or unenforceability of the remaining portions of this Agreement. 
The parties further agree to replace such void or unenforceable provisions of 
this Agreement with valid and enforceable provisions which will achieve, to 
the extent possible, the economic, business and other purposes of the void or 
unenforceable provisions.

    10.6 COUNTERPARTS

         This Agreement may be executed in separate counterparts, each of 
which shall be deemed as an original, and 

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when executed, separately or together, shall constitute a single original 
instrument, effective in the same manner as if the parties had executed one 
and the same instrument.

    10.7  WAIVER

          No waiver of any term, provision or condition of this Agreement, 
whether by conduct or otherwise, in any one or more instances, shall be 
deemed to be, or be construed as, a further or continuing waiver of any such 
term, provision or condition or as a waiver of any other term, provision or 
condition of this Agreement.

    10.8  ENTIRE AGREEMENT

          This agreement, and any terms and conditions agreed to pursuant to 
this agreement, is intended by parties to be the final expression of their 
agreement and constitutes and embodies the entire agreement and understanding 
between the parties hereto and constitutes a complete and exclusive statement 
of the terms and conditions thereof, and shall supersede any and all prior 
correspondence, conversations, negotiations, agreements or understanding 
relating to the same subject matter.

    10.9  AMENDMENTS

          No change in, modification of or addition to the terms and 
conditions contained herein shall be valid as between the parties unless set 
forth in a writing which is signed by authorized representatives of both the 
parties and which specifically states that it constitutes an amendment to 
this Agreement.

    10.10 ASSIGNMENT

          Rights Owner shall not assign its rights or obligations under this 
Agreement to any other person without the prior written approval of 
Macrovision, and any such attempt at assignment without such prior written 
approval shall be void.

    10.11 BINDING ON SUCCESSORS AND ASSIGNS

          Subject to the restrictions of Section 9.9, this Agreement and all 
of its terms, conditions and covenants are intended to be fully effective and 
binding, to the extent 

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permitted by law, on the successors and permitted assigns of the parties 
hereto. 

    10.12 CAPTIONS

          Captions are provided herein for convenience only and they form no 
part of this Agreement and are not to serve as a basis for interpretation of 
construction of this Agreement, nor as evidence of the intention of the 
parties hereto.

    10.13 DISCLAIMER OF AGENCY

          Nothing contained in this Agreement is intended or shall be 
construed so as to constitute Macrovision and Rights Owner as partners or 
joint ventures or as agents of each other. Neither party shall have any 
express or implied right or authority to assume or create any obligations on 
behalf or or in the name of the other party or to bind the other party in any 
contract, agreement or undertaking with any third party.

     IN WITNESS WHEREOF, this Agreement has been executed and delivered by 
the parties hereto as of the day and year first above written. 


MACROVISION CORPORATION


By          /s/ Eugene Eidenberg               Date         12/8/88
  -----------------------------------------         ----------------------
      Eugene Eidenberg, President

VICTOR COMPANY OF JAPAN, LIMITED

By          /s/ Kunio Kakigi                   Date      DEC. 27, 1988
  -----------------------------------------         ----------------------
   Kunio Kakigi
   President


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